Ralph SEXTON and Ranch Management Consultants, Inc., Appellants,
Johnathan A. FERGUSON, Appellee.
Marcy I. LaHart of Marcy I. LaHart, P.A., Gainesville, for appellants.
Johnathan A. Ferguson, Fort Pierce, for appellee.
The issue in this appeal is whether section 57.105(1), Florida Statutes, authorizes an attorney's fee award solely against a party's attorney when the case against the attorney's client has been voluntarily dismissed as a result of settlement negotiations, and the claim for attorney's fees against the client has been waived. We hold that the statute does not authorize the award of fees solely against the attorney under these circumstances.
Ralph Sexton and Ranch Management Consultants, Inc. appeal the final order of an administrative law judge that denied their motion for attorney's fees against appellee, Attorney Johnathan A. Ferguson. The underlying dispute arose when appellants petitioned the governing board of the St. Johns River Water Management District (the " District" ) for a formal administrative hearing after the District issued a consumptive use permit to Wild Turkey Estates of Vero, LLC (" Wild Turkey" ). The permit allowed Wild Turkey to de-water a sand mine located adjacent to the petitioners' cattle ranch operation. Appellants objected that their ranch would be adversely impacted by the proposed dewatering on Wild Turkey's property; it would impact the surface and groundwater levels on their ranch property. Appellants asserted that the District's decision to issue the permit violated Florida's statutes, violated Florida's administrative code, and that it was contrary to public policy. They requested that the matter be referred to the Division of Administrative Hearings for a formal hearing and that the Board ultimately reverse its decision and deny Wild Turkey's permit.
Wild Turkey's counsel, Mr. Ferguson, filed a motion for attorney's fees under section 57.105(1), Florida Statutes (2010), alleging that Wild Turkey was entitled to fees because appellants " knew or should have known their claims made in the Petition" were not supported by material facts necessary to establish the claims alleged in the petition. In response, appellants filed their own motion for attorney's fees and requested that Attorney Ferguson and Wild Turkey each be held equally liable to pay the fees incurred in defending against Wild Turkey's motion for attorney's fees, based upon their petition for an administrative hearing.
Appellants asserted that Wild Turkey's attorney had no basis for claiming that appellants filed a petition based on unsubstantiated facts. In support, appellants pointed out that on the same day that Ferguson filed his motion for attorney's fees, he also filed his first discovery request— a request for production.
Appellants moved the administrative law judge (ALJ) for a summary final order denying Wild Turkey's motion for section 57.105 attorney's fees. They argued that their petition for an administrative hearing was supported by the facts, as it " was based upon technical review and expert opinions of a licensed professional geologist with three decades of experience in matters relevant to the water resource issues identified in the petition." In addition, appellants argued that Wild Turkey's motion for attorney's fees " was a blatant attempt to intimidate Petitioners into withdrawing their petition."
Before the time expired for filing a response to appellants' motion for summary final order, Ferguson withdrew as Wild Turkey's attorney. After Ferguson's withdrawal, neither Wild Turkey nor its successor counsel ever responded to appellants' motion for summary final order.
Soon after Ferguson withdrew from the matter, appellants and Wild Turkey negotiated a settlement to resolve all disputes between the parties. As a result of these negotiations, appellants filed a Notice of Voluntary Dismissal with Prejudice. They not only dismissed their request for an administrative hearing, but notified the ALJ of their withdrawal of their pending motion for attorney's fees against Wild Turkey. The withdrawal specifically stated that, " Petitioners also give notice of withdrawal of Petitioners' pending motion for attorney's fees as to Respondent, Wild Turkey Estates of Vero Beach, LLC." As appellants concede on appeal, " the notice of voluntary dismissal waived [appellants'] claim for attorney's fees against Wild Turkey. " However, appellants argue that their withdrawal of their motion for attorney's fees did not apply to releasing Wild Turkey's prior attorney, Ferguson, from liability for fees.
The Notice of Voluntary Dismissal also requested that the ALJ retain jurisdiction to rule on appellants' Motion for Summary Final Order, along with their motion for attorney's fees against Ferguson. The ruling on the motion for summary final order was a condition precedent to appellants' motion for attorney's fees. As the ALJ noted in its final order, " If Petitioners prevail on the Motion for Summary Final Order, Petitioners will be the prevailing party on Wild Turkey's motion for attorney's fees and Wild Turkey will be the losing party, thus fulfilling a condition for an award of Section 57.105 fees." Appellants requested that the ALJ review their request for attorney's fees related to their costs for defending the motion filed by Ferguson.
In May 2010 the ALJ entered an order that relinquished jurisdiction over the petition and, as requested by appellants, retained jurisdiction over the Motion for Summary Final Order and Petitioners' motion for attorney's fees against Ferguson. Ferguson filed a response, opposing appellants' request for a ruling on the Motion for Summary Final Order and for a hearing on his liability for attorney's fees. Whereupon, the ALJ ordered both parties to file a memorandum of law on whether he could award fees solely against Ferguson under section 57.105(1) without also finding Wild Turkey similarly liable, as the " the statute calls for attorney's fees to be borne equally by a ‘ losing party’ and the losing party's attorney."
After reviewing both Ferguson's and appellants' memoranda, the ALJ denied appellants' motion for summary final order on the ground that their attorney's fees motion was " moot," and subsequently denied their request for a hearing on Ferguson's liability for fees. The ALJ held that because appellants withdrew their motion ...