Background
RAM Investments of South Florida, Inc. sued Wilfredo A. Diaz in Miami-Dade Circuit Court seeking an injunction to enforce the terms of a non-competition agreement between the parties. The non-compete agreement included a provision entitling the prevailing party to recover attorney’s fees.
The trial court denied RAM’s motion for a temporary injunction and ultimately entered a final judgment in Diaz’s favor on the merits of the dispute. However, the trial court denied Diaz’s subsequent motion seeking to recover prevailing party attorney’s fees and costs, despite his victory in the underlying action.
The Court’s Holding
The Third District Court of Appeal reversed the trial court’s denial of Diaz’s entitlement to attorney’s fees and costs. The court held that because Diaz was the prevailing party in the underlying litigation brought on the non-compete contract, he is entitled to recover attorney’s fees pursuant to the prevailing party provision in the agreement itself.
The court also held that Diaz is entitled to recover costs under Florida Statute § 57.041(1). The opinion relied on the precedent established in Fed. Vending, Inc. v. Steak & Ale of Fla., Inc., 687 So. 2d 1366 (Fla. 4th DCA 1997). The case was remanded to the trial court with instructions to determine the specific amount of fees and costs to which Diaz is entitled.
Key Takeaways
- A party who prevails in litigation involving a contract with a prevailing party attorney’s fees clause is entitled to recover those fees.
- The prevailing party doctrine applies to non-competition agreement disputes decided in favor of the defendant.
- Prevailing party cost recovery under Florida law is available in addition to contractual attorney’s fees provisions.
- Trial courts must calculate and award the full measure of fees and costs once the prevailing party’s entitlement is established.
Why It Matters
This decision clarifies that businesses and individuals who successfully defend against non-compete enforcement actions can recover their attorney’s fees and costs when the underlying contract includes a prevailing party fee-shifting clause. For defendants in non-compete litigation, this ruling reinforces the availability of fee recovery as both a financial remedy and a potential deterrent against frivolous enforcement attempts.
The decision also reinforces Florida courts’ commitment to enforcing fee-shifting provisions in commercial contracts according to their terms, requiring trial courts to award fees to prevailing parties rather than denying recovery in their discretion.