Failure to Settle Not “Vexatious” in Fourth District

In a recent opinion by the Fourth District Court of Appeals, the court affirmed a trial court order reducing an award of attorneys fees to a wife because of her refusal to accept a reasonable settlement offer. Hallac v. Hallac, No. 4D10-4450, 37 Fla. L. Weekly D517a (Fla. 4th DCA February 29, 2012). Interestingly, however, the appellate court reversed the trial court’s award of attorney’s fees to the husband for the same conduct. Why? Citing Rosen v. Rosen, 696 So. 2d 697 (Fla. 1997), the court acknowledged that the trial court may consider results obtained in making a fee award pursuant to Fla. Stat. s. 61.16. However, when assessing fees against a party as a sanction, the failure to accept a settlement, without other vexatious conduct, does not justify an award of fees under Chapter 61.

While attorneys’ fees are available in domestic cases based upon a showing of need, financial need is not the only factor to be considered. The Florida Supreme Court has said that, under s. 61.16, the financial resources of the parties are the primary factor to be considered. However, other relevant circumstances to be considered include: 1) the scope and history of the litigation; 2) the duration of the litigation; 3) the merits of the respective positions; 4) whether the litigation is brought or maintained primarily to harass (or whether a defense is raised mainly to frustrate or stall); and 5) the existence and course of prior or pending litigation. Rosen, 696 So.2d at 697.

Prior to Rosen, the First District held in Aue vs. Aue, 685 So. 2d 1388 (Fla. 1st DCA 1997), that “there is no authority for denying attorney’s fees in dissolution cases solely for the failure to accept and offer of settlement,” and bolstered the point by noting that Florida’s offer of judgment statute specifically excluded dissolution of marriage proceedings from its purview. In light of Aue, the Fourth District held that Rosen allowed for a dimunition of a fee award based “uon the results obtained,” and affirmed that part of the trial court’s order. However, with respect to the award of fees to the husband, who made no showing of need under s 61.16, the court held that Rosen did not permit such an award despite the determination that the wife’s refusal to accept the husband’s final settlement offer was so unreasonable that litigation beyond the offer was baseless and without merit.

The Fourth District pointed out that Rosen gives the courts discretion to deny fees to the spouse for vexatious conduct, but stated disagreement with the Fifth District, which has interpreted Rosen as authorizing an award of attorneys fees against a spouse for similar conduct, even where the recipient spouse has the greater ability to pay. (See Elliott v. Elliott, 867 So. 2d 1198 (Fla. 5th DCA 2004)(“We disagree with Elliot to the extent that it suggests that Rosen can be applied to an award of attorney’s fees in favor of the spouse with the greater financial ability to pay.”) The Fourth District acknowledged that an award of fees to the spouse with the greater ability to pay can be granted by the trial court, but not under Rosen. Rather, such fees are awarded under Bitterman v. Bitterman, 714 So. 2d 356 (Fla. 1998), a case that recognized the trial court’s inherent authority to prevent inequitable conduct by awarding fees against a party who has exhibited egregious conduct or acted in bad fatih. To make a fee award under Bitterman, the court must make an express finding of bad faith and include facts justifying the award. Moakly v. Smallwood, 826 So. 2d 221 (Fla. 2002).

Because the trial court in Hallac made no finding of bad faith or other egregious conduct other than the wife’s refusing to accept the final settlement offer, the Fourth District reversed the award of attorney’s fees against the wife in favor of the husband. Practitioners should note: this case distinguishes the analysis required for determining a fee award under Fla. Stat. s. 61.16 from a fee award granted as a sanction for vexatious conduct.

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