October 14, 2008

Relative Financial Position of Parties to a Divorce – Determining Who Can Recover Attorney’s Fees in Florida: Part 2

In the previous post, we discussed that Florida law allows a party to a divorce proceeding to make a claim for attorney’s fees from the opposing party. More specifically, if one party makes such a request, the court will primarily consider the financial resources of both parties to make an order for one party to pay a reasonable amount to the other party for attorney’s fees, suit money, and costs. Because the relative financial resources of both parties to a divorce proceeding is the principal criterion the court examines in making this determination, I believe it is essential explore the concept of relative financial positions more fully.

Florida courts have repeatedly stated that when looking to the relative financial position of the parties, the first two questions which must be answered are: (1) does one party need attorney’s fees from the opposing party to pursue this divorce?; and (2) does the other party have the ability to pay for the other’s attorney’s fees? To make this determination, the court will require each party make an evidentiary showing of their respective assets and liabilities and make a comparison of each party’s independent financial resources. Recall from the last post that this comparison will not take into account money that a party’s family and friends are willing to share as aid. Also recall that it is not necessary that one party be completely unable to pay attorney’s fees in order for the other party to pay for them; it is only necessary that the party requesting attorney’s fees be in a substantially inferior financial position. A calculation of each party’s independent financial resources takes into account all circumstances and resources, including benefits that significantly enhance one party’s financial position, net income (and income-earning abilities), and the extent of their financial liquidity (like if the party’s assets are readily available).

Imagine a common situation in many states, including Florida. A husband and wife had been married in Fort Lauderdale for 19 years. During their marriage, the husband worked full-time making a great yearly salary while his wife remained unemployed to take care of the family. On their 19th year of marriage, husband and wife decided to get a divorce. That same year, the husband received a $100,000 bonus at work. Realizing the disparity in income between both parties and her inability to afford counsel, the wife requested attorney’s fees from her husband during the dissolution proceeding. In a similar case decided in Florida, the husband was required to pay all of the wife’s attorney’s fees and costs in the dissolution proceeding.

In another scenario, Florida courts have been reluctant to deny attorney’s fees to a requesting party simply because he or she has assets (because those assets are not necessarily readily available). For example, attorney’s fees were awarded to a former wife who was in an inferior financial position to her husband, and who would have to invade her assets to pay attorney’s fees for a dissolution proceeding. Similarly, in another case, a former wife was entitled to attorney’s fees and costs, even when all marital assets were equally distributed and the wife was awarded permanent period alimony. That court awarded the former wife attorney’s fees rather than having her invade her capital assets to pay the litigation costs because it would decrease her income. Furthermore, the husband was in a position to pay for all his fees and her fees combined out of his current income without digging into any of his own assets or investments.

It becomes clear that income-earning abilities appear to be of primary concern when making a financial comparison of the parties when one party requests attorney’s fees from the other party in a divorce proceeding. If you are going through a divorce and are a party that is in a substantially inferior financial position, it would be wise to discuss making a request for attorney’s fees with your attorney.

October 9, 2008

Are You Entitled to Attorney’s Fees During or After Your Divorce Proceeding?

Pursuant to Florida statute, the court in a dissolution, child custody, or child support proceeding may order one party to pay a reasonable amount for the other party’s attorney’s fees. Furthermore, these fees may even include a party’s costs to maintain or defend any one of these proceedings, including enforcement or modification of support, custody or visitation. But in Florida, how does the court decide to award attorney’s fees and in what situations is it appropriate?

Awarding attorney’s fees is at the sole discretion of the judge, and in determining whether to award these fees to a party, the judge may consider the earning ability of the parties, the marital assets and liabilities each party obtained through the divorce proceeding, and those assets’ liquidity. It is important to note that in Florida applying for an award of attorney’s fees, suit money, or costs does not require additional support through corroborating expert testimony. Florida courts, through an order of attorney’s fees, ensure that both parties to a dissolution proceeding have the ability to be represented by competent counsel.

Although a judge looks to several factors when considering a motion for attorney’s fees or litigation expenses, the principal issue considered by the judge is the respective financial resources of each party. The primary elements of that issue include the requesting party’s inability to afford an attorney and the other party’s ability to pay for competent legal counsel. In Florida, courts will not order one party to pay the other party’s attorney’s fees in a divorce proceeding when both are on significantly equal footing with regard to their ability to pay their own legal expenses. This calculation does not include financial assistance that may be provided by family members or friends. However, it is not necessary that one spouse be totally unable to pay for legal expenses for the judge to require the other spouse to pay them. Furthermore, the determination of ordering one party to pay for the other’s legal expenses may also be made after the court considers the relative financial status of each party at the conclusion of a dissolution proceeding. Therefore, a spouse may not be entitled to legal fees where the “spouse in need’s” financial position was made equal to the other spouse through the award of alimony and equitable distribution of marital assets. The Florida statute which allows for the award of attorney’s fees in proceedings for dissolution of marriage, support, or child custody also requires the judge to consider other relevant factors in making his or her determination to order this award, including: (1) scope and history of litigation; (2) the proceeding’s duration; (3) each party’s merit in presenting their arguments; and (4) whether the litigation is being used as a means to harass the other party.

Other Considerations: Please keep in mind that there are several other factors the court will not look at in this determination for attorney’s fees. For example, it does not matter if one party prevails in the proceeding or if the party is to blame for the failure of the marriage (i.e., through adultery), the court will not consider these subjective factors in making its determination for attorney’s fees.

Settlement Offers: What if one party wants to settle before the proceeding gets more expensive but the other party, who will demonstrate need for attorney’s fees, wants the proceeding to continue? Well, there is no Florida case law or statute to suggest that a court will deny attorney’s fees in dissolution cases simply because one party failed to accept an offer of settlement, even if a refusal to accept was unreasonable.

Pre-marital contracts: Contract provisions, which are typically found in prenuptial agreements, which waive the right to attorney’s fees and suit money are given consideration by the court, but are not conclusive as to how the court will decide the matter. Therefore, the court considers contractual provisions along with all other pertinent conditions affecting the party’s need and ability to pay. For example, if one spouse had the other spouse sign a prenuptial agreement (a contract) before they got married, and that contract contained a provision stating that neither party would pay the other party’s legal costs in the event of divorce, the court must consider this in making its determination. However, if enforcing this provision would lead to fundamental unfairness, the agreement may not be binding and the court may exercise its discretion to award attorney’s fees.

Please stay tuned for the next post, where we will continue this discussion of awarding for attorney’s fees in dissolution proceedings.