RAYMOND S. HURLEY, FAYE HURLEY, VISTA BUILDERS, VISTA REALTY, P & H SEAWALL & PILING, LTD., A.B. HURLEY, CARL PAUL, AND HURLEY RELATED INTERESTS, APPELLANTS/CROSS APPELLEES,
v.
HENRY H. SLINGERLAND, JR., ET AL., APPELLEES/CROSS APPELLANTS; ROGER DAVIS AND THE ESTATE OF WILLIAM H. DAVIS, APPELLANTS, V. HENRY H. SLINGERLAND, JR., RAYMOND S. HURLEY, ET AL., APPELLEES

Fla. 4th DCA | 1985-08-28
Nos. 83-2756, 83-2799
ANSTEAD and DELL, JJ., concur.
480 So. 2d 104 Florida District Court of Appeal, Fourth District (1985) Caution
Cited by 17 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

In this partnership dispute, the Fourth District Court of Appeal addressed whether a general partner in Carriage Hill Limited Partnership engaged in self-dealing by purchasing property at less than fair market value, and reviewed awards of prejudgment interest and attorney's fees. The court reversed the trial court's damage award on the fair market value issue due to the trial court's perceived limitation on its discretion to accept additional evidence, affirmed prejudgment interest awards under the modern "liquidated damages" test, and reversed certain attorney's fee awards.


Holding

The court reversed on the fair market value issue and remanded for the trial judge to reconsider with or without additional evidence as appropriate. The court affirmed the awards of prejudgment interest, as modern Florida law permits prejudgment interest when a verdict fixes damages as of a prior date, even if the amounts were contested. The court reversed attorney's fee awards against Faye Hurley (a non-party to the partnership contract) and the $135,000 and $50,000 common fund fees, as all partnership parties had participated in the lawsuit with separate counsel.


Headnotes

[1] A trial court's discretion regarding the consideration of additional evidence on remand is not limited by a prior appellate opinion unless such limitation is explicitly s…

[2] A claim becomes liquidated and susceptible to prejudgment interest when a verdict fixes damages as of a prior date, even if the amount of the debt is disputed.

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Key Quotes

“No such limitation was intended to be imposed on the trial court's discretion as to whether additional evidence was necessary to determine fair market value on the date of sale.”

Establishes that the trial court erred in thinking its discretion to accept additional evidence was limited by the appellate court's prior opinion.

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Facts & Procedural History

Raymond Hurley was a general partner in Carriage Hill Limited Partnership who engaged in several transactions allegedly benefiting himself at the expe…

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Opinion of the Court
HERSEY, Chief Judge.

HERSEY, Chief Judge.

As a general partner in Carriage Hill Limited Partnership, appellant, Hurley, engaged in certain acts alleged to have accrued to his own self-interest to the detriment of the limited partner appellee Sling-erland (and his successors in title) and the other general partners. Other facts are set out in a previous opinion of this court, Slingerland v. Hurley, 388 So. 2d 587 (Fla. 4th DCA 1980). Many points are raised on appeal and cross appeal. We treat only those deemed significant.

Appellant’s first point on appeal is stated thusly: “Whether the trial court erred in holding that the special master could not take additional evidence in valuing the property in Carriage Hill II and in refusing to accept the valuation of the property as set forth in the special master’s report.”

The master did take additional testimony, over objection, and determined that no self-dealing profit resulted from the sale. The trial court refused to accept this finding based in part upon that court’s understanding of the extent of its authority on remand. The court ultimately concurred “with the Plaintiff, Slingerland, that the HURLEY interest, the managing partner paid too little, and therefore, owes” a certain sum as self-dealing profit. We are unable to tell for certain the basis for this ruling. It is clear that the court felt compelled only to answer the question posed by this court’s previous opinion: whether Hurley paid full market value for the property. What is unclear is whether the trial court construed the language of that opinion as precluding the consideration of any evidence other than that already in the record. No such limitation was intended to be imposed on the trial court’s discretion as to whether additional evidence was necessary to determine fair market value on the date of sale. We are therefore concerned that the court may have considered its discretion to be limited and that, but for that limitation, might have decided the issue differently. Accordingly, we reverse on this issue and remand to permit the trial judge either to confirm his finding that Hurley paid less than fair market value or to reconsider the issue with or without the taking of additional evidence as may seem appropriate.

We are not impressed by appellee’s argument that appellant should be precluded from now arguing that there was no profit, having previously taken the position that whether there was a profit or not he was justified in selling the property to himself. The former is the issue that ultimately was tried and argued.

Appellant’s Point IV questions the propriety of three awards of prejudgment interest:

(1) $620,000 in self-dealing profits on the Carriage Hill II property with interest from June 15, 1971;

(2) $117,411 in self-dealing profits on the sale of twenty-five lots with interest from December 3, 1975; and (3) $85,278 in self-dealing profits with regard to seawall construction with interest from various dates (March through June 1973) as to separate portions of the award. Appellant's position is that since the above amounts were unliquidated until fixed by the trier of fact, prejudgment interest is inappropriate.

Although the general rule is that prejudgment interest may be awarded where damages are liquidated and may not be awarded where they are unliquidated, it has been recognized that “in Florida the distinction between liquidated and unliqui-dated damages ‘has been substantially blurred.’ ” Bergen Brunswig Corp. v. State of Fla. Dep’t of Health and Rehabilitative Services, 415 So. 2d 765, 767 (Fla. 1st DCA 1982)(citation omitted), rev. denied, 426 So. 2d 25 (Fla.1983). Two tests have evolved in determining whether prejudgment interest may be awarded. The first test is that set forth in Town of Longboat Key v. Carl E. Widell & Son, 862 So. 2d 719, 723 (Fla.2d DCA 1978), “that a claim is unliquidated when the amount of the damages cannot be computed except on conflicting evidence, inferences and interpretations.” See also City of St. Petersburg v. Wall, 419 So. 2d 1167 (Fla.2d DCA 1982). Stated another way, the claim is unliquidated if the amount is contested and is not finally fixed until determined by the trier of fact. Alarm Systems of Florida, Inc. v. Singer, 380 So. 2d 1162 (Fla.3d DCA 1980). See also Whatley Equipment Co. v. Duster, 433 So. 2d 539 (Fla. 3d DCA 1983). Under this test, a distinction is made between contesting the right to damages and contesting the amount, the claim being liquidated in the former case and unliquidated in the latter. Broward County v. Sattler, 400 So. 2d 1031 (Fla. 4th DCA 1981).

The second test, espoused in recent years by the first district, purports to “[eliminate] the unwarranted disparate treatment of those litigants who contest liability only, and those who contest the measure of damages.” Bergen Brunswig Corp., 415 So. 2d at 767. That test is: “a claim becomes liquidated and susceptible of prejudgment interest when a verdict has the effect of fixing damages as of a prior date.” Id. The Bergen case involved a fact situation similar to the instant case — a claim for misappropriation and misuse of funds arising out of a contractual arrangement. This court very recently adopted the same test and added that “the fact that there is an honest dispute whether there is an actual debt and, if so, the amount, does not render the claim unliquidated.” Law v. Blue La goon-Pompano, Inc., 470 So. 2d 33 (Fla. 4th DCA 1985).

The Florida Supreme Court has now settled the controversy. In Argonaut Insurance Company v. May Plumbing Company, 474 So. 2d 212 (Fla.1985), the court approved the Bergen Brunswig Corp. rule. Under that rule, the awards of prejudgment interest in the instant case were proper. Although the amounts were contested, the trial court’s order fixed the amounts due as of specific dates. We therefore conclude that the awards of prejudgment interest should be affirmed (with the exception of the interest on the $620,000 award, since the propriety of that damage award must be redetermined on remand).

We also affirm each of the attorney’s fee awards questioned by appeal or cross appeal with three exceptions. First, we reverse the award requiring payment of fees by Faye Hurley who was not a party to the contract creating the partnership. Contractual provisions for attorney’s fees must be strictly construed. Fairways Royale Ass’n v. Hasam Realty Corp., 428 So. 2d 288 (Fla. 4th DCA 1983). We also reverse the award of a fee of $135,000 from the partnership assets in recognition of the contribution of appellees’ counsel in creating a common fund and the award of a fee of $50,000 to the Estate of William H. Davis made on the same basis.

The common fund rule “permits the award of fees ‘from a fund or estate which has been benefited by the rendering of legal services.’ ” Fidelity and Casualty Co. of New York v. O’Shea, 397 So. 2d 1196, 1198 (Fla. 2d DCA 1981) (citation omitted). Before the rule may apply, five prerequisites must be met:

1. The existence of a fund over which the court has jurisdiction and from which fees can be awarded;

2. The commencement of litigation by one party which is terminated successfully;

3. The existence of a class which received, without otherwise contribu ting to the lawsuit, substantial benefits as a result of the litigation;

4. The creation, preservation, protection or increase of the fund as a direct and proximate result of the efforts of counsel for that party;

5. A reasonable relationship between the benefit established and the fees incurred.

Id. It appears that requirements one, two, four, and five are met in the instant case; however, in referring to requirement three in its order, the trial court (apparently inadvertently) omitted the portion which mandates “[t]he existence of a class which received [substantial benefits] without otherwise contributing to the lawsuit .... ” In the instant case, such a class does not exist. All of the parties to the partnership agreement participated in the lawsuit and were represented by counsel. It would be inequitable to require them, after paying fees to separate counsel, to also pay appel-lees’ counsel out of their shares of the 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 or cross appeal, we affirm.

AFFIRMED IN PART; REVERSED IN PART; REMANDED.

ANSTEAD and DELL, JJ., concur.


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  • Getelman v. Burton R. Levey, 481 So. 2d 1236 (Fla. 3d DCA 1985)
    …49). In Bergen Brunswig Corp. v. Florida Dept. of Health and Rehabilitative Services, 415 So. 2d at 767, the court reversed a trial court’s denial of prejudgment interest in a claim for misuse and misappropriation of funds. In Hurley v. Slingerland, 480 So. 2d 104 (Fla. 4th DCA 1985), the court affirmed an award of prejudgment interest in a suit against a partner for self-dealing to the detriment of his co-partners. Given the foregoing, we conclude Mr. Levey is entitled to prejudgment interest.5 We note that…
  • …ss, we note that a contractual attorney fee provision should be strictly construed, B & H Constr., 542 So. 2d at 387; Keys Lobster v. Ocean Divers, Inc., 468 So. 2d 360 (Fla. 3d DCA), review denied, 480 So. 2d 1295 (Fla.1985); Hurley v. Slingerland, 480 So. 2d 104 (Fla. 4th DCA 1985), review denied 492 So. 2d 1335 (Fla.1986); as such, Baker Protective is only entitled to the attorney’s fees it expended in collecting monies due under the contract. Vistaco, Inc. v. Prestige Properties, Inc., 559 So. 2d 744, 744…
  • Perez v. George, 662 So. 2d 361 (Fla. 3d DCA 1995)
    …4) The creation, preservation, protection or increase of the fund as a direct and proximate result of the efforts of counsel for that party; 5) A reasonable relationship between the benefit established and the fees incurred. Hurley v. Slingerland, 480 So. 2d 104, 107-108 (Fla. 4th DCA), rev. denied 492 So. 2d 1335 (Fla.1986). We find that the common fund rule offers no support to George, Hartz because litigation was never commenced in this case (i.e., a complaint was never filed). Under these circumstances,…

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