10 Fla. L. Weekly Supp. 462b
Attorney’s fees — Insurance — Personal injury protection — Prevailing party — Costs including postage, but excluding photocopies and faxes, are awarded — Contingency risk multiplier — Where likelihood of insured prevailing was more than 50% at outset given quality of claim and counsel but case was not “run of the mill” due to insurer’s failure to give any explanation for nonpayment of bill, insurer’s after-the-fact explanation that it had negligently mishandled bill does not affect assessment of potential for success, which is measured at outset of case — Holding in Palma, allowing recovery for time spent litigating entitlement to attorney’s fees but not time spent litigating amount of fees, does not preclude consideration of prospect of extensive unremunerated attorney’s fees litigation that affects client’s ability to retain effective counsel in determining multiplier — Multiplier of 1.5 awarded — Expert witness fees awarded — Question certified
VINCENT FAUGIANA, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 18th Judicial Circuit in and for Brevard County. Case No. 05-2001-CC-025163. April 10, 2003. David E. Silverman, Judge. Counsel: Gregory J. Donoghue, for Plaintiff. Dale T. Gobel, for Defendant.
AMENDED FINAL ORDER AWARDING ATTORNEY’S FEES AND COSTS
This cause coming before this Court on Motion to Tax Attorney’s Fees and Costs filed by the plaintiff and the Motion for Reconsideration filed by the defendant and the parties having appeared on due notice and the Court having considered the pleadings, the motions, the affidavits, depositions and the evidence, under oath and subject to cross-examination, and the Court having considered that testimony and evidence as well as the argument of the parties, and having been advised in the premises:
The Court finds as a matter of fact and concludes as a matter of law, as follows.Reasonable Attorney’s Fees
The defendant concedes that the plaintiff is entitled to recover reasonable attorney’s fees and costs as a result of prevailing in this case for personal injury protection (PIP) insurance benefits. In determining a reasonable fee, the Court has considered the criteria set forth in, Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145, 1151 (Fla.1985), Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828, 832 (Fla.1990), Bell v. U.S.B. Acquisition Company, Inc., 734 So.2d 403 (Fla. 1999) and Rule 4-1.5, The Florida Bar Rules of Professional Conduct.Costs
The Court finds that the reasonable costs, which the Court deems to include postage but exclude photocopies and faxes, are calculated at $820.25.Hourly Rate
For in excess of ten years of his approximately 15 years in the practice of law, plaintiff’s counsel Gregory J. Donoghue, Esq., has focused principally on handling personal injury cases and PIP claims. Among other evidence, it was represented that in at least one similar case Mr. Donoghue has been awarded $350.00 or more per hour for his legal services by another county judge of the 18th Judicial Circuit in Brevard County. Based on the testimony and applicable law, the Court finds that in this particular case that $350.00 per hour is a reasonable hourly rate for his services.Hours
The Court finds that the substantive case was litigated to an appropriate extent, that Mr. Donoghue’s presentation and affidavit, and that of Douglas Beam, Esq., are credible and that Mr. Donoghue actually and reasonably expended 11.4 hours in pursuit of the litigation, excluding the time spend litigating the amount of the attorney’s fees.Litigating the Fees
The law in Florida distinguishes between time spent litigating entitlement to fees, which is recoverable, and time spent litigating the amount, which is not.1 In State Farm Fire & Casualty Co. v. Palma, 629 So.2d 830, 832-33 (Fla. 1993) the supreme court observed with respect to attorney’s fee litigation that “[s]uch work inures solely to the attorney’s benefit and cannot be considered services rendered in procuring full payment of the judgment.”
This doctrine has been applied even where the client has become contractually obligated to pay for the attorney’s time in litigating the amount of the attorney’s fees. See, Mangel v. Bob Dance Dodge, Inc., 739 So.2d 720 (Fla. App. 5 Dist., 1999). And it has been extended to awards under Section 57.105, Florida Statutes. See, Eisman v. Ross, 644 So.2d 1128 (Fla. App. 3 Dist., 1995) reversing that portion of an award under Section 57.105 representing, “attorney’s time spent litigation amount of fees because there is no statutory basis for the same.” See also, Dep’t of Transp. v. Robbins & Robbins, Inc., 700 So.2d 782, 785 (Fla. 5th DCA 1997) holding that, “[t]ime spent litigating a fee amount is not compensable since the condemnee has no interest in the amount of the fee, the benefit of which inures solely to its attorney,” Seminole County v. Butler, 676 So.2d 451, 455 (Fla. 5th DCA 1996) and Seminole County v. Chandrinos, 816 So.2d 1241 (Fla. App. 5 Dist., 2002) reiterating that rationale.
Several reported County Court cases have characterized the dispute regarding a multiplier as an entitlement issue and awarded fees for litigating over the application of a multiplier. See, e.g. Palma v. State Farm Fire & Cas. Co., 3 Fla. L. Weekly Supp. 231 (15th Cir., Palm Beach Co., 1996), Joseph v. Allstate Insurance Co., 4 Fla. L. Weekly Supp. 325b (15th Cir., Palm Beach Co., 1996) and Trevino v. State Farm Automobile Insurance Co., 9 Fla. L. Weekly Supp. 854a, (12th Cir., Hardee Co., 2002).
However, applying the Supreme Court’s rationale in Palma, the client would have no greater interest in the multiplier than in the attorney’s hourly rate. Increasing either the multiplier or the rate would inure to the benefit of the attorney rather than the client. The imposition of a multiplier may enhance the attorney’s fees, but it would not vary the nature of the substantive relief granted or the amount of the client’s recovery. The difficulty in the reasoning which would permit an award for time spent on the multiplier is suggested by the passage in Joseph, supra, where the court observed that, “common sense suggests that the application of a multiplier does not affect ‘entitlement’ to fees,” but only relates to the amount.
Moreover, as a multiplier is usually at issue and often intertwined with the hourly rate or number of hours,2 the distinction between litigating over the multiplier or over the lodestar amount would tend to circumvent Palma and result in courts routinely awarding fees for litigating the amount. This Court concludes that it would be contrary to the dictates of Palma to award attorney’s fees for the time expended litigating the multiplier issue.Expert Witness
Pursuant to the parties’ stipulation, Douglas Beam, Esq., testified by affidavit as an expert witness as to plaintiff’s attorney’s fees. The Court finds that he actually and reasonably expended 3 hours in review of the file and preparation of the affidavit and should be compensated at a reasonable rate of $300.00 per hour.Multiplier
The Court finds that at the outset of the litigation, the likelihood of the plaintiff prevailing on the claim was more than fifty percent, given the quality of the plaintiff’s claim and that of his counsel. However, this was not a “run-of-the-mill” PIP case, in part, due to the absence of any explanation from the insurer regarding the non-payment of the bill at issue. As a result of the defendant’s silence, it is unclear whether the insurer was arbitrarily rejecting a particular bill while paying others for the plaintiff’s chiropractic treatment or whether the insurer had undisclosed information that the treatment was never performed or other information that would justify the omission. The defendant’s after-the-fact explanation that it had negligently mishandled the bill misses the mark. The potential for success is determined at the outset of the case and is not measured by the later-discovered clerical mistake. Absent an explanation or a high degree of clairvoyance, plaintiff’s counsel should not be expected to divine the intentions of the insurer in omitting to pay the bill. Even assuming plaintiff’s counsel should have guessed that it was inadvertently unpaid, overcoming that level of carelessness is not necessarily easy. It was only through the efficient and thorough advocacy of the plaintiff’s attorney that the plaintiff was able to promptly obtain the benefits to which he was entitled.
The existence of another justification for the application of a multiplier in this case depends upon whether the court may consider the nature and extent of the prospective attorney’s fee litigation. In contrast to less than 12 hours expended on the substantive case, litigation regarding the attorney’s fees involved over 35 hours of plaintiff’s counsel’s time. That time appears to have been consumed, in substantial part, by hearings and depositions and by responding to discovery exercises initiated by the defendant. The Clerk’s file reflects that there have been approximately 60 filings, excluding the appeal, relating to the attorney’s fee issue and approximately 15 addressing substantive issues in the case.
The Court in Discovery Experimental and Development, Inc. v. Department of Health, 824 So.2d 195 (Fla. App. 2 Dist., 2002) observed that the awarding of a multiplier is intended to promote access to the courts through the retention of effective counsel.
In Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145, 1151 (Fla.1985), the supreme court cited increased access to courts and competent counsel as compelling policy rationales for enhancing fee awards by use of contingency risk multipliers. The court reasoned that the contingency risk factor is important to plaintiffs in personal injury cases because it facilitates access to the court system and the services of attorneys who might otherwise be unwilling to accept plaintiffs’ cases. Id. However, risk multipliers should not be used “unless the applicant can establish that without an adjustment for risk the prevailing party ‘would have faced substantial difficulties in finding counsel in the local or other relevant market.’ ” Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828, 832 (Fla.1990) (quoting Pa. v. Del. Valley Citizens’ Council for Clean Air, 483 U.S. 711, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987)).
In this case it is incumbent on the Court to reconcile the principle guiding the application of a multiplier, a principle that tends to ensure representation by effective counsel, with the rationale for precluding the recovery for the time spent litigating the amount of the fees — time spend advancing the attorney’s instead of the client’s interest.
It is clear that a litigant’s ability to engage representation by competent counsel to pursue the claim may be impaired by the prospect of extensive attorney’s fee litigation. Counsel may be reluctant to take a case likely to become unprofitable as a result of protracted uncompensated attorney’s fee litigation. In that instance, the client does have a stake in the nature of the attorney’s fee litigation, although not in the outcome. The client’s important interest in obtaining competent counsel may be affected by the extent of anticipated litigation over the amount of the fees. Therefore, this Court concludes that the holding of Palma does not preclude consideration of prospective attorney’s fee litigation where that affects the client’s ability to retain effective counsel. To hold otherwise would be to simply ignore the economics of the market for legal services and to invite prolonged attorney’s fee litigation designed to dissuade more effective counsel from representing plaintiffs in meritorious PIP cases.
Precluding recovery of time spent litigating the entitlement to a multiplier, but permitting consideration of the length of reasonably anticipated attorney’s fee litigation in determining a multiplier accommodates important competing public policies. It reconciles the goal of promoting access to the courts through effective representation as set forth in Quanstrom with Palma’s exclusion of fees for litigating the amount of the fees — an issue the outcome of which would not be expected to benefit the client.
The Court finds that reasonable concerns regarding the type of protracted and unremunerated attorney’s fee litigation that actually occurred in this case tended to significantly prejudice the plaintiff’s ability to retain experienced, effective counsel. Considering the appropriate factors, including without limitation the nature and extent of the attorney’s fee litigation as reasonably expected by counsel at the outset of the litigation, and the contingency fee arrangement between the plaintiff and Mr. Donoghue, a multiplier of 1.5 is essential for the plaintiff to obtain the services of competent counsel within the local market.
The Court recognizes the absence of distinct appellate guidance on these important issues and that other courts, as indicated by opinions published in the Florida Law Weekly Supplement, have taken positions different than those adopted here. These are significant, recurring issues arising daily in the county courts of this State and are of great public importance and affect the uniform administration of justice. Therefore, pursuant to Section 34.017, Florida Statutes,3 in order to resolve these issues it is appropriate that this Court hereby certify certain questions to the appellate court.Interest
As the counsel for the defendant conceded during the argument, Plaintiff’s counsel is entitled to interest on the attorney’s fee award. See, Novack v. Novack, 210 So.2d 215 (Fla. 1968) and Stone v. Jeffres, 208 So.2d 827 (Fla. 1968). That interest should be imposed on the lodestar amount at a rate of 10% percent per year as of April 26, 2001, the date of the filing of the attorney’s fees affidavit of plaintiff’s counsel. The 10% rate is the rate set by the Comptroller of the Currency for the year in which it was filed. For the propriety of that rate see, Cascio v. Allstate Insurance Company, 9 Fla. L. Weekly Supp. 539a (15th Jud. Cir., Palm Beach County, 2002).
It is therefore hereby ORDERED and ADJUDGED as follows:
The Order of this court awarding attorney’s fees and costs in this cause and dated July 13, 2002 is hereby vacated;
The plaintiff’s Motion to Tax Attorney’s Fees and Costs and the defendant’s Motion for Reconsideration are granted to the extent provided herein and disposed;
The defendant, State Farm Mutual Automobile Insurance Company, shall pay to the plaintiff, Vincent Faugiana, attorney’s fees in the amount of $5,985.00, interest on said attorney’s fees in the amount of $1,170.00, taxable costs in the amount of $820.25, and expert witness fees in the amount of $900.00;
The plaintiff shall recover said amounts from the defendant, together with interest at the rate of 6% per year from the date of this Order and the Clerk shall issue a writ of execution on or after May 10, 2003, upon the plaintiff’s request, unless the defendant has filed a notice that the said payments have been made; and,
Pursuant to Section 34.017, Florida Statutes, and Rule 9.030(b)(4)(A), Florida Rules of Appellate Procedure, this Court hereby certifies the following questions to the Fifth District Court of Appeals:
1. Whether attorney’s fees may be awarded for litigating the application of a multiplier?
2. Whether a Court applying a multiplier may consider the prospect of extensive attorney’s fees litigation?
This is a final order for appellate purposes, however, this Court retains jurisdiction to enforce payment of the awards made herein.
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1This is in contrast to the federal courts which make no such distinction and allow recovery of fees for litigating fees as a matter of course. See, Johnson v. Univ. Coll. of the Univ. of Ala. in Birmingham, 706 F.2d 1205, 1207 (11th Cir.1983).
2For example, in this instance, the insurer has asserted that the existence of a clearly valid claim would tend both to reduce the number of hours plaintiff’s counsel reasonably expended and increase the likelihood of plaintiff’s success.
3Section 34.017 provides, in part, as follows:
(1) A county court is permitted to certify a question to the district court of appeal in a final judgment if the question may have statewide application, and:
(a) Is of great public importance; or
(b) Will affect the uniform administration of justice.
(2) In the final judgment, the trial court shall:
(a) Make findings of fact and conclusions of law; and
(b) State concisely the question to be certified.
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