Ethics Of Paying Fact Witness At Issue In Florida

From sunEthics

Under Rule 4-3.4(b), fact witnesses may be paid “reasonable compensation” for “preparing for, attending, and testifying at proceedings,” including assistance with case and discovery preparation. [Added 10/30/17]

Antaramian entered into a “Consulting Agreement” with Trial Practices, Inc. (“TPI”) under which TPI was to provide “various trial support services” for Antaramian in his suit against a third party.  Per the Agreement TPI was to receive 5% of any gross recovery that Antaramian obtained through verdict or settlement.  Antaramian and the third party settled, with each party dropping its claims.  Antaramian refused to pay TPI, asserting that he owed TPI nothing since he did not obtain a gross recovery.  TPI sued Antaramian for breach of contract.

The jury found for Antaramian, who then sought prevailing party fees pursuant to a clause in the Consulting Agreement which provided in part:  “[The] prevailing party in any action arising from or relating to this agreement will be entitled to recover all expenses of any nature incurred in any way in connection with the matter, whether incurred before litigation, during litigation, in an appeal, . . . or in connection with enforcement of a judgment, including, but not limited to, attorneys' and experts’ fees.” 

The court awarded prevailing party fees to the Hahn law firm, which was substituted for Antaramian at his death.  The award included fees for litigating the amount of fees to which Hahn was entitled.  TPI appealed.

The Second DCA affirmed.  “Both the Florida Supreme Court and this court have recognized that when parties are seeking attorneys’ fees pursuant to a statute, the parties are not necessarily entitled to recover attorneys’ fees for litigating the amount of fees.  . . .  However, in this case, the attorneys’ fees and costs were not awarded pursuant to a statute but were instead awarded pursuant to the fee-shifting provision in the Consulting Agreement.”  The fee provision “was broad enough to encompass the award of fees and costs for litigating the amount of attorneys’ fees.”  The appeals court declined to rewrite the contract to relieve TPI of its obligation.

The court also rejected TPI’s argument that Hahn was not entitled to prevailing party fees “because Antaramian improperly paid expert witness fees to fact witnesses.”  Antaramian paid more than the statutory $5 per day to fact witnesses.  Rule 4-3.4(b) does not make it “unethical or illegal for a party to pay fact witnesses reasonable compensation for their preparation for, attendance at, or testimony at trial.”  The Rule does not conflict with F.S. 92.142, regarding the state’s payment to witnesses.  “The statute restricts payments to witnesses for their attendance and thus presumably their actual testimony at trial.  But the rule addresses payments for entirely different and compensable items: witnesses’ expenses incurred in connection with their attendance and testimony at trial and reasonable compensation for the time spent by the witnesses in preparing for, attending, and testifying at trial so long as the payments are not conditioned on the content of the witnesses’ testimony.  Thus we interpret the rule to mean that witnesses may be compensated not only for travel related expenses, such as airfare, car rentals, and hotel expenses, but also for a witness's time spent in responding to discovery and appearing at depositions.”  (Footnote omitted.)

The court certified the following question to the Florida Supreme Court as one of great public importance:  “Does Rule 4-.34(b) of the Rules Regulating The Florida Bar permit a party to pay a fact witness for the witness’s assistance with case and discovery preparation?”   Trial Practices, Inc. v. Hahn Loeser & Parks, LLP, __ So.3d __ (Fla. 2d DCA, Nos. 2D13-6051, 2D14-86, 10/25/2017) (on clarification), 2017 WL 479894

Hat tip! (Mike Frisch)