10 Fla. L. Weekly Supp. 877d
Attorney’s fees — Insurance — Personal injury protection — Contingency risk multiplier — Application of 2.0 multiplier is supported by competent substantial evidence of expert’s testimony that cases in which insurer has received written demand from lawyer but refused to pay PIP claim without stated reason are considered dangerous for successor counsel and will not be taken without the ability to petition court for contingency fee multiplier and opinion of expert and insured’s counsel that likelihood of success was 50% or less at outset — Award of attorney’s fees for time spent litigating entitlement to multiplier is consistent with intent of section 627.428(1) and within trial court’s discretion
ALLSTATE INDEMNITY COMPANY, Defendant/Appellate, vs. JEFFREY HICKS, Plaintiff/Appellee. Circuit Court, 18th Judicial Circuit (Appellate) in and for Seminole County. Case No. 00-14. L.T. Case No. 01-CC-1532. August 29, 2003. Appeal from County Court, Seminole County, Honorable Mark E. Herr. Counsel: Joseph Currier Brock and Steven W. Igou, for Appellant. John G. Crabtree and Michael B. Brehne, for Appellee.
[Certiorari granted at 29 Fla. L. Weekly D1523a. Question certified at 29 Fla. L. Weekly D1974b.]
AFFIRMED.
This is the appeal of a Final Judgment Awarding Attorney’s Fees and Costs totaling $18,723.98 including interest. This Court has jurisdiction. Appellant, Allstate Indemnity Company (hereinafter “Allstate”), raises two issues: (1) whether the trial court erred in awarding Plaintiff’s counsel attorney’s fees for litigating the issue of entitlement to a multiplier in this case, and (2) whether the trial court abused its discretion in applying a 2.0 multiplier.FACTS
The Plaintiff in this case, Jeffrey Hicks, was involved in an automobile accident on February 28, 1996, and received chiropractic treatment for which he sought PIP benefits, including wages and mileage.
Allstate made PIP payments; however, Allstate discontinued paying benefits after May 28, 1996, based upon an independent medical examination (IME), which concluded that further treatment was no longer reasonable, necessary, or related to the accident.
Plaintiff hired a personal injury attorney who submitted a claim form to Allstate seeking payment of Hicks’ chiropractic treatment after the IME cutoff and also raised a claim for Hicks’ lost wages and mileage. Allstate never responded to the wage and mileage claim. Plaintiff’s personal injury attorney did not file suit against Allstate, but referred Hicks to Attorney Michael B. Brehne, a PIP specialist.
On May 16, 2001, Mr. Brehne filed this PIP action against Allstate, seeking medical and wage benefits and attorney’s fees pursuant to F.S. Sections 627.428, 57.041, and 92.231. Allstate filed an answer denying the claims for benefits and attorney’s fees and raised four affirmative defenses alleging, inter alia, that (a) Hicks’ claims for treatment, expenses, and services were not reasonable and necessary; (b) Allstate had paid everything it was obligated to pay; (c) Hicks lacked standing because of an assignment to his provider; and (d) the IME proved that the claimed treatment was not reasonable, necessary, or related.
On May 6, 2002, Plaintiff served a set of Requests for Admissions on Allstate asking Allstate to admit, inter alia, that Plaintiff was entitled to a lodestar multiplier in this case. From the testimony at the fee hearing and the arguments in the briefs, there is apparently no dispute that the requested admission was denied by Allstate.
The disputed benefit claims were ultimately resolved between the parties, and the only issues brought before the trial court were the amount of Plaintiff’s attorney’s fees and whether a multiplier was appropriate and in what amount.
The trial court made the following findings of fact in determining the amount of attorney’s fees and the multiplier in this case:
a. 26.2 hours were reasonable, under the circumstances presented, for attorney time prosecuting this case.
b. A reasonable hourly rate for Plaintiff’s attorney was $240.00 per hour.
c. This case is the type of case under the Rowe and Quanstrom guidelines where a multiplier is appropriate because the relevant market requires the application of a multiplier in order for Plaintiff to find competent counsel.
d. The litigation presented an undesirable claim, and Plaintiff could not have obtained competent counsel for a standard contingency fee unless a multiplier was applied.
e. The amount in controversy was small, and the results obtained were excellent because Defendant had to pay all the benefits available to Plaintiff.
f. The contingency fee contract between Plaintiff and counsel was a pure contingency fee agreement which allowed for a contingency risk multiplier.
g. The multiplier in this cause should be 2.0 because, based upon its actions and defense in this cause, Allstate believed that the chiropractic care of Plaintiff was no longer necessary, reasonable, or related, and the outstanding amounts of lost wages and medical mileage were not owed by the Defendant.
h. Plaintiff’s counsel was required to litigate this case until Allstate agreed to pay for the benefits that were at issue in this cause.
WHETHER A 2.0 MULTIPLIER IS APPROPRIATE
In Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990), the Supreme Court established a multiplier system to be applied by trial courts in the appropriate case to determine a reasonable fee. The Supreme Court specifically said:
If the trial court determines that success was more likely than not at the outset, it may apply a multiplier of 1 to 1.5; if the trial court determines that the likelihood of success was approximately even at the outset, the trial judge may apply a multiplier of 1.5 to 2.0; and if the trial court determines that success was unlikely at the outset of the case, it may apply a multiplier of 2.0 to 2.5. (e.s.)
Clearly it was the intent of the Supreme Court for the trial court, in light of all the circumstances of the case before it, to make the determination as to whether a multiplier was to be utilized and, if so, how much, after applying the factors set forth in Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985). As the Supreme Court said, “Evidence of these factors must be presented to justify the utilization of a multiplier.” Quanstrom, 834. This is a finding of fact, not of law.
A trial court’s findings of fact with regard to an award of attorney’s fees are to be presumed correct, and an appellate court should not substitute its judgment unless the record is “devoid of substantial competent evidence to support the award. . . .” See DiStefano Constr., Inc. v. Fidelity & Deposit Co. of Md., 597 So.2d 248, 250 (Fla. 1992) (stating that “the award of attorney’s fees is a matter committed to sound judicial discretion which will not be disturbed on appeal, absent a showing of clear abuse of discretion”); Brake v. Murphy, 736 So.2d 745 (Fla. 3rd DCA 1999); accord, Moore v. Excal Enterprises, Inc., 769 So.2d 1062 (Fla. 2nd DCA 2000); Centex-Rooney Construction Co., Inc. v. Martin County, 725 So. 2d 1255 (Fla. 4th DCA 1999).
Unless Allstate shows a clear abuse of discretion, this court should not disturb the award on appeal. Centex-Rooney.
The trial court’s ruling comes to the appellate court with a presumption of correctness and cannot be disturbed in the absence of a record demonstrating error. Wright v. Wright, 431 So.2d 177 (Fla. 5th DCA 1983).
The trial court heard the testimony of the Plaintiff’s expert, Attorney Brian Coury, an acknowledged PIP expert. Coury testified that cases like this one — where an insurance company has received a written demand from a licensed lawyer but refused without stated reason to pay a PIP claim — are considered “dangerous” for potential successor counsel, because counsel is left to speculate why the company is not paying the bill. Coury distinguished between cases where insurance companies have ignored requests from insureds and cases where insurance companies have denied demands from attorneys, as in the instant case.
Coury testified, “I’m not aware of any plaintiff’s attorney that would take a case like this without the ability to petition the court for a contingency fee multiplier. . . .”
Attorney Brehne testified that at the outset of his representation this case presented “more than meets the eye,” and that his chances of success were less than 50%. Attorney Coury testified that the Plaintiff’s likelihood of success appeared no greater than 50% when Mr. Brehne accepted representation. The trial court was entitled to accept this testimony and obviously did.
Allstate’s counsel conceded of Allstate’s expert, Attorney Ray Barber:
He has not done a whole lot of PIP. He’s done some PIP. He’s not a big player in the game either way, so there’s nothing . . . He’s never served as an expert before in any capacity in a PIP case.
The trial court was entitled to believe Plaintiff’s expert. Chrysler Corp. v. Weinstein, 522 So.2d 894 (Fla. 3rd DCA1988).
Pursuant to the Quanstrom standards, if the trial court determines that the likelihood of success was approximately even at the outset, the trial judge may apply a multiplier of 1.5 to 2.0. An appellate court will not disturb the implied findings of fact made by a trial judge in support of an order anymore than it will interfere with the express findings on which a final judgment is predicated. Donner v. Donner, 313 So.2d 456 (Fla. 3rd DCA 1975). In light of the testimony in this case, implicit in finding “G” of the Final Judgement is the fact that the trial court determined that the likelihood of success was approximately even at the outset.
The application of a 2.0 multiplier is supported by competent substantial evidence.
FEES FOR LITIGATING THE MULTIPLIER
The Supreme Court in State Farm Fire and Casualty Co. v. Palma, 629 So.2d 830 (Fla. 1993), emphasized that the purpose of Florida Statute Section 627.428(1) is to discourage insurance companies from contesting valid claims. According to the analysis in Palma, allowing an award of attorney’s fees for arguing entitlement and disallowing an award of fees for arguing amount was consistent with this intent. Allstate’s argument to the contrary, the Palma court did not discuss whether litigating the issue of the applicability of a multiplier was “amount” or “entitlement.”
Because the legislature deemed it necessary to adopt § 627.428 to balance the playing field between insurance companies and their insureds, it strikes this Court that the availability of competent counsel is of great importance in discouraging insurance companies from contesting valid claims. History has shown that the scales of justice are balanced only when the insurance companies’ ability to accept or reject claims is tempered by the availability of competent counsel to challenge those decisions, thus, the genesis of § 627.428. Since the application of a multiplier affects the availability of counsel, an award of fees for successfully urging its application would seem to be consistent with the statutory intent of § 627.428(1). See Erick Joseph v. Allstate Insurance Company, County Court in and for Palm Beach County, Civil Division, Case No. MS-94-19824-RF, October 3, 1996, Peter D. Blanc, Judge.
In Diaz v. Santa Fe Health Care, Inc., 642 So.2d 765 (1st DCA 1994), the only District Court of Appeals case this Court is aware of that discusses the award of fees for establishing entitlement to a multiplier, the Court stated:
In an appropriate case, the fee award may include time spent establishing entitlement to the use of a multiplier if the trial Court is of the opinion that such time was of benefit to the client.
The Diaz court raises a distinction based upon the beneficiary of the award of attorney’s fees and suggests that generally the time spent arguing the amount of fees is solely for the benefit of the attorney, while time spent arguing entitlement benefits the client. However, the court concluded that if the trial court found that establishing entitlement to the use of a multiplier benefitted the client, then the time so spent was compensable. This case is binding upon this court and the trial court. Graham v. Langley, 683 So.2d 1147 (Fla. 5th DCA 1996) (if district court sitting in trial court’s district has not spoken on an issue, but another district court has, trial court is required to follow decision from that district).
The trial court in this cause found that the Plaintiff was entitled to fees for litigating the issue of the multiplier. Implicit in the trial court’s finding is the fact that the Plaintiff was benefitted by the availability of a multiplier in this case because it afforded him the services of an attorney. Donner, supra at 458.
As discussed in Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990), the two basic purposes of the contingency risk multiplier are: (1) to increase the availability of legal services, and (2) to compensate attorney’s for the risk incurred in taking certain cases. While the application of a multiplier to an attorney’s fee clearly does not affect the entitlement to the fee, it is a major, if not the decisive, factor in increasing the availability of legal services. Therefore, the application of the multiplier not only affects the amount of fees creating a benefit for the attorney, it also enhances the availability of quality legal services, thereby creating a benefit to all potential clients. Both attorney and client benefit from the application of a multiplier.
Although one might posit that the application of a multiplier does not affect “entitlement” to fees, but instead only affects the “amount” of fees by multiplying the court’s award, common sense suggests that entitlement to a multiplier creates a benefit to both attorney and client by increasing not only the awardable fee, but also the availability of competent counsel, one of the key purposes for which the Rowe and Quanstrom courts established multipliers.
Consequently, it is the ruling of this Court that an award of attorney’s fees for successfully presenting evidence supporting the applicability of a multiplier, particularly where that issue has been contested as in the instant case, is consistent with the intent of Florida Statute, Section 627.428(1) and within the trial court’s discretion. Once the question of whether a multiplier is applicable (and if so, what the appropriate multiplicand should be) has been decided, the actual application of the multiplier to plus-up the lodestar fee is merely a ministerial math problem. Thus, the issue of whether a multiplier is appropriate is clearly an “entitlement” issue and not merely a question of “amount.”
To rule otherwise would be to encourage recalcitrant insurance companies to concede that 627.428 applies and fees are appropriate, but to litigate the application of a multiplier with impunity, confident that no matter how obstreperous, the insured can not recover for that portion of the litigation. This violates the very principal of 627.428, which is to discourage insurance companies from contesting valid claims by permitting a trial court to award reasonable attorney’s fees to a successful insured litigant. “[T]he multiplier is . . . a useful tool which can assist trial courts in determining a reasonable fee. . . .” Quanstrom, supra at 834.
MOTION FOR ATTORNEY’S FEES
Appellee has filed a Motion for appellate attorney’s fees which is hereby granted. The trial court should determine an appropriate amount after hearing.
REMANDED to the lower court for further proceedings consistent with this opinion.
* * *
