United States District Court, M.D. Florida, Jacksonville Division
TIMOTHY J. CORRIGAN, UNITED STATES DISTRICT JUDGE.
Florida's reciprocal attorney's fee statute, Fla. St.
§ 57.105(7), is an award of attorney's fees to the
prevailing party mandatory or discretionary? This bankruptcy
appeal is before the Court on the O'Steen debtors'
appeal of the Bankruptcy Court's Order denying the
O'Steens' amended motion for attorney's fees and
costs following the entry of judgment in their favor in an
adversary proceeding brought by appellee, Lafayette State
Bank (“the Bank”). The parties filed briefs and
numerous record excerpts and state they do not wish to
mediate. See Docs. 3, 4, 5, 10, 11,
The Court held oral argument on October 15, 2019, the record
of which is incorporated by reference.
Standard of Review
Court is sitting in an appellate capacity and reviews the
Bankruptcy Court's legal conclusions de novo and
its factual findings for clear error. In re Hood,
727 F.3d 1360, 1363 (11th Cir. 2013) (citation omitted).
O'Steens were dairy farmers in Lafayette County, Florida,
who filed a Chapter 12 bankruptcy petition in 2014. The Bank
was a long-time creditor of the O'Steens. The Bank's
$3.6 million claim was secured by the O'Steen's real
property, equipment, and livestock, valued at $1, 996,
451.00, with the remaining debt unsecured. At the Bank's
urging, the Court converted the O'Steens' Chapter 12
case to a Chapter 11 and later to a Chapter 7, from which the
O'Steens sought a discharge.
December 2015, the Bank filed an adversary proceeding
objecting to the O'Steens' Chapter 7 discharge and
seeking to determine the dischargeability of the
O'Steens' debt to the Bank. The parties litigated for
over two years, culminating in a two-day trial in which the
Bank sought to demonstrate that the O'Steens had
transferred or concealed cattle and other property during
their bankruptcy case, they had manipulated the claims in the
case, and they had not provided required financial
nineteen page Memorandum Opinion, the Bankruptcy Court
weighed the evidence as to each claim, and, noting that the
“denial of a debtor's discharge is an extraordinary
remedy, ” with exceptions “construed in favor of
the debtor and against the objecting party, ” found the
Bank failed to demonstrate by a preponderance of the evidence
the elements of any of their claims, all of which required
proof of willful, fraudulent, intentional, or malicious
conduct. Doc. 4-165 at 2. The Bankruptcy Court entered Final
Judgment in favor of the O'Steens and against the Bank on
the Bank's adversary complaint, and directed the entry of
the O'Steens' discharge in their Chapter 7 case.
the O'Steens timely moved to recover $38, 800.00 in
attorney's fees and $6, 230.14 in costs pursuant to the
parties' contractual attorney's fees provisions and
Florida law, and the bankruptcy costs rule. The Bankruptcy
Court conducted a hearing and denied the motion, finding
“it ‘would be unjust' to require the Bank to
pay the [O'Steens'] attorneys' fees and
costs.” Doc. 4-2 at 6 (citation omitted).
O'Steens take this timely appeal, arguing that because
the parties' contract included an attorney's fee
provision by which the Bank could recover its fees from the
O'Steens,  Florida's reciprocal attorney's
fee statute, Fla. St. § 57.105(7), mandates that they
recover their fees as the prevailing party, and the
Bankruptcy Court erred as a matter of law by holding
otherwise. The O'Steens alternatively argue that if fees
are not mandated under the reciprocal attorney's fee
statute, the Bankruptcy Court abused its discretion in
declining to award them their fees.
the “bedrock principle known as the ‘American
rule, '” “[e]ach litigant pays his own
attorney's fees, win or lose, unless a statute or
contract provides otherwise.” Hardt v. Reliance
Standard Life Ins. Co., 560 U.S. 242, 253 (2010)
(citations omitted). Although this is an appeal of a federal
bankruptcy case, the underlying source of the possible fee is
a contract (the promissory note) which states on its face
that it is governed by federal laws applicable to the lender
(the Bank) and, to the extent not pre-empted by federal law,
by Florida law. See Doc. 4-172 at 16 (CM/ECF PageID
2257). The parties agree that Florida law governs the fee
issue arising out of this contract.
contract language provides that the Bank may recover its fees
for bankruptcy proceedings if it prevails. However, Florida
has a reciprocal attorney's fee statute, Florida Statute
§ 57.105(7), which “aims to even the playing
field” by “engraft[ing] a reciprocity condition
onto contractual attorneys' fees provisions” such
that either side may benefit from a contract's otherwise
one-sided attorney's fee provision. Pier 1 Cruise
Experts v. Revelex Corp., 929 F.3d 1334, 1344 (11th Cir.
2019) (quoting Fla. Hurricane Prot. & Awning, Inc. v.
Pastina, 43 So.3d 893, 895 (Fla. 4th DCA 2010)). In
relevant part, Florida Statute § 57.105(7) provides-
If a contract contains a provision allowing attorney's
fees to a party when he or she is required to take any action
to enforce the contract, the court may also allow
reasonable attorney's fees to the other party when that
party prevails in any action, ...