United States District Court, E.D. Pennsylvania
JASON O. GARDINER Plaintiffs,
WESTGATE RESORTS et al., Defendants.
August 10, 2016, Plaintiffs filed this action in state court
regarding a contract for the sale of timeshare interests in
real property located in Florida. (Doc. No. 12.) After
removing the case to this Court on September 21, 2016,
Defendants filed a Motion to Dismiss or alternatively to
transfer to Florida on September 28, 2016. (Doc. Nos. 1, 6.)
On October 10, 2016, Plaintiffs voluntarily dismissed the
case. (Doc. No. 7.) Before the Court is Defendants'
Motion for Attorneys' Fees to which Plaintiffs filed a
Response in Opposition. (Doc. Nos. 12, 13.) For the reasons
that follow, the Court will deny the Motion.
Jason O. Gardiner and Eneidaliz Rodriquez
(“Plaintiffs”) filed a Complaint against
Defendants Westgate GV at the Woods, LLC (“Westgate
GV”), Westgate Resorts, Ltd. (“Westgate”),
CFI Resorts Management, Inc. (“CFIRM”) and
Central Florida Investments, Inc. (“CFI”),
collectively “Defendants, ” in the Court of
Common Pleas of Bucks County Pennsylvania. (Doc. No. 1-1.)
The Complaint consisted of six separate claims including: (1)
Fraud in the Inducement, (2) Violation of the Florida
Deceptive and Unfair Trade Practices Act Sections 501, et
seq., (3) Violation of Florida's Vacation Plan and
Timesharing Act, Chapter 721, et seq., (4) Violation of
Chapter 825, Florida Statutes relating to Abuses of Senior
Citizens, (5) Civil RICO, and (6) Disgorgement of Assets.
September 21, 2016, Defendants removed the case to this Court
based on diversity of citizenship jurisdiction. (Doc. No.
13.) On September 28, 2016, Defendants filed a Motion to
Dismiss or Alternatively to Transfer to the Middle District
of Florida. (Doc. No. 6.) Defendants based their Motion to
Dismiss or Alternatively to Transfer on (1) lack of personal
jurisdiction, (2) failure to state a claim, and (3) improper
venue. (Doc. No. 6.) Subsequently, on October 10, 2016,
Plaintiffs filed a notice of Voluntary Dismissal under Rule
October 24, 2016, Defendants filed a Motion for
Attorneys' Fees and Costs pursuant to Federal Rule of
Civil Procedure 54(d)(1) and (2), Local Rule 54.1 and 28
U.S.C. § 1920. (Doc. No. 12-1.) Defendants argue they
are entitled to fees based on the underlying contract which
served as the basis of Plaintiffs' Complaint.
(Id.) The contract apparently was between Plaintiffs
and Westgate Lakes, LLC for the sale of timeshare interest in
real property. (Doc. Nos. 12-2 at 4; 13 at 3.) Paragraph 15
of the contract provides: “In the event of any
litigation arising out of this Contract, the prevailing party
will be entitled to recover its reasonable attorney's
fees, including paralegal fees, and all costs and fees on
appeal.” (Doc. No. 12-1 at 4.) On November 2, 2016,
Plaintiffs filed a Response in Opposition to Defendants'
Motion. (Doc. No. 13.) Plaintiffs argue that the named
Defendants were not parties to the contract at issue, as
evidenced by Defendants' arguments in their Motion to
Dismiss, and that none of the named Defendants in the
Complaint were parties to any contract with the Plaintiffs.
argue they are entitled to recover fees pursuant to a
prevailing party attorneys' fee provision in the contract
underlying Plaintiffs' Complaint. (Doc. No. 12-1 at 3;
Doc. No. 13 at 3.) In this regard, Defendants argue that the
contract at issue is interpreted under Florida law. (Doc. No.
12-1 at 4.) According to Defendants, under Florida law,
regardless of whether the voluntary dismissal by Plaintiffs
was with or without prejudice, Defendants are considered
prevailing parties under terms of the contract and therefore
are entitled to attorneys' fees. Henn v. Ultrasmith
Racing LLC, 67 So.3d 444, 445-46 (Fla. 4th Dist. Ct.
App. 2011) (“The fact that the trial court dismissed
the case without prejudice was sufficient to trigger
appellants' entitlement to attorney's fees as the
prevailing party under the contract”); Alhambra
Homeowners Ass'n Inc. v. Asad, 943 So.2d 316 (Fla.
4th Dist. Ct. App. 2006).
respond that Defendants are not entitled to attorneys'
fees under the contract because no named Defendant was ever a
party to the contract. (Doc. No. 13 at 3.) Due to the
multiple entities using the name “Westgate”,
Plaintiffs unintentionally failed to name the proper Westgate
entity in the Complaint. Westgate Lakes, LLC, the proper
party, was a party to the contract that contained provisions
for the payment of attorney's fees and costs to the
prevailing party. (See id.) Defendants Westgate GV,
Westgate Resorts, Westgate, CFIRM, and CFI were never parties
to the contract in issue. (See Doc. Nos. 6 at 1-5,
12-1 at 3.) Defendants concede this fact in their Motion to
Dismiss where they state, “Defendants' Declaration
and the Contract itself establish that . . . none of the
Defendants is a party to the Contract.” (Doc. No. 6 at
10.) Even though Defendants admit that they are not a party
to the contract, they argue that Plaintiffs acquiesced to the
rights and remedies under the contract because the contract
served as the “basis of [Plaintiffs']
complaint.” (See Doc. No. 12-1 at 4.)
Court and Florida courts adhere to the American Rule, a
general rule in law regarding costs and attorney's fees.
Bd. of Tr., Roofers Local No. 30 Combined Welfare Fund v.
Int'l Fid. Ins. Co., 63 F.Supp.3d 459, 474 (E.D. Pa.
2014), aff'd, 644 F. App'x. 133 (3d Cir.
2016); Fla. Patient's Comp. Fund v. Rowe, 472
So.2d 1145, 1148 (Fla. 1985). Under the American Rule,
“attorney's fees are not ordinarily recoverable in
the absence of a statute or enforceable contract providing
therefor.” Fleischmann Distilling Corp. v. Maier
Brewing Co., 386 U.S. 714, 717 (1967). In Florida,
individuals who are not a party to a contract have no right
to enforce it. See Gallagher v. Dupont, 918 So.2d
342, 347 (Fla. Dist. Ct. App. 2005) (“[A] nonparty to
[a] settlement agreement has no standing to enforce
it.”). Here, Defendants admit on more than one
occasion they were not a party to the contract. (See
Doc. No. 6 at 10, 13; Doc. No. 12-1 at 3.) As non-parties,
Defendants do not have a right to enforce the contract. Had
Defendants joined the correct party and thereafter prevailed,
that party would have been entitled to recover attorney fees
and costs. However, this is not the case here.
assert, however, that Plaintiffs are estopped from opposing
the award of attorney's fees, relying on MCG Fin.
Servs., L.L.C. v. Technogroup, Inc., 149 So.3d 118 (Fla.
Dist. Ct. App. 2014). But the present case differs
significantly from MCG. In MCG,
Technogroup, Inc., referred to as “ABS,
” brought a breach of contract and fraud action against
a defendant named Joel Mason and his corporation MCG
Financial Services, LLC, doing business as Approved
Associates. 149 So.3d at 119. As part of the request for
relief in the complaint, ABS sought attorney's fees under
the contract. Id. MCG and Mason filed an answer and
also demanded attorney's fees. Id. At a non-jury
trial, ABS admitted the existence of the contract, and
counsel for both parties stipulated that MCG was the real
party in interest. Id. In his testimony, Mason
acknowledged the existence of the contract and his intention
to bind MCG. Id. at 120. The trial court ultimately
found for Mason and MCG. Mason and MCG then moved for
attorney's fees based on a contractual provision allowing
the award of attorney's fees. Id.
hearing on Mason's motion for attorney's fees, ABS
was represented by a new attorney who argued the contract was
between ABS and another party, and that MCG and Mason were
not parties to the contract at issue. Id. The trial
court agreed, and denied MCG and Mason fees because they were
not proper parties to the contract. Id. MCG and
Mason appealed the trial court's denial of attorney's
fees. Id. The District Court of Appeal of Florida,
Fourth District, held that:
ABS is estopped from arguing, in opposition to the
contractual provision for attorney's fees, the completely
inconsistent position that MCG and Mason were not parties to
the contract, where it had based its case on its claim that
MCG and Mason were bound by the contract. “[L]itigants
are not permitted to take inconsistent positions in judicial
proceedings and [ ] a party cannot allege one state of facts
for one purpose and at the same action or proceeding ...