10 Fla. L. Weekly Supp. 424a
Insurance — Disability — Refusal to pay benefits — Attorney’s fees — Court-awarded fee cannot exceed maximum permitted under contingent fee contract — Contract with insured limited amount of attorney’s fees to one-third of settlement, regardless of court’s finding that reasonable fee would have been much higher without contract’s limiting language
EVELYN HENDERSON, Plaintiff, vs. LIBERTY LIFE ASSURANCE COMPANY OF BOSTON, Defendant. County Court, 2nd Judicial Circuit in and for Leon County. Case No. 02-CC-2586, Civil Division. April 30, 2003. Judith W. Hawkins, Judge. Counsel: Charles A. Curran, for Plaintiff. Lee W. Marcus.
ORDER ON PLAINTIFF’S MOTIONFOR ATTORNEY’S FEES AND COSTS
This cause came before the Court on Plaintiff, Evelyn Henderson’s (hereinafter “Henderson”), Motion for Attorney’s Fees and Costs. This litigation arose from the Defendant, Liberty Life Assurance Company of Boston’s (hereinafter “Liberty Life”), refusal to pay disability benefits to Henderson. However, mediation resulted in Liberty paying benefits and the issue before this Court is Henderson’s counsel’s, Charles A. Curran (hereinafter “Curran”), entitlement to and amount of attorney’s fees and costs.
The evidence taken showed that in July 2001 Curran accepted Henderson from the Tallahassee Bar Referral program. At that time, Henderson, who was bedridden, had received notice of termination of disability benefits under her policy with FSU where Henderson was employed as a custodian supervisor. Upon investigation, Curran realized that the notice was based upon Henderson’s failure to provide medical documentation requested by Liberty which was then promptly submitted and benefits were reinstated in September 2001.
However, Henderson’s disability benefits were again terminated based upon an Independent Medical Examination (IME) requested by Liberty. Although Liberty’s collection of her medical records clearly stated that her health condition was seriously deteriorated, the IME report stated that she was capable of working in “any occupation” under the terms of Liberty’s policy. The parties really do not contest that the position described by the IME physician as appropriate for Henderson is basically a non-existing job.
Henderson filed suit. Liberty failed to timely respond to Henderson’s Request for Production and on June 13, 2002 the Court ordered Liberty to produce the documents identified in Henderson’s Request.
At the December 20, 2002 mediation the parties settled for $20,000, but the agreement specifically excluded Curran’s attorney’s fees pursuant to Section 627.428(1), Florida Statutes (2002), which provides:
Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured … , the trial court … shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.
Liberty does not dispute Curran’s entitlement to attorney’s fees, since “settlement of the (disputed) claim is, indeed, the functional equivalent of a confession of judgment or verdict in favor of the insured,” thereby providing a basis for an award of attorney’s fees pursuant to statute. Wollard v. Lloyd’s & Companies of Lloyd’s, 439 So.2d 217 (Fla. 1983). But, based upon the December 19, 2001 contract letter, Liberty asserts that the Court is limited in its award of attorney’s fees to one-third of the $20,000 settlement pursuant to Florida Patients Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985) and Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990).
The contract letter between Henderson and Curran provided that:
If we prevail at trial and the court awards attorney’s fees in addition to your recovery on the policy, I agree to accept as payment in full for my services whatever the court awards. If, however, you decide to settle with the insurance company and such settlement includes the right to recover attorney fees, I will be entitled to one-third of the settlement as a fee.1
The Court’s review of the evidence, testimony and applications of the Rowe and Quanstrom criteria yields the various findings. A reasonable amount of time is 88.0 hours based upon a careful review of the testimony, Liberty’s Table of Disputed Attorney’s Fees and Curran’s Response. The time was reasonably documented contemporaneously when expended. The Court recognizes that attorneys cannot charge at an attorney’s rate for what is considered staff/clerical support time, but acknowledges that there is extra time required in “one person” law offices.
Curran testified that because of the parties’ prior dealings, the amount of labor involved, the novelty and the difficulty of the questions involved were heightened by Liberty’s position to terminate Henderson’s benefits after obtaining her past and current medical records and reinstating full benefits in September 2001. The case, Curran thought, could be removed to federal court. Further, Curran believed that Liberty would fiercely litigate the policy terms which Liberty maintained would permit denial of benefits. Also, Henderson’s benefits were only until age 62, so Liberty’s refusal to “wash-out” the claim complicated the case. Thus, when Curran agreed to represent Henderson, he did so committing to take the case to final resolution, wherever and however long it took.
The parties’ testimony agreed that litigation of such policies is performed by a limited number of attorneys because the work is complex, detailed and zealously defended. The requisite skill to pursue such claims is beyond the range of lawyers who do not practice in this area of law on a regular basis.
The testimony did not support a finding that Curran’s acceptance of Henderson’s case precluded other employment.
Based upon the parties’ testimony, the Court finds that $200-$300 is an appropriate range of fees customarily charged in this locality and that Curran should be awarded on the higher end.
The Court finds that the subject matter was very significant, for although the actual amount of dollars may have been small to Liberty, the disability benefits were absolutely necessary for Henderson’s well-being. Her attorney, as a sole practitioner, obtained a good result, i.e., the benefits were restored.
The testimony did not support a finding that any time limitations, special demands or requests between Henderson and Curran were imposed. Nor, does the Court find that there were any unusual qualities about the professional relationship between Henderson and Curran or about the length of time expended by Curran on Henderson’s behalf.
The testimony shows that Curran has practiced for more than 20 years, initially in South Florida, before significantly reducing his practice and moving five years ago to the Tallahassee area. He has been admitted to federal courts. He served as General Counsel for the U.S. Marshall’s Office and has obtained multiple seven-figure verdicts. His practice includes denial of insurance benefit cases.2 His attorney’s fees award case is cited at Aetna Life Insurance Company v. Casalotti, 544 So.2d 242 (Fla. 3rd DCA ). The Court finds that Curran possesses extensive experience, demonstrated diligence and displayed ability in the performance of his services on Henderson’s behalf.
The Court finds that Henderson and Curran entered into a contingency contract, with payment conditioned upon recovery.
As to contingency fee multiplier, the likelihood that Henderson would recover was approximately even at the outset. While it was clear to Curran that Henderson’s medical condition was extremely poor and Liberty had acknowledged that, Liberty’s new refusal was based upon an IME which could be found adequate to support Liberty’s refusal to continue benefits.
Thus, the Court concludes that if attorney’s fees were awarded it would be 88.0 hours times $300 x 2 multiplier for a total of $52,800.
However, Rowe and Quanstrom clearly hold that the court-awarded fee cannot exceed the maximum permitted under the Plaintiff’s contingent fee contract. The way around this limitation is to state in the contingent fee contract that the attorney’s compensation “would be either a specific percentage or the amount awarded by the Court under the prevailing party statute — whichever yielded the higher fee.” Kaufman v. McDonald, 557 So.2d 572, 573 (Fla.1989).
In Lugassy v. Independent Fire Insurance Co., 636 So. 2d 1332 (Fla. 1994), prior to the jury’s verdict, the parties amended the language of their contract from the percentage of any recovery to court-awarded attorney’s fees. The Supreme Court approved the trial court’s award of fees above the original contract’s limiting percentage language.
The problem with this case is that the contract does not include the whichever yielded the higher fee “either/or” option. Rowe clearly states that “in no case should the court-awarded fee exceed the fee agreement reached by the attorney and his client,” Rowe, 472 So.2d 1151. Thus, Liberty’s position is well taken and the Court finds that Curran’s contract limits him to one-third of the settlement.
Henderson’s expert, William Sundberg, was necessary to render an opinion relating to the reasonable number of hours and a reasonable hourly rate. He expended time reviewing file materials, preparing for and providing expert testimony and was required to take time away from his practice and is entitled to a fee of $2,400 (12 hours X $200).
The parties stipulate that costs are not recoverable under Fla. Stat. §627.48 and that Henderson is responsible for costs. It is therefore,
ORDERED AND ADJUDGED that attorney’s fees are awarded to Henderson’s attorney, Charles A. Curran, in the amount equal to $6,666.67, one-third of the settlement amount with Henderson; no taxable costs are awarded and Plaintiff is awarded $2,400 for expert witness fee.
The total amount of said fees are payable by Liberty Life Assurance Co. of Boston and shall bear interest at the legal rate of 6% per year, for which let execution issue.
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1The contract consisted of a letter between the Plaintiff and her attorney, rather than the language proscribed in Rule 4-1.5(f), Rules Regulating the Florida Bar.
2See Lubin v. Provident Life and Accident Insurance Co., 681 So.2d 753 (3rd DCA 1996).
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