In the case of Ham v. Portfolio Recovery Associates (Case No. 18-2148), the Florida Supreme Court accepted jurisdiction to resolve a conflict between rulings by Florida’s District Courts of Appeal on the issue of whether attorney fees may be awarded under Florida’s reciprocal attorney fee statute where a creditor sues to collect a debt under an account stated cause of action. Earlier, two of the five Florida District Courts of Appeal, its intermediate appellate tribunal, reached differing conclusions. The first District Court of Appeal in Ham v. Portfolio Recovery Associates, 260 S. 3d 450 (Fla. 1st DCA 2018) denied a consumer defendant’s motion to recover attorney fees after the defendant prevailed in defeating a suit on an account stated. The Second District Court of Appeals in Bushnell v. Portfolio Recovery Associates, 255 So.3d 473 (Fla. 2nd DCA 2018) reached a contrary result, awarding the consumer debtor over $100,000.00 in fees for successfully defending an account stated suit on a debt of slightly over $4000.00.
NCBA along with the Florida Creditors Bar Association requested leave to file an Amicus Brief. The Florida Supreme Court granted their motion and their Brief was filed on February 24, 2020. A copy of the brief can be accessed by using this link.
The Brief explains that most consumers admit the debt and are willing to enter into payment arrangements. The brief also points out that when consumer attorneys get involved in defending credit card claims sued on an account stated, it increases the likelihood that the case will go to trial, thereby further congesting the Court’s docket. At that time, it is the consumer attorney who has a conflicting aim from the client. The consumer most often desires to pay the debt and resolve the suit but the attorney seeks to churn the litigation in the hopes of convincing the Court that Florida’s reciprocal attorney fee provision applies even where the creditor did not base its claim on a written contract with an attorney fee provision. The Amicus also argued that creditors who elect not to sue on the contract give up the right to collect fees, thereby reducing the amount of the consumer’s obligation. It follows that if the Court allows recovery of attorney fees when suing on an account stated, creditors will then revert to suing for breach of contract resulting in awards of attorney fees in the overwhelming majority of the cases, a result not benefiting consumers who owe the debt.
The court has not scheduled oral Argument. At this time, there are two vacancies on the Florida Supreme Court. If the case is decided while the two vacancies exist for the seven-member tribunal, a binding decision can only be entered if four of the five justices concur given that Florida law does not permit a Supreme Court ruling agreed to by less than four Supreme Court justices.
The NCBA Amicus Brief was authored by Ronald S. Canter, a three-time member of NCBA’s Board of Directors and a frequent contributor at NCBA conferences.