Schwartz v. Bloch

Citations: 88 So. 3d 1068; 2012 WL 2012321; 2012 Fla. App. LEXIS 9068Docket: No. 4D10-742

Court: District Court of Appeal of Florida; June 6, 2012; Florida; State Appellate Court

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The court granted the appellees’ motion for rehearing and certification, withdrawing its prior opinion and substituting a new one. Mayan Schwartz appealed a final judgment favoring defendants attorney Stuart Bloch and his law firm, Bloch, Minerley, Fein, P.L., in a legal malpractice and breach of fiduciary duty case. The court affirmed all aspects of the trial court’s decision except for the striking of the jury’s award of $250,000 in attorney’s fees and costs. It ruled that Schwartz was not required to provide independent expert testimony on the reasonableness of these fees since they were part of 'wrongful act' damages. 

The case background reveals that in 2004, Schwartz consulted Bloch for asset protection advice regarding his upcoming marriage. Bloch suggested assigning his business interests to family members instead of pursuing a prenuptial agreement. Schwartz executed assignments of interests in six entities to his father, Israel Schwartz, prior to his marriage in December 2004. However, in January 2006, Israel sent a letter removing Schwartz's authority over DBS Distributors and access to family business bank accounts, leading to a feud. Schwartz subsequently hired attorney Andrew Seiden and filed a lawsuit against several family members and his former attorneys, settling most claims by July 2007, except the legal malpractice action against Bloch and his firm.

At trial, Schwartz provided expert testimony claiming the defendants breached their duties by advising him to assign assets without proper consideration or disclosure of conflicts. He sought damages for attorney’s fees incurred in his litigation against his family and accountant, presenting Seiden's testimony on the fees without independent verification of their reasonableness. Schwartz also sought damages for harm to interests in twelve entities, although only six assignments were executed. The jury found in favor of Schwartz for some entities while ruling in favor of the defendants for others.

A jury awarded $500,000 in total damages, with $125,000 granted to each of four entities and an additional $250,000 for attorney’s fees under the wrongful act doctrine. The defendants filed post-trial motions seeking set-off and judgment, arguing that the plaintiff did not provide expert testimony on the reasonableness of attorney’s fees or adequately prove damages related to business losses. The trial court vacated the damages awards and ruled in favor of the defendants based on these arguments, deeming the other grounds moot. The plaintiff appealed, and the appellate court reversed the decision regarding the $250,000 attorney’s fee award. It held that independent expert testimony was not required for attorney’s fees incurred in litigation with the plaintiff's family, as these fees could be recovered under the wrongful act doctrine. This doctrine allows recovery of expenses, including reasonable attorney’s fees, incurred due to a defendant’s wrongful actions. While Florida law generally requires independent expert testimony to establish the reasonableness of attorney’s fees, this requirement does not apply when such fees are part of the damages in a breach of contract action or when the fees are not being sought from the opposing party in the same litigation. The court noted the ongoing debate about the necessity of this expert testimony requirement but ultimately affirmed its applicability in certain contexts.

Plaintiff sought recovery of attorney’s fees incurred during litigation with his family as damages in malpractice claims against former attorneys. This case differs from typical attorney-client fee disputes or fee-shifting cases where payment of the opposing party's fees is mandated by statute or contract. Roshkind establishes that independent expert testimony is not necessary to prove the reasonableness of professional fees when they are part of compensatory damages. Applying reasoning from Sea World, it was determined that since the plaintiff was claiming fees related to family litigation as compensatory damages under the wrongful act doctrine, he was not required to provide corroborating expert testimony. The trial court erred in vacating wrongful act damages based solely on the absence of such testimony. This conclusion holds even though the plaintiff included his family and defendants in the same lawsuit. The decision may conflict with Seitlin, Co. v. Phoenix Insurance Co., leading to a certification of conflict. The court reversed the trial court's ruling that struck a $250,000 damage award due to the lack of independent expert testimony while directing the trial court to consider other grounds asserted in the defendants’ post-trial motions on remand. The decision was affirmed in part and reversed in part. The Florida Supreme Court was asked to review the case but declined.