Key Points

  • The Florida Supreme Court held that a prevailing-party attorney's fee provision in an easement agreement does not touch and concern the land and therefore does not run with it.
  • The court restated Florida's touch-and-concern test as whether an obligation is sufficiently connected to how the land is used, occupied, or enjoyed.
  • The court distinguished and declined to extend Hayslip v. U.S. Home Corp. (Fla. 2022), which held that a deed's arbitration provision ran with the land, without being asked to revisit it.
  • Justices Barrios and Tanenbaum concurred in result only, arguing the test requires a direct effect on the physical use of land and calling Hayslip an outlier with a flawed premise.
  • The certified question was answered in the negative and the case was returned to the Eleventh Circuit for further proceedings.

The Florida Supreme Court ruled Thursday that a clause in an easement agreement awarding attorney's fees to the winner of a lawsuit does not bind later owners and users of the property. The decision undercuts a Miami landowner's bid to collect its legal fees from Crown Castle South LLC after a federal court found Crown Castle liable for trespass and a jury awarded the landowner damages.

Justice Grosshans wrote for the court, joined by Chief Justice Couriel and Justices Labarga, Muñiz and Francis. Justices Barrios and Tanenbaum agreed with the outcome but not the reasoning, and each wrote separately. The case reached the state court as a certified question from the U.S. Court of Appeals for the Eleventh Circuit, a procedure for questions of Florida law that will decide a federal case and on which the state high court has not spoken.

The ruling holds that such a fee clause does not "touch and concern" the land. That requirement must be met before an obligation can "run with the land," meaning that it binds anyone who later acquires an interest in the property even without having agreed to it. The court also declined to extend Hayslip v. U.S. Home Corp., its 2022 decision holding that an arbitration provision in a deed ran with the land.

More than three decades ago, Hidden Valley Corporation bought two neighboring properties in Miami, according to the opinion. It leased one to BellSouth Mobility and later let BellSouth and its successors use part of the other parcel for telecommunication purposes. The easement agreement provided that if either party had to sue to enforce it, "the prevailing party in such suit shall be entitled to receive reasonable attorney's fees and court costs."

Both properties changed hands several times. By the time of the suit, RJ's International Trading LLC owned the land subject to the easement, and Crown Castle subleased the neighboring property from BellSouth. In 2020, Crown Castle dug up parts of RJ's land beyond the easement and installed fiber optic cables underground.

RJ's sued in federal court. The district court found Crown Castle liable for trespass and breach of the easement agreement, and after a six-day trial a jury awarded RJ's $1 for the breach and $40,000 for the trespass. Crown Castle did not appeal.

RJ's then sought attorney's fees, arguing that the fee clause was a "real covenant" binding the original parties' successors, including both companies. Crown Castle countered that the clause was a personal promise that bound only Hidden Valley and BellSouth. The district court sided with Crown Castle. The Eleventh Circuit, after rejecting a separate contract argument by RJ's, certified the property-law question to the state's high court.

Justice Grosshans wrote that a covenant runs with the land only if the original parties intended to bind successors, the successors had notice of it, and it touches and concerns the land. The court treated the third requirement as dispositive. Drawing on centuries of case law, the court held that courts "should consider whether the obligation is sufficiently connected to how the land is used, occupied, or enjoyed."

The fee clause failed that test. Relying on Caulk v. Orange County, a 1995 appellate decision holding that a reservation of eminent-domain proceeds did not run with the land, Justice Grosshans wrote that the provision "is simply too attenuated from the use, enjoyment, or occupation of the land to touch and concern it." The opinion added that the clause "does not restrict or proscribe how the land RJI owns can be used. Nor does it govern who can enjoy or make use of it."

RJ's had argued that Hayslip required the opposite answer. The court disagreed, noting that the arbitration clause in Hayslip governed how homeowners resolved construction defects built into the house. A fee clause is different, Justice Grosshans wrote: "It comes into play only after the dispute has been finally resolved on the merits and serves solely to allocate litigation costs between the parties."

The court said its answer matched most courts outside Florida that have decided the issue, and it identified only two that had reached the opposite result. In a footnote, the court said neither party had asked it to revisit Hayslip.

Justice Barrios, joined by Justice Tanenbaum, wrote that the touch-and-concern test requires that a covenant "have a direct effect on the physical use of the property," and that the rule could not be squared with Hayslip. "But it is difficult to discern the logical difference between an arbitration provision and a prevailing party attorney fee provision applicable to litigation over an easement," Justice Barrios wrote. "So, I'd call Hayslip what it is—an outlier." The concurrence said the point was worth making now so that "when the next issue arises, whether it is a jury trial waiver or something else," parties would have a clear rule.

Justice Tanenbaum, joined by Justice Barrios, wrote separately to explain "why a prevailing party attorney fee provision cannot ever be a real covenant." That concurrence described such a clause as a two-way agreement about litigation rather than a promise affecting either side's land. "The premise underlying the Eleventh Circuit's question, then, is flawed. In this respect, so is the premise underlying Hayslip," Justice Tanenbaum wrote.

Lawyers for RJ's International Trading included Dwayne A. Robinson of Kozyak Tropin & Throckmorton LLP. Crown Castle was represented by Eve A. Cann of Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C. C. David Harper of Foley & Lardner LLP filed an amicus brief for U.S. Home Corporation and Lennar Homes, LLC, and the Florida Land Title Association also appeared as an amicus.

The court answered the certified question in the negative and returned the case to the Eleventh Circuit for further proceedings. The decision is not final until the time to file a rehearing motion expires and any motion filed is resolved.