United States District Court, M.D. Florida, Jacksonville Division
ORDER
TIMOTHY J. CORRIGAN UNITED STATES DISTRICT JUDGE
This
case is before the Court on Defendant Caroline Square Realty,
LLC's Motion to Distribute Bond Funds (Doc. 56), and
Motion to Discharge Lis Pendens (Doc. 57). Plaintiff Triangle
River, LLC responded in opposition to both motions. (Docs.
59, 60).
The
Motion to Discharge Lis Pendens can be quickly resolved.
Triangle River asserts that the lis pendens should not be
discharged before September 26, 2019, its last day to serve a
motion to vacate the underlying arbitration award. As that
date has passed and no motion to vacate has been filed, the
lis pendens is due to be discharged.
This
case involves a contract dispute concerning the sale of an
apartment building in Jacksonville, Florida. The parties
contracted to sell the building for approximately $19
million, but Caroline Square refused to sell, asserting that
Triangle River had not satisfied required contingencies.
(Docs. 1-1, 5, 52). After this case was sent to arbitration,
(Doc. 32), the Court extended the lis pendens and, following
an evidentiary hearing, set a bond in the amount of $90, 675.
(Doc. 49). This amount was based on the following: $22, 725
billed by Murphy & Anderson, P.A. between November 1-20,
2018 in preparation for and attendance at the bond hearing;
$38, 850 in projected fees if a trial on damages resulting
from an unjustified lis pendens were to take place; $4, 100
in expert fees for the November 20, 2018 bond hearing; and
$25, 000 in projected expert fees if a trial on damages for
an unjustified lis pendens were to take place. Id.
Triangle River posted a bond with International Fidelity
Insurance Company as surety, (Doc. 51), and the case
proceeded to arbitration.
The
arbitration panel determined that Triangle River was entitled
to a return of its escrow deposit, but that neither party was
entitled to any damages on their claims. (Doc. 56-1).
Caroline Square subsequently moved in this Court to recover
$43, 188.50 out of the bond for litigation regarding the lis
pendens.[1] (Doc. 56 at 3). Neither party has
requested a trial on damages resulting from the lis pendens.
Triangle
River asserts that Caroline Square is not entitled to
attorneys' fees from the lis pendens bond because: (1)
the arbitration panel determined this issue; (2) Caroline
Square has not proven it was damaged by the lis pendens; and
(3) attorneys' fees are not awardable for work on the
underlying merits. (Doc. 59 at 5-6).
Attorneys'
fees incurred in obtaining the discharge of a lis pendens are
recoverable from the lis pendens bond. S & T Builders
v. Globe Props., Inc., 944 So.2d 302, 305 (Fla. 2006).
This includes fees incurred arguing in favor of a bond.
See BCJJ, LLC v. Lefevre, No. 8:09-CV-551-T-17EAJ,
2010 WL 1433403, at *6 (M.D. Fla. Mar. 8, 2010) (including in
the bond fees incurred arguing in support of the bond),
report and recommendation adopted sub nom. BCIJ, LLC v.
Lefevre, No. 8:09-CV-551-T-17EAJ, 2010 WL 1544114 (M.D.
Fla. Apr. 19, 2010). However, Triangle River argues that
because the disputed contract contained an attorneys' fee
provision and the arbitration panel determined all matters
relating to the contract, it necessarily determined the
attorneys' fees at issue here. (Doc. 59 at 7-9).
The
arbitration panel's final award states that
“Caroline Square Realty, LLC, shall recover nothing on
[its] claim against . . . Triangle River, LLC” and that
aside from getting its $600, 000 escrow deposit back,
“Triangle River, LLC, shall recover nothing on [its]
Counter-Claim against . . . Caroline Square Realty, LLC. . .
.” (Doc. 56-1 at 4-5). Throughout the arbitration
proceedings, the panel stated that it would issue an interim
merits decision and then receive briefing on attorneys'
fees. (Doc. 59-5 at 2-3). The panel would then issue a final
award which “shall incorporate, the prevailing party
attorneys' fees, if there is one, and the
interim decision on the merits.” (Doc. 59-5 at 2-3).
The arbitration panel never issued an interim decision,
instead issuing only a final award, which stated: “This
Final Award is in full settlement of any and all claims,
counterclaims, defenses and set-offs properly submitted. Any
claim, counterclaim, defense or set-off not specifically
granted or upheld herein is hereby denied.” (Doc. 56-1
at 5). Triangle River argues that this statement means that
the arbitration panel denied Caroline Square's
entitlement to attorneys' fees related to the lis
pendens. (Doc. 59 at 5). The Court disagrees.
The
arbitration panel's final award, and its decision not to
issue an interim merits decision, is most reasonably
understood to mean that it found that neither party
prevailed. See Doc. 56-1 at 4-5; Doc. 59-5 at 2-3.
This makes sense because both parties filed breach of
contract claims, but the arbitration panel found that neither
party breached the contract. Because the arbitration panel
never determined a prevailing party, it did not determine
whether Caroline Square is entitled to attorneys' fees
for an unjustified lis pendens.[2]
That
Caroline Square was not the prevailing party in the
arbitration does not disqualify it from recovering its
damages from the bond. The panel found that Caroline Square
was within its rights to terminate the contract based on
Triangle River's inability to satisfy the contract's
“financing contingency.” (Doc. 56-1 at 2-4). As
Caroline Square was not required to sell the property to
Triangle River, the lis pendens was unjustified because it
encumbered the property while Caroline Square should have had
a clear title to it. Cf. Med. Facilities Dev., Inc. v.
Little Arch Creek Props., Inc., 675 So.2d 915, 917 (Fla.
1996) (“The notice [of lis pendens] will often prevent
the property holder from selling or mortgaging the
property.”); Parker Tampa Two, Inc. v. Somerset
Dev. Corp., 544 So.2d 1018, 1021-22 (Fla. 1989)
(“The standard for determining whether an injunction
was wrongfully issued is simply whether the petitioning party
was unentitled to injunctive relief.”). Therefore,
Caroline Square is entitled to recover damages it proves were
caused by the lis pendens.
Reasonable
attorneys' fees are “a form of recoverable damage
covered by a bond posted for the issuance of” a lis
pendens. Abner v. Johnson, 56 So.3d 137, 139 (Fla.
4th DCA 2011) (citing S & T Builders, 944 So.2d
at 304-05). In setting the bond amount, the Court found that
Caroline Square had incurred $22, 725 in attorneys' fees
(from November 1, 2018 through the November 20, 2018 bond
hearing) and $4, 100 in expert's fees related to the lis
pendens and litigation over the bond. (Doc. 49). Having
already determined that these fees were incurred in relation
to the lis pendens, the Court will award them to Caroline
Square.[3]
Accordingly,
it is hereby
ORDERED:
1.
Caroline Square Realty, LLC's Motion to Discharge Lis
...