In Hayward Baker, Inc. v. Westfield Ins. Co., the Florida District Court of Appeal, Second District, reversed a lower court’s order denying a subcontractor’s motion for attorneys’ fees under Florida Statutes, Section 713.29. 2020 WL 7767859, at *1 (Fla. Dist. Ct. App. Dec. 30, 2020). The underlying case stemmed from construction of an addition to University Community Hospital in Carrollwood, Florida.
Diaz Fritz Group, Inc. (DFI) was the general contractor for the project. DFI subcontracted with Hayward Baker, Inc. (HBI) for foundation work with a contract amount of $290,000.00. After HBI completed its work on the hospital project, DFI refused to pay HBI the subcontract amount, claiming that HBI was responsible for remediating or paying for damage DFI claimed HBI had caused to the hospital’s existing building while performing the foundation work. A dispute arose and three lawsuits ensued, including one against the surety that issued DFI’s payment bond.
DFI sued HBI for breach of contract seeking to recover the cost of remediating the damages to the hospital’s existing building. HBI counterclaimed for breach of contract seeking to recover the entire amount due under the subcontract.
DFI later filed an additional action in federal court against HBI’s insurance carrier, Zurich American Insurance Company, to recover the same damages claimed in the suit against HBI directly. DFI reached a settlement with Zurich under which Zurich agreed to pay DFI $450,000.
The remaining cases were consolidated and tried before a jury. Shortly before trial, the parties stipulated that HBI was entitled to $290,000 pursuant to the subcontract with DFI. At the conclusion of the trial, the jury found HBI was responsible for $266,596.32 of the damages caused to the hospital.
Both DFI and HBI moved for attorney fees’ following the jury verdict and entry of the final judgment, contending they were the “prevailing party.” The trial court denied both motions on the basis that neither party was the prevailing party since both parties prevailed on significant issues.
The trial court granted HBI’s motion to set off the damages award against HBI to the hospital by the $450,000.00 DFI received from HBI’s insurer, Zurich, through the prior settlement of the third case. However, the lower court did not take the setoff into consideration for determining which party prevailed on the significant issues, contending the prevailing party determination would be “the same no matter what the ruling on the setoff question was[.]”
HBI appealed the lower court’s decision, arguing “because it succeeded on significant issues in the litigation and achieved all of the benefit it sought against DFI, while DFI and [the surety] achieved nothing, the trial court abused its discretion in failing to find that HBI was entitled to attorneys’ fees as the prevailing party.”
Under Florida law, the party who prevails on the “significant issues in the litigation” is considered the prevailing party for purposes of awarding attorneys’ fees. HBI argued it was awarded the full amount due to it under the subcontract, despite being found to be responsible for a portion of the damages to the hospital. The appellate court agreed with HBI and reversed the lower court’s order denying HBI’s Motion for Attorneys’ Fees.
The appellate court found the ruling on HBI’s Motion for Set Off was “pivotal” to the prevailing party determination. The result of applying the set off against DFI’s damages award, the appellate court found, was that DFI did not receive any benefit it sought in the litigation because a judgment was not entered against HBI for any of the damage to the hospital. Alternatively, HBI was awarded the full subcontract price and was relieved of paying damages to DFI. Thus, the appellate court concluded that when the setoff was considered, “HBI received all of the benefit it sought in the litigation[,]” and should have been considered a prevailing party and held that the trial court abused its discretion in finding otherwise.