IN THE SUPREME COURT OF FLORIDA

Case Number: SC10-506

ACE AMERICAN INSURANCE COMPANIES, INC., a foreign corporation; AMERICAN MANUFACTURERS’ INSURANCE COMPANY, INC., a foreign corporation; BROADSPIRE SERVICES, INC., a foreign corporation; ILLINOIS

TOOL WORKS, INC., a foreign corporation; HOBART CORPORATION, a foreign corporation, and JOHN DOES,

Petitioners.

v.

SEA WORLD OF FLORIDA, INC., a Florida Corporation; and BUSCH ENTERTAINMENT CORP., a foreign corporation.

Respondents.

On Discretionary Review from the Fifth District Court of Appeal

Fifth DCA Case Nos.: 5D08-1496, 5D08-1497, 5D08-4197, & 5D09-2497

RESPONDENTS’ ANSWER BRIEF ON THE MERITS

Robert I. Westerfield, Esquire Erin J. O’Leary, Esquire California Bar No. 112183 Florida Bar No. 0001510 rwesterfield@bowlesverna.com eoleary@orlandolaw.net BOWLES & VERNA, LLP BROWN, GARGANESE, 2121 North California Blvd., #875 WEISS & D’AGRESTA, P.A. Walnut Creek, California 94596 111 North Orange Ave., Ste. 2000 (925) 935-3300 - Telephone Orlando, Florida 32802 (925) 935-0371 - Facsimile (407) 425-9566 - Telephone (407) 425-9596 - Facsimile

Attorneys for Respondents, Sea World of Florida, Inc. and Busch Entertainment Corp.

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TABLE OF CONTENTS

TABLE OF CITATIONS ........................................................................................ iii INTRODUCTION ..................................................................................................... 1 STATEMENT OF THE CASE AND FACTS .......................................................... 2 SUMMARY OF THE ARGUMENT ...................................................................... 11 ARGUMENT ........................................................................................................... 13

A. THE FIFTH DISTRICT COURT’S DECISION REINSTATING THE JURY’S AWARD OF THE MDCG FEES WAS CORRECT (IN RESPONSE TO ISSUES “C” and “D” OF INITIAL BRIEF)... .................................... 13

1. This Court Should Adopt The Reasoning Of The Fifth District And Overrule Seitlin To The Extent It Requires Corroborating Independent Expert Testimony Where Attorney’s Fees Are Sought As A Component Of Contract Damages. ........................................................................................ 13 2. The Trial Court Abused Its Discretion In Granting The Directed Verdict. ............................................................................ 20

a. Seitlin Is Distinguishable Because Respondents Presented Evidence Of Reasonableness. ............................. 20 b. Substantial Evidence Supported The Jury’s Verdict. .......... 21 c. Petitioners Waived Any Right To Contest

The Reasonableness Of The MDCG Fees. .......................... 22

d. The Trial Court Abused Its Discretion In Denying Respondents’ Motion To Reopen Their Case To Introduce Expert Testimony. ............................................... 24 e. If An Expert Is Required, The Appropriate Remedy Is Remand. ............................................................. 27

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B. THE COURTS BELOW PROPERLY CONCLUDED SEA WORLD WAS ENTITLED TO INDEMNITY FROM HOBART. (IN RESPONSE TO ISSUE “A” OF INITIAL BRIEF) ................................................................................. 28

1. The Trial Court’s Construction Of Section 1.13 Was Correct. ........................................................................................... 29 2. The Trial Court Properly Refused To Look Outside The Contract. .................................................................................. 36

C. THE COURTS BELOW PROPERLY CONCLUDED SEA WORLD WAS ENTITLED TO COVERAGE FROM ACE. (IN RESPONSE TO ISSUE “B” OF INITIAL BRIEF). ................................................................................ 40 D. THE TRIAL COURT’S FEE AWARD SHOULD BE UPHELD. (IN RESPONSE TO ISSUE “E” OF INITIAL BRIEF) ................................................................................. 45

1. Schultz Does Not Support Petitioners’ Arguments.......................... 2. Petitioners Improperly Attack the Trial Court’s Factual Findings, And The Record Nevertheless Supports The Fee Award .................................................................................... 47

CONCLUSION ........................................................................................................ 50 CERTIFICATE OF SERVICE ................................................................................ 50 CERTIFICATE OF COMPLIANCE ....................................................................... 51

iii

TABLE OF CITATIONS

Cases Altamonte Springs Imaging, L.C. v. State Farm Mut. Auto. Ins. Co., 12 So. 3d 850 (Fla. 3d DA 2009) ............................................................................. 48 Aspen Inv. Corp. v. Holzworth, 587 So. 2d 1374 (Fla. 4th DCA 1991) ................................................ 6, 12, 22, 23, 24 Behm v. Div. of Admin., State of Fla., Dep’t of Transp., 292 So. 2d 437 (Fla. 4th DCA 1974) ........................................................................ 49 Blout Bros. Realty Co. v. Eilenberger, 124 So. 41 (Fla. 1929) .............................................................................................. 14 Camp, Dresser & McKee, Inc. v. Paul N. Howard Co., 853 So. 2d 1072 (Fla. 5th DCA 2003) .................................................... 33, 34, 35, 36 Crittenden Orange Blossom Fruit v. Stone, 514 So. 2d 351 (Fla. 1987) ................................................................................. 15, 18 DiStefano Const., Inc. v. Fidelity and Deposit Co. of Maryland, 597 So. 2d 248 (Fla. 1992) ....................................................................................... 46 Donaldson v. State, 772 So. 2d 177 (Fla. 1998) ...................................................................................... 24 Florida Patient’s Comp. Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985) ..................................................................................... 46 General Motors Acceptance Corp. v. Laesser, 791 So. 2d 517 (Fla. 4th DCA 2001) ........................................................................ 46 Gossett & Gossett, P.A. v. Mervolion, 941 So. 2d 1207 (Fla. 4th DCA 2006) ...................................................................... 30 Govan v. State, 813 So. 2d 276 (Fla. 2 DCA 2002) .................................................................... 24, 25

iv

Hagen v. Aetna Cas. & Sur. Co., 675 So. 2d 963 (Fla. 5th DCA 1996) ........................................................................ 42 Herpich v. Estate of Herpich, 994 So. 2d 1195 (Fla. 5th DCA 2008) ...................................................................... 37 Highlands Carpentry Service Inc. v. Connone, 873 So. 2d 611 (Fla. 2d DCA 2004) ........................................................................ 46 Hunzinger Const. Corp. v. Quarles & Brady General Partnership, 735 So. 2d 589 (Fla. 4th DCA 1999), rev. denied, 766 So. 589 (Fla. 2000) ............ 21 Island Hoppers, Ltd. V. Keith, 820 So. 2d 967 (Fla. 4th DCA 2002) ........................................................................ 16 Jenkins v. Eckerd Corp., 913 So. 2d 43 (Fla. 1st DCA 2005) .......................................................................... 37 Jones v. State, 998 So. 2d 573 (Fla. 2008) ....................................................................................... 38 Liza Danielle, Inc. v. Jamko, Inc., 408 So. 2d 735 (Fla. 3d DCA 1982) ........................................................................ 30 Phillip Morris Inc. v. French, 897 So. 2d 480 (Fla. Rd DCA 2004) ....................................................................... 30 Progressive Express Insurance Company v. Schultz, 948 So. 2d 1027 (Fla. 5th DCA 2007) ................................................................ 47, 50 Rea v. Barton Protective Servs., 660 So. 2d 772 (Fla. 4th DCA 1995) ........................................................................ 36 Robinson v. Weiland, 936 So. 2d 777 (Fla. 5th DCA 2006) ........................................................................ 24 Rodriguez v. Campbell, 720 So. 2d 266 (Fla. 4th DCA 1998) ........................................................................ 28 Roshkind v. Machiela,

v

No. 4D10-203, 2010 WL 2882359 *2 (Fla. 4th DCA 2010) .............................. 16, 17 Safeco Ins. Co. v. Rochow, 384 So. 2d 163 (Fla. 5th DCA 1980) ........................................................................ 30 Schimpf v. Reger, 691 So. 2d 579 (Fla. 2d DCA 1997) .................................................................. 14, 17 Scott v. TPI Restaurants, Inc., 798 So. 2d 907 (Fla. 5th DCA 2001) ........................................................................ 21 Sea World of Florida, Inc. v. ACE American Insurance Companies, 28 So. 3d 158 (Fla. 5th DCA 2010) ................................. 1, 11, 13, 14, 18, 20, 29, 41 SEFC Bldg. Corp. v. McClosky Window Cleaning Inc., 645 So. 2d 1116 (Fla. 3d DCA 1994) ................................................................ 34, 35 Seitlin and Co. v. Phoenix Ins. Co., 650 So. 2d 624 (Fla. 3d DCA 1994) ........................................... 1, 6, 11, 13, 14, 15, ............................................................................................. 16, 17, 18, 19, 20, 21, 28 Shaw v. Shaw, 334 So. 2d 13 (Fla. 1976) ......................................................................................... 38 Silva v. Hernandez, 595 So. 2d 230 (Fla. 3d DCA 1992) ........................................................................ 28 Snow v. Harlan Bakeries, Inc., 932 So. 2d 411 (Fla. 2d DCA 2006) ........................................................................ 28 State v. Spaziano, 692 So. 2d 174 (Fla. 1997) ....................................................................................... 38 State Department of Transportation v. Plunske, 267 So. 2d 337 (Fla. 4th DCA 1972) ........................................................................ 49 Taurus Holdings, Inc. v. United States Fidelity and Guaranty, 913 So. 2d 528 (Fla. 2005) ........................................................................... 41, 43, 44

vi

Walker v. Kremer, 382 So. 2d 338 (Fla. 4th DCA 1980) ........................................................................ 28 Wheeler v. Wheeler, Erwin & Fountain, P.A., 964 So. 2d 745 (Fla. 1st DCA 2007) ........................................................................ 38 Other Authorities Fla. R. App. P. 9.210(a)(2) ....................................................................................... 51 75A Am. Jur. Trial § 672 (2009 ed.) ....................................................................... 38 75A Am. Jur. Trial § 679 (2009 ed.) ....................................................................... 38 55 Fla. Jur. 2d Trial § 150 (2009 ed.) ................................................................ 37, 38 Phillip J. Padovano, Florida Appellate Practice § 18.6 (2009 ed.) .......................... 38 Robert J. Hauser, Raymond E. Kramer, Patricia A. Leonard, Is Expert Testimony Really Needed in Attorney’s Fees Litigation?, 77-Jan. Fla. B.J. 38 (2003). ........... 16

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INTRODUCTION

Some thirty years ago, the Florida judiciary created a rule which is largely

unique to this state: A prevailing party seeking to recover attorneys fees must

provide testimony from an independent attorney expert corroborating the

reasonableness of the fees sought. In recent years, several courts of appeal have

questioned the need for that rule, including the court below.

In Seitlin and Co. v Phoenix Ins. Co., 650 So. 2d 624 (Fla. 3d DCA 1994),

the Third District Court of Appeal arguably expanded the rule to require such

testimony where attorney's fees are a component of a plaintiff's contract damages.

Seitlin offered no rationale for that decision and no appellate court in any

jurisdiction has seen fit to adopt it. Yet some litigants, including Petitioners, have

used Seitlin to escape otherwise meritorious damage awards.

In Sea World of Florida, Inc. v ACE American Insurance Companies, 28 So.

3d 158 (Fla. 5th DCA 2010), the Fifth District Court took issue with Seitlin to the

extent Seitlin does in fact require plaintiffs seeking fees as a component of contract

damages to obtain corroborating testimony from an independent expert. The Sea

World opinion is well-reasoned and reflects sound public policy. Respondents

respectfully request that this Court affirm the Sea World decision in all respects.

2

STATEMENT OF THE CASE AND FACTS Busch Entertainment Corporation and Sea World of Florida, Inc. (hereinafter

referred to as “BEC” and “Sea World,” or collectively as “Respondents”)1

In return for the payment it was to receive, Hobart was required to protect

Respondents against claims arising from its work in two ways: by obtaining

liability insurance in favor of Sea World for any claims resulting from its work and

also by indemnifying Sea World against claims other than those caused by Sea

World’s sole negligence. Specifically, under Section 1.13(b) of the Service Order,

Hobart agreed to “indemnify and hold [Respondents] harmless from any and all

loss to the extent caused or incurred as a result of the negligence or other

actionable fault of Contractor [Hobart].” (R. Vol. 10, pp. 1611-1620). The

entered

into a contract with Hobart Corporation (“Hobart”) to come onto Sea World’s site

to repair a Rondo Spiral Mixer. The contract with Hobart was embodied in two

documents: a Purchase Order and a Service Order Agreement that incorporated

Part One of the “Service Order General Conditions To Service Order Contracts”

(“Service Order”). (R. Vol. 10, pp. 1609-1622). The parties agreed that only Part I

of the Service Order applied to this contract; Part 2 was expressly NOT part of the

contract. (R. Vol. 3, p 466, 468).

1 Sea World of Florida was formerly a division of Busch Entertainment Corporation. BEC underwent a name change and the two entities are now known as Sea World Parks & Entertainment.

3

definition of “loss” included attorney’s fees and settlement payments, including

those incurred in connection with “spurious” claims. The term “Contractor” was

defined as including Hobart’s employees. In addition, Hobart waived the right to

assert comparative negligence or other similar defenses. In sum, Hobart expressly

agreed to indemnify Sea World for defense costs and settlement payments made in

connection with spurious claims asserted against Sea World by anyone, including

Hobart’s own employees. Specific consideration was paid for this indemnity. (Id.).

Section 1.14(b) of the Service Order required Hobart to name Respondents

as additional insureds with respect to “claims and/or liability arising out of work

performed for [Respondents] by [Hobart] or acts or omissions of [Respondents] in

connection with its general supervision of [Hobart]’s Work.” (R. Vol. 10, pp.

1611-1620).

On November 2, 2001, Hobart’s employee, Robert Dufault (“Dufault”) was

injured while repairing a Rondo Spiral bread mixer. (R. Vol. 16, pp. 74:13-20). In

direct violation of safety rules, Dufault inserted his hand into the belt while the

machine was operating, severing portions of two fingers. (R. Vol. 16, pp. 80:25-

88:19). Nevertheless, Dufault sued Sea World, alleging that his injuries resulted

from the negligence of Sea World’s employee, David Holley, and for Sea World’s

negligent hiring and retention of Mr. Holley. (R. Vol. 14, pp. 2325-2330).

Respondents tendered the case to Hobart and Hobart’s insurer, Ace American

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Insurance Company (“ACE”). (Vol. 10, pp. 1742-1761; Vol. 14, pp. 2319-2322).

Hobart and ACE refused to defend or indemnify Respondents (Vol. 14, pp. 2323-

2324), and Sea World retained attorney Mark Thompson of Marshall, Dennehy,

Coleman and Googin (“MDCG”) to represent it as defense counsel in the Dufault

lawsuit.

Discovery revealed that Dufault was partially, if not completely, responsible

for his own injuries. Sea World again demanded that Hobart and ACE indemnify

it and settle the Dufault suit on its behalf. Sea World filed a third party complaint

against Hobart alleging, inter alia, that Hobart’s failure to enforce its safety

procedures caused or contributed to Dufault’s injuries. When Hobart and ACE

continued to deny any obligation, Sea World settled with Dufault for $85,000. (R.

Vol. 16, p. 73:8-11). Sea World incurred defense fees and costs in the amount of

$147,964. (R. Vol. 7. pp 1049-1248, R. Vol. 8, pp. 1249-1336). Although not

sued by Dufault, Hobart paid Dufault $40,000 in settlement and also waived its

worker’s compensation lien which it contended amounted to $128,000.

Following the settlement with Dufault, Sea World and BEC filed the instant

suit to recover the settlement sum and fees and costs paid to MDCG. The

complaint alleged that Hobart and ACE (hereinafter collectively referred to as

“Petitioners”) breached their contracts by failing to defend, indemnify, and insure

Respondents against Dufault’s claims. (R. Vol. 1, pp. 148-187). Hobart contended

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neither it nor ACE owed any obligation to Sea World because the negligence of

Sea World’s employee was the “sole cause” of Dufault’s injures. (R. Vol. 15, pp.

67:12- 68:4).

At trial, Respondents put on evidence that it was not Mr. Holley, but instead

was Hobart’s employee, Dufault, who was responsible for the accident, and that

Respondents were not negligent. As evidence of the attorney’s fees it had incurred

as damages, Respondents introduced MDCG’s invoices into evidence. The jury

also heard several hours of testimony from Mr. Thompson describing in detail the

work reflected on the billing invoices and why that work was reasonable and

necessary. (R. Vol. 15, pp. 68-140). Petitioners never objected to the admission of

this evidence. Rather, Petitioners chose to cross-examine Mr. Thompson as to the

reasonableness of the defense fees. (R. Vol. 15, pp. 123:25-138:21). In fact,

fifteen of the twenty-one pages of cross-examination of Mr. Thompson related

solely to the reasonableness of the time billed for certain tasks. Indeed, Hobart’s

counsel at one point characterized the “only issue” in the case as being “whether or

not the attorney’s fees were reasonable.” (R. Vol. 15, pp. 83:5-9).

After Respondents rested, Petitioners moved for a directed verdict, asserting

for the first time that Respondents were required to put on an expert as to the

reasonableness of the attorney’s fees incurred in the Dufault action. (R. Vol. 17,

6

pp. 14:6-16:17). Petitioners’ motion relied solely on Seitlin & Co. v Phoenix Ins.

Co., 650 So. 2d 624 (Fla. 3d DCA 1994).

Respondents opposed the motion on the ground that the expert witness

requirement was inapplicable under the circumstances because they were seeking

MDCG’s fees as damages for Petitioners’ breach of contract in the underlying

Dufault case, not as attorney’s fees in the instant litigation. (R. Vol. 17, pp. 58:18-

59:23). The trial court did not immediately rule on the motions and trial

proceedings were continued for four days due to the trial judge’s unavailability.

(R. Vol. 17, 105:9-25). During this time, Respondents sought to cure the supposed

omission by retaining Andrew DeBevoise as an expert to testify on the

reasonableness of the MDCG fees. After first making Mr. DeBevoise available for

deposition (R. Vol. 18, 57:9-16), Respondents moved to reopen their case to

present his testimony. (R. Vol. 18, p. 58:6-10). The court initially granted the

motion (R. Vol. 18, p. 65), but just as Mr. DeBevoise was about to begin testifying,

Petitioners objected on the grounds that the jurors had not been asked whether they

knew Mr. DeBevoise and Petitioners did not have a rebuttal witness. The trial

court sustained the objections and granted Petitioners’ motion for directed verdict

on the issue of the MCDG fees because Respondent’s had not submitted expert

testimony. (R. Vol. 18, p. 72:15-24). In doing so, the court disregarded Aspen Inv.

Corp. v. Holzworth, 587 So. 2d 1374 (Fla. 4th DCA 1991), which holds that a party

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who waits until the directed verdict stage to argue that expert testimony regarding

reasonableness of attorney’s fees is required waives any such objection. The trial

court also rejected Respondents’ argument that a directed verdict was improper and

Mr. DeBevoise’s testimony should be permitted because some evidence of the

reasonableness of fees has been offered at trial through Mr. Thompson’s testimony.

(R. Vol. 18, pp. 78:17-79:1).

Petitioners neither called any witnesses nor offered any evidence.

Petitioners elected not to retain, disclose or call an expert witness on the issues of

the reasonableness of the MDCG fees. The case then went to the jury, which

returned a unanimous verdict finding Hobart’s employee Dufault 100% responsible

for his own injuries. Despite the lack of expert corroboration of Mr. Thompson’s

testimony and Hobart’s attack on the reasonableness of certain fees, the jury

awarded Respondents the full amount claimed: “$266,089.97 plus attorney’s fees

and costs.” (R. Vol. 5, pp. 723-917). The award compensated Respondents for the

Dufault settlement payment plus the undisputed sum Sea World paid MDCG to

defend against the Dufault lawsuit.

The parties submitted briefing on a number of legal issues that remained

unresolved after the jury verdict. (R. Vol. 4, pp. 663-668, 712-715; Vol. 5, pp. 723-

917; Vol. 6, pp. 918-938). Thereafter, the trial court issued its “Order on All

Pending Motions” on January 24, 2008. (R. Vol. 6, pp. 965-978). The court

8

concluded that Hobart and ACE were both obligated to indemnify Respondents for

the damages sought. The order contained a footnote: “The issues addressed by

directed verdict stand and are not addressed herein.” Nevertheless, the trial court

went on to deny Petitioners’ “Motion to Set Aside Portion of Verdict and Enter

Judgment in Accordance with the Court’s Directed Verdict on Attorney’s Fees”

and granted Respondents’ “Motion for Entry of Final Judgment.”

Competing forms of judgment were submitted and on March 24, 2008, the

trial court entered judgment for Respondents in the amount of $139,308.54. The

trial court reduced the jury’s verdict by the amount Sea World paid to MDCG

based on the directed verdict. (R. Vol. 6, p. 979-980).

Respondents filed a Motion to Tax Attorney’s Fees and Litigation Costs

seeking to recover their fees and costs in the instant case. The motion was heard

on May 28, 2009 before Circuit Judge Thomas B. Smith. Prior to the hearing,

Judge Smith read the parties’ motions, memoranda and supporting affidavits. (R.

Supp. 2d Vol. 1, pp. 93-94). He then heard over seven hours of testimony from

five witnesses. (R. Supp. 2d Vol. 1, pp. 89-269; R. Supp. 2d Vol. 2, pp. 300-434).

The time records were admitted into evidence (R. Supp. 2d Vol. 1, pp. 139-140)

and the court heard testimony regarding specific billing entries, billing rates and

counsel’s experience. (R. Supp. 2d Vol. 1, pp. 181-190). Sea World’s in-house

counsel testified concerning his review of the invoices and the reasonableness of

9

the rates and hours charged. (R. Supp. 2d Vol. 1, p. 249). Sea World’s expert,

Glenn Klausman, testified that he had compared each time entry with the

corresponding work product, asked the attorneys specific questions to determine

the reasonableness of each of the billing entries (R. Supp. 2d Vol. 2, p. 309) and

reduced the hours where appropriate. (R. Supp. 2d Vol. 2, pp. 317-322). Mr.

Klausman also opined that the rates charged were for the most part appropriate (R.

Supp. 2d Vol. 2, pp. 312:12-315-24) and gave specific examples of Central Florida

attorneys with comparable experience who charged $450 to $600 per hour for

comparable work. (R. Supp. 2d Vol. 2, p. 316:11-15). At the conclusion of his

testimony, Mr. Klausman stated that his expert witness rate in this case was $450

per hour and that he had spent a total of 42.8 hours on this case. (R. Supp. 2d Vol.

2, p. 348:7-22). The court permitted cross-examination as to this issue but

Petitioners declined the offer. (R. Supp. 2d Vol. 2, pp. 349:22-350:5).

Petitioners relied solely on their expert, Dennis O’Connor, who opined that

Sea World’s fees should be reduced by 73 percent. (R. Supp. 2d Vol. 2, pp. 392:6-

10). Mr. O’Connor admitted he spent only 3.3 hours looking over the time records

(R. Supp. 2d Vol. 2., p. 398:4-8), that he never compared the invoices with Sea

World’s work product (R. Supp. 2d Vol. 2, p. 398:16-24), and that his reduction of

Sea World’s counsel’s hours was “arbitrary.” (R. Supp. 2d Vol. 2, p. 418:4-13).

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When Respondents’ counsel notified Petitioners and the Court that Sea

World would be seeking recovery of Mr. Klausman’s expert witness fees, ACE did

not object. (R. Supp. 2d Vol. 2, p. 429:15-19). The court gave both sides until

June 2, 2009 to submit arguments or briefs on the expert fee issue. (R. Supp. 2d

Vol. 2, pp. 430:25-431:6).

On June 18, 2009, Judge Smith issued a nine-page Amended Supplemental

Final Judgment awarding Sea World attorney’s fees in the amount of $317,265.50,

plus $10,717.86 in taxable costs, plus interest and $19,260 in expert witness fees.

(R. 2d Vol. 1, pp. 67-75). Judge Smith made specific and detailed findings of fact

as to the reasonableness of the hourly rate and amount of time expended on this

case. Included in those findings were statements that the court had relied upon the

evidence presented at the hearing and its experience in private practice as well as

on the bench. Judge Smith detailed the specific number of hours reasonably

charged by each attorney/paralegal, and the reasonable hourly rate for each, to

provide the total cost and fee calculation. (R. 2d Vol. 1, pp. 73-74). Finally, the

court provided substantial legal and factual justification for the award of Mr.

Klausman’s expert fees. (R.2d Vol. 1, p. 74).

Respondents appealed the directed verdict depriving them of the attorney’s

fees paid to MDCG as defense counsel in the Dufault action. Petitioners appealed

the trial court’s determinations in favor of Respondents with regard to the

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indemnity and insurance provisions, as well as the post-trial fee award. The Fifth

District held that “Sea World was not required to present independent expert

testimony” to establish the reasonableness of the fees incurred defending the

Dufault action, and reversed and remanded with instructions to reinstate the jury’s

verdict. Sea World of Florida, Inc., 28 So. 3d 158. The court found the issues

raised by Petitioners on the cross-appeal “to be without merit” and also affirmed

the post-trial fee award “without discussion.” Id. at 159 n.1.

SUMMARY OF THE ARGUMENT Respondents’ arguments in response to the issues raised in Petitioners’

Initial Brief will be presented in an order that differs from the order in which

Petitioners have presented them, so that the issues that caused this Court to accept

jurisdiction over this case are addressed first.

The trial court erred in granting a directed verdict setting aside the jury’s

award of attorney’s fees to Sea World. The Fifth District correctly concluded that

because those fees were a component of Respondents’ contract damages, Sea

World was not required to present independent expert testimony to corroborate the

reasonableness of the fees.

The Fifth District’s reversal of the directed verdict can be affirmed on

several additional grounds. The decision the trial court relied upon in granting the

directed verdict, Seitlin & Co., 650 So. 2d 624, is distinguishable because here

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Respondents presented testimony from underlying defense counsel as to the

reasonableness of the fees; since that testimony constituted some evidence

supporting the jury’s verdict awarding fees, a directed verdict was improper.

Furthermore, Petitioners’ election to wait until the directed verdict stage to assert

that expert testimony was required amounted to a waiver pursuant to Aspen Inv.

Corp., 587 So. 2d at 1377. The trial court’s refusal to follow that authority was

error. Finally, the trial court abused its discretion in refusing to permit Respondents

to reopen their case to present expert testimony given the extreme prejudice

resulting therefrom, i.e., the directed verdict depriving Petitioners of over half the

jury’s damage award.

The trial court correctly concluded the Respondents were entitled to

contractual indemnity and the Fifth District properly affirmed that decision.

Section 1.13 clearly and unambiguously provides indemnity for settlements and

attorney’s fees, including those due to spurious claims, for injury to Hobart’s

employees caused by the negligence of Hobart and its employees. The jury found

Hobart’s employee Robert Dufault 100% responsible for his own injuries, so

Hobart was obligated to indemnify Sea World in full.

Likewise, the trial court and Fifth District were both correct in concluding

that Respondents were entitled to insurance coverage from ACE for the Dufault

claim. ACE insured Sea World for any liability arising out of Hobart’s work.

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Dufault was injured due to his own negligence while acting within the scope of his

duties as Hobart’s employee. The trial court properly rejected Petitioners’ effort to

read the “arising from” language to limit coverage to claims for vicarious liability.

Finally, the trial court’s post-trial award of attorney’s fees must be affirmed.

The award was based on substantial evidence and cannot be overturned absent a

showing of abuse of discretion. Petitioners do not come even close to meeting that

burden; instead, their appeal amounts to an effort to improperly reargue the

evidence presented to the trier of fact.

ARGUMENT

A. THE FIFTH DISTRICT COURT’S DECISION REINSTATING THE JURY’S AWARD OF THE MDCG FEES WAS CORRECT. (IN RESPONSE TO ISSUES “C” and “D” OF INITIAL BRIEF) 1. This Court Should Adopt The Reasoning Of The Fifth District And Overrule Seitlin To The Extent It Requires Corroborating Independent Expert Testimony Where Attorney’s Fees Are Sought As A Component Of Contract Damages.

The Fifth District Court held that, “Sea World was not required to present

independent expert testimony” to establish “the reasonableness of the fees

expended in defending against DuFault's claim.” Sea World of Florida, Inc., 28 So.

3d at 159. Where fees are a component of a plaintiff’s damages pursuant to an

insurance policy or contractual indemnification provision, there is no legitimate

need for an expert to verify the reasonableness of the fees. Id. at 160. The fees

have already been paid and long-established principles underlying contract

14

damages would be undermined if a party were not allowed reimbursement for the

entirety of those losses. See, e.g., Blout Bros. Realty Co. v. Eilenberger, 124 So.

41 (Fla. 1929). As a party seeking to recover previously incurred attorney’s fees as

an element of damages in a breach of contract action, “Sea World’s burden of

proof was that which is required in a contract action – the presentation of evidence

‘sufficient to satisfy the mind of a prudent, impartial person’ as to the amount of

awardable damages.” Sea World of Florida, Inc., 28 So. 3d at 160 (citing Schimpf v

Reger, 691 So. 2d 579, 580 (Fla. 2d DCA 1997)). The MCDG invoices and Mr.

Thompson’s detailed testimony on why those fees were reasonable and necessary

more than satisfied Sea World’s burden of proof. Id. As the Fifth District stated,

“[w]e see no reason to impose a higher standard of proof simply because the

professional fees sought to be recovered are those of an attorney.” Id. at 160.

In granting Petitioner’s motion for directed verdict with regard to the MDCG

fees, the trial court relied on Seitlin & Co., 650 So. 2d 624 for the proposition that

an independent expert is required to corroborate the reasonableness of attorney’s

fees even when those fees are sought as previously incurred damages in a breach of

contract action. Respondents respectfully urge this Court to overrule the Seitlin

decision and adopt the reasoning of the appellate court below.

In Seitlin, Brad Schandler was an insured on a policy issued by Phoenix

Insurance Company. Howard Silber sued Schandler for bodily injury and the

15

insurer wrongfully denied coverage. Schandler retained counsel to defend him, but

at trial Silber recovered a judgment against Schandler for $80,000. Silber and

Schandler then reached a settlement that included Schandler’s assignment of his

rights against Phoenix to Silber.

Schandler sued Phoenix to recover the attorney’s fees and costs expended in

defending against the Silber lawsuit. At trial, Schandler testified to his out-of-

pocket costs and attorney’s fees owed and introduced invoices reflecting these

amounts. The jury returned a verdict of zero as to Schandler’s damage claim and

Schandler moved for a new trial. Phoenix argued Schandler was not entitled to

recover his damages because he failed to call an attorney’s fees expert at trial.

In affirming the trial court’s order denying the new trial motion, the Seitlin

court concluded expert testimony was necessary to support Schandler’s claim for

defense fees. Seitlin, 650 So. 2d at 627. That conclusion was predicated on a

single case, Crittenden Orange Blossom Fruit v. Stone, 514 So. 2d 351, 352-53

(Fla. 1987). Id. However, Crittenden is factually inapposite as it involved a

claimant seeking to recover his attorney’s fees in connection with a worker’s

compensation proceeding. Crittenden, 514 So. 2d 351. In short, Crittenden

concerned a claim for attorney’s fees as attorney’s fees, rather than as a component

of previously incurred damages.

Seitlin simply applied the rule requiring expert testimony where a party is

16

seeking to recover attorney’s fees as fees to the dissimilar situation where the

claimant sought attorney’s fees as damages based on his insurer’s alleged breach

of contract. In doing so, the Seitlin court did not purport to expressly expand the

expert requirement to situations where the defendant breaches its contractual

obligations. Rather, the court appears to have merely taken the expert requirement

and, without analysis or explanation, applied it to an entirely different context.

In the sixteen years that have passed since it was published, no court has

followed Seitlin for the legal proposition upon which the trial court and Petitioners

rely. Instead, recent decisions and commentary (including the decision below)

have questioned the need for expert testimony even in true attorney’s fees claims.

See Island Hoppers, Ltd. v. Keith, 820 So. 2d 967, 976 (Fla. 4th DCA 2002)

(describing the expert requirement as resting on “shaky theoretical grounds.”);

Robert J. Hauser, Raymond E. Kramer, Patricia A. Leonard, Is Expert Testimony

Really Needed In Attorney’s Fees Litigation?, 77-Jan. Fla. B.J. 38 (2003). In

Roshkind v. Machiela, No. 4D10-203, 2010 WL 2882359, at *2 (Fla. 4th DCA

2010), the Fourth District recently questioned the usefulness of requiring an

independent expert witness to establish the reasonableness of attorney's fees

charged. The court could see "little reason to simply increase litigation costs by

requiring another lawyer to testify as an expert" and explained that "[e]liminating

the need for an independent expert witness does not eliminate the requirement of

17

reasonableness." Id. at *2. The court then certified to the Supreme Court the

question of whether expert witness testimony is necessary to establish attorney's

fees due under a charging lien against a client. Id. at *3. The Fifth District has,

thus, joined the Fourth District in questioning the need for corroborating experts in

fee claims. Given the growing sentiment in favor of abolishing a questionable,

judicially created rule requiring corroborating experts where fees are sought as

fees, there is no rational justification for instead extending that rule where fees are

sought as damages for breach of contract.

Petitioners attempt to justify the Seitlin decision, but like the Seitlin court,

they present no compelling reason why expert testimony should be required to

support attorney’s fees as damages. Petitioners criticize the Fifth District’s

conclusion that an expert is not required where fees are sought as a component of

contract damages, but those criticisms never address the court’s rationale head on.

Petitioner’s argue that the Schimpf requirement that contract damages be proved by

evidence “sufficient to satisfy the mind of a prudent, impartial person” is merely a

“general proposition” of contract law. Initial Brief, pp. 37-38. But that is precisely

the point. Where fees are a component of contract damages they should be treated

the same way as any other contract damages. The same standards and “general

propositions” governing the burden of proof should apply.

Petitioners also accuse the Fifth District of “attempting to deviate from the

18

fee recovery standard recognized by Crittenden, which requires the testimony of an

independent attorney fee expert witness.” (Initial Brief, p. 38). But Crittenden, and

every other case cited by Petitioners aside from Seitlin, are cases where attorney’s

fees were sought as fees. The Fifth District properly distinguished the established

(albeit questionable) requirement for expert testimony in those situations from the

instant case where fees are a component of contract damages.

Last, Petitioners admonish the Fifth District for having the audacity to

“question the mandates of this Court” by seeing “no reason to impose a higher

standard of proof simply because the professional fees sought to be recovered are

those of an attorney.” (Id. at 38). But once again, the key distinction applies. In

opining there was no reason to distinguish between the proof required for attorneys

fees as opposed to those of other professionals, the Fifth District was referring to

fees being sought as damages for breach of contract, not to fees as fees as in

Crittenden.

In sum, Petitioners have failed to articulate a single reason why the

corroborating expert requirement for attorney’s fees should apply where such fees

are an element of contract damages. Instead, Petitioners rely solely on the

argument that Seitlin arguably imposed that requirement. Seitlin, however, fails to

offer any explanation as to why such a rule makes legal or practical sense.

Finally, it should be emphasized that affirming the Fifth District below does

19

not prevent either side from calling an expert to corroborate or attack the

reasonableness of attorney’s fees if they choose to do so. If a plaintiff seeks

attorney’s fees as a component of contract damages and the defendant truly

believes those fees are unreasonable, there is nothing to stop the defendant from

hiring an expert to challenge those fees. Likewise, a plaintiff may choose to spend

the money to hire its own expert to provide support for the fees being sought,

particularly if a large amount is sought or the plaintiff feels an expert would assist

the jury. Simply put, allowing, but not requiring, corroborating experts where

attorney’s fees are a component of contract damages treats attorney’s fees like any

other type of damages, while allowing litigants to choose how best to utilize their

resources.2

2 Amicus Curiae waxes poetic that “unscrupulous attorneys will seek to prolong litigation or otherwise incur unnecessary expenses” if they are the only ones required to testify to the reasonableness of their fees. Amicus Curiae Brief, p. 16. Realistically, Amicus Curiae’s ideal that the requirement for the plaintiff to hire an expert as to reasonableness will rein-in fees is far-fetched. As the Fifth District noted in this case, “expert testimony in fees cases ‘is often nothing more than a rubber stamp of the billing and time records submitted to the court by the party seeking fees . . . .’” It is unlikely that an allegedly unscrupulous lawyer could not find (and pay) another equally unscrupulous lawyer to provide expert testimony as to the reasonableness of the fees. In reality, the prospect of having their bills questioned by a defense expert would likely prove a far more effective deterrent to excessive fees.

At the same time, overruling Seitlin removes an element of

gamesmanship from such litigation by preventing defendants from sandbagging

unsuspecting plaintiffs with directed verdict motions based on a single obscure and

20

analytically flawed decision.

2. The Trial Court Abused its Discretion in Granting the Directed Verdict.

Because the Fifth District concluded Respondents were not required to

present independent expert testimony to support their damages, it did not reach the

other bases for Respondents’ appeal. However, should this Court either disagree

with the court below or prefer not to reach that issue, it may properly affirm the

Fifth District’s decision on separate grounds.

a. Seitlin is Distinguishable Because Respondents Presented Evidence of Reasonableness.

In its opinion, the Fifth District Court distinguished Seitlin from this case.

In Seitlin, the plaintiff testified as the amount of the fees incurred but presented no

evidence as to the reasonableness of those fees. The absence of such evidence may

well have accounted for the jury verdict awarding the plaintiff nothing. As the

Fifth District noted, it is unclear whether the Seitlin court would have reached the

same conclusion had the plaintiff called his prior attorney to offer percipient

testimony as to why the activities reflected in the invoices was necessary and the

fees charged reasonable. Sea World of Florida, Inc., 28 So. 3d at 160.

Here, attorney Mark Thompson provided detailed testimony in support of

the reasonableness of the fees paid to him by Sea World. He was crossed examined

at length about specific entries that Petitioners contended were excessive. After

21

hearing the evidence, the jury awarded the full amount of the fees to Respondents,

a sharp contrast to the outcome in Seitlin.

b. Substantial Evidence Supported The Jury’s Verdict.

Motions for directed verdict should be affirmed only when it can be said

that, after viewing the evidence and testimony in a light most favorable to the non-

moving party, a jury could not reasonably differ as to the existence of a material

fact and the movant is entitled to judgment as a matter of law. See Scott v. TPI

Restaurants, Inc., 798 So. 2d 907, 908-09 (Fla. 5th DCA 2001). A directed verdict

should be granted only where there is no evidence upon which a jury could

properly rely for finding for the nonmoving party. Hunzinger Const. Corp. v.

Quarles & Brady General Partnership, 735 So. 2d 589, 597 (Fla. 4th DCA 1999),

rev. denied, 766 So. 2d 589 (Fla. 2000).

The testimony of Mark Thompson, as well as the invoices reflecting the

attorney’s fees and costs incurred in defending the Dufault action, more than met

the “some evidence” standard needed to overcome a directed verdict. Moreover,

the jury accepted that evidence despite Petitioners’ extensive cross-examination

regarding certain time entries. Further, although the reasonableness of the hourly

rates charged by MDCG was never even challenged by Petitioners, their fee expert

acknowledged the reasonableness of the rates in the post-trial fee hearing. (R.

22

Supp. 2d Vol. 2, p. 250:5-251:7). As such, it was an abuse of discretion for the

trial court to grant a directed verdict in Petitioners’ favor.

c. Petitioners Waived Any Right To Contest The Reasonableness Of The MDCG Fees.

If expert testimony was required to corroborate the reasonableness of the fee

component of Respondents’ damages, the trial court nonetheless abused its

discretion in granting a directed verdict because Petitioners waited until after

Respondents’ rested to object to the absence of expert testimony. Petitioners

therefore waived their right to assert that Respondents had not established the

reasonableness of the fees. Aspen Inv. Corp., 587 So. 2d at 1377.

Aspen involved the appeal of the trial court’s directed verdict in favor of

cross-defendant David Fraser following a jury verdict for cross-plaintiff, Aspen

Investments Corporation. After settling certain mortgage foreclosure suits against

it, Aspen cross-claimed against Fraser, its former director, president, secretary, and

treasurer for civil theft and slander of title. On directed verdict, the trial court

found that Aspen failed to prove its civil theft claim and did not have a slander of

title claim. As to damages, the trial court further found that Aspen failed to prove

the reasonableness of his attorney’s fees incurred in the defense of the mortgage

foreclosure claims. The Fourth District reversed the trial court’s ruling, stating:

It is undisputed that no objection was raised at the time the evidence was accepted concerning Aspen’s failure to prove the reasonableness of the attorney’s fees incurred. We . . . are concerned . . . only with

23

the cross-plaintiffs’ failure to introduce testimony that the fees incurred were reasonable. … Still, Fraser’s failure to object to the evidence on this ground waived any right to have it subsequently considered on a motion for directed verdict. To hold otherwise would allow a party to lure the other side into believing that evidence on a necessary element of proof is before the court by not objecting to its introduction and then permitting that party to subsequently ask the court to disregard that evidence after the opponent has rested.

Id. at 1377 (emphasis added).

If Respondents were required to call an expert to support the reasonableness

of the MDCG fees, then Petitioners were required to follow the procedure outlined

in Aspen. Petitioners did not object to Mark Thompson’s testimony that the time

spent and fees charged by MDCG were reasonable, nor did they object to

Respondents’ introduction of MDCG’s invoices into evidence. Instead, they lured

Respondents into believing the necessary proof was before the court by cross-

examining Thompson on the issue of reasonableness. The first time Petitioners

challenged the sufficiency of the fee evidence was after Respondents rested. As

such, Respondents waived any objection to the reasonableness of the MDCG fees.

The joint pre-trial statement did not provide Respondents with adequate

notice that Petitioners believed an expert witness was required on the issue of the

reasonableness of fees. Petitioners merely stated that one issue in dispute was the

reasonableness of the damages being claimed; an issue they addressed at trial via

cross-examination of Mr. Thompson. Petitioners said nothing to suggest they

believed an expert was required and they did not identify an expert of their own.

24

(R. Vol. 4, pp. 674-681). Fairness matters and one party should not be allowed to

obtain an unjust result by sandbagging the other.

Petitioners’ failure to even mention Aspen in their brief is telling. Petitioners

waived their right to move for a directed verdict based on the lack of expert

testimony. Under the doctrine of stare decisis the trial court was bound to follow

Aspen. Granting Petitioners’ motion for a directed verdict on the issue of

attorney’s fees was an abuse of discretion.

d. The Trial Court Abused Its Discretion In Denying Respondents’ Motion To Reopen Their Case To Introduce Expert Testimony.

A trial court has discretion to grant a motion to reopen a case for

presentation of additional evidence after the parties have rested and even after

granting a motion for directed verdict for a party. Robinson v. Weiland, 936 So. 2d

777, 781 (Fla. 5th DCA 2006). “[W]hen the request is timely made and the jury is

deprived of evidence that could significantly impact an important issue, it is an

abuse of discretion to deny the motion to reopen.” Govan v. State, 813 So. 2d 276,

277 (Fla. 2d DCA 2002). If a case is not technically closed (i.e., closing arguments

have not yet begun and the jury had not received instructions), “the denial of a . . .

motion to reopen the case will be reversed if the motion was timely and a proper

showing has been made as to why the evidence was omitted.” Id. at 277 (citing

Donaldson v. State, 772 So. 2d 177, 181 (Fla. 1998)).

Here, after Petitioners moved for directed verdict on the issue of fees,

25

Respondents immediately retained Andrew DeBevoise as a fees expert, notified

Petitioners, and made him available for three days for Petitioners to depose. (R.

Vol. 18, 57:9-16). Petitioners declined the offer. (Id.). Respondents then moved

to reopen their case to supplement their evidence by presenting Mr. DeBevoise’s

testimony. (R. Vol. 18, p. 58:6-10). The court initially granted the motion to

reopen but later changed its mind, finding that the presentation of Mr. DeBevoise’s

testimony would prejudice Petitioners. Thereafter, Respondents made a proffer to

the court, establishing that Mr. DeBevoise would have testified that Mr.

Thompson’s time spent defending the Dufault suit and the rate charged were

reasonable. (R. Vol. 18, pp. 74:8-78:13). Petitioners stated they would have

stipulated to Mr. DeBevoise’s qualifications as an expert. (R. Vol. 18, p. 75:11-

20).

The denial of the motion to reopen was an abuse of discretion. Respondents

motion to reopen was timely. See Govan, 813 So. 2d at 277. Precluding Mr.

DeBevoise’s testimony “significantly impacted” the key issue of Appellant’s

damages in that the absence of such evidence led to the directed verdict.

Respondents made a proper showing why the evidence was omitted, explaining

they believed Mr. Thompson’s testimony and MDCG’s invoices were sufficient

proof of the attorney’s fees because Respondents were seeking the fees as part of

their contract damages, not as prevailing party or statutory attorney’s fees.

26

Respondents also rested without producing an expert because Petitioners did not

challenge their evidence or object to the lack of expert testimony at any time prior

to that point.

The trial court acknowledged that Petitioners’ purported concern that a

member of the jury might be familiar with Mr. DeBevoise could be addressed

simply through a limited voir dire of the panel. (R. Vol. 18, p. 72:8-14). However,

the court declined to follow such procedure, disregarding the fact that courts

routinely deal with the absence of voir dire with regard to rebuttal witnesses. The

court likewise rejected Respondents’ proposal to sever the issues of attorney’s fees

from liability without explanation. (R. Vol. 18, pp. 78:17-79:1).

Since Respondents’ motion to reopen was timely, the evidence sought to be

admitted significantly impacted an important issue in this case, and because

Respondents adequately explained the omission of the evidence, the trial court

abused its discretion in denying Respondents’ motion to reopen.

Petitioners do not dispute that the trial court’s refusal to allow Sea World to

re-open its case resulted in extreme prejudice to Sea World by depriving it of

damages to which it was otherwise entitled. Instead, Petitioners argue that

allowing Sea World to re-open would have caused them to suffer prejudice.

Petitioners’ claims do not withstand scrutiny.

First, Petitioners cannot credibly argue that they would not have been able to

27

prepare to examine Mr. DeBevoise or call an expert of their own. This Court need

only look at the detailed cross-examination of Mr. Thompson to conclude that

Petitioners had reviewed the invoices in detail and were fully prepared to cross-

examine on those issues, whether the witness was Mr. Thompson or Mr.

Debevoise.

Second, nothing whatsoever prevented Petitioners from retaining their own

expert on the reasonableness of the MCDG fees, either prior to or during the trial,

regardless of what Respondents did or did not do.

Last, Hobart’s emphasis on the potential prejudice if a juror recognized Mr.

DeBevoise is unwarranted. The mere possibility that a juror might know a witness

is pure speculation. Second, if a juror did know him, that juror could have been

excused – there was an alternate juror. And Petitioners’ argument that conducting

voir dire would have placed too much emphasis on that witness is so speculative,

particularly compared to the certain prejudice to Respondents by not allowing the

expert to testify, that it serves to underscore the weakness of Petitioners’ position.

e. If An Expert Is Required, The Appropriate Remedy Is Remand.

Petitioners contend the rules governing proving the reasonableness of

attorney’s fees as fees are not applicable to fees that are a component of contract

damages. However, if this Court were to conclude otherwise, Respondents should

be entitled to the benefit of those rules. As such, the omission of expert testimony

28

is not fatal to Respondents’ recovery of those fees. Rather, the appropriate way to

correct a party’s failure to produce expert testimony where some evidence

supporting the fee order exists is to remand to allow for such testimony. See Snow

v. Harlan Bakeries, Inc., 932 So. 2d 411 (Fla. 2d DCA 2006); Rodriguez v.

Campbell, 720 So. 2d 266 (Fla. 4th DCA 1998); Silva v. Hernandez, 595 So. 2d 230

(Fla. 3d DCA 1992); Walker v. Kremer, 382 So. 2d 338 (Fla. 4th DCA 1980).

“[W]hen the record contains some competent substantial evidence supporting the

fee or cost order, yet fails to include some essential evidentiary support such as . . .

testimony from an expert attorney’s fees witness, the appellate court will reverse

and remand the order for additional findings or an additional hearing if necessary.”

Rodriguez, 720 So. 2d at 268. Even Seitlin, upon which the trial court relied,

remanded for a new trial on damages and explained that on retrial, Schandler

would be permitted to call an expert witness on the reasonableness of the fees. 650

So. 2d at 627.

B. THE COURTS BELOW PROPERLY CONCLUDED SEA WORLD WAS ENTITLED TO INDEMNITY FROM HOBART. (IN RESPONSE TO ISSUE “A” OF INITIAL BRIEF)

From the outset of this case, Hobart’s primary focus has been to avoid its

indemnity obligation to Sea World. In its pre-trial motions, during the trial, and on

appeal, Petitioners have proffered an array of impressive sounding arguments that

all have one thing in common - they ignore the actual language of the contract

29

between the parties. Hobart’s position can be boiled down to this: The contract

does not mean what it says and its promise to indemnify is worthless.

The trial court addressed Hobart’s indemnity arguments in detail and

rejected each one. On appeal, Hobart tried again, attacking the trial court’s

reasoning, its interpretation of case law and common sense. The Fifth District

found Petitioners’ arguments to be “without merit.” Sea World of Florida, Inc., 28

So. 3d at 159 n.1. And yet, Hobart makes the indemnity issue the centerpiece of

this appeal. As such, Respondents must again address Hobart’s claims even if

unwarranted.

1. The Trial Court’s Construction Of Section 1.13 Was Correct.

In its Initial Brief on the Merits, Hobart has largely avoided using the phrase

“vicarious liability” when describing the scope of its indemnity obligation.

Nevertheless, Hobart’s position remains the same: 1) It was only obligated to

indemnify where Sea World is held liable on a vicarious liability theory for

Hobart’s sole negligence; 2) Because the Dufault complaint alleged that only Sea

World was negligent, such allegations – rather than the actual facts - precluded

indemnity; and 3) The trial court’s conclusion that Sea World was entitled to

indemnity was error.

In fact: 1) The indemnity clause goes far beyond vicarious liability and

expressly includes claims for injuries to, and caused by, Hobart’s employees; 2)

30

Notwithstanding the “spurious” allegations of the complaint, the evidence showed

Sea World was not negligent; 3) The lower courts concluded, and Hobart admits,

the contract provides indemnity for Hobart’s negligence and the jury found Hobart

was 100% negligent.

Hobart and Sea World entered into a contract and it is that contract which

controls their indemnity rights and obligations. “In construing a contract, the

intention of the parties is ascertained from the language used in the instrument and

the object to be accomplished and unless clearly erroneous, the construction placed

upon a contract by the trial court should be affirmed.” Gossett & Gossett, P.A. v.

Mervolion, 941 So. 2d 1207, 1210 (Fla. 4th DCA 2006) (citation omitted); see also

Safeco Ins. Co. v. Rochow, 384 So. 2d 163, 164 (Fla. 5th DCA 1980) (“The

interpretation by a trial court of a contract between the parties should not be

reversed by an appellate court unless it is clearly incorrect and unsupported by the

evidence in the cause.”) (citation omitted); see also Liza Danielle, Inc. v. Jamko,

Inc., 408 So. 2d 735, 737 (Fla. 3d DCA 1982). The courts interpret the words of a

contract in their everyday, non-technical sense in order to give effect to the parties’

express intent. Phillip Morris Inc. v. French, 897 So. 2d 480, 488-489 (Fla. 3d

DCA 2004) (“a court is required to use a construction that best expresses the

intention of the parties”).

31

The relevant portions of the “Indemnity” clause, Section 1.13 of the Service

Order General Conditions, provide as follows:

a. Definitions

2. “THE CONTRACTOR” means and includes Contractor and its Subcontractors and their respective agents, servants and employees; and

3. “LOSS” means any and all loss, damage, liability, or

expense, whether incurred as a judgment, settlement, penalty, fine or otherwise (including attorney’s fees and the cost of defense), in connection with any action, proceeding or claim, whether real or spurious, for injury including death to any person or persons or damage to, loss of the use of, or loss of the property of any person, firm or corporation including the parties hereto, arising or resulting out of the performance of services required pursuant to this Contract.

b. The Indemnity

Contractor hereby agrees to indemnify and hold harmless THE OWNER from any and all LOSS to the extent caused or incurred as a result of the negligence or other actionable fault of THE CONTRACTOR.

c. Waiver of Certain Defenses

With respect to the Owners indemnity rights under the Contract Documents, Contractor expressly waives all common law or statutory defenses including but not limited to those under Worker’s Compensation, Contribution, Comparative Fault or similar statutes or legal principles to the extent said defenses are inconsistent with or would defeat the purpose of the indemnification provided under this Section ….

d. Consideration

It is stipulated and agreed that 1% of the Contractor’s compensation is paid as and for specific consideration for this indemnity.

32

(R. Vol. 10, p. 1613). Reducing Section 1.13 to the words most relevant to these

specific facts produces the following:

Hobart agrees to indemnify Sea World from all loss (including settlement and defense costs) for any claim (real or spurious) for injury to any person (including Hobart and its employees) arising out of services required under the contract to the extent such loss is incurred as a result of the negligence of Hobart or its employees. Hobart waives any defense of contribution, comparative fault or similar principles to the extent they would defeat indemnification. Hobart agrees it has been paid consideration for this indemnity.

There are two arguably reasonable interpretations of the indemnity clause.

The first, which gives effect to the entire clause, is that Hobart will not be required

to indemnify where Sea World is solely negligent, but to the extent Hobart is

negligent at all, it will indemnify Sea World for any and all loss incurred, including

loss attributable to Sea World in a joint negligence situation. This interpretation

gives effect to paragraph 1.13 (c) which provides that Hobart may not avoid

indemnity in a joint negligence situation by asserting that Sea World was itself

partially to blame. Alternatively, Section 1.13 could be interpreted to provide that,

in comparative negligence situations, Hobart is only required to indemnify to the

extent of its own negligence. This is the interpretation adopted by the trial court.

Under either of these interpretations, Sea World is entitled to indemnity for

Hobart’s negligence. Thus, it is not necessary to resolve the question of which

interpretation is correct since Sea World was found by the jury to be blameless and

33

Hobart entirely at fault. Because the interpretation proffered by Hobart – that the

contract only requires indemnification where Sea World is without fault but

vicariously liable for Hobart’s negligence – is patently unreasonable, the trial

court’s conclusion that Hobart breached the indemnity clause was correct.

The trial court’s analysis focused on Camp, Dresser & McKee, Inc. v. Paul

N. Howard Co., 853 So. 2d 1072 (Fla. 5th DCA 2003). There, as here, an injured

employee of the indemnitor (Howard), prohibited by Worker’s Compensation law

from suing the indemnitor, sued the indemnitee (CDM) for negligence. CDM

demanded indemnification from Howard but Howard refused. Like Sea World,

CDM then settled with the injured worker and sued Howard for contractual

indemnity. Id.

Howard argued, as Hobart does here, that indemnity was limited to vicarious

liability and since CDM was only sued for its own negligence, indemnity would

not lie. The Fifth District, which had earlier remanded for a determination of

CDM’s negligence, rejected that argument. Citing the very cases upon which

Hobart now relies, the court stated:

Howard's unwavering view then and now is that unless CDM had been sued on a theory of vicarious liability for Howard's negligence, both common law and contractual indemnity were simply not available to CDM.

Howard is wrong. As we tried to explain in Camp Dresser I, common law indemnity is an equitable remedy that arises out of obligations imposed through special relationships, but contractual indemnity is

34

not concerned with "special relationships" or vicarious, constructive, derivative or technical liability; it is concerned with the express terms of the agreement to indemnify. In cases involving contractual indemnity, the terms of the agreement will determine whether the indemnitor is obligated to reimburse the indemnitee for a particular claim.

Id. at 1077 (internal citations omitted).

In terms of the underlying facts, contract language, and arguments asserted

by the indemnitor, Camp Dresser is easily the most analogous of the cases cited by

either party. Applying Camp Dresser’s analysis to the instant indemnity clause,

the trial court reasoned that the phrase “to the extent caused or incurred as a result

of the negligence or other actionable fault of THE CONTRACTOR” is

comparative fault language that provides indemnity in joint negligence situations.

(R. Vol. 6, p. 974). Taking into account the entire indemnity clause, the trial court

reasoned that “the present indemnity language, when read together with all

relevant terms of the contract … dictates a conclusion that indemnity is available to

Sea World.” (R. Vol. 6, p. 974).

Camp Dresser is a lengthy, detailed, well reasoned opinion involving

strikingly similar facts and an indemnity clause with many similarities to the case

at issue. But Hobart prefers to focus on SEFC Bldg. Corp v. McClosky Window

Cleaning Inc., 645 So. 2d 1116 (Fla 3d DCA 1994), which it argues “mirrors” the

instant case. Like Camp Dresser, in SEFC the injured employee of the indemnitor

sued the indemnitee for negligence. However, the indemnity provision in SEFC is

35

entirely different from the instant case. There, the contractor agreed to provide

indemnity for claims made “in connection with” three specific circumstances: 1)

the contractor’s work at the jobsite; 2) the contractors default under the contract;

and 3) any act of omission of the contractor. In its one-page opinion, the Third

District held that the indemnity clause did not clearly and unequivocally indemnify

the owner for its own negligence, a point conceded by the owner on appeal. There

is nothing in the opinion to suggest there was any evidence, or that the owner even

alleged, that the accident came within one of the three specific types of conduct

that could have given rise to indemnity. The trial court below properly looked to

the detailed analysis in Camp Dresser rather than SEFC; the latter provides no

guidance here.

Fundamental to Hobart’s argument is the false premise that the allegations

of the underlying tort claim, rather than the actual facts, control the parties’

indemnity obligations. 3

3 Even if Hobart were correct, it would have been obligated to indemnify Sea World. Sea World filed a third party complaint in the Dufault action alleging Hobart’s negligence caused the injury. (R. Vol. 14, pp. 2405-2406). And Hobart stipulated to the fact that, as an affirmative defense, Sea World asserted the negligence of Dufault and Hobart. (R. Vol. 6, p. 966). If Hobart’s indemnity obligation is, as it argues, determined by the allegations in the pleadings, then of course the allegation in Sea World’s complaint would, alone, have triggered Hobart’s indemnity obligation.

Camp Dresser implicitly rejected that argument: If

Hobart’s position was correct, Howard could have successfully moved to dismiss

CDM’s complaint since, according to Hobart, the underlying pleadings control and

36

there can never be indemnity where the indemnitee is sued for its own negligence

rather than for vicarious liability. In Camp Dresser, Howard made that very

argument and it was flatly rejected. The Camp Dresser court looked to the facts,

not the allegations, to determine the parties’ indemnity rights. Camp, Dresser,

853 So. 2d at 1077. Other courts have expressly repudiated the argument that

allegations control indemnity. See Rea v. Barton Protective Servs., 660 So. 2d

772, 774 (Fla. 4th DCA 1995) (in claims for indemnification and breach of

contract, the parties “are not bound by the allegations of the original complaint and

the characterization of conduct set forth therein”).

Hobart’s efforts to tie its indemnity obligation to the allegations of the

underlying complaint fails for another reason: Section 1.13 expressly provides

indemnity for “spurious” claims. Hobart’s arguments all hinge on the fact that

Dufault alleged that Sea World was negligent. But the jury found Sea World was

not negligent and Dufault’s allegation was spurious. To deny Respondents

indemnity, as Hobart asks, based on that spurious allegation would require the

Court to ignore the plain language of the parties’ contract.

2. The Trial Court Properly Refused To Look Outside The Contract.

Hobart next argues that the courts below erred by refusing to consider the

entire contract, specifically Part 2 of the Service Order General Conditions. The

trial court found that Part 2 was not part of the contract between the parties and

37

thus could not be considered. (R. Vol. 6, 966-967, 967 fn. 4). “[I]f a contract

provision is ‘clear and unambiguous,’ a court may not consider extrinsic or ‘parol’

evidence to change the meaning set forth in the contract.” Jenkins v. Eckerd Corp.,

913 So. 2d 43, 52 (Fla. 1st DCA 2005) (citation omitted); see also Herpich v.

Estate of Herpich, 994 So. 2d 1195, 1197 (Fla. 5th DCA 2008);

Hobart acknowledges that the parties agreed that Part 2 “does not apply.”

(Petitioners’ Brief at p. 2). But that admission does not stop Hobart from stating,

without citation to supporting evidence, that Part 2 was somehow part of the

contract. Hobart asserts that Parts 1 and 2 are “two parts of a single contract”

(Petitioners’ Brief at p. 27). The undisputed evidence is to the contrary. In truth,

the parties stipulated that the contract consisted of the Purchase Order and Part 1 of

the Service Order General Conditions. (R. Vol. 4, p. 674). When Hobart tried to

argue that Part 1 should be construed by reference to Part 2 at trial, the trial court

asked if Part 2 was included in the contract and Hobart’s counsel admitted it was

not. (R. Vol. 17, pp. 34:19-36:8). As such, the court’s findings of fact properly

state:

The terms of the agreement between the parties were embodied in two documents: a Purchase Order and a Service Order Agreement which incorporated “Part One” of certain “Service Order General Conditions to Service Order Contracts” (hereinafter the “Contract”).

(R. Vol. 6, p. 966). Contract interpretation is a question of law for the court, but the issue of

38

what constitutes the contract is a factual one. See 55 Fla. Jur. 2d Trial § 150 (2009

ed.) ("Where the facts are disputed, the question whether a contract has been made

is a jury question.”); 75A Am. Jur. Trial § 672 (2009 ed.) ("The determination of

the intent of the parties to make a contract, as gathered from what they did and

said, is normally a question of fact for the jury."); see also 75A Am. Jur. § 679

(2009 ed.) (addressing the types of matters that are questions for the jury). The

trial court’s finding that Part 2 was not part of the contract is supported by

substantial evidence, in fact, by Hobart’s stipulation and subsequent admission,

and should not be disturbed on appeal. See Jones v. State, 998 So. 2d 573, 580

(Fla. 2008); Shaw v. Shaw, 334 So. 2d 13, 16 (Fla. 1976); State v. Spaziano, 692

So. 2d 174, 175 (Fla. 1997); Phillip J. Padovano, Florida Appellate Practice § 18.6

(2009 ed.).

Hobart does not cite a single case to support the proposition that the court

should interpret a contract based upon provisions outside the agreement. Indeed,

[a]s a general rule, in the absence of some ambiguity, the intent of the parties to a written contract must be ascertained from the words used in the contract, without resort to extrinsic evidence. Extrinsic evidence is admissible regarding the intent of parties to a contract only if a latent ambiguity exists. A latent ambiguity arises when a contract on its face appears clear and unambiguous, but fails to specify the rights or duties of the parties in certain situations.

Wheeler v. Wheeler, Erwin & Fountain, P.A., 964 So. 2d 745, 749-50 (Fla. 1st

DCA 2007) (internal citations and quotation marks omitted). The contract at issue

39

here does not contain a “latent ambiguity.” Neither the trial court nor the Fifth

District found Section 1.13 to be ambiguous. As such, it is improper for Hobart to

resort to extrinsic evidence to interpret the contract.

The argument that SWF “must” have meant Part 1 to be narrower than Part 2

is mere speculation unsupported by any evidence. There are many reasons why the

parties may elect to use one set of conditions as opposed to another: the state in

which the work was to be performed, the type of work involved, and the resources

of the contractor are but a few. The mere fact that Sea World has different forms

for different uses does not compel the conclusion that the language must mean

different things. Nor is there any evidence in the record to support Hobart’s

assertion that, if Section 2.18 provides indemnity where there is joint negligence

that must mean that Section 1.13 does not.

Even if this Court were to consider Section 2.18 and adopt Hobart’s

argument that Section 1.13 must be interpreted more narrowly, the outcome

remains unchanged. As noted above, the most limited reasonable interpretation of

Section 1.13 is that Sea World is only entitled to indemnity for the negligence

actually attributable to Hobart. The jury found Hobart, through its employee

Dufault, was entirely responsible for the damages in this case. Under any reading

of Section 1.13, Hobart was contractually obligated to indemnify Respondents.

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C. THE COURTS BELOW PROPERLY CONCLUDED SEA WORLD WAS ENTITLED TO COVERAGE FROM ACE. (IN RESPONSE TO ISSUE “B” OF INITIAL BRIEF)

Hobart purchased general liability from ACE and the policy contained an

additional insured endorsement that included Sea World. Sea World tendered the

Dufault lawsuit ACE and Hobart but ACE did not respond to the tender. After

settling with Dufault, Sea World sued ACE for breach of contract. (R. Vol. 14, p.

2405-2406). The only issue on appeal with regard to the trial court’s conclusion

that ACE breached the insurance policy is ACE’s contention that the trial court’s

interpretation of the language in question was incorrect. As such, this issue

presents a question of law for which de novo review is appropriate.

Under Section 1.14(b) of the Service Contract, Hobart agreed to name Sea

World as an additional insured “with respect to claims and/or liability arising out

of Work performed for Owner [Sea World] by Contractor [Hobart] or acts or

omissions of Owner in connection with its general supervision of Contractor’s

Work.” (R. Vol. 10, p. 1613). Based upon the language of the additional insured

endorsement, the trial court concluded ACE’s insurance obligation was limited to

that required by Section 1.14. (R. Vol. 6, p. 969). Thus, the question presented was

whether Dufault’s claim for injuries suffered while repairing Sea World’s mixer

was one “arising out of work performed for Sea World by Hobart.” The trial court

readily concluded that it was (Id. at 970), and the Fifth District affirmed that

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conclusion without discussion. Sea World of Florida, Inc., 28 So. 3d at 159.

ACE’s main argument is that the coverage provided by the first clause,

standing alone, is so broad that it would always include claims based on negligent

supervision. ACE reasons that since the parties added the second clause to

expressly include negligent supervision claims, the first clause is magically

transformed so as to limit coverage to vicarious liability. In other words, ACE

claims that if the agreement between the parties had simply required Hobart to

obtain coverage for Sea World for “claims and/or liability arising out of Work

performed for Owner by Contractor” the Dufault claim would have been covered

by the policy. But because the contract made express that claims involving

negligent supervision were also covered, the parties could only have intended to

drastically limit the coverage obligation. ACE’s reasoning is unreasonable and its

proffered interpretation was correctly rejected below.

The trial court looked primarily to this Court’s opinion in Taurus Holdings,

Inc. v. United States Fidelity and Guaranty, 913 So. 2d 528 (Fla. 2005), which

“examined the ‘arising out of’ language in the context of insurance coverage and

ruled that such language is to be given broad meaning and specifically ruled that it

is not to be construed as being limited to vicarious liability.” (R. Vol. 6, p. 970).

Florida case law is clear that the phrase “arising out of” is not ambiguous.

That phrase is typically used, as here, to define the nature of connection between

42

the claim being asserted and the conduct of the named insured to determine if there

is coverage. The courts have stated that where coverage is limited to claims that

arise out of the work or product of the contractor or the operation or use of an

automobile, coverage exists if there is “some causal connection, or relationship”

between the claim and the specified conduct. Taurus Holdings, 913 So. 2d at 532,

539-40; see also Hagen v. Aetna Cas. & Sur. Co., 675 So. 2d 963, 965 (Fla. 5th

DCA 1996).

Applying that principle here, Sea World is covered for the Dufault claims if

there was “some causal connection” between Dufault’s injuries and either 1)

Hobart’s work or 2) Sea World’s supervision of that work. Inasmuch as Dufault’s

injuries were undeniably caused by his work under the Hobart contract, the plain

and ordinary meaning of the agreement compels a finding of coverage.

ACE’s contention that the unambiguous phrase “arising out of Work

performed for Owner by Contractor” is rendered ambiguous by virtue of the

additional requirement that Hobart also obtain insurance for claims “arising out of .

. . acts or omissions of Owner in connection with its general supervision of

Contractor’s Work” was properly rejected by the court below. Taurus Holdings

did not say that its broad interpretation of the phrase “arising out of” depended on

their being only one type of conduct described thereafter. Indeed, ACE does not

cite a single case to support its claim that the addition of coverage for general

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supervision serves to limit coverage in this case. In fact, under ACE’s analysis,

coverage in Taurus Holdings would have been limited to vicarious liability for the

contractor’s work because the coverage was for claims arising out of the

contractor’s work and products: If the contractor manufactured and installed its

own product, its work and product would be the same so claims arising out of both

would mandate less coverage rather than more. Clearly, this Court intended no

such thing.

The trial court also explained that claims for negligent supervision do not

necessarily overlap in all instances, an assumption that is key to ACE’s argument.

(R. Vol. 6, 970). Moreover, ACE demonstrated in this case why expressly

requiring coverage for both the contractor’s conduct and general supervision by

Sea World is important. In its Cross-Motion for Summary Judgment, ACE

acknowledged Dufault was negligent (R. Vol. 3, p. 371), yet also argued that “as

Sea World’s negligence caused Dufault’s injury, and Sea World was not

supervising Dufault, Sea World is not covered by the Policy for Dufault’s claims.”

(R. Vol. 3, p. 388). Given the likelihood that an insurer, faced with a claim that an

owner was negligent for improperly supervising a contractor, will try to avoid

coverage by arguing that negligent supervision is not covered because it does not

arise from the contractor’s work, it is no surprise that Sea World chose to

anticipate such an argument to expressly include a requirement that Hobart insure

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for both.

ACE states that Dufault never claimed that Sea World was negligent in its

supervision of Hobart’s work. Initial Brief, p. 33. Perhaps, but Hobart made that

claim. At trial, Hobart urged that Sea World employee David Holley was to blame

for the accident in part because he knew Dufault was about to stick his hand into

the energized mixer and did not stop him from doing so, even though Holley knew

it was unsafe and would not have let his own employee do such a thing. (R. Vol.

16, pp. 32-33). As such, the claim did involve allegations by Hobart that the

injuries arose from an omission by Sea World in its general supervision of

Hobart’s work.

As the trial court concluded, adopting ACE’s interpretation would

necessitate rewriting the insurance clause to limit coverage to claims for vicarious

liability, which the court declined to do. (R. Vol. 6, p. 970). Courts “may not

rewrite contracts, add meaning that is not present, or otherwise reach results

contrary to the intentions of the parties.” Taurus Holdings, 913 So. 2d at 532.

ACE’s assertion that the trial court erred because it did not consider the

entire insurance provision is false. The trial court explained how the two clauses

“may co-exist without rewriting the first to include only claims based exclusively

on vicarious liability.” (R. Vol. 6, p. 970). Instead, it is ACE who fails to

45

acknowledge, much less address, the court’s conclusion that the clauses can be

harmonized.4

As with the indemnity argument, ACE’s arguments at times seem to be

based on the idea that Dufault’s allegations control coverage. The fact that Dufault

did not sue Hobart, because of worker’s compensation exclusivity, or specifically

allege negligent supervision of Hobart’s work

5

A trial court’s findings of fact with regard to an attorney’s fee award arrive

on appeal “cloaked with the presumption of correctness and, as long as competent

is of no moment. The contract

requires broad coverage for claims arising from Hobart’s work and regardless of

the allegations, the facts as determined by the jury were that Hobart’s employee

was negligent.

No reasonable interpretation of the insurance clause can lead to any

conclusion other than that coverage was provided for, at a minimum, the acts of

Hobart. The accident was found to be due to the acts of Hobart. The trial court’s

conclusion was correct and should not be disturbed on appeal.

D. THE TRIAL COURT’S FEE AWARD SHOULD BE UPHELD. (IN RESPONSE TO ISSUE “E” OF INITIAL BRIEF)

4 To the extent ACE is also arguing the trial court should have considered Part 2 of the agreement, as noted above, that section is not part of the contract before the court and cannot be considered on appeal. 5 As the court noted, there was evidence adduced at trial supporting a negligent supervision claim. (R. Vol. 6, p. 970).

46

evidence exists to support its determinations, the appellate court should affirm.”

General Motors Acceptance Corp. v. Laesser, 791 So. 2d 517, 520 (Fla. 4th DCA

2001)(citation omitted); see DiStefano Const., Inc. v. Fidelity and Deposit Co. of

Maryland, 597 So. 2d 248, 250 (Fla. 1992). Appellate courts “simply cannot reject

the trial court’s findings of fact and substitute [their] own judgment” on these

issues. General Motors, 791 So. 2d at 520.

A fee award is overturned only when the trial court’s judgment lacks the

necessary consideration of the factors set forth in Florida Patient’s Comp. Fund v.

Rowe, 472 So. 2d 1145, 1150 (Fla. 1985). In Highlands Carpentry Service Inc. v.

Connone, 873 So. 2d 611 (Fla. 2d DCA 2004), the trial court’s fee award provided

a reasonable range of fees and hours, and made a calculation without any specific

findings. Id. at 613-14. The appellate court held that, “‘absent a showing of clear

abuse of discretion,’ we are compelled to reverse and remand for further

proceedings because the final judgment lacks the necessary specific findings.”

Id. (internal citation omitted). The case was remanded for the trial court to make

specific findings as to the reasonable rate and number of hours to be awarded. Id.

Here, Judge Smith’s Amended Supplemental Final Judgment provided a

detailed review of the various Rowe factors. (R.2d Vol. 1, pp. 72-74 ¶ 12-20). He

made specific findings regarding the hourly rate and the time reasonably expended

(R.2d Vol. 1, pp. 73-74), found the case novel and complex (R.2d Vol. 1, p. 71),

47

and based his award on over seven hours of testimony from witnesses who

discussed in detail invoices and legal work performed in this case. Substantial

evidence exists to support Judge Smith’s fee award. Thus, no abuse of discretion

can be found.

1. Schultz Does Not Support Petitioners’ Arguments.

Petitioners repeatedly claim that Progressive Express Insurance Company v.

Schultz, 948 So. 2d 1027, 1031 (Fla. 5th DCA 2007) holds that an hourly rate over

$400 constitutes an abuse of discretion. This is not true. Schultz involves the

application of a multiplier and does not even reach the reasonable fee issue. More

importantly, had the Fifth District truly believed that any hourly rate above $400

was excessive and unreasonable, the panel could and would have made such a

ruling when this case was before it. Instead, the Fifth District affirmed Judge

Smith’s judgment, finding that substantial evidence supported the fee award.

2. Petitioners Improperly Attack The Trial Court’s Factual Findings. The Record Supports The Fee Award.

Petitioners attacks Judge Smith’s fee award by rearguing factual issues

already presented, considered and rejected by Judge Smith and affirmed on appeal

by the Fifth District. Petitioners are apparently, and improperly, seeking de novo

review, but fail to cite any legal authority that permits a complete departure from

well-settled principles. These arguments must be rejected.

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First, petitioners challenge the hourly rates assigned to Robert I. Westerfield

($500) and Cathy S. Huang ($300), contesting Judge Smith’s findings regarding

Mr. Westerfield’s expertise and Sea World’s victory below. Petitioners ask this

Court to reweigh the evidence on these factual issues and substitute its judgment

for that of the trial court, which it cannot do.

Petitioners then attack the number of hours Bowles & Verna expended,

arguing that the work performed and time spent was excessive and unnecessary,

and questioned Bowles & Verna’s billing practices. These arguments again

challenge the trial court’s findings of fact and are not properly raised on appeal.

Third, contrary to petitioners’ claims, the law does not require that Judge

Smith evaluate each and every time entry.6

6 At least one court has held that “summaries of hours and hourly rates” may serve as the basis for upholding a fee award. See Altamonte Springs Imaging, L.C. v. State Farm Mut. Auto. Ins. Co., 12 So. 3d 850, 857 (Fla. 3d DCA 2009).

The record evidence demonstrates that

Judge Smith based his award on the invoices and “other evidence” presented

during the hearing, which consisted of over seven hours of testimony from Sea

World’s trial attorneys, in-house counsel, and two expert witnesses who provided

detailed testimony regarding the time records. Judge Smith also relied on each

side’s briefs, accompanying affidavits, and his “20 years of experience in private

practice and 8 years on the bench.” (R.2d Vol. 1, pp. 68). There is absolutely no

indication to support petitioners’ claim that Judge Smith was trying to

49

“overextend” the import of Behm v. Div. of Admin., State of Fla., Dep’t of Transp.,

292 So. 2d 437 (Fla. 4th DCA 1974), or that his refusal to examine each individual

time entry was arbitrary, improper or an abuse of discretion.

Fourth, the record shows that Sea World gave petitioners notice, in open

court, that it would be seeking expert fees as part of the Motion to Tax Fees and

Costs. (R. Supp.2d Vol. 2, p. 429:17-19). ACE did not object to the motion at that

time and declined the opportunity to investigate the expert fee issue at the hearing.

(R. Supp.2d Vol. 2, pp. 349-350). Judge Smith gave both sides time to address

whether Sea World was entitled to Mr. Klausman’s fees. (R. Supp. 2d Vol. 2, pp.

430:25-431:16). Petitioners even submitted a post-hearing letter brief and Power

Point presentation in opposition to Sea World’s evidence. (R. Supp. 2d Vol. 1, pp.

653-654). Thus, because Petitioners were provided both notice and an opportunity

to be heard, no due process rights were violated. See State Department of

Transportation v. Plunske, 267 So. 2d 337, 339 (Fla. 4th DCA 1972).

Lastly, petitioners challenge the expert fee award on the grounds that Mr.

Klausman spent too much time reviewing and comparing each time entry with six

boxes of work product and that such work could have been completed by a

subordinate employee. Petitioners also claim that the $450 hourly rate was

excessive given Mr. Klausman’s lack of expertise. Judge Smith rejected these

arguments and made factual findings contrary to petitioners’ arguments. Again,

50

petitioners cannot properly attack the trial court’s factual findings on appeal,

especially where the record, as here, supports the award. Schultz does not require a

different conclusion

CONCLUSION

Respondents respectfully request this Court affirm the Fifth District Court of

Appeal’s decision in its entirety. In the alternative, if this Court should disagree

with the appellate court’s holding, Respondents ask that this Court nonetheless

affirm the Fifth District’s disposition of the case. For the reasons set forth above,

even if an expert was required to corroborate the fee component of Respondents’

damages, the trial court’s directed verdict on that issue was improper and must be

reversed and the jury verdict reinstated. At minimum, Respondents request the

directed verdict be reversed and the case remanded to allow Respondents to

present expert testimony regarding the reasonableness of the MDCG fees.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this _____ day of September, 2010, a true

and correct copy of the foregoing was furnished by electronic mail and regular

U.S. Mail to: Michael J. Roper, Esquire, and Dale A. Scott, Esquire, Bell, Roper

& Kohlmyer, P.A., 2707 East Jefferson St., Orlando, FL 32803; John S. Vishneski,

III, Esquire, Reed Smith LLP, 10 S. Wacker Dr., Chicago, Illinois 60606; Edward

S. Polk, Esquire, Cole, Scott & Kissane, P.A., Dadeland Centre II, 9150 S.

51

Dadeland Blvd., 14th Floor, Miami, FL 33156; and Philip D. Parrish, Esquire, 7301

SW 57th Court, Suite 430, Miami, Florida 33143-5324.

______________________________

ROBERT I. WESTERFIELD, ESQUIRE ERIN J. O’LEARY, ESQUIRE California Bar No. 112183 Florida Bar No. 0001510 rwesterfield@bowlesverna.com eoleary@orlandolaw.net BOWLES & VERNA, LLP BROWN, GARGANESE, 2121 North California Blvd., #875 WEISS & D’AGRESTA, P.A. Walnut Creek, California 94596 111 North Orange Ave., Ste. 2000 (925) 935-3300 - Telephone Orlando, Florida 32802 (925) 935-0371 - Facsimile (407) 425-9566 - Telephone (407) 425-9596 - Facsimile

Attorneys for Respondents, Sea World of Florida, Inc. and Busch Entertainment Corp.

CERTIFICATE OF COMPLIANCE

I HEREBY CERTIFY that this brief was prepared using Times New

Roman 14-point font and that this brief complies with all requirements of Florida

Rule of Appellate Procedure 9.210(a)(2).

______________________________

ERIN J. O’LEARY Florida Bar No. 001510