260 So. 3d 450
Fla. Dist. Ct. App.2018Background
- Portfolio Recovery Associates sued Eugene Ham and Laura Foxhall in small claims on an account‑stated theory to collect unpaid credit card balances; complaints attached billing statements but did not plead or attach the underlying written credit card contracts or request fees.
- At trial the county court found Portfolio failed to present admissible evidence and entered judgments for the debtors, reserving attorney’s fees.
- Debtors moved for reciprocal attorney’s fees under Fla. Stat. §57.105(7), relying on unilateral fee provisions in their underlying credit contracts.
- The trial court initially awarded substantial fees to the debtors, but granted Portfolio’s new‑trial motion after an intervening circuit decision (Gruenwald) and then denied fees.
- The county court certified a question of great public importance: whether an assignee’s account‑stated action to collect a credit‑card debt arising from a written contract triggers reciprocal fees under §57.105(7) when the debt includes late fees and finance charges.
- The First DCA affirmed the denial of fees, holding an account‑stated claim is independent of the underlying credit agreement and thus does not constitute an action "with respect to the contract" under §57.105(7).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an account‑stated action by an assignee to collect credit‑card debt triggers reciprocal attorney’s fees under §57.105(7) | Debtors: account‑stated action arises from the credit contract (would not exist but for it), so the contract’s unilateral fee clause becomes reciprocal under §57.105(7) | Portfolio: account‑stated is a separate cause of action not based on the written contract; Portfolio chose that theory so §57.105(7) does not apply | Held: No — account‑stated is independent of the written contract, so §57.105(7) does not provide reciprocal fees |
| Whether inclusion of previously accrued late fees/finance charges makes the account‑stated claim "with respect to the contract" | Debtors: recovering amounts that derive from contract terms makes the claim intertwined with the contract, triggering §57.105(7) | Portfolio: the origin of underlying charges is irrelevant to account‑stated elements; liability is based on a new promise to pay the stated balance | Held: No — character of claim depends on the pleaded cause of action, not the genesis of individual charge items |
| Whether a plaintiff’s election of a noncontractual remedy can be used to force reciprocal contractual fee exposure | Debtors: mutuality should apply because the contract created the debt | Portfolio: allowing fees would undermine plaintiff’s choice of remedy and expand statutory scope | Held: Held for Portfolio — plaintiff’s election of account‑stated means fees in the underlying contract are not triggered |
| Whether Caufield v. Cantele controls (i.e., inextricably intertwined doctrine applies) | Debtors: rely on Caufield to show tort/claim that would not exist but for the contract is "with respect to" the contract | Portfolio: distinguishable because Caufield involved a tort claim requiring contract proof; account‑stated does not | Held: Caufield distinguished; inextricable‑intertwining not found for account‑stated claims |
Key Cases Cited
- Price v. Tyler, 890 So. 2d 246 (Fla. 2004) (attorney’s fees allowed only by statute or contract)
- State Farm Fire & Cas. Co. v. Palma, 629 So. 2d 830 (Fla. 1993) (American Rule—fees only when authorized)
- Everett v. Webb Furniture Co., 124 So. 278 (Fla. 1929) (elements and nature of account‑stated cause of action)
- Farley v. Chase Bank, U.S.A., 37 So. 3d 936 (Fla. 4th DCA 2010) (account stated enforceable without showing underlying contract items)
- Caufield v. Cantele, 837 So. 2d 371 (Fla. 2002) (inextricably intertwined doctrine where tort claim arose from contractual duty)
- Tylinski v. Klein Automotive, Inc., 90 So. 3d 870 (Fla. 3d DCA 2012) (denial of fees where plaintiff sued under a contract that did not contain a fee provision despite existence of a separate finance contract that did)