Understanding Contractual Claims for Attorney Fees in Multi-Contract Transactions

In the United States, a claim for a prevailing party’s legal fees must be based on either a contract or a statute. The US legal system, unlike other legal systems, does not have a default prevailing-party legal fee. In other words, the person who wins the case does not automatically get his legal fees just by winning.

So, what happens then in a situation where a party prevails under one agreement, but the transaction at issue has multiple related agreements? This situation can occur for example, when in a purchase and sale transaction, where there is an agreement for the purchase and sale of the item, and another, parallel agreement financing that item. This is very common in transactions for the purchase and sale of cars.

The situation described above was addressed by the Third District Courts of Appeals in Tylinski v. Klein Automotive, Inc. 90 So. 3d 870 (Fla. 3d DCA 2012). In that case, a car dealership and the buyers entered into two contracts related to the vehicle sale: a financing agreement, which contained an attorney’s fee provision, and a sales contract, which did not. The car dealership subsequently sued the buyers for breach of the sales contract.

The buyers prevailed under the purchase and sale agreement and moved for fees under the financing agreement. The Third District held that they were not entitled to fees under the provision in the financing agreement. Though the buyers argued “that both contracts were relevant, because the sale would not have existed but for the financing,” the Third District noted that “the dealership sought recovery under the” sales contract instead of the financing agreement. As a consequence, the Third District explained that “there [was] no contractual avenue for recovering attorney’s fees.” Ham v. Portfolio Recovery Assocs., LLC, 308 So. 3d 942, 945 (Fla. 2020) (quoting Tylinski, 90 So. 3d at 871-73) (internal citations omitted).

As seen, in order to be able to obtain legal fees after prevailing in a contractual claim, the contract on which the claim was based must have its own provision allowing for fees. Florida courts will interpret each agreement independently, and will not allow for recovery of fees based on a related agreement, even if the agreements are dependent on each other.

For legal help with contractual disputes, contact one of our experienced contract attorneys at 305-570-2208. You can also email our lead attorney Eduardo directly at eduardo@ayalalawpa.com.   

We at Ayala Law PA are passionate about helping those in legal need, so please don’t hesitate to schedule a case evaluation with us online here.  

[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case].