Family Law Fees–The High Points and the Current State of the Law
The award of fees in family law matters is a rapidly evolving legal issue. Much has changed, although admittedly much remains the same. Currently, it is an awareness of the nuances in the law that make the difference. Although need and ability to pay are always the starting point in fee shifting matters, this mantra does not resolve all issues. It is the nuances that this overview seeks to impart. mastering these nuances, the practitioner will advance the client’s cause in recovering or defending against fee awards, and, in the process, the practitioner will enhance the ability to collect a reasonable fee from the opposing party and from the practitioner’s own client.
Results Really Do Matter
Remember James Fox Miller’s insightful columns on fees way back in 1991? The essential theme of the two columns was that billable hours are the curse of the legal profession. Mr. Miller reasoned that billable hours are a curse because they create a misdirected focus on how many hours are put into a matter, rather than the fact that it is what is put into each hour that really matters.
Last year, the Florida Supreme Court, in Rosen v. Rosen, 696 So. 2d 697 (Fla. 1997), came to a similar conclusion. In the most important family law decision since Canakaris v. Canakaris, 382 So. 2d 1197 (Fla. 1980), the Florida Supreme Court in Rosen resolved the conflict in the districts and held that a trial court can use a “results obtained” or “prevailing party” standard in awarding attorneys’ fees and costs.1 The Rosen court ruled that need and ability to pay still are the primary elements in determining entitlement to, and the amount of, any attorneys’ fees and costs award in Florida. Having said that, however, the Florida court ruled that all relevant circumstances are to be considered by the trial court in awarding fees and costs pursuant to F.S. §61.16,2 inclusive of:
the scope and history of the litigation; the duration of the litigation; the merits of the respective positions; whether the litigation is brought or maintained primarily to harass (or whether a defense is raised mainly to frustrate or stall); and the existence and course of prior or pending litigation.3
In awarding fees in family law matters, the trial court first is to determine the lodestar, or the reasonable number of hours times the reasonable hourly rate, as a starting point in determining a reasonable fee.4 Then, the trial court is to consider all the circumstances surrounding the suit in determining the ultimate award of fees pursuant to F.S. §61.16.5 If the action is frivolous, the request for fees may be denied altogether.6 The Florida Supreme Court emphasized that trial judges would have “wide leeway to work equity” in awarding fees in family law cases.7
Obviously, Rosen is of immense import. The family law practitioner who best serves his or her client will be even more mindful of the trial judge’s ability to assess the overall reasonableness of the fee request at the conclusion of the case. The case, therefore, should be quickly assessed, settlement offers should be made quickly, and the efficacy of discovery should be considered at the onset, all with this standard in mind. The party with the greater financial resources should be even more mindful of this standard, and seek to minimize the client’s exposure to fees by streamlining the litigation, and searching for methods to resolve the case without undue expense.
Rosen is simply another aspect of the trend in family law matters which seeks to reduce unnecessary fees and costs. Witness the Wrona v. Wrona, 592 So. 2d 694 (Fla. 2d DCA 1991), decision when it noted that “trial courts should understand that they have authority to take steps designed to avoid needless expense during a divorce proceeding. . . . ”8 The Wrona court ruled that one method trial courts can use to punish the party causing avoidable litigation expenses is to take such expenses into account in awarding attorneys’ fees and costs at the conclusion of the matter.9 Obviously, Wrona is simply a foreshadowing of Rosen.
Likewise, in Dralus v. Dralus, 627 So. 2d 505 (Fla. 2d DCA 1993), the Second District Court of Appeal ruled that a litigant “cannot be required to pay all or part of an unreasonable fee.”10 In reversing an award of attorneys’ fees and costs, the Dralus court noted that “[t]he case presented no serious financial issues and no new or unique issues of law.”11 Again, the same type of result seen in Rosen. Thus, the results expected should be examined with a critical eye every step of the way in a family law matter.
The Big Picture Matters— Effect of Disparity in Income, Assets on Award
The purpose of F.S. §61.16 is to ensure that each party has a similar ability to obtain competent legal counsel.12 If the parties have an equal ability to pay fees and costs (and, parenthetically, no other Rosen equity is present), it is error to award either party fees and costs from the other.13 If a substantial disparity in income or assets exists (and, parenthetically, no other Rosen equity is present), it is error not to award 100 percent of fees and costs.14 Having said this, however, it is error to award 100 percent of fees based solely on disparity in income if a party receives a substantial award of assets.15 If the trial court’s equitable distribution and support awards have roughly equalized the parties’ relative financial circumstances, the parties each have a similar ability to pay their attorneys’ fees and costs, and any award is error.16 Consequently, it is the overall financial circumstances of the parties that is paramount, and, if these overall financial circumstances are substantially equal, an award of fees and costs is error (and if they are not substantially equal it is error to deny a fee and costs award).17
Temporary Fees Under Same Standard as Permanent Fees
In Nichols v. Nichols, 519 So. 2d 620 (Fla. 1988), the Florida Supreme Court ruled that the standard for an award of temporary fees is the same as for an award of fees at the conclusion of the proceedings.18 Thus, it is error for the trial court to award only a partial award of the temporary fees and costs necessary as it indefinitely postpones compensation to the impecunious spouse.19 The temporary award must be consistent with the evidence adduced, and the trial court cannot ignore uncontradicted evidence.20 Thus, if the evidence justifies a temporary award of fees to your client, you should move for the award as soon as you know enough about the case to cogently set forth a roadmap to the trial court as to why the temporary fees are needed.
and Cost Records
It is essential that detailed time slips and cost records make sense, as you can only recover actual time and costs from an opponent.21 Keep these records with the consideration that some day a trial court or an appellate court may actually review them in detail.22
Travel Time to
You can recover travel time to outlying communities if the client had a reasonable reason for selecting counsel from another community.23
Charging Lien Provision
in Retainer Agreement
To ensure you are ultimately paid, put a charging lien provision in your retainer agreement.24
Request to Tax Costs
F.S. §61.16 authorizes the award of a broader scope of costs than under the statewide uniform guidelines for taxation of costs in civil actions.25
Pre-judgment and Post-judgment Interest Accrual
Attorneys’ fees and costs accrue interest from the date of entitlement determination and not from date of award, and post-judgment interest accrues on the pre-judgment amount.26
Expert fees are recoverable as a taxable cost.27
Client Deductibility of Fees
Generally, the attorneys’ fees and costs for obtaining a divorce are not deductible, as they are personal expenses.28 Any fees incurred related to obtaining tax advice are deductible.29 Also, the fees related to the production or collection of income, including those related to obtaining an alimony award or collecting alimony arrearages, are deductible.30
The judiciary reads Florida Rule of Professional Conduct 4-1.5(f)(3)31 restrictively to prohibit contingency fees in any dissolution of marriage matter even though this is not what the express language of the rule prohibits.32 The better practice, if your talents justify substantial fees, is to charge nonrefundable retainers and predetermined fees in excess of hourly rates upon the occurrence of specific circumstances, i.e., bonus of specific amount in the event case is settled prior to trial or subsequent to trial.33
Family law matters typically involve a high degree of tension. Mindfulness of the above-referenced rules of law can assist in reducing that tension to some degree as it ensures that both you and your client are not left with unfulfilled fee expectations at the conclusion of the case. The recovery of fees, or the successful defense of an application for fees, can go a long way toward creating a happy client at the conclusion of your case. Thus, remember above all else that results do count, and be ever mindful of the other nuances referenced above along the way. q
1 Rosen, 696 So. 2d at 698.
2 The material language of Fla. Stat. §61.16 is: “The court may from time to time, after considering the financial resources of both parties, order a party to pay a reasonable amount for attorney’s fees, suit money, and the cost to the other party of maintaining or defending any proceeding under this chapter, including enforcement and modification proceedings and appeals. . . . ”
In Rosen, the Florida Supreme Court ruled that §61.16 should be liberally construed to achieve the statutory mandate of achieving equity. Fla. Stat. §61.011.
3 Rosen, 696 So. 2d at 700 (emphasis added). See also Rosen, cases cited at page 700; Cibula v. Cibula, 578 So. 2d 519 (Fla. 4th D.C.A. 1991) (fees and costs awarded former wife for nonmeritorious modification action filed by former husband); Mettler v. Mettler, 569 So. 2d 496, 498 (Fla. 3d D.C.A. 1990) (fees may be allocated to discourage “vexatious” litigation); Meloan v. Coverdale, 525 So. 2d 935 (Fla. 3d D.C.A. 1988), rev. den., 535 So. 2d 935 (Fla. 1988) (citing decisions where equity permits trial courts to consider inappropriate conduct of litigants which increased litigation expenses; Jaffee v. Jaffee, 394 So. 2d 443 (Fla. 3d D.C.A. 1981) (attorneys’ fees and costs properly awarded against former husband in meritless modification of alimony claim brought despite language in agreement waiving such claims).
4 Rosen, 696 So. 2d at 701; see Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985).
5 Rosen, 696 So. 2d at 701.
8 Wrona, 592 So. 2d at 697.
9 Id. at 696 n.6.
10 Dralus, 627 So. 2d at 506–08.
11 Id. at 506.
12 Canakaris, 382 So. 2d at 1204.
13 Waters v. Waters, 461 So. 2d 976 (1st D.C.A. 1984).
14 Nisbeth v. Nisbeth, 568 So. 2d 461 (Fla. 3d D.C.A. 1990); Lochridge v. Lochridge, 526 So. 2d 1010, 1012 (Fla. 2d D.C.A. 1988); Blackburn v. Blackburn, 513 So. 2d 1360 (Fla. 2d D.C.A. 1987).
15 Stoler v. Stoler, 679 So. 2d 837 (Fla. 2d D.C.A. 1996); Green v. Green, 646 So. 2d 210 (Fla. 2d D.C.A. 1994).
16 Platzer v. Platzer, 626 So. 2d 690 (Fla. 4th D.C.A. 1993); Murray v. Murray, 598 So. 2d 310 (Fla. 2d D.C.A. 1992); Kirkland v. Kirkland, 618 So. 2d 295 (Fla. 1st D.C.A. 1993); Benekos v. Benekos, 557 So. 2d 942 (Fla. 2d D.C.A. 1990).
17 See Straley v. Frank, 585 So. 2d 334 (Fla. 2d D.C.A. 1991); Stagman v. Fontenot, 532 So. 2d 44 (Fla. 1st D.C.A. 1988); Nisbeth v. Nisbeth, 568 So. 2d 461 (Fla. 3d D.C.A. 1990).
18 Nichols, 519 So. 2d at 622.
19 Martin v. Martin, 611 So. 2d 1357 (Fla. 4th D.C.A. 1993); Dussich v. Dussich, 449 So. 2d 395 (Fla. 4th D.C.A. 1984).
20 Fitterman v. Fitterman, 502 So. 2d 8 (Fla. 4th D.C.A. 1986).
21 Safford v. Safford, 656 So. 2d 485 (Fla. 2d D.C.A. 1994); Dralus v. Dralus, 627 So. 2d 505 (Fla. 2d D.C.A. 1993); Haines v. Sophia, 711 So. 2d 209 (Fla. 4th D.C.A. 1998).
22 See generally Haines, 711 So. 2d 209.
23 Wright v. Wright, 577 So. 2d 1355 (Fla. 1st D.C.A. 1991); but see Chandler v. Chandler, 330 So. 2d 190 (Fla. 2d D.C.A. 1979) (travel time not recoverable).
24 See generally Sinclair, Louis, Siegel Heath, Nussbaum & Zavertnik v. Rojas, 529 So. 2d 749 (Fla. 3d D.C.A. 1988).
25 Stoler, 679 So. 2d 837; Payne v. Payne, 481 So. 2d 551 (Fla. 2d D.C.A. 1986).
26 Quality Engineered Installation, Inc. v. Higley South, Inc., 670 So. 2d 929 (Fla. 1996); Stoler, 679 So. 2d 837.
27 Traveiso v. Traveiso, 474 So. 2d 1184 (Fla. 1985).
28 I.R.C. §262.
29 I.R.C. §212(3); Rev. Rul. 72-545.
30 I.R.C. §212(1); for an excellent general treatise on tax issues see M. Frumkes and R. Steinberg, Florida Divorce Taxation Made Easy (West 1983).
31 Fla. R. Prof. Conduct 4-1.5(f)(3) provides: “[A] lawyer shall not enter into an arrangement for, charge or collect. . . any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of alimony or support, or a property settlement in lieu thereof.”
Query how charging a contingency fee in a domestic relations matter when alimony is not an issue is triggered by the above-cited rule.
32 See King v. Young, Beckman, Berman & Karpf, 709 So. 2d 572 (Fla. 3d D.C.A. 1998).
33 Nonrefundable retainers, however, must also be reasonable under the circumstances. See Fla. R. Prof. Conduct 4-1.5(a).
Mark A. Sessums is a partner in the law firm of Frost, O’Toole and Saunders, P.A., where he practices marital and family law. He is a board certified marital and family lawyer. Mr. Sessums received his J.D., with honors, from the University of Florida.
This column is submitted on behalf of the Family Law Section, Jane L. Estreicher, chair, and Sharon O. Taylor, editor.