11 Fla. L. Weekly Supp. 471a
Attorney’s fees — Insurance — Personal injury protection — Amount — Lodestar fee is calculated for 21 hours at hourly rate of $300 — Costs, expert witness fee, and prejudgment interest awarded — Contingency risk multiplier — Multiplier is not necessary where provider’s attorney has not shown that relevant market requires contingency fee multiplier to obtain competent counsel since provider is active medical practice with enough assigned benefit cases to justify long-standing retainer agreement with three law firms for nearly a year before suit and it has not been shown that provider cannot afford counsel on noncontingent basis, and attorney has not shown inability to mitigate risk of nonpayment in any way since availability of fees under section 627.428 mitigated against risk of nonpayment and risk of nonpayment in one case is mitigated by retention on high volume of cases for provider
CRAIG H. LICHTBLAU, M.D., P.A., (Annette Tirella), Plaintiff, vs. NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County, South County Civil Division “RD”. Case No. 2002SC018869. February 23, 2004. Jonathan D. Gerber, Judge. Counsel: Charles J. Kane, Kane & Kane, Boca Raton, for Plaintiff. J.D. Dickenson, Fowler White Boggs Banker, P.A., West Palm Beach, for Defendant.
ORDER ON PLAINTIFF’S MOTION TO TAX ATTORNEYS’ FEES AND COSTS AND TO DETERMINE AMOUNT OF PREJUDGMENT INTEREST
THIS CAUSE came before this Court on “Plaintiff’s Motion to Tax Attorneys’ Fees and Costs and to Determine Amount of Prejudgment Interest.” This Court has reviewed the motion and the court file, has reviewed the parties’ evidence and arguments, and is otherwise fully advised in the premises.
The primary issue which Plaintiff’s motion presents is whether this Court should apply a multiplier to this Court’s calculation of Plaintiff’s lodestar fee. Before addressing that issue, this Court shall review the background of this case and shall set forth this Court’s calculation of the lodestar fee.Factual Background
This case arose out of Plaintiff’s claim to recover assigned personal injury protection benefits from Defendant. Plaintiff prevailed on its motion for summary judgment upon this Court’s predecessor finding that Defendant had not complied with Section 627.736(10), Florida Statutes, to take advantage of the option of paying reduced PPO rates for payment of PIP benefits. Plaintiff obtained a judgment for the full claim amount of $1,958.78. Plaintiff now seeks to recover reasonable attorneys’ fees pursuant to Section 627.428(1), Florida Statutes, which states, in pertinent part, “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 or the named beneficiary under a policy or contract executed by the insurer, 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.” Plaintiff also seeks to recover its court costs pursuant to Section 57.041, Florida Statutes, as well as prejudgment interest.
The fee agreement between Plaintiff and Plaintiff’s counsel (Plaintiff’s Exhibit 3 in evidence) is a general retainer agreement not just between Plaintiff and Plaintiff’s counsel in this case (Kane & Kane), but also between Plaintiff and two other law firms (Watson & Lentner and Marks & Fleischer, P.A.). The retainer agreement states, in pertinent part:
The law firms of Watson & Lentner, Marks & Fleischer, P.A., and Kane & Kane hereby agree to represent the below named client in enforcing the rights of the client against any and all insurance carriers who are obligated to pay the client any benefits pursuant to contracts of insurance in accordance with Florida or federal statutes. The law firms of Watson & Lentner, Marks & Fleischer, P.A., and Kane & Kane are separate law firms which agree to assume joint legal responsibility to the below named client in enforcing the rights of the client against any and all insurance carriers.
The retainer agreement is in the form of a contingency fee arrangement between Plaintiff and the three law firms. The agreement states, in pertinent part:
This fee is contingent on the outcome of the case. That is if we are successful in obtaining insurance benefits, we will recover a fee but if we are not successful in obtaining insurance benefits, then you will not be obliged to pay us a fee.
Florida Statutes provides that the prevailing party in insurance company disputes is entitled to recover a fee from the insurance company carrier. We will accept the award of the court in satisfaction of your obligation for fees to us under this contract. The obligation for fees commences from the time before a lawsuit is filed in which reasonable efforts to investigate the claim is made through the collection of funds and resolution of the action.
As a matter of law, the foregoing arrangement constitutes a contingency fee arrangement. See Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828, 835 (Fla. 1990) (“In the instant case, Quanstrom’s attorney agreed to represent her upon the understanding that, if he were successful, he would be entitled to a fee which would be set by the court pursuant to section 627.428, Florida Statutes (1987). Implicit in this arrangement was the understanding that no fee would be paid if the attorney did not prevail. This constituted a contingency fee arrangement even though the amount of the fee was not to be determined by the amount of recovery.”).
Plaintiff signed the retainer agreement in September, 2001, nearly one year before Plaintiff filed this lawsuit in August, 2002.Calculation of the Lodestar Fee
In Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145, 1151-1152 (Fla. 1985), the Florida Supreme Court established the method for calculating a reasonable attorney’s fee: “the trial judge should (1) determine the number of hours reasonably expended on the litigation; (2) determine the reasonable hourly rate for this type of litigation; (3) multiply the result of (1) and (2); and (4) adjust the fee on the basis of the contingent nature of the litigation or the failure to prevail on a claim or claims.” The Court specified that courts of this state should utilize the following criteria in determining the reasonable number of hours and the reasonable hourly rate: (1) the time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. Id. at 1150. In Quanstrom, supra, the Florida Supreme Court reaffirmed the lodestar approach as the basic starting point.
Plaintiff and Defendant stipulated that the number of hours reasonably expended on the litigation was 21.0 hours. Plaintiff and Defendant also stipulated that the reasonable hourly rate for this type of litigation was $300.00 in this market for an attorney with similar qualifications. Having considered the testimony parties’ stipulation, as applied to the Rowe and Quanstrom criteria, this Court determines that the number of hours reasonably expended on the litigation was 21.0 hours, and that the reasonable hourly rate for this type of litigation was $300.00 based on Plaintiff’s counsel’s qualifications. Multiplying 21.0 hours times $300.00 per hour, this Court determines that the lodestar fee should be $6,300.00. The parties stipulated that Plaintiff was entitled to recover costs in the amount of $394.66, and that Plaintiff was entitled to recover interest through January 29, 2004, in the amount of $618.39, plus $0.38 per diem in interest thereafter. Defendant did not dispute that the number of hours which Plaintiff’s fee expert expended on the litigation was 3.1 hours, and that Plaintiff’s fee expert charged an hourly rate of $300. This Court determines both of those amounts to be reasonable based on Plaintiff’s fee expert’s experience and qualifications to which he testified at the hearing, yielding an expert fee of $930.00.Whether to Apply a Multiplier to the Lodestar Fee
In Quanstrom, supra, the Florida Supreme Court clarified the use of the contingency fee multiplier to the lodestar fee. The Court stated that, although a trial court must consider a contingency risk factor when awarding a statutorily-directed reasonable attorney fee, “the words ‘must consider’ do not mean ‘must apply,’ but mean ‘must consider whether or not to apply’ the contingency fee multiplier.” 555 So. 2d at 831. The Court then placed attorney’s fee cases into three categories: (1) public policy enforcement cases; (2) tort and contract claims; and (3) family law, eminent domain, and estate and trust matters. Id. at 833. With respect to Category 2 cases, that is, tort and contract cases, the Court found that courts of this state should consider the following factors in determine whether a multiplier is necessary: “(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel; (2) whether the attorney was able to mitigate the risk of nonpayment in any way; and (3) whether any of the factors set forth in Rowe are applicable, especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client.” Id. at 834. If the trial court determines that a multiplier is necessary, then the trial court should determine the amount of the multiplier as follows: “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.” Id.
Plaintiff and Defendant agreed that this was a Category 2 contract case. Plaintiff’s counsel and Plaintiff’s expert testified that a multiplier was necessary under the Quanstrom criteria. Plaintiff’s expert opined that the relevant market required a multiplier to obtain competent counsel because Plaintiff’s counsel was the first attorney in this area to address the Section 627.736(10) issue, other attorneys accepted this type of litigation only if they could seek a multiplier, and Plaintiff’s office manager told Plaintiff’s fee expert that Plaintiff did not feel comfortable with other attorneys’ qualifications to address the Section 627.736(10) issue. Plaintiff’s counsel testified that Plaintiff’s counsel was not able to mitigate the risk of nonpayment in any way because Plaintiff’s counsel’s fee was 100% contingent on the result given the retainer agreement’s provision that, if Plaintiff’s counsel was not successful in obtaining benefits, then Plaintiff would not be obliged to pay a fee. Plaintiff’s counsel and Plaintiff’s expert testified that several of the Rowe factors were applicable: the Section 627.736(10) issue and an assignment issue were novel and difficult; Plaintiff’s counsel possessed the skill requisite to perform the legal service properly based on his specialization in this area; the results obtained were a 100% recovery for Plaintiff after Defendant mounted a vigorous defense; Plaintiff had been a good client of Plaintiff’s counsel; and Plaintiff’s counsel’s experience, reputation, and ability directly resulted in a successful outcome for Plaintiff. Plaintiff’s counsel and Plaintiff’s expert further testified that, if this Court determined that a multiplier was necessary, then this Court should apply a multiplier of 2.0 because success was unlikely at the outset of the case given the unclear state of the law as to the Section 627.736(10) issue and the assignment issue. Plaintiff’s counsel introduced several county court orders (Plaintiff’s Composite Exhibit 5 in evidence) which have applied a multiplier of 2.0 for Plaintiff’s counsel’s services in similar cases.
Defendant’s expert testified, and Defendant’s counsel argued, that a multiplier was not necessary under the Quanstrom criteria. They contended that the relevant market did not require a multiplier to obtain competent counsel because other competent attorneys seek this type of litigation which often results in plaintiffs recovering benefits and attorney’s fees, and because this type of litigation does not require a high degree of skill. Defendant’s expert and Defendant’s counsel conceded that other attorneys handling this type of litigation always seek a multiplier after obtaining a favorable result. But Defendant’s expert and Defendant’s counsel argued that no reason exists for plaintiffs’ attorneys not to seek a multiplier after obtaining a favorable result, so it cannot be said that the relevant market “requires” a multiplier. Defendant’s counsel contended that Plaintiff’s counsel was able to mitigate the risk of nonpayment because Plaintiff’s counsel testified that he has a high volume caseload which results in some form of recovery in approximately 80% of the cases. Defendant’s expert and Defendant’s counsel agreed with Plaintiff’s application of the Rowe criteria with respect to Plaintiff’s counsel’s skills and results obtained, but Defendant’s expert and Defendant’s counsel contended that the Section 627.736(10) issue and assignment issue were not novel or difficult because Plaintiff’s counsel had addressed the same issues in earlier cases and had a better understanding of the likelihood of success in this case.
Applying the Quanstrom criteria, this Court concludes that a multiplier is not necessary in this case. This Court finds that Plaintiff has not satisfied the first two Quanstrom criteria, that is, Plaintiff has not shown that the relevant market requires a contingency fee multiplier to obtain competent counsel, and Plaintiff has not shown that Plaintiff’s counsel was not able to mitigate the risk of nonpayment in any way. If this Court had found it necessary to reach the third Quanstrom criteria, this Court would find that Plaintiff satisfied that criteria, that is, Plaintiff showed that several of the Rowe factors were applicable. If this Court had found that a multiplier was necessary in this case, then this Court would have found that the likelihood of success was approximately even at the outset because existing case law at the outset did not favor either side on either the Section 627.736(10) issue or the assignment issue. This Court also would have found that the minimum-required multiplier of 1.5 for even cases would have been appropriate given that, at the outset of this case, the parties understood and anticipated the Section 627.736(10) issue and the assignment issue, both of which have become commonplace in this type of litigation.
This Court has found that Plaintiff has not satisfied the first two Quanstrom criteria after comparing this case with other cases which have evaluated those criteria. The Florida Supreme Court has evaluated the first Quanstrom criteria in two cases, Sun Bank of Ocala v. Ford, 564 So. 2d 1078 (Fla. 1990), and Bell v. U.S.B. Acquisition Company, Inc., 734 So. 2d 403 (Fla. 1999). In Sun Bank, the Court approved a trial court’s rejection of a commercial bank’s request for a multiplier in a suit to collect on a promissory note. The Court reasoned:
. . . ‘Before adjusting for risk assumption, there should be evidence in the record, and the trial court should so find, that without risk-enhancement plaintiff would have faced substantial difficulties in finding counsel in the local or other relevant market.’ Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 483 U.S. 711, 107 S.Ct. 3078, 3089, 97 L.Ed.2d 585 (1987) (footnote omitted). Therefore, the existence of a contingent-fee arrangement between attorney and client does not automatically require application of a multiplier. Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990). In this case the claimed right to attorney’s fees is predicated on being the prevailing party in a suit on a promissory note. It is not and never has been contemplated that a court should utilize a contingent-fee multiplier to calculate a reasonable attorney’s fee for an attorney in such an action.
. . . We are not aware of any situations where commercial banks have had difficulty finding attorneys to represent them. Indeed, from the myriad of cases involving banks it seems as though attorneys are anxious to represent them. There might be a preference not to accept certain individual cases, but any reluctance generally yields to the reward of gaining other cases and for the business representing a bank engenders.
Id. at 1079-1080 (emphasis added here). In Bell, the Court further articulated the rationale to be applied in the consideration of a multiplier when a contract is the basis for the court-awarded fee. The Court stated:
A primary rationale for the contingency risk multiplier is to provide access to competent counsel for those who could not otherwise afford it. In Rowe, we observed that the benefit of the contingent fee system is to provide a party with ‘increased access to the court system and the services of attorneys.’ 472 So. 2d at 1151. We recognized in Rowe that the availability of attorney’s fees would have the effect of encouraging plaintiffs to bring meritorious claims that would not otherwise be economically feasible to bring on a noncontingent fee basis. Id. at 1149. These goals are consistent with the Florida Constitution. See art. I, § 21, Fla. Const. (providing that courts shall be open to every person for redress of any injury).
Similarly, in his concurring opinion in [Lane v. Head, 566 So. 2d 508 (Fla. 1990)], Justice Grimes emphasized that ‘[t]he justification for a contingency fee multiplier is that without providing an added incentive for lawyers to obtain higher fees, clients with legitimate causes of action (or defenses) may not be able to obtain legal services.’ 566 So. 2d at 513 (Grimes J., concurring). The importance of this policy consideration is highlighted by the fact that the very first factor listed in Quanstrom for courts to consider in determining if a multiplier should be utilized in tort and contract cases is ‘whether the relevant market requires a contingency fee multiplier to obtain competent counsel.’ 555 So. 2d at 834.
We perceive no policy consideration that would prevent a court’s consideration of a contingency multiplier when the parties to a contract agree to have the court award reasonable attorney’s fees. Instead, we find that the primary policy that favors the consideration of the multiplier is that it assists parties with legitimate causes of action or defenses in obtaining competent legal representation even if they are unable to pay an attorney on an hourly basis. In this way, the availability of the multiplier levels the playing field between parties with unequal abilities to secure legal representation. While a prevailing party’s attorney’s fee provision in a contract may be a powerful sword in the hands of those who can afford an attorney, a party who would be faced with substantial difficulties in obtaining an attorney without a contingency arrangement ought to be able to claim a multiplier in the appropriate case, if the evidence justifies it.
743 So. 2d at 411 (emphasis added here).
The Fourth District Court of Appeal, in whose jurisdiction this Court resides, has followed the same rationale in its own cases. This Court shall examine three of those cases, Jones v. Minnesota Mutual Life Insurance Company, 759 So. 2d 723 (Fla. 4th DCA 2000), Michnal v. Palm Coast Development, Inc., 842 So. 2d 927 (Fla. 4th DCA 2003), and Munao, Munao, Munao and Munao v. Homeowners Association of La Buona Vita Mobile Home Park, 740 So. 2d 73 (Fla. 4th DCA 1999), rev. denied, 753 So. 2d 565 (Fla. 2000).
In Jones, the Fourth District affirmed the trial court’s denial of a multiplier in a case involving a suit to recover disability benefits. The parties had entered into a settlement agreement which provided that the plaintiff would receive attorney’s fees pursuant to Section 627.428. The trial court declined to apply a multiplier, finding that the amount at issue was significant enough for many competent attorneys in the relevant market to have taken the case, without the necessity of applying a multiplier. The trial court also noted the high probability that the case would be settled and that a multiplier was unnecessary because the availability of fees under section 627.428 mitigated against the risk of non-payment. The plaintiff appealed on the basis that the availability of relief pursuant to Section 627.428 cannot logically serve as the basis, per se, for rejecting a multiplier. The Fourth District affirmed the trial court’s denial of a multiplier, reasoning:
We do not disagree with [the plaintiff’s] argument that the availability of relief pursuant to section 627.428 cannot logically serve as the basis, per se, for rejecting a multiplier. However, we do not read the trial court’s decision as making such a per se ruling. Rather, we find that the trial court, upon review of the facts of this case, concluded that a multiplier was not necessary in order to serve the reasonable fee provisions of the statute. The court recognized [that plaintiff’s counsel] was not only well compensated for the time and effort spent in prosecution of [the plaintiff’s] claim, but the amount awarded by the court was significantly in excess of the contingency fee [that plaintiff’s counsel] would have received under the parties’ fee agreement. The court also recognized that application of a multiplier in this case would provide a fee award to counsel ‘more than double the amount recovered by the client and, based on [plaintiff’s counsel’s] request, approximately six to eight times what the contingency fee award would have been, absent the statute.’
We note that in Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828, 831 (Fla. 1990), the supreme court recognized that a trial court must ‘consider’ the application of a multiplier where the prevailing party’s counsel is employed on a contingent fee basis. This, however, does not mean that the trial court need apply a contingency fee multiplier. See Askowitz v. Susan Feuer Interior Design, Inc., 563 So. 2d 752, 754 (Fla. 3d DCA 1990) (noting that the application of a multiplier is not mandatory when prevailing party’s counsel is employed on a contingency fee basis).
It is apparent that the trial court’s decision not to apply a multiplier in this case was supported by facts and testimony, which demonstrated the availability of competent counsel in the market place, the likelihood of recovery, the likelihood and fact of reasonable compensation unrelated to a multiplier, the likelihood that competent attorneys with the skill and experience to handle it would have accepted this case absent a multiplier and the ability of the defendant to respond to an award. Furthermore, it cannot be claimed that there is an inequity created by this decision, as it is obvious that counsel, even without the application of a multiplier, received an award well in excess of the $30,000 that would have been paid as a contingency fee. There is also record support for the trial court’s conclusion that application of a multiplier would not further the purpose of section 627.428, which is to discourage insurance companies from contesting valid claims and reimburse successful insured for their outlays for attorney’s fees when they are compelled to defend or to sue to enforce their insurance contracts.
759 So. 2d at 725.
In Michnal, the Fourth District Court of Appeal reversed a trial court’s finding that a defendant’s “scorched earth” defense merited a multiplier because without a multiplier a plaintiff could be economically overwhelmed. The Fourth District wrote:
. . . Multipliers are intended to level the playing field, to provide litigants, who may otherwise lack the resources, to obtain competent counsel, as a means of access to the legal system. As discussed in Quanstrom and its progeny, the appropriate time frame for determining whether a multiplier is ‘necessary’ is when the party is seeking the employ of counsel. See, e.g., Simmons v. Royal Floral Distributors, Inc., 724 So. 2d 99 (Fla. 4th DCA 1998) (there must be evidence that a contingent fee agreement was necessary in order for the prevailing party to have obtained competent counsel if a multiplier is to be imposed on the nonprevailing party).
Here, the trial court found a multiplier was not warranted at the time [the plaintiff’s] case was filed, an event which occurred after [the plaintiff] had already obtained counsel, the same counsel that followed this case through to its completion. There is no precedent for using a multiplier as an incentive for a party’s counsel to ‘stay on the case.’ While we address only the instant case, we recognize allowing such could set a dangerous precedent; one can imagine a whole new arena of fee litigation, attorneys arguing that they are entitled to a multiplied fee award in practically every case that is litigated to the end, asserting the case ‘became’ harder than anticipated, and the incentive of a multiplier was needed to stay on the case. This is certainly not the case for expanding multiplier jurisprudence, and awarding a multiplier on that basis. Both sides were represented by well-known, and well-respected counsel immediately after the dispute arose; we are fairly certain each side knew what they were up against at the outset of the case.
842 So. 2d at 934-935 (emphasis added here).
In Munao, the Fourth District affirmed the trial court’s application of a multiplier. The case involved the plaintiffs’ successful suit against mobile home lot owners for a rent reduction and restoration of lot amenities. The trial court found that the plaintiffs were entitled to recover their reasonable attorney’s fees, to which the trial court applied a multiplier based on several factors which included the following: the questions involved in the case were complex, the case involved a class action including numerous clients and opposing fact witnesses, the case was aggressively litigated on both sides and agreement on any issue of fact or law was seldom reached between the parties, the case had at best an even chance of success at the outset, the results obtained by plaintiffs’ counsel were outstanding, particularly in light of the difficulty of the case from beginning to end and the unequal resources of the parties; and there was no possibility of payment of the legal bills rendered from plaintiffs’ counsel to the plaintiffs. The lot owners appealed the trial court’s application of a multiplier. The Fourth District affirmed, reasoning that the record supported the trial court’s findings and that attorneys should be encouraged to take cases on a contingency fee arrangement, “since this policy also will encourage attorneys to provide services to persons who otherwise could not afford the customary legal fee.”740 So. 2d at 79, quoting Lane, 566 So. 2d at 511 (emphasis added here).
Comparing the instant case to the facts of Sun Bank, Plaintiff has not shown that the relevant market requires a contingency fee multiplier for this Plaintiff to obtain competent counsel. Plaintiff is an active medical practice with enough assigned benefit cases to justify a longstanding retainer agreement with three law firms which handle cases throughout South Florida, and that agreement was in place nearly one year before Plaintiff even filed this lawsuit. Plaintiff obviously is not some individual insured who lacks the financial resources, understanding, experience, or ability to collect insurance benefits from an insurer without hiring counsel. To paraphrase Sun Bank, this Court is not aware of any situation where medical practices seeking to collect assigned benefits have had difficulty finding attorneys to represent them. Indeed, from the myriad of cases involving medical practices seeking to collect assigned benefits, it seems as though attorneys are anxious to represent them. There might be a preference not to accept certain individual cases (as Plaintiff’s fee expert testified), but any reluctance generally yields to the reward of gaining other cases and for the business representing a medical practice engenders. The fact that Plaintiff’s counsel, along with two other law firms, have maintained a longstanding retainer agreement with Plaintiff for all of Plaintiff’s cases justifies that observation.
Comparing this case to the Bell and Munao rationale emphasized above, Plaintiff has not shown that Plaintiff could not afford competent counsel, that it would not otherwise be economically feasible to represent Plaintiff’s claims on a noncontingent fee basis, that Plaintiff may not be able to obtain legal services, or that Plaintiff is unable to pay an attorney on an hourly basis. Frankly, it defies common sense to suggest that Plaintiff’s active medical practice cannot afford competent counsel on an hourly basis. While it may not be appealing for Plaintiff to hire an attorney on an hourly basis when the attorney’s fees incurred may be much greater than the amount of a claim, the test is not what financial arrangement is most economically beneficial to the plaintiff, but what the plaintiff can afford. The fact that Plaintiff’s counsel, the two other law firms, and other counsel for medical practices seeking to collect assigned benefits always enter into contingency fee arrangements with the medical practices does not demonstrate that the medical practices cannot obtain competent counsel without such arrangements. On the contrary, common sense dictates that the exact opposite may be true, that is, the desire to attract the medical practices’ business has caused plaintiffs’ counsel to offer contingency fee arrangements to medical practices even where such arrangements are not necessary. Weighing the evidence, this Court concludes that competent attorneys with the skill and experience to handle this type of litigation would accept this case absent a multiplier, especially given that the availability of fees under section 627.428 mitigates against the risk of non-payment.
Comparing the instant case to the facts of Jones, Plaintiff has not shown that Plaintiff’s counsel was unable to mitigate the risk of nonpayment in any way. To paraphrase Jones, based on Plaintiff’s counsel’s testimony that 80% of his cases result in some recovery of attorney’s fees, there is a high probability that a multiplier was unnecessary because the availability of fees under section 627.428mitigated against the risk of non-payment. Moreover, Plaintiff’s retainer agreement shows that Plaintiff’s counsel is able to mitigate the risk of nonpayment in any one case by being retained on a volume of cases with this client alone. As in Jones, the parties should not interpret this Court’s decision as making a per se ruling that the availability of relief pursuant to Section 627.428 cannot logically serve as the basis, per se, for rejecting a multiplier, nor a per se ruling that a medical practice plaintiff never can show that it is entitled to a multiplier. Rather, this Court, upon review of the facts of this case, concludes that a multiplier was not necessary in order to serve the reasonable fee provisions of Section 627.428. Moreover, based on this Court’s determination of the lodestar fee of $6,300.00, Plaintiff’s counsel will be well compensated for virtually all of the time and effort spent in prosecution of Plaintiff’s claim. This Court recognizes that, in other cases, there may be situations like that seen in Munao and in State Farm Fire & Casualty Co. v. Palma, 555 So. 2d 830 (Fla. 1993), where a plaintiff’s attorney should be entitled to a large multiplier where the attorney takes on the cause of a client who cannot otherwise afford an attorney against a defendant which “goes to the mat” in a case. See also Quanstrom, 555 So. 2d at 835 (“the principles to be utilized in computing these fees must be flexible to enable the courts to consider rare and extraordinary cases with truly special circumstances.”) However, this case is not Palma. Toparaphrase Michnal, both sides have been represented by well-respected counsel since immediately after the dispute arose, and this Court is fairly certain each side knew what they were up against at the outset of the case.
This Court also recognizes that its rejection of a multiplier in this case may appear on first glance to put this case in conflict with those county court orders introduced by Plaintiff’s counsel which have applied a multiplier of 2.0 for Plaintiff’s counsel’s services in similar cases. However, in seven of the eight orders upon which Plaintiff’s counsel relies, there was no discussion or evaluation of the first two Quanstrom criteria, but rather conclusory opinions such as, “The Court has considered the evidence presented and pursuant to the factors enunciated in Quanstrom and Rowe finds that a multiplier of 2.0 is appropriate in this case, as the risk for success at the outset was less than, or even at best.” This Court presumes that, during the fee hearings in those cases, the county court may have determined that the plaintiffs in those cases satisfied the first two Quanstrom criteria; however, without record of the county court’s determinations on those criteria, this Court cannot rely upon those conclusory opinions. See, e.g., Executive Square, Ltd. v. Delray Executive Square, Ltd., 553 So. 2d 803, 804 (Fla. 4th DCA 1989) (reversing trial court’s order award of attorney’s fees, to which trial court had applied multiplier, where form order did not contain sufficient findings of fact to support application of multiplier, but only conclusory language concerning novelty of issues, results obtained and contingent nature of fee); State Farm Mutual Insurance Co. v. Cedolia, 571 So. 2d 1386, 1387 (Fla. 4th DCA 1990) (reversing trial court’s award of attorney’s fees, to which trial court had applied multiplier, where final judgment contained conclusory language that likelihood of success was approximately even, relevant market required multiplier to obtain counsel, and case involved difficult issues, while nothing in record supported statement that relevant market required a contingency fee multiplier to obtain counsel).
In the eighth order which Plaintiff’s counsel introduced, Mark Scherer, D.C., P.A. v. Progressive Express Insurance Company, Case No. 2001CC009219 (Fla. Palm Beach Cty. Oct. 16, 2003), it appears, respectfully, that the county court may have erred inadvertently, because the county court applied a multiplier despite finding that the plaintiff had not satisfied the first Quanstrom criteria for the same reasons which this Court has articulated (“the Court cannot find that without a multiplier, other competent counsel would not have been available to handle these cases or that without a multiplier, [the plaintiff] would not have had the financial ability to access the courts. In Quanstrom and Rowe, the court awarded a multiplier when the individual insured had to take on the large insurance companies. In this and other recent cases before this court, the Plaintiffs were not individual insureds, but rather, doctors with large practices.”) This Court respectfully believes that the county court in Scherer had the right idea in finding that the plaintiff could have accessed the court system absent a multiplier, but inadvertently erred in contradictorily applying a multiplier anyway. The Florida Supreme Court cases of Sun Bank and Bell clearly state that trial courts should evaluate the first Quanstrom criteria from the perspective of the plaintiff’s ability or inability to afford counsel, not from the perspective of counsel who choose to accept or reject cases based on internal business reasons.Conclusion
Based on the foregoing findings of fact and conclusions of law, it is ORDERED AND ADJUDGED that “Plaintiff’s Motion to Tax Attorneys Fees and Costs and to Determine Amount of Prejudgment Interest” is GRANTED IN PART AND DENIED IN PART as follows. Plaintiff shall recover against Defendant the lodestar fee of $6,300.00, costs of $394.66, interest through the date of this order in the amount of $627.89, and an expert fee of $930.00, for a total judgment amount of $8,252.55, all of which shall bear interest at the rate of 7% for the current year and thereafter at the prevailing rate per year as provided for by Florida Statute, for all of which let execution issue instanter and forthwith.
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