Non-Party That Finances And Controls Litigation Can Be Liable For Prevailing Party Attorneys Fees

In Abu-Ghazaleh, et al v. Chaul, et al (3D07-3128, 3D07-3130), the Third District reversed the trial court's order denying attorneys fees and costs and held a non-party that financed and controlled the litigation can be subject to the inposition of attorneys fees and costs.  You can read about the facts in a prior decision, Chaul v. Abu-Ghazaleh, 994 So. 2d 465 (Fla. 3d DCA 2008).  In the current attorney fee appeal, the court stated:

Around September of 2002, prior to the start of litigation, the plaintiffs entered into an agreement with Van Diepen and CSI. Neither Van Diepen nor CSI were named parties to the litigation. Van Diepen, however, financed and controlled the litigation. He was to receive 18.33% of any award the plaintiffs received plus reimbursement for the expenses of the case. Additionally, Van Diepen had to approve the filing of the lawsuit; controlled the selection of the plaintiffs’ attorneys; recruited fact and expert witnesses; received, reviewed and approved counsel’s bills; and had the ability to veto any settlement agreements.

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To recover fees, Abu-Ghazaleh must prove that the nonnamed plaintiffs, Van Diepen and CSI, were “parties” within the meaning of sections 57.041, 768.79, and 772.11 of Florida Statutes (2007) for attorney’s fees.

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This Court has previously stated that a “party” “is defined under Florida law as any person who participates in litigation regardless of whether or not [the party is] actually named in the pleadings.”

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Van Diepen and CSI clearly have risen to level of a party. The agreement stated that Van Diepen and CSI had to approve counsel for the plaintiffs. The litigation costs were paid for pursuant to the agreement. They had veto power over whether the litigation was filed, who would file it and how it would be pursue. Van Diepen even paid $13,000 worth of expenses for one of plaintiff’s main witnesses. Further, the agreement allowed for Van Diepen and CSI to have the final say over any settlement agreements proposed to the plaintiffs. In return for funding the suit, Van Diepen was to receive 18.33% of any sum awarded to the plaintiffs. All of these facts point to the fact that Van Diepen indeed had “such control thereof as to be entitled to direct the course of the proceedings” and was a party to the suit.