In Quiroga v. Citizens Property Insurance Corporation, 35 Fla. L. Weekly D767a (Fla. 3DCA 2010), the Florida Third District Court of Appeal invalidated an attorney’s charging lien for unpaid legal fees that was asserted against the collected proceeds of an insurance claim for a former client. In short, the attorney’s were able to collect monies from an insurance company for unpaid damages to the former client’s home. After collecting those proceeds, the former client fired the attorneys and refused to pay any legal fees while claiming that the law firm could not deduct such fees from the insurance proceeds because they were homestead protected. The Third District agreed with the former client holding that the homestead exemption that applies to homestead property also applies to the insurance proceeds for the protected homestead property and a client could not waive such an exemption even by entering into a fee agreement with a lawyer.
Liquidated Damages Clause Deemed Invalid
In Cloud v. Schenk, 1D03-2023 decided April 6, 2004 (Fla. 1DCA 2004), the Florida First District Court of Appeal held that a real estate sales contract that contained a liquidated damages clause that provided that in the event of a default, the seller would be entitled to keep the deposit as damages or seller at seller’s option could proceed to enforce the contract was deemed to be invalid. The liquidated damages clause was deemed invalid because the option to either retain the deposit as liquidated damages or to bring an action for actual damages, constitutes a penalty as a matter of law and is not valid. The decision relied upon the Florida Supreme Court authority of Lefemine v. Baron, 573 So.2d 326 (Fla. 1991).
