Florida’s Lien Law statute generally provides in Section 713.29 that the prevailing party in a lien foreclosure or bond enforcement action shall be entitled to its reasonable attorney’s fees. The sense of certainty that appeared on the face of this Statute historically weighed favorably on a party’s evaluation of whether and how to prosecute or defend a lien or bond claim. Over the years, however, courts throughout the State began to dismantle this sense of certainty by refusing awards of attorney’s fees based upon the “net judgment” rule. Instead, the Courts began following and ultimately adopted the rule defining a “prevailing party” as the party who prevailed on the “significant issues” of the case. See Prosperi v. Code, Inc., 626 So.2d 1360 (Fla. 1993).
The Florida Supreme Court all but eliminated the utility of Fla. Stat. § 713.29 as a planning tool in deciding prospectively how and whether to litigate lien foreclosure cases in Trytek v. Gale Industries, Inc., 3 So. 3d 1194, 1203 (Fla. 2009), by holding that “a trial court has the discretion to make a determination that neither party has prevailed on the significant issues in litigation…,” thus requiring no award of attorney’s fees to either party. In Trytek, a contractor filed an action to foreclose a lien in the amount of $12,725.00. Tough the contractor succeeded on the lien foreclosure, it recovered a net judgment of only $1,525.00 due to the homeowners’ successful recovery on their counterclaim. The trial court determined that the homeowners were the prevailing party, as the focus of the litigation was the damage caused by the contractors actions, which were the subject matter of the counterclaim. The court awarded attorney’s fees to the homeowners because it felt compelled to do so, though it expressed a preference to enter an Order requiring that each party shall bear its own attorney’s fees and costs. The Trytek Court freed the trial courts of the requirement to enter awards for attorney’s fees, effectively ruling that while Fla. Stat. § 713.29 required an award of attorney’s fees to the prevailing party, it did not require the identification of any prevailing party in the litigation.
Recently, the Fifth District Court of Appeal exacerbated the problem spawned by the Trytek decision. In Continental Casualty Co. v. Baylor, 2012 WL 3870415 (Fla. 5th DCA 2012), the Court applied the same uncertain analysis articulated in Trytek to fee awards on claims to enforce private project payment bonds. As case law continues to emerge in support of the Trytek analysis, the only legitimate cure appears to be legislative intervention. In fact, the Associated General Contractors of America may be on the verge of proposing legislation to initiate a correction of the course of Florida law on this issue. Whether a proponent of the “net judgment” or “significant issues” standard in defining prevailing parties for purposes of awarding attorney’s fees under Fla. Stat. § 713.29, an inescapable consensus must be reached that the current course of uncertainty embarked upon by the Trytek and Baylor Courts is a detriment to all parties involved.