SANDRA GEVERTZ, APPELLANT,
v.
ANNA GEVERTZ, APPELLEE
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Sandra Gevertz appeals from a foreclosure judgment and attorney's fees award on a $20,000 mortgage loan from her in-laws. The court reverses the application of a 10% default interest rate (holding that the note's express 5.5% rate applies until paid) and the 12% interest on fees, and remands for recalculation of attorney's fees based on reasonable hours expended.
The court held that the note unambiguously provides for 5.5% interest until paid, which applies both before and after default, and the trial court erred in applying 10% prejudgment and postjudgment interest. The trial court also erred in applying 12% interest on fees when the mortgage provides for 10%. The $25,300 attorney's fee award must be reconsidered because it exceeds the principal debt and fails to account for the reasonable hours that should have been expended on the limited issues on remand.
[1] A promissory note and mortgage unambiguously providing for a specific interest rate until fully paid control the prejudgment and postjudgment interest rate on the unpaid…
[2] A trial court errs by rewriting an unambiguous provision of a note or mortgage.
Previewing 2 of 6 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“the note and mortgage clearly provides that interest accrues 'at the rate of 5½ per cent, per annum from date until fully paid.'”
Establishes the unambiguous language controlling the interest rate both before and after default, rejecting the trial court's application of a 10% default rate.
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Join FLexlaw to unlock all legal intelligenceIn 1977, Anna and Morris Gevertz loaned their son Leonard and daughter-in-law Sandra $20,000 to purchase a home, secured by a second mortgage and dema…
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GODERICH, Judge.
The defendant below, Sandra Gevertz, appeals from a final judgment of foreclosure and from a postjudgment award of attorney’s fees and costs. We reverse and remand with directions.
In March, 1977, Anna and Morris Gev-ertz loaned their son, Leonard, and daughter-in-law, Sandra, $20,000.00 to purchase a home. Leonard and Sandra executed a demand promissory note and a second mortgage. The note, which is expressly incorporated into the mortgage, provides, in part, as follows:
We promise to pay to the order of Morris Gevertz and Anna Gevertz, his wife, Twenty Thousand and 00/100 — Dollars ... with interest thereon at the rate of 5½ per cent, per annum from date until fully paid.
The mortgage provides for a ten percent (10%) interest rate for delinquent property taxes and unpaid insurance. The mortgage also contains the following provision: “said costs, charges and expenses ... shall be immediately due and payable ... and the full amount of each and every such payment shall bear interest from the date thereof until paid at the rate of ten per centum per annum.”
In 1984, Sandra and Leonard were divorced and Sandra was awarded sole title to the marital home. In 1987, Anna filed a complaint seeking to have the mortgage foreclosed. Sandra answered the complaint alleging that the $20,000.00 was a gift. The trial court entered judgment in favor of Sandra declaring the mortgage and note to be void. This court, in Gevertz v. Gevertz, 566 So. 2d 541 (Fla. 3d DCA 1990), reversed the trial court’s judgment and remanded with directions to enter a judgment of foreclosure. On remand, the issues to be determined by the trial court included the date of default, the applicable prejudgment and postjudgment interest rates, and the amount of attorney's fees and costs.
On remand, the trial court determined that the ten percent (10%) interest rate provided for in the mortgage for delinquent taxes, delinquent insurance, fees and costs was intended to be the general default rate of interest. Accordingly, the trial court entered its final order of foreclosure ordering that Anna was entitled to recover $20,-000.00, plus prejudgment interest at a rate of ten percent (10%) per annum. Additionally, the trial court ordered that post-judgment interest would accrue at the rate of ten percent (10%) per annum.
The trial court, on remand, also heard the issue of attorney’s fees and costs at three separate hearings. During the hearings, the attorneys submitted affidavits that included entries describing the nature of services performed, the date the services were performed and the amount of time spent for each service. Sandra argued that the hours being claimed by Stanley Jay Bartel, Anna's attorney, were excessive when considering that all that he had to do after remand was obtain a judgment foreclosing the $20,000.00 mortgage. During the hearing, Anna’s expert witness, Sheldon Evans, testified that the hours claimed by Bartel were reasonable. However, in a prior deposition, Evans testified that no more than 40 hours were reasonable when considering that all that Bartel had to do was obtain a judgment of foreclosure for $20,000.00. Sandra’s expert witness, Harvey Ziegler, testified that 35-40 hours were reasonable for Bartel’s services.
The trial court awarded Anna fees and costs totalling over $34,000.00, plus interest at a rate of 12% per annum. This award represents, in part, $25,300.00 to Stanley J. Bartel, who represented Anna during the appeal and after remand. Bar-tel received compensation for 126.50 hours at a rate of $200.00 per hour. Bartel requested fees for 189 hours. However, the trial court excluded 63 hours which were related to Bartel’s services in the appeal which were not compensable.
First, Sandra contends that the trial court erred in applying a ten percent (10%) prejudgment and postjudgment interest rate on the unpaid mortgage debt. We agree.
The note, which expressly incorporates the mortgage, is unambiguous as to the applicable prejudgment and post-judgment interest rates on the unpaid mortgage debt. The note and mortgage clearly provides that interest accrues “at the rate of 5V2 per cent, per annum from date until fully paid.” (emphasis supplied). See Annotation, Rate of Interest After Maturity on Contracts Fixing Rate “Until Payment”, 6 A.L.R. 1196, 1197 (1920) (“the holding of the reported case (Agency of Canadian Can and Foundry Corp. v. American Can Co., [258 F. 363 (2d Cir.1919)]) that ‘if the parties agree upon the rate of interest until the money is paid, or until date of payment, that agreement is controlling and fixes the measure of damages upon default,’ is supported by the great majority of the cases in the United States in which this question has arisen.”); see also, 47 C.J.S. Interest & Usury § 40(a) (1982). Therefore, since there was no ambiguity as to the applicable prejudgment and postjudgment interest rates, the trial court’s application of any interest rate other than five and one half percent (5½) constitutes a rewriting of that provision. The trial court erred in rewriting an unambiguous provision. See Carey v. Carey Inv. Corp. Inc., 385 So. 2d 154 (Fla.2d DCA 1980).
Next, Anna correctly concedes that the trial court erred in applying a 12% interest rate on the fees and costs where the mortgage unambiguously provides for a ten percent (10%) interest rate.
Finally, Sandra contends that the $25,-300.00 attorney’s fee award to Bartel for his services was error. We reverse and remand for further proceedings.
An attorney is entitled to compensation for his services only for the number of hours reasonably spent on the case. The Supreme Court of Florida, in In re Estate of Platt, 586 So. 2d 328 (Fla.1991), stated:
According to Rowe, the first step requires the court to determine the number of hours reasonably expended in providing the service. “Reasonably expended” means the time that ordinarily would be spent by lawyers in the community to resolve this particular type of dispute. It is not necessarily the number of hours actually expended by counsel in the case. Rather, the court must consider the number of hours that should reasonably have been expended in that particular case. The court is not required to accept the hours stated by counsel. In this respect, the magnitude of the case should be a consideration. For example, it will not ordinarily be reasonable to spend as much legal time on a case as the amount of money in dispute. The lawyer could not reasonably charge the client that much, and the fee could not be justified simply because someone else is required to pay it. In re Estate of Platt, 586 So. 2d at 333-34 (emphasis in original); see also Miller v. First American Bank and Trust, 607 So. 2d 483 (Fla. 4th DCA 1992).
In the instant case, Bartel played a very limited role in the foreclosure action after remand. As stated earlier, this court remanded with directions to enter a judgment of foreclosure. On remand, there were only four issues which needed to be addressed: 1) the date of default; 2) the applicable prejudgment and postjudgment interest rates after default; 3) the amount of reasonable attorney’s fees and costs; and 4) the applicable interest rate on the attorney’s fees and costs. For this limited role, Bartel was awarded $25,300.00.1 This award, by the way, also exceeds the amount of the principal debt that was foreclosed. We remand this cause for a determination of “the number of hours that should reasonably have been expended” on this action. Platt, 586 So. 2d at 333-34.
Accordingly, we reverse and remand for further proceedings consistent with this opinion.
. At oral argument, Bartel conceded that the trial court’s award included 14 hours that were counted twice, therefore, on remand, the trial court must adjust the award of attorney’s fees accordingly. On remand, the trial court is also to take into consideration that 32 of the 126.5 hours were spent on litigating the attorney’s fees issue.
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Whitehurst v. Camp, 699 So. 2d 679 (Fla. 1997)…PER CURIAM. We have for review Whitehurst v. Camp, 677 So. 2d 1361 (Fla. 1st DCA 1996), which certified conflict with the opinion in Gevertz v. Gevertz, 608 So. 2d 129 (Fla. 3d DCA 1992). We have jurisdiction. Art. V, § 3(b)(4), Fla. Const. For the reasons expressed below, we approve Whitehurst, disapprove Gevertz, and hold that unless a contract’s terms explicitly provide for a specific interest rate to apply to…1 / 2
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Whitehurst v. Camp, 677 So. 2d 1361 (Fla. 1st DCA 1996)…lorida Statutes (1995), with subsection 15-1-4(1) of the Utah Code ("Any judgment rendered on a lawful contract shall conform to the contract and shall bear the inter- ' est agreed upon by the parties...."). . To the extent that Gevertz v. Gevertz, 608 So. 2d 129 (Fla. 3d DCA 1992), holds that the contract rate of interest is applicable to both prejudgment and post-judgment interest rates, with respect, we believe that Gevertz is wrongly decided. While the case on which Gevertz relies, Agency of Canadian Car…
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Previewing 3 of 5 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- In re Est. OF Lester Platt, 586 So. 2d 328 (Fla. 1991)
- Miller v. First Am. Bank & Tr., 607 So. 2d 483 (Fla. 4th DCA 1992)
- Gevertz v. Gevertz, 566 So. 2d 541 (Fla. 3d DCA 1990)
- Carey v. Carey Inv. Corp., Inc., 385 So. 2d 154 (Fla. 2d DCA 1980)