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Attorney Fees as an Element of Damages?

The Powell Law Firm, and its lawyers in Fort Myers, love creativity. Unfortunately, we cannot take credit for the creative argument advanced by an opposing Fort Myers Lawyer. In the case, the opposing Fort Myers lawyer argued that our client should pay “attorney fees as an element of damages” in a Breach of Warranty of Deed case. The case involved an encumbrance to a piece of real property located in Fort Myers. The encumbrance, (a sewer assessment lien) was not disclosed to the purchaser at the time the property was conveyed. In fact, the sewer assessment lien had encumbered the property for many years before our clients ever took title to the Fort Myers property and was unknown to our clients. After our clients sold the property, the purchaser discovered the encumbrance and sued her title company and our clients.

Ultimately, the title company paid the amount of the lien, but refused to pay for the purchaser’s attorney fees. The purchaser’s Fort Myers lawyer then filed a Motion for Summary Judgment on the issue of attorney fees and successfully argued to the Magistrate that his client should recover “attorney fees as an element of damages.” In support of the argument, the Fort Myers lawyer cited to Gore v. Gen. Prop. Corp., 6 So. 2d 837 (Fla. 1942). If read broadly, Gore lends credence to the argument.

In opposition, the Fort Myers Lawyers of The Powell Law Firm, with appellate support from our Miami office, filed an “objection” to the Magistrate’s Report and Recommendation arguing that attorney fees can only be awarded as “damages” if the attorney fees were incurred in a third-party suit to gain title to, or possession of, real property from that third-party.

In support of our argument we cited to J & L Enterprises v. Jones, 614 So. 2d 1151 (Fla. 4th DCA 1993), a case directly on point.  Notwithstanding our argument, the trial court denied our objection and proceeded to adopt the Report and Recommendation of the Magistrate which awarded attorney fees as an element of damages. To stay execution on the judgment, a bond was posted pending appellate review.

The case is currently pending in the the Second District Court of Appeal (oral arguments were held on September 27, 2011). We will write an updated blog post when the Second District renders a decision. For now, we write about this case to applaud the creativity of a fellow Fort Myers lawyer and to point out that no lawyer (yours truly included) wins every time.

The Fort Myers Lawyers of the Powell Law Firm are experienced in representing sellers and purchasers in disputes with their title companies.