Pest Control Contract Provisions Regarding Attorney's Fees: Still A Useful Tool?

By: Robert L. Blank

04.07.11

Like other businesses, most pest control companies require their customers to sign a contract in order to receive the services the customer wants to buy. Such contracts are typically form agreements drafted by the attorney for the pest control company and designed to protect the company in the event of a legal dispute. Typically, pest control contracts will describe what services the company will perform, the amount and schedule of the customer’s payments, the location to be treated, any guarantees for re-treatment or damage repair necessitated by future infestations, and a property diagram showing the current infestation and any inherent conditions which might excuse the guarantees because of their effect on the chance of success of treatment efforts.

Despite its best efforts however, a pest control company – like any other business – will inevitably endure customer disputes that result in lawsuit. Upon resolution, the prudent company will scrutinize how the dispute could have been avoided in the first place. As one such measure, the company may revise its form contract to improve pronouncements about the limitations on its liability, clarify the duties of the parties to prevent similar disputes with future customers, or shift the cost of litigation to the customer should a lawsuit occur.

This last type of contractual proviso is prompted by Florida law which holds that ordinarily, “each party pays its own litigation expenses absent a statute or contractual provision to the contrary.” See Pepper's Steel & Alloys, Inc. v. United States, 850 So. 2d 462, 465 (Fla. 2003). Thus, to ensure the customer bears the financial risk of unsuccessful litigation against the company, many pest control contracts now require payment of the company’s expenses and attorney’s fees should it win a legal proceeding against the customer in connection with the contract. These “attorney’s fee provisions” are designed to dissuade the customer from breaching the contract or bringing unfounded lawsuits against the company. If successful in court, the pest control company not only wins the lawsuit but forces the customer to pay the company’s attorney’s fees as well.

Because attorneys drafting such agreements are employed by pest control companies, the contracts are far more likely to permit the collection of attorney’s fees only by the company, while not granting a corresponding right to a prevailing customer. Finding it unfair that the party who drafted the contract could reserve for itself the right to receive attorney’s fees while not likewise giving such benefit to the other contracting party, the Florida legislature passed “The Reciprocal Attorney’s Fee Statute,” Fla. Stat. § 57.105(2), which provides in part as follows:

If a contract contains a provision allowing attorney's fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney's fees to the other party when that party prevails in any action, whether as Plaintiff or Defendant, with respect to the contract . . . .

The intent of this law was to provide mutuality of the right to attorney’s fees as a remedy in contract cases. Lanahan Lumber Co., Inc. v. McDevitt & Street Co., 611 So. 2d 591, 592 n.1 (Fla. 4th DCA 1993). Under the statute, any attorney’s fee provision in a pest control contract executed after October 1, 1988 will be reciprocal, allowing the prevailing customer to collect attorney's fees regardless of whether the specific contractual provision entitled only the pest control company to collect such expenses.

The problem with the reciprocal attorney’s fee statute is that it appeared to permit a customer to demand attorney’s fees in any type of litigation, even when the specific attorney’s fee provision in the contract only entitled the pest control company to such fees in limited types of lawsuits. For example, some pest control contracts allow the company only a limited right to attorney’s fees in certain types of cases. A typical limited attorney’s fee provision might state: 

ATTORNEY’S FEES
If the customer, SAM SMITH, defaults on the debt owed under this contract, he shall be responsible for the costs of the collection of any sums due to AAA TERMITE COMPANY, including reason-able attorney’s fees for collection of the debt, trial, and appellate services.

Under this limited provision, AAA Termite Company would be entitled to attorney’s fees only if it prevailed in a lawsuit regarding Sam Smith’s failure to pay his monthly bill on time. However, if Sam Smith sued AAA Termite Company for dam-ages caused by a purported failure to control termites for example, Smith might attempt to argue that under the Reciprocal Attorney’s Fee Statute, the contract entitles him to attorney’s even though his lawsuit was unrelated to the collection of his monthly bill.

Customers in such cases argue they are still entitled to attorney’s fees under § 57.105(2) because of the broad language of that statute which appears to permit recovery of attorney's fees “in any action” in which a party prevailed under the contract. Pest control companies should seriously reevaluate whether it makes sense to have attorney’s fees provisions in their form contracts in light of this argument.

However, in Anderson Columbia Co., Inc. v. Florida Department of Transportation, 744 So. 2d 1206 (Fla. 1st DCA 1999), the Florida First District Court of Appeal refused to place the broad interpretation on the “any action” language of the Reciprocal Attorney’s Fee Statute. In Anderson Columbia Co., a contract drafted by the Florida Department of Trans-portation (FDOT) provided the agency the right to recover attorney's fees against Anderson Columbia’s monetary deposit in the event the company breached the FDOT contract.

Anderson Columbia did not breach the contract, but instead prevailed in a lawsuit against FDOT for breach of contract. Anderson Columbia argued that it was entitled under the FDOT contract to receive attorney’s fees even though its lawsuit was unrelated to the monetary deposit. In essence, Anderson Columbia asserted that under the broad provisions of § 57.105(2), recovery of attorney’s fees was permitted “in any action” under which it prevailed under the contract.

The First District Court of Appeal refused to award Anderson Columbia its attorney’s fees. The Court reasoned the contractual right to attorney’s fees arises solely from the language of the contract. If such language limits the type of litigation in which the party drafting the contract is entitled to attorney’s fees, the Reciprocal Attorney’s Fee Statute will likewise limit the opponent’s right to attorney’s fees to that type of litigation. See also, Subway Restaurants, Inc. v. Thomas, 860 So.2d 462, 463 (Fla. 4th DCA 2003) (Holding that a tenant was not entitled to attorney’s fees for lawsuit for wrongful eviction and breach of contract because the attorney's fees provision of the lease only applied to rent collection actions).

Therefore, if a pest control contract entitles the company to attorney’s fees upon victory in certain types of lawsuits, the customer’s reciprocal right to attorney’s fees under § 57.105(2) is likewise be limited whether the contract says this or not. To allow the customer otherwise, would destroy the very mutuality designed to be achieved by the Reciprocal Attorney’s Fee Statute.

While Anderson Columbia Co. provides a sound defense to the creative argument by customers to extend an otherwise limited attorney’s fees provision to “any action” brought by the customer, pest control companies should still conduct a risk / benefit analysis in deciding whether to insert an attorney's fee clause into their contracts. It is only by conducting such analysis that the pest control company can evaluate whether its form contract avoids this attorney fee exposure in the rapidly growing litigation involving improper pest control treatment.