By: Ron Ponzoli, Chair, Religious Organizations Practice Group
WEST PALM BEACH, FL – April 22, 2019 – The business world is driven by contracts. Religious organizations are not insulated from this reality. If a synagogue needs a new roof, if a church has a hole in the parking lot that needs repair, if a loan is necessary to construct a new Buddhist temple, each of these events will require a written contract.
Parties can agree that if they end up in a lawsuit over the contract, the party who loses the case will pay the winning parties’ reasonable attorney’s fees. But should a religious organization agree to a prevailing party fee provision?
What should be considered when faced with this question is which party has more to lose from a prevailing party fee provision. For example, if a well-funded religious organization contracts with a small contractor who has limited resources, the religious organization agreeing to a prevailing party provision may not make sense. The only party in that example who has the means to pay the other party’s attorney’s fees is the religious organization. Conversely, if a modest religious organization is contracting with a major financial institution, then the religious organization agreeing to the fee provision makes more senses. In litigation, a prevailing party fee provision can become the rock that brings down Goliath. Prevailing party fee provisions level the playing field for the smaller party: if the smaller party wins, it can recoup the financial burden of going through the courts.
It is also important to understand that in Florida, a religious organization does not eliminate the risk of paying an opposing party’s fees by entering into a contract that only allows the religious organization to recover fees. Florida statute permits the award of prevailing party fees to a party who wins a case under a contract that expressly provides only the opposing party may recover fees.
Therefore, careful thought should be given to the economic realities of the contracting parties when considering a prevailing party fee provision. The attorneys at GrayRobinson can counsel religious organizations on the best strategies for these, and other, contract terms.
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