MERRILL LYNCH, PIERCE, FENNER AND SMITH, INC., APPELLANT,
v.
LEROY RITCHEY AND DOROTHY RITCHEY, APPELLEES
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Merrill Lynch obtained rescission of a stock transaction due to its own error in identifying the stock, but the trial court offset its recovery with the Ritcheys' attorney's fees. The appellate court affirmed the rescission but reversed the attorney's fee offset, holding that absent contract or statute, attorney's fees cannot be awarded as costs.
The trial court erred in allowing the setoff against Merrill Lynch's recovery for the Ritcheys' attorney's fees. Absent contractual or statutory mandate, attorney's fees cannot be taxed as costs.
[1] Attorneys' fees cannot be taxed as costs unless authorized by contract or legislative authority.
[2] A trial court errs in allowing a setoff for attorney's fees in the absence of a contractual or statutory mandate.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“This court is committed to the doctrine that attorneys' fees cannot be taxed as costs in any cause unless authorized by contract or legislative authority.”
Establishes the foundational Florida rule prohibiting attorney's fee awards absent contractual or statutory authorization
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Join FLexlaw to unlock all legal intelligenceMerrill Lynch mistakenly sold the Ritcheys shares of United Utilities of Kentucky stock when it intended to quote Kentucky Utilities stock. The Ritche…
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HOBSON, Acting Chief Judge.
Appellant Merrill Lynch, Pierce, Fenner and Smith, Inc. (Merrill Lynch) was plaintiff below in an action for rescission. Although Merrill Lynch was successful in obtaining rescission of a transaction between the parties, the trial court granted a setoff against appellant’s recovery in the amount of $3,969.23 for the purpose of paying appellees’ attorney’s fees. Merrill Lynch appeals only that portion of the final judgment awarding the setoff for attorney’s fees.
Inasmuch as these parties are before us for the second time, a brief history is in order.1 Leroy and Dorothy Ritchey telephoned an employee of Merrill Lynch and arranged for the sale of 500 shares of United Utilities of Kentucky common stock. After receiving a quote on the value of the stock from the employee, the Ritcheys delivered the stock certificate to Merrill Lynch and subsequently received a check in the amount of $11,229.74 in connection with the sale of the stock.
The stock actually owned by the Ritcheys was worthless. Merrill Lynch had erroneously contemplated a transaction in Kentucky Utilities common stock instead of United Utilities of Kentucky common stock. When Merrill Lynch discovered its error, it demanded that the funds be returned. The Ritcheys refused and Merrill Lynch instituted a rescission action. In that action, Merrill Lynch obtained a summary judgment which ordered a rescission of the transaction. On appeal, this court reversed, holding that if the Ritcheys were not aware of the error and if the mistake was fully due to the inexcusable negligence of Merrill Lynch, these factors might preclude the equitable remedy of rescission.
On remand, the lower court found that the mistake was not due to Merrill Lynch’s inexcusable neglect. Rescission of the transaction was again decreed but the court granted a setoff against Merrill Lynch’s recovery for the purpose of paying the Rit-cheys’ attorney’s fees.
The Florida Supreme Court stated in Codomo v. Emanuel, 91 So. 2d 653, 655 (Fla.1956):
This court is committed to the doctrine that attorneys’ fees cannot be taxed as costs in any cause unless authorized by contract or legislative authority.
We recognize that certain exceptions have been carved from this general rule; however, none of the exceptions apply to the case at bar.2 Therefore, in the absence of any contractual or statutory mandate, we hold that the trial court erred in allowing a setoff against Merrill Lynch’s recovery for the purpose of paying the Ritcheys’ attorney’s fees.
The portion of the final judgment which ordered rescission of the transaction between the parties is affirmed and that portion which granted the setoff is reversed.
AFFIRMED IN PART; REVERSED IN PART.
GRIMES, J., and BUCK, MORISON, Associate Judge, concur. . A more complete statement of the facts may be found in Ritchey v. Merrill Lynch, Pierce, Fenner and Smith, Inc., 361 So. 2d 438 (Fla.2d DCA 1978).
. Attorney fees may be recoverable in the absence of contract or statute when a fund has been created or brought into court; in actions for wrongful attachment, false imprisonment, malicious prosecution and slander of title. Glusman v. Lieberman, 285 So. 2d 29, 31 (Fla. 4th DCA 1973). Attorney fees may be allowed where a partner is forced to bring suit for dissolution of the partnership and an accounting. A. J. Richey Corp. v. Garvey, 132 Fla. 602, 182 So. 216 (1938).
Cases With Similar Vibessemantic neighbors from the corpus
Citator
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Hurley v. Slingerland, 480 So. 2d 104 (Fla. 4th DCA 1985)…partnership assets. It is obvious that the common fund rule contemplates that the other parties benefitted have not incurred additional expense in obtaining separate representation. Further, Merrill Lynch, Pierce, Fenner and Smith, Inc. v. Ritchey, 394 So. 2d 1057 (Fla.2d DCA 1981), indicates that the rule should apply only “in the absence of contract or statute,” id. at 1058 n.2, and in the instant case there is a contractual provision for recovery of attorney’s fees. As to all other issues raised by appeal…
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State v. Johnson, 485 So. 2d 880 (Fla. 2d DCA 1986)…orney’s fees may be awarded only where authorized by contract or stat [*881] ute or where an attorney creates or brings a special fund into the court. Kittel v. Kittel, 210 So. 2d 1 (Fla.1968); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ritchey, 394 So. 2d 1057 (Fla. 2d DCA 1981); Polk County v. Deaton, 352 So. 2d 571 (Fla.2d DCA 1977). None of these circumstances is present here. The order before us is in the continuing juvenile dependency proceedings brought pursuant to chapter 39, Florida Statutes; it i…
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California Federal Savings AND Loan Assn. v. Coley, 593 So. 2d 1152 (Fla. 1st DCA 1992)…paid by California Federal, over its objection that there was no contractual, statutory or other authority to award such a fee. California Federal reiterates this argument on appeal, citing Merrill, Lynch, Pierce, Fenner and Smith, Inc. v. Ritchey, 394 So. 2d 1057 (Fla. 2d DCA 1981) (in the absence of contractual provision or statu [*1153] tory mandate, it is error to require the prevailing party to pay the fees of the non-prevailing party). Munger concedes the absence of such authority, but contends that he…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Glusman v. Lieberman, 285 So. 2d 29 (Fla. 4th DCA 1973)
- A. J. Richey Corp. v. Garvey, 132 Fla. 602 (Fla. 1938)
- Smith v. Gifford, 91 So. 2d 653 (Fla. 1956)
- Codomo v. Obert Emanuel, 91 So. 2d 653 (Fla. 1956)
- Ritchey v. Merrill Lynch, 361 So. 2d 438 (Fla. 2d DCA 1978)