Foodtown, Inc. v. Argonaut Insurance
Docket: 95-3216
Court: Court of Appeals for the Eleventh Circuit; December 30, 1996; Federal Appellate Court
Original Court Document: View Document
Foodtown, Inc. of Jacksonville appeals a district court order that awarded attorneys' fees under Florida's fee-shifting statute, section 627.428. The court determined the maximum fees based solely on a written contingent fee agreement, rejecting a separate oral agreement between Foodtown and its attorneys. The district court affirmed that the oral agreement violated Florida's ethical rule requiring written contingent fee agreements, stating that enforcing oral agreements would waste judicial resources and present potential for abuse. A magistrate judge calculated the fees based on the written agreement, which stipulated a 40% recovery fee, and the district court adopted this recommendation despite Foodtown's objections. Foodtown argues that both agreements together comply with the ethical rule and claims they form an indivisible fee contract, asserting the court erred by enforcing only the written agreement. Additionally, Foodtown appeals a court order denying its claim for income loss and consequential damages related to its insurance policy, which the court affirmed without further discussion. Foodtown contends that the district court should have applied the lodestar method to determine attorneys' fees, while Argonaut asserts that the oral fee agreement is unenforceable under Florida law due to its violation of the ethical requirement for contingent fee agreements to be in writing. Argonaut claims that the district court correctly deemed the written agreement as separate and valid for establishing the maximum fees. The court's review of the attorneys' fee award is for abuse of discretion but allows scrutiny of legal questions involved in the fee determination. The court clarifies that a fee agreement does not dictate the reasonable fee awarded under fee-shifting statutes but merely sets a maximum limit. The district court rejected the oral agreement, which aimed to avoid a maximum by linking fees to either a percentage of recovery or a court-determined amount. Citing *Chandris, S.A. v. Yanakakis*, the Florida Supreme Court mandates that contingent fee agreements must be in writing to be enforceable, emphasizing the need for public protection. As the oral agreement was invalid, the district court appropriately relied on the enforceable written agreement to cap attorneys' fees. The court refutes Foodtown's argument against using the written agreement, highlighting potential abuse in fee-shifting scenarios if courts disregard clear, enforceable contracts due to unenforceable oral agreements. The risk rests on the law firm for not ensuring an oral agreement is documented in writing. Consequently, the district court's decision regarding attorneys' fees is affirmed.