RESIDENTS FOR BETTER COMMUNITY v. WCI COMMUNITIES INC WCI LLC (2020)

The appellants, Residents for a Better Community (“RBC”) and Barbara Hinkson Craig, brought a declaratory judgment action against the appellees, WCI Communities, Inc., and WCI Communities, LLC. (“WCI”). The action centered on a dispute between homeowners in a residential community and the developer. RBC and Craig ultimately voluntarily dismissed their action when the community association brought a claim against WCI for the same relief RBC and Craig had sought.

After RBC and Craig dismissed their complaint, WCI filed a motion for sanctions pursuant to section 57.105(1), Florida Statutes (2017), against RBC, Craig, and their counsel. The trial court awarded sanctions after finding that “the claims raised by Plaintiffs were not supported by the material facts necessary to establish the claim, in that Plaintiffs lacked standing.” On appeal, RBC, Craig, and their counsel challenge the award of sanctions arguing that the trial court did not have jurisdiction to entertain the motion for sanctions because it was filed after they had voluntarily dismissed their complaint. We agree.

While a notice of voluntary dismissal serves to terminate litigation and divest the trial court of jurisdiction, the supreme court has recognized certain exceptions, one of which is the ability of the trial court to award sanctions under section 57.105(1). See Pino v. Bank of N.Y., 121 So. 3d 23, 41-42 (Fla. 2013). However, for this exception to apply, the motion for sanctions must have been filed before the case was voluntarily dismissed. Id. The filing of the motion for sanctions gives the trial court “continuing jurisdiction to resolve the pending motion and to award attorney's fees ․ regardless of the plaintiff's subsequent dismissal.” Id. at 42-43; see also Sidlosca v. Olympus Ins. Co., 276 So. 3d 987, 988 (Fla. 3d DCA 2019); Buckingham Estates Homeowners Ass'n v. Metcalf, 207 So. 3d 966, 967 (Fla. 5th DCA 2016); Bank of Am., N.A. v. Turkanovic, 204 So. 3d 595, 595 (Fla. 1st DCA 2016); Pomeranz & Landsman Corp. v. Miami Marlins Baseball Club, L.P., 143 So. 3d 1182, 1182 (Fla. 4th DCA 2014). WCI did not file its motion for sanctions until after RBC and Craig voluntarily dismissed their complaint. At that point the case ceased to exist, and there was no pending motion for sanctions to provide the court with continuing jurisdiction.

WCI also filed a timely motion for attorney's fees and costs pursuant to Florida Rule of Civil Procedure 1.525. WCI sought and was awarded attorney's fees pursuant to a prevailing party attorney's fee provision in the community's “Declaration and General Protective Covenants.” The provision allowed an award of attorney's fees to the developer if it or a party it had designated brought an action to enforce the Declaration and prevailed in that action. WCI's motion for fees asserted that it was entitled to fees under this provision because RBC and Craig were attempting to enforce the Declaration and that WCI became a prevailing party when RBC and Craig voluntarily dismissed their complaint. The trial court agreed, concluding that the “Plaintiffs sought to enforce the terms of the Declaration against Defendants by means of seeking a declaratory judgment[ ] and that Defendants prevailed in that action.”

Leaving aside the question of whether the Declaration actually provided a basis to award fees to WCI under the facts presented to the trial court, a matter which seems dubious, we conclude the award was erroneous because WCI did not prevail. Generally, a plaintiff's voluntary dismissal makes the defendant the prevailing party. Tubbs v. Mechanik Nuccio Hearne & Wester, P.A., 125 So. 3d 1034, 1040 (Fla. 2d DCA 2013). However, this court has recognized that this rule does not apply without exception and that a court may look behind a voluntary dismissal at the facts of the litigation to determine if a party has prevailed. Id. at 1041. Stated differently, “courts must look to the substance of litigation outcomes—not just procedural maneuvers—in determining the issue of which party has prevailed in an action.” Id.

Here, as was the case in Tubbs, the claims brought by RBC and Craig had become moot for reasons unrelated to the merits of the litigation. See id. at 1041-42. RBC and Craig dismissed their action after the homeowner's association for the residential community became involved in the litigation and asserted the same claims against the developer that RBC and Craig had asserted. After the association took up the cause, it would have served no purpose for RBC and Craig to continue to pursue their separate action. WCI did not achieve its objective of making the litigation go away as a result of the dismissal—the same claims remained pending against WCI. Under these circumstances, it was error to conclude that WCI had prevailed. See id. at 1042-43 (explaining that the trial court erred when it prematurely determined which party prevailed as to the significant issues in the litigation when related claims were still pending).

Accordingly, we reverse the award of sanctions as well as the award of prevailing party attorney's fees. Our reversal renders WCI's cross-appeal moot.

Reversed.

KELLY, Judge.

SLEET and BADALAMENTI, JJ., Concur.