CodeVentures, LLC v. Vital Motion Inc.
1:20-cv-21574
S.D. Fla.Oct 19, 2021Background
- In Jan. 2019 CodeVentures loaned Vital Motion $100,000; Vital issued a convertible promissory note that matured Jan. 10, 2020 and went unpaid.
- CodeVentures sued Vital (Count I: breach of promissory note) and Vital plus five individual defendants (Counts II–IV: fraud-based tort claims). Defendants moved to dismiss; CodeVentures amended the complaint.
- CodeVentures served a Proposal for Settlement (PFS) on Vital on Aug. 19, 2020 for $94,198 (not accepted); later obtained partial summary judgment and a final judgment against Vital for $122,421.72 on Count I.
- Individual Defendants served a joint PFS on Jan. 21, 2021 for $100 (apportioned equally) to resolve the Tort Claims (not accepted); courts dismissed Counts III & IV and dismissed or sustained parts of Count II as to various defendants.
- Both sides moved for fees under Fla. Stat. § 768.79: CodeVentures sought fees/costs from Vital; Individual Defendants sought fees for defending the Tort Claims. The magistrate recommended partial awards after hearing and billing review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement to fees under Fla. Stat. § 768.79 for CodeVentures’ Aug. 19, 2020 PFS | PFS complies with § 768.79 and CodeVentures recovered >25% more than its offer, so fees from the date of filing are recoverable | Vital did not dispute entitlement but sought reductions on specific entries and costs | Court found entitlement established (judgment >25% of offer) but reduced the fee award for specific, justified reasons; recommended $31,297.50 in fees awarded to CodeVentures. |
| Recoverability of fees for pre-PFS work and work on Tort Claims | All reasonably incurred fees after the date of the demand are recoverable; tort and note work were intertwined | Pre-PFS time is not recoverable; fees spent prosecuting dismissed Tort Claims are not awardable | Court disallowed pre-PFS entry preparing the PFS and disallowed fees attributable to Tort Claims that failed §768.79 favorability requirements (applying Scherer); specific line-item reductions totaling $20,432.50+ were recommended. |
| Effect of block-billing, vague or non-allocable entries on fee amount | Billing descriptions were adequate; overall hours reasonable | Block-billed and vague entries prevent meaningful allocation between claims and warrant reductions | Court applied reductions for block/vague entries (used a 50% cut for many entries and other specific reductions), citing Eleventh Circuit and district precedent; contributed to the reduced award. |
| Recoverability of litigation costs claimed by CodeVentures | As prevailing party, CodeVentures sought $5,129.68 in costs | Vital objected to most costs for lack of detail and statutory/nonstatutory basis; also noted Local Rule noncompliance | Court denied nearly all costs due to failure to comply with Local Rule 7.2/7.3 and failure to show costs were recoverable; awarded only $635.60 (filing fee and process service). |
| Entitlement of Individual Defendants to fees under their $100 PFS | Individual Defs. argued PFS valid and claims were inextricably intertwined so fees are not allocable away | CodeVentures argued the nominal $100 offer was made in bad faith and favorability not met as to all defendants (Lovenheim dismissal) | Court held CodeVentures failed to prove bad faith; the joint PFS complied with rules (apportioned amounts); claims were inextricably intertwined so allocation infeasible; awarded Individual Defs. $16,754.50. |
Key Cases Cited
- Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (U.S. 1975) (default rule that prevailing party is not entitled to attorney’s fees absent statute)
- McMahan v. Toto, 311 F.3d 1077 (11th Cir. 2002) (Florida § 768.79 treated as substantive and applies under Erie; offeree bears burden to prove bad faith)
- Diamond Aircraft Indus., Inc. v. Horowitch, 107 So. 3d 362 (Fla. 2013) (strict construction of § 768.79 and Rule 1.442)
- Scherer Const. & Eng’g of Cent. Fla., LLC v. Scott P’ship Architecture, Inc., 151 So. 3d 528 (Fla. 5th DCA 2014) (fees not awardable for counts voluntarily dismissed; favorability requirement applies to each count)
- Norman v. Housing Auth. of City of Montgomery, 836 F.2d 1292 (11th Cir. 1988) (billing vagueness impedes reasonableness review and may justify reductions)
- Signal Hill Gold Course, Inc. v. Womack, 309 So. 3d 707 (Fla. 1st DCA 2020) (intertwined claims require allocation unless infeasible)
- First Baptist Church of Cape Coral v. Compass Const., Inc., 115 So. 3d 978 (Fla. 2013) (alternative fee agreements can be enforced when calculating fee awards)