308 So.3d 942
Fla.2020Background
- Portfolio Recovery Associates sued Eugene Ham III and Laura Foxhall in county court on a single count of common law account stated to collect unpaid credit card balances; Portfolio attached monthly billing statements but not the underlying credit-card contracts.
- The credit-card contracts (between the original creditor and each debtor) contained unilateral fee clauses allowing the creditor to recover collection costs, including attorney’s fees, if it hired outside counsel to collect the account.
- At trial the county court entered final judgments for the debtors for Portfolio’s failure to present admissible evidence and reserved ruling on attorney’s fees; the debtors sought fees under the contracts and § 57.105(7), Fla. Stat.
- The county court initially awarded fees but then, relying on a circuit decision, vacated those awards; the First District affirmed in Ham, holding account stated is not an action to enforce the contract and § 57.105(7) did not apply.
- The Second District in Bushnell reached the opposite result, holding an account stated action can be “with respect to” the contract under the inextricably intertwined test and thus trigger reciprocity under § 57.105(7).
- The Florida Supreme Court granted review, held that § 57.105(7) applies (construing “with respect to” broadly), approved Bushnell, quashed Ham, and awarded reciprocal fees to the debtors; Justice Muñiz dissented advocating a narrower reading of “with respect to.”
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a unilateral contractual attorney’s-fee clause is made reciprocal under § 57.105(7) when a debtor prevails in an account stated action | Debtors: § 57.105(7) applies because (1) the contracts contain fee provisions authorizing fees to enforce/collect the account, and (2) the debtors prevailed in an action “with respect to the contract” | Portfolio: An account stated action is not an action to enforce the contract; by suing on account stated (not on the contract) Portfolio cannot invoke the contract fee clause and reciprocity should not apply | Held: § 57.105(7) applies; the contracts’ fee clauses satisfy the first element and the account stated actions were “with respect to” the contracts, so debtors are entitled to reciprocal fees |
| Proper scope of the statutory phrase “with respect to the contract” (broad vs. narrow construction) | Debtors: “With respect to” should be read broadly ("respecting"/"relating to") so non-contract claims closely tied to the contract fall within the statute | Portfolio: “With respect to” should be read narrowly ("about"/"regarding"), limited mainly to contract actions; otherwise statute would be overbroad and unpredictable | Held: The Court adopted the broader meaning—"with respect to" is inclusive and covers account stated claims closely related to the contract; the dissent urged a narrower reading and strict construction but was not adopted |
Key Cases Cited
- Bushnell v. Portfolio Recovery Assocs., LLC, 255 So. 3d 473 (Fla. 2d DCA 2018) (held account stated claim could be “with respect to” credit-card contract under § 57.105(7))
- Ham v. Portfolio Recovery Assocs., LLC, 260 So. 3d 450 (Fla. 1st DCA 2018) (held account stated claim not an action to enforce contract; reciprocal fees denied)
- Caufield v. Cantele, 837 So. 2d 371 (Fla. 2002) (inextricably intertwined test for when tort/other claims arise out of a contract)
- Tylinski v. Klein Automotive, Inc., 90 So. 3d 870 (Fla. 3d DCA 2012) (declined fees under separate financing agreement where suit proceeded under different contract)
- Lamar, Archer & Cofrin, LLP v. Appling, 138 S. Ct. 1752 (2018) (interpreting “respecting” broadly in statutory context)
- Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992) (ordinary meaning of “relating to” is broad)
- Farley v. Chase Bank, U.S.A., 37 So. 3d 936 (Fla. 4th DCA 2010) (explaining elements of account stated require proof of a business relationship and prior transactions)
- Gershuny v. Martin McFall Messenger Anesthesia Prof. Ass’n, 539 So. 2d 1131 (Fla. 1989) (statutory attorney’s-fee provisions must be strictly construed)
- Lopez v. Hall, 233 So. 3d 451 (Fla. 2018) (standard of review: statutory interpretation is de novo)