Effective Teleservices, Inc. v. Smith, 132 So. 3d 335

Background

Employee was president/COO under an employment agreement and a business agreement; he took medical leave and was later terminated.
Employee sued company and board chair for breach of the employment agreement, FMLA violation (against company), and breach of the business agreement, breach of fiduciary duty, and fraud in the inducement (against board chair).
Trial court struck defendants’ pleadings for discovery violations, entered default liability, and a damages-only trial awarded large judgments against both defendants; that liability judgment was affirmed on appeal.
Employee moved for attorneys’ fees and costs based on contractual fee provisions (employment agreement and business agreement) and statutory FMLA fees; he sought fees against both defendants for all work, arguing claims were inextricably intertwined.
At the fee hearing employee’s counsel did not contemporaneously allocate time by claim, admitted inability to apportion claim-by-claim, but argued the claims arose from a common core of facts; the trial court awarded joint and several fees and costs and found alter-ego liability.
On appeal the Fourth District reviewed whether the claims were inextricably intertwined (affecting fee entitlement and apportionment) and whether costs (including expert costs) were properly apportioned between defendants.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether claims were "inextricably intertwined" so allocation of fees is unnecessary	Claims arise from a common core of operative facts and related legal theories; full fees warranted against both defendants	Claims arose at different times, under different theories, against different parties, and sought different remedies — therefore separate and distinct	Claims are separate and distinct; not inextricably intertwined under Current Builders/Anglia Jacs test
Whether employee satisfied burden to allocate fees to fee-authorizing claims	Time was kept on a timeline; allocation after judgment was sufficient; intertwined nature made apportionment infeasible	Counsel failed to allocate time to fee-authorizing claims; records are inadequate	Employee failed to meet burden to apportion fees; trial court’s fee award must be vacated and remanded for proper allocation
Whether supervising attorneys’ testimony sufficed (vs. requiring every timekeeper to testify)	Supervising attorneys had personal knowledge and reviewed contemporaneous records; full testimony unnecessary	(Defendants argued more testimony might be required)	Testimony from supervising attorneys was sufficient; trial court did not err in declining to require all timekeepers to testify
Whether costs (expert fees) should be apportioned between defendants	Employee argued costs supported jointly and severally	Defendants argued some expert costs related only to claims against one defendant	Certain expert costs must be apportioned to the defendant whose claim the expert addressed; cost judgment reversed and remanded for apportionment

Key Cases Cited

Anglia Jacs & Co. v. Dubin, 830 So.2d 169 (Fla. 4th DCA 2002) (defines "inextricably intertwined" and discusses when full fees may be awarded)
Centex-Rooney Constr. Co. v. Martin County, 725 So.2d 1255 (Fla. 4th DCA 1999) (awarding fees where claims involved a common set of facts and apportionment was impractical)
Current Builders of Florida, Inc. v. First Sealord Surety, Inc., 984 So.2d 526 (Fla. 4th DCA 2008) (two-part rule: analyze relationship between claims; award full fee only when common core of facts and related legal theories exist)
Van Diepen v. Brown, 55 So.3d 612 (Fla. 5th DCA 2011) (moving party must show portion of effort expended on fee-authorizing claims; vague time records preclude fees)
Rosen Bldg. Supplies, Inc. v. Krupa, 927 So.2d 899 (Fla. 4th DCA 2005) (when claims are not inextricably intertwined, trial court must deduct fees and costs attributable to unsuccessful claims)