Arbitration and Attorneys’ Fees Issues: An Attorney’s and Arbitrator’s Viewpoint
Increasingly, our judicial system is being used to untangle the problems of society. For an
aggrieved party the idea of uttering a final statement, “I’ll see you in court,” may seem satisfying at the moment; however, in the long run it can be emotionally draining and financially unsound. There is a consensus among many that the court system is expensive and has too few judges to deal adequately with the ever-growing litigiousness of our society. In response, a trend has developed, especially in commercial and employment matters, to look to alternative dispute resolution programs to settle disputes. Of such programs, arbitration by proper design can offer a faster and cheaper method of resolving disputes since parties are free to tailor such programs to their needs. Moreover, arbitration can provide a significant advantage for parties engaged in international transactions because international arbitration is governed by specific rules under a single treaty known as the New York Convention on the Recognition of Enforcement of Foreign Arbitral Awards (New York Convention), 3 U.S.T. 2517, codified in 9 U.S.C.A. §201 (West 1997), ratified by a majority of the industrialized nations. Consequently, it may be easier to enforce an arbitration award in other countries than to enforce a court judgment.
Although arbitration is a favored alternative dispute resolution instrument, it has not developed its full potential. It is now at a critical juncture and whether the pendulum will swing in its favor will depend in large part on future decisions of federal and Florida courts in arbitration matters such as: 1) recovery of attorneys’ fees incurred in arbitration; 2) the extent of the applicability of the law to arbitration; and 3) which disputes are arbitrable disputes.1 Recent decisions addressing some of these issues have imposed more of the attributes of litigation on arbitration. The result is increased litigation tactics by lawyers in arbitration and the consequential escalation in the length and cost of the arbitration, all of which tend to limit the benefits of arbitration.
One of the most important and misunderstood issues is the recoverability of attorneys’ fees incurred during an arbitration. The purpose of this article is to discuss the current status of this issue and provide some guidelines that will help overcome potential pitfalls attorneys may encounter in this area.
Jurisdiction
Generally, the jurisdiction of arbitrators to make awards is governed by statute. In Florida, arbitration is controlled by the Florida Arbitration Code found in F.S. Ch. 682.01 et seq. Controversies involving interstate commerce are controlled by the Federal Arbitration Act, codified at 9 U.S.C. §§1 et seq., as well as the code. The code and the act apply to written agreements which provide that controversies arising under the agreement must be submitted to arbitration unless the agreement stipulates that the code does not apply to the arbitration.2 If both the code and the act apply to an arbitration, the act will control the proceedings.3
Entitlement to Fees
Florida courts have stated uniformly that the threshold issue of whether there is a right to attorneys’ fees in arbitration is governed by F.S. §682.11, which provides that:
Unless otherwise provided in the agreement or provision for arbitration, arbitrators’ and umpires’ expenses and fees, together with other expenses, not including counsel fees, incurred in the conduct of the arbitration, shall be paid as provided in the award.
Although nothing in §682.11 clearly prohibits entitlement to attorneys’ fees incurred during arbitration, until 1991 several district courts interpreted the wording of §682.11 to prohibit an award of attorneys’ fees for services rendered during arbitration.4 Some decisions went so far as to interpret §682.11 to mean that even an agreement by the arbitration parties to vest jurisdiction in arbitrators to award attorneys’ fees was prohibited.5
Then, in 1990, in Fewox v. McCarthy, 556 So. 2d 419 (Fla. 2d DCA 1990), the Second District concluded that previous cases which held that §682.11 prohibited attorneys’ fees for time spent in arbitration “were wrongly decided insofar as they hold that the statute prohibits an award of attorneys’ fees for services rendered during arbitration proceedings.”6 The Fewoxcourt further stated that although §682.11 might prohibit arbitrators from having jurisdiction to consider attorneys’ fees as expenses in an award, §682.11 does not prohibit a trial court from awarding attorneys’ fees for time expended in arbitration. Thereafter, in Insurance Co. of North America v. Acousti Engineering Co. of Florida, et al., 579 So. 2d 77 (Fla. 1991), the Florida Supreme Court resolved the conflict created by Fewox and other district court decisions, by holding that §682.11 does not prohibit entitlement to attorneys’ fees for services rendered during arbitration proceedings, “but rather merely prohibits arbitrators from awarding such fees.”7 The court did not address the issue of whether the parties by agreement could confer jurisdiction upon the arbitrators to determine entitlement to attorneys’ fees for time spent in arbitration and to assess such fee.
Thereafter, in Fridman v. Citicorp Real Estate, Inc., 596 So. 2d 1128 (Fla. 2d DCA 1992), the Second District followed Acousti Engineering and held that a party may be awarded fees for arbitration proceedings if authorized by statute or contract, but specifically held that parties could not by agreement confer jurisdiction upon arbitrators to determine attorneys’ fees, since only the circuit court has jurisdiction to determine entitlement to fees.
Subsequently, the Fourth District in Pierce v. J.W. Charles-Bush Securities, 603 So. 2d 625 (Fla. 4th DCA 1992), held that parties to an arbitration agreement may confer jurisdiction on the arbitration panel to decide entitlement to attorneys’ fees and the amount of such fees.8 Thereafter, the Second District reconfirmed its Fridman ruling in Higley South, Inc. v. Quality Engineering Installation, Inc., 632 So. 2d 615 (Fla. 2d DCA 1994).
In Service Station Aid, Inc. v. Turnberry Associates, 629 So. 2d 204 (Fla. 3d DCA 1994), however, the Third District, like the Fourth District, disregarded Fridman and Higley South, Inc. and decided to follow the Fourth District’s holding in Pierce v. J.W. Charles-Busch Securities, Inc., that parties to an arbitration may by stipulation confer jurisdiction upon the arbitration to decide entitlement to attorneys’ fees and to assess such fees.
On certiorari conflict, the Florida Supreme Court in Turnberry Associates v. Service Station, 651 So. 2d 1173 (Fla. 1995), sided with the Third and Fourth districts and firmly established the principle that parties may stipulate to waive their right to have the circuit court determine entitlement to attorneys’ fees and confer subject matter jurisdiction upon the arbitrators to award fees. The Supreme Court, however, also held that in the event that a dispute arises as to whether such stipulation was entered into, only the trial court had jurisdiction to resolve such factual dispute.
Recent Developments
Since the Turnberry decision, the Supreme Court has not come forth with any further opinions regarding attorneys’ fees incurred for time spent in arbitration. However, issues of what constitutes a waiver of a party’s entitlement to have the circuit court determine the entitlement to attorneys’ fees, and whether the parties stipulated to have arbitrators decide entitlement and amount of fees, began to arise with conflicting results.
In Dean Witter Reynolds, Inc. v. Wood, 676 So. 2d 464 (Fla. 5th DCA 1996), a claimant in a National Association of Securities Dealers (NASD) arbitration argued that the arbitrator had the authority to award fees. The respondent, Dean Witter, opposed this position. Nevertheless, the arbitrator determined that he had the authority to hear the attorneys’ fees issue and awarded Wood attorneys’ fees. However, the amount of attorneys’ fees awarded by the arbitrator did not satisfy Wood, who asked the circuit court to determine fees, claiming that the arbitrator’s award of fees was invalid because there was no agreement to confer jurisdiction upon the arbitrators to determine attorneys’ fees. The circuit court agreed with Wood that there was no such stipulation between the parties and that, therefore, the arbitrator’s fee award was invalid. Using a contingency fee multiplier, the circuit court then gave Wood a substantially greater amount of attorneys’ fees than did the arbitrator. On appeal, the Fifth District, citing Turnberry, affirmed the circuit court’s reversal of the arbitrator’s fee award, stating that since there was “no express waiver as contemplated in Turnberry,9 only the circuit court had jurisdiction to determine attorneys’ fees.”
A more significant decision is the case of Robert Gay Construction Co. v. Ceco Building System, A Division of Robertson Ceco Corp., 680 So. 2d 1124 (Fla. 1st DCA 1996). Ceco, a building supplier, initiated a demand for arbitration of a dispute with Gay, a general contractor. Gay filed a counterclaim and sought an affirmative recovery against Ceco under a performance bond. In response to Gay’s counterclaim, Ceco claimed that, under the terms of the performance bond and F.S. §57.105 (1993), it was entitled to recover attorneys’ fees and costs incurred in arbitration. Ceco also requested that the arbitrator make a specific finding in the award that Ceco was the prevailing party in the arbitration.
After the arbitration hearing, the arbitrator awarded Ceco affirmative relief and awarded Gay a credit against Ceco’s award on Gay’s counterclaim. The arbitrator’s award, however, made no determination as to who was the prevailing party, or as to entitlement to attorneys’ fees. Ceco then moved to modify the arbitrator’s award, asking the arbitrator to make a specific finding that Ceco was the prevailing party. The motion was denied. Thereafter, both Ceco and Gay sought attorneys’ fees in the circuit court. After hearing the circuit court determined that Ceco was the prevailing party and awarded Ceco substantial attorneys’ fees. Gay appealed.
After reviewing and reaffirming the Turnberry decision, the First District took a dramatic turn in a different direction. The First District decided that, although the parties did not agree to have the arbitrator decide all issues relating to attorneys’ fees, Ceco did expressly submit to the arbitrator the issue of who was the prevailing party. The court, however, did not explain how it determined that Ceco expressly submitted this issue to the arbitrators.
The First District, in what appears to be a new approach to attorneys’ fees issues in arbitration, reasoned that, since a determination of who is the prevailing party is “the central question on which. . . entitlement to fees is based. . . ,” the court would first have to determine whether a submission of the prevailing party issue to the arbitrator constituted a waiver of entitlement to have the circuit court decide the attorneys’ fee issue.10 Reviewing the facts in the record, the First District then decided that, because Ceco submitted the prevailing party issue to the arbitrator, Ceco, as a matter of law, waived its entitlement to have the prevailing party issue determined by the circuit court. The First District then went on to hold that, because of Ceco’s waiver, the circuit court did not have jurisdiction to determine whether Ceco was the prevailing party. Consequently, since the arbitrator made no determination that Ceco was the prevailing party, Ceco was not entitled to any attorneys’ fees.
In GCA, Inc. v. 90 S.W. 8th St. Enterprises, Inc., 696 So. 2d 1230 (Fla. 3d DCA 1997), GCA, the general contractor, filed suit in circuit court against Enterprises to foreclose a construction lien. In addition to damages, GCA requested attorneys’ fees in its complaint. Pursuant to the parties’ contract, Enterprise obtained an agreed order directing the parties to arbitrate the dispute. GCA then filed a demand for arbitration, to which it attached its circuit court complaint. Enterprises filed an answer to the arbitration claim and requested attorneys’ fees. At the conclusion of the arbitration, the arbitrator awarded GCA the final payment on the contract in satisfaction of the lien, but made no determination as to attorneys’ fees. In the circuit court, GCA requested that the court retain jurisdiction for entry of a final judgment of foreclosure and inter alia, to resolve attorneys’ fees and costs requests. Enterprise opposed the motion. Subsequently, Enterprise filed a motion for attorneys’ fees pursuant to F.S. §57.105 (1993) and GCA filed a motion for fees pursuant to the provision of the contract and F.S. §713.29 (1993).
The circuit court thereupon ruled that, because GCA requested attorneys’ fees in its demand for arbitration and Enterprise requested fees in its answer to arbitration, the parties had voluntarily submitted the attorneys’ fees issue to the arbitration. The circuit court also ruled that Enterprise was not entitled to §57.105 fees. Consequently, the circuit court denied attorneys’ fees to GCA because the arbitrators did not award any attorneys’ fees and denied Enterprise fees pursuant to §57.105. Both parties appealed.
After discussing Turnberry, and decisions prior to Turnberry, the Third District aligned itself with the Fourth District and held that only an express waiver to have the circuit court determine attorneys’ fees issues will confer jurisdiction on the arbitrator to decide attorneys’ fees issues. The court found that the inclusion by both parties of a prayer for attorneys’ fees in their pleadings did not constitute “sufficient substantial evidence to support a finding of an express waiver.”11 Therefore, it ruled that GCA was entitled to proceed with its motion for attorneys’ fees in the circuit court.
In D.H. Blair & Co., Inc. v. Johnson, 697 So. 2d 912 (Fla. 4th DCA 1997), the appellee investors brought an NASD arbitration proceeding pursuant to an NASD submission agreement signed by both parties, which provided that all disputes were to be resolved by arbitration. The brokerage firm filed a counterclaim and both parties requested attorneys’ fees in their pleadings. The arbitrators entered an award against D.H. Blair and also awarded Johnson attorneys’ fees, the amount to be determined in the circuit court. In the circuit court, D.H. Blair alleged that the arbitrators exceeded their jurisdiction in finding that the Johnsons were entitled to attorneys’ fees. The circuit court confirmed the arbitrator’s award and awarded the Johnsons a substantial amount of attorneys’ fees. D.H. Blair appealed.
In the appeal, the Johnsons contended that since both parties requested fees in the arbitration and that, by signing the NASD submission agreement, which provided that “all controversies or disputes between [the parties] of any kind shall be settled by arbitration,”12 both parties agreed to submit the issues of attorneys’ fees to the arbitrators.
Although the court stated that it found the “appellees’ argument persuasive,” the Fourth District in D.H. Blair, unlike the Fifth District in GCA, felt that the Turnberry decision specifically required both parties to expressly waive their rights to have the circuit court determine attorneys’ fees, and that facts in the case did not clearly show that an express waiver to have the circuit court determine attorneys’ fees existed.
In Prudential Securities, Inc. v. Ruskin, 707 So. 2d 782 (Fla. 4th DCA 1998), appellee filed an arbitration claim with the NASD against Prudential and Prudential’s employee, Linda Ryan, under F.S. §517.211 (1995). Although Prudential and Ryan objected to the arbitration, the circuit court compelled arbitration. Neither party agreed to submit to the arbitrators the issue of attorneys’ fees under §517.211(4). After Ruskin presented his case, the arbitrators dismissed Ruskin’s claim as being without merit and ruled that each party would bear its own attorneys’ fees and costs. Subsequently, Prudential and Ryan requested the circuit court to confirm the panel’s dismissal of Ruskin’s complaint and to modify the portion of the award which denied attorneys’ fees to both parties and to award them attorneys’ fees pursuant to §517.211(6).
The circuit court confirmed the dismissal of Ruskin’s complaint, but vacated the arbitration panel’s ruling denying attorneys’ fees to all parties, on the basis that the panel exceeded its authority in deciding issues related to attorneys’ fees. The circuit court also denied Prudential and Ryan’s request for fees pursuant to §517.211(6), adding that, although ordinarily Prudential and Ryan would have been entitled to attorneys’ fees pursuant to §517.211(6), their request for fees was untimely under the Florida Supreme Court’s decision of Stockman v. Downs, 573 So. 2d 835 (Fla. 1991), because they failed to plead entitlement to attorneys’ fees either in the arbitration or when the matter was first brought before the circuit court to compel arbitration.
A majority of the Fourth District panel agreed with the circuit court that the arbitration panel did not have jurisdiction to determine attorneys’ fees issues. More significantly, however, the majority rejected Prudential and Ryan’s argument that Turnberry permitted a party to wait until the matter was brought before the circuit court on a motion to confirm a panel’s decision, before requesting attorneys’ fees. The majority came to the conclusion on the basis that Turnberry decided only the issue of “whether parties by stipulation may waive their statutory right to have a circuit court determine their entitlement to attorneys’ fees and instead confer jurisdiction upon arbitrators to award fees,”13 and did not address the issue of when a request for attorneys’ fees in an arbitration first must be made. Moreover, the majority believed that any other interpretation would conflict with Stockman. In a cogent dissent, Judge Stone concluded that, logically, a party should not be required to specifically give any notice of a request for attorneys’ fees during arbitration, when such issue was not within the jurisdiction of the arbitration panel.
On rehearing, the majority recognized that its original decision could result in some confusion as to when a party must specifically plead attorneys’ fees during an arbitration proceeding, and filed a revised opinion stating that “a party need only give notice, whether formal or informal, that it will later seek attorneys’ fees pursuant to a specific contractual agreement or statute.”14 Unfortunately, rather than clarifying this issue, the revised opinion creates additional ambiguity and will result in further litigation on this issue. Moreover, in due time this issue will have to be resolved by the Supreme Court, since Judge Stone’s dissent may be viewed by other district courts as the more appropriate resolution of this issue.
Analysis of the Decisions
In analyzing the foregoing decisions, it would appear that under Gay, if an agreement contains an arbitration provision that provides for attorneys’ fees and costs to the prevailing party, arbitrators have jurisdiction to determine entitlement to fees and if no such determination is made by the arbitrators, then the circuit court has no jurisdiction to award any attorneys’ fees. On the other hand, in the Third and Fourth districts, unless the parties have specifically waived their right to have the circuit court determine attorneys’ fees and stipulated to let the arbitrators decide such fees, only the circuit court has jurisdiction to make a determination of which party is the prevailing party, so as to determine entitlement to attorneys’ fees.
Therefore, it seems that a conflict exists between the Fifth District and the Third and Fourth districts as to the jurisdiction of arbitrators to determine entitlement to fees incurred for arbitration proceedings. Unless such conflict is resolved, each new district court decision on this issue could create further uncertainty as to what constitutes a waiver to have the circuit court determine entitlement to attorneys’ fees.
Federal Courts
Federal court decisions regarding attorneys’ fees incurred in arbitration are somewhat similar to Florida courts’ decisions, with the exception that some federal courts have extended arbitrators’ authority to award attorneys’ fees if the agreement pursuant to which the arbitration is held provides for the submission of all disputes to the arbitrators. The federal courts hold that such a provision is broad enough to grant authority to the arbitrators to award attorneys’ fees.15
In Irena v. Arthur Murray Int’l, Inc., 833 F.2d 1472 (11th Cir. 1987), the 11th Circuit affirmed the arbitrator’s award of attorneys’ fees for the defendants, on the basis that the fee award was an integral part of the merits of the case. More recently, in Davis v. Prudential Securities, 59 F.3d 1186 (11th Cir. 1995), the 11th Circuit held that the arbitrators had no authority to determine entitlement to fees where no claim for fees was submitted to the arbitrators by any of the parties. The 11th Circuit remanded the case to the district court for consideration of the issue of entitlement and amount of attorneys’ fees.
Consequently, just as in the Florida courts, issues exist in the federal courts as to what facts are sufficient to constitute a waiver to have the trial court determine attorneys’ fees and authorize arbitrators to determine entitlement and amount of attorneys’ fees.
What Should Attorneys Do?
Parties to an agreement have considerable power to establish whatever procedures they want to govern the arbitration of their disputes. Commenting on the ability of parties to accomplish subject objective, Judge Posner in Baravati v. Josephthal, Lyon & Ross, Inc., 128 F.3d 704, 709 (7th Cir. 1994), stated:
Short of authorizing trial by battle or ordeal or, more doubtfully, by a panel of three monkeys, parties can stipulate to whatever procedures they want to govern the arbitration of their disputes; parties are as free to specify idiosyncratic terms of arbitration as they are to specify any other terms in their contract.
Therefore, in light of the fact that the issue of attorneys’ fees is unsettled both in the federal and Florida courts, the best procedure for counsel to follow, if arbitration is contemplated, is to carefully draft a provision that can be incorporated into an agreement that will resolve these attorneys’ fees issues. It also would be advisable to incorporate clauses which will address other arbitration issues, heretofore mentioned, that are as yet not fully resolved by the courts; because such issues, if left unresolved, will hinder the purposes of both parties in arbitrating a dispute.
Care must be taken, however, in drafting an arbitration provision. An arbitration clause that simply states that “disputes arising under this agreement shall be resolved by arbitration” leaves many issues unresolved and will result in further litigation, causing delays, additional expenses, and inconvenience to parties and their attorneys.
The standard arbitration clause recommended by the American Arbitration Association does address some of these issues and can be used as a starting point in drafting an arbitration provision.16 Counsel would be well advised, however, to provide a more inclusive clause which will address other issues and make arbitration a truly beneficial dispute resolution alternative. Toward this end the following provision is submitted by the author for consideration:
Arbitration of Disputes. The parties hereto agree to submit to binding arbitration any dispute, controversy or claim arising out of this agreement, including disputes regarding interpretation of this agreement on the entering of this agreement, determination of the prevailing party, entitlement to attorneys’ fees by any party, including the assessment of the amount of attorneys’ fees and entitlement to attorneys’ fees for time incurred in arbitration in seeking attorneys’ fees. The arbitration will be administered by (e.g., American Arbitration Association or NASD), in accordance with its arbitration rules. Any matter to be arbitrated hereunder must be decided by a panel of three arbitrators, notwithstanding any rule of the (AAA, NASD, etc.) to the contrary, with an arbitrator to be chosen by each party. The arbitrators so chosen will choose an additional arbitrator from the following five arbitrators: (insert names here). If the selected arbitrators cannot agree to a third arbitrator from this list, the (selected administrator or any other person) shall select the third arbitrator from the aforesaid list of names. It is further agreed that the parties will abide by and perform any award rendered by the arbitrator(s) and that a judgment on the arbitration award may be entered in any court of proper jurisdiction.
Without prejudice to any party or this arbitration provision, any of the parties may petition an appropriate court of competent jurisdiction for any temporary or preliminary relief, such as for an injunction or garnishment. The filing for such relief shall not be considered a waiver of the right to arbitration under this provision. Alternatively, pending arbitration, any provisional remedy which would be available from a court of law shall be available to the parties to this agreement from the arbitrators.
The foregoing provision should only be viewed as a starting point in drafting an arbitration provision. Each arbitration provision should be tailored to meet the specific purposes of the parties. For example, other clauses which address particular desires or objectives of the parties should be included, so as to make the arbitration more effective and beneficial for all parties. Among them, clauses: 1) specifying discovery rights; 2) mediation requirements; 3) escrow requirements, if applicable; 4) location of the arbitration; 5) requiring a written opinion by the arbitrators; 6) specifying allowance or nonallowance of appeal; 7) regarding attorneys’ fees and costs more specifically, including determination of entitlement to attorneys’ fees incurred in connection with any appeal; and 8) choice of law designation.
Conclusion
The current status of the law as to many issues in arbitration, and in particular, entitlement to attorneys’ fees for arbitration, causes unwanted and unnecessary litigation to creep into the arbitration process. Such result runs counter to the expectations of arbitration participants who believe that they had avoided becoming embroiled in the litigation process by agreeing to arbitration. Requiring a two-tiered system to determine entitlement and amount of attorneys’ fees incurred in arbitration is not only detrimental to parties involved in arbitration, but is also without a logical foundation.17 It is submitted that most arbitrators today are experienced attorneys and business people and are, therefore, as equally able to determine reasonable attorneys’ fees as are judges. Furthermore, having been involved with the arbitration process from the beginning and having heard all the evidence, arbitrators are in the best position to determine entitlement to and amount of attorneys’ fees. In contrast, a trial court has to determine entitlement to and amount of fees on far less knowledge of the facts of the case than that possessed by the arbitrators and will have to rely heavily on the attorneys’ perception of the arbitration. Alternatively, the trial court would have to have an extensive and expensive evidentiary trial on attorneys’ fees.
If, it is proper to assume, as the First District held in Gay that when a determination of prevailing party is called for in the arbitration process, the submission of such issue to the arbitrators carries with it the jurisdiction to determine fees, it then becomes logical to take the next step and conclude that under F.S. §682.11 arbitrators have jurisdiction to determine attorneys’ fees incurred in arbitration. In the next opportunity it has to address this issue, the Florida Supreme Court should firmly adopt this interpretation of §682.11 and eliminate the necessity of requiring a stipulation by the parties to confer jurisdiction upon arbitrators to determine entitlement to and amount of fees as part of the arbitration process.
However, until the Supreme Court resolves such issue, attorneys and parties to an agreement should control the outcome of the attorneys’ fees issue by incorporating an arbitration provision that specifically provides that the parties to the agreement waive their entitlement to have the circuit court determine fees and stipulate to arbitrators determining entitlement to attorneys’ fees and amounts. q
1 For a discussion of the role that the various alternative dispute resolution methods play among the Bar, see Richard C. Reuben, The Lawyer Turns Peacemaker, A.B.A. J. (Aug. 1996) 54.
2 United Securities General Life Co. v. Baner, 568 So. 2d 1321 (Fla. 2d D.C.A. 1990).
3 Southland Corp. v. Keating, 465 U.S. 1 (1984).
4 Tassinari v. Loyer, 189 So.2d 651 (Fla. 2d D.C.A. 1966); Glen Johnson, Inc. v. L.M. Howdeshell, Inc., 520 So. 2d 297 (Fla. 2d D.C.A. 1988); Buena Vista Construction Co. v. Carpenters Local Union, 472 So. 2d 1356 (Fla. 3d D.C.A. 1985); Cuevas v. Potamkin Dodge, Inc., 455 So. 2d 398 (Fla. 3d D.C.A. 1984).
5 Pierce v. J.W. Charles-Bush Securities, 603 So. 2d 625 (Fla. 4th D.C.A. 1992).
6 Fewox v. McCarthy, 556 So. 2d 419, 421 (Fla. 2d D.C.A. 1990).
7 Insurance Co. of North America v. Acousti Engineering Co. of Florida, et al., 579 So. 2d 77, 80 (Fla. 1991).
8 The Fourth District thought that its decision was in conflict with Fridman, 596 So. 2d 1128, because it believed that Fridman stood for the proposition that arbitrators do not have jurisdiction to determine entitlement to fees for the arbitration proceedings, even if the parties to the arbitration agree to let the arbitrators make this determination. The author represented Fridman in the appeal and wrote the briefs. No oral argument was allowed in the case. The facts in Fridman do not support such a conclusion since, in Fridman, no agreement existed between Citicorp and Fridman to confer jurisdiction upon the arbitrators to determine the fees incurred for the arbitration. Furthermore, Citicorp contended that, as a matter of law, Fridman was not entitled to recover any fees whatsoever incurred for the arbitration. Apparently, the Fourth District came to this conclusion because the arbitrators in Fridman were all attorneys, empaneled to determine entitlement to fees arising out of a foreclosure.
9 Dean Witter Reynolds, Inc. v. Wood, 676 So. 2d at 466. The district court, however, reversed the amount of the fees because the circuit court applied an improper contingency fee multiplier.
10 Robert Gay Construction, 680 So. 2d at 1126.
11 GCA, Inc., 696 So. 2d at 1233.
12 D.H. Blair, 697 So. 2d at 914.
13 Prudential Securities, Inc. v. Ruskin, 707 So. 2d 782 (Fla. 4th D.C.A. 1998).
14 Id. at 785.
15 Irena v. Arthur Murray Int’l, Inc., 833 F.2d 1472, 1476 (11th Cir. 1987); First Interregional Equity Corp. v. Houghton, 842 F. Supp. 105 (S.D.N.Y. 1994); and Prudential-Bache Securities, Inc. v. Depew, 814 F. Supp. 1081 (M.D. Fla. 1993).
16 See American Arbitration Ass’n, Drafting ADR Clauses: A Practical Guide (1994); Aibel and Friedman, Drafting Dispute Resolution Clauses In Complex Business Transactions, 51 Dispute Resolution Journal (Spring/March 1996).
17 In discussing and examining arbitration issues, other authors have raised the questionable logic and benefits of requiring a bifurcated procedure to determine attorneys’ fees incurred in arbitration. See Hala A. Sandridge, Recovering Attorneys’ Fees Incurred in Arbitration: The Unworkable Two Tiered System, 68 Fla. B.J. 80 (Nov. 1994); see also Michael A. Hayman, Pre-Arbitration “Status Quo” Injunctions, 72 Fla. B.J. 20 (March 1998); and Michael A. Hayman, Arbitration Agreements; Analyzing Threshold Choices Of Law And Arbitrability Questions, 70 Fla. B.J. 14 (Dec. 1996).
Frank Nussbaum is a shareholder with the firm of Sinclair, Louis, Heath, Nussbaum & Zavertnik, P.A., Miami. He received his J.D. from the University of Miami in 1965, and his LL.M. from the University of Miami in international law in 1973. He is a certified civil and family mediator in the circuit court and certified as a mediator in the U.S. District Court for the Southern District of Florida.
This column is submitted on behalf of the General Practice, Solo and Small Firm Section, Dykes C. Everett, chair, and David A. Donet, editor.
