Background
Hidden Valley Corporation granted BellSouth Mobility and its successors an easement to use part of an adjoining property for telecommunications purposes. The easement agreement provided that, if either party filed suit to enforce the agreement, the prevailing party could recover reasonable attorney’s fees and court costs. After later transfers, RJ’s International Trading, LLC owned the burdened property, while Crown Castle South, LLC held rights under the easement.
RJ’s sued Crown Castle in federal court after Crown Castle excavated beyond the easement’s boundaries and installed underground fiber-optic cables. A jury awarded RJ’s $1 for breach of the easement agreement and $40,000 for trespass. The district court denied RJ’s subsequent fee motion, concluding that the fee provision did not touch and concern the land and therefore did not bind the successors. On appeal, the Eleventh Circuit rejected RJ’s contention that it was a contractual “party” and certified to the Florida Supreme Court whether the fee provision was a real covenant running with the land.
The Court’s Holding
The Florida Supreme Court answered the certified question in the negative. A covenant runs with the land under Florida law only if the original parties intended to bind successors, the successors had notice, and the covenant touches and concerns the land. Addressing the dispositive third element, the court held that an obligation touches and concerns land when it is sufficiently connected to how the land is used, occupied, or enjoyed.
The prevailing-party fee provision was too attenuated from the property to satisfy that standard. It neither regulated use of the land nor determined who could occupy or enjoy it, and it did not alter property rights or remedies. Instead, it became relevant only after a dispute had been resolved and merely allocated litigation costs. Accordingly, the provision could not run with the land or bind Crown Castle as a successor.
The court declined to extend Hayslip v. U.S. Home Corp., which held that a deed’s arbitration provision ran with the land. Unlike the arbitration requirement in Hayslip, which supplied the means for resolving physical construction defects and obtaining repairs, the fee provision here operated only after resolution of the underlying property dispute. Justices Barrios and Tanenbaum concurred in the result but advocated a stricter rule requiring a covenant to affect the physical use of land.
Key Takeaways
- A prevailing-party attorney’s-fee provision in an easement agreement does not run with the land under Florida law.
- To touch and concern land, a covenant must be sufficiently connected to the land’s use, occupation, or enjoyment; a merely tangential financial connection is insufficient.
- A fee-shifting provision allocates litigation costs after the merits are resolved and does not itself regulate property rights, use, or remedies.
Why It Matters
The decision limits successors’ exposure to contractual fee obligations contained in easement instruments. Recording such a provision within a property agreement does not, by itself, make the obligation enforceable by or against later owners or interest holders.
The ruling also confines Hayslip to materially different circumstances involving arbitration of physical defects in property. Florida courts evaluating other litigation-related clauses must focus on the clause’s own relationship to the use, occupation, or enjoyment of the land rather than its placement within an instrument concerning real property.