Creditor Attorney Fees in Fraudulent Transfer Action
Judgment debtors often discover that a creditor’s judgment includes substantial amounts of money accrued or incurred after the court issued the judgment. These post-judgment charges can include attorneys fees awarded to the creditor’s attorney.
Florida law authorizes a court to award attorneys fees where either a Florida statute provides for attorneys fees in certain legal actions or where the lawsuit is based on a contract or other legal document that provides attorney fees awarded to the prevailing party in any litigation between the parties. Courts typically will first award a money judgment in the underlying lawsuit, and the court will schedule a subsequent hearing to hear a creditor attorney fee claim. At the subsequent hearing a judgment creditor must demonstrate its legal entitlement to fees based upon applicable statute or contract and then prove the amount of reasonable fees incurred. Attorney fees awarded are added to the money judgment and thereafter accrue interest.
In the course of collecting a judgment a creditor may initiate an action to attack and recover a debtor’s fraudulent transfer. Fraudulent transfer actions can be complicated involving many legal and evidentiary issues. Some judgment creditors request a court issue an additional attorney fees award for fees the debtor incurs to prosecute fraudulent transfer remedies.
A federal court in Florida considered in a 2020 decision (Wesolek v. Wesolek) a creditor’s request for an attorney fees award in a fraudulent transfer lawsuit. The court denied the judgment creditor’s attorney fees because there is no statutory attorney fee provision in Florida’s fraudulent transfer remedy statutes. The creditor argued that the statute’s catch-all remedy provision authorizing courts to grant, “any other relief that circumstances require” allowed for an award of attorney’s fees. The court held that this provision is not a sufficient basis for an attorney fee award in fraudulent transfer actions.
About the Author
Jon Alper is an expert in asset protection planning for individuals and small businesses.
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