12 Fla. L. Weekly Supp. 1182a

Attorney’s fees — Insurance — Personal injury protection — Contingency risk multiplier — If a party fails to acquiesce to moving party’s entitlement to attorney’s fees, movant is entitled to recover all fees, including fees incurred with post-trial discovery — A party’s acquiescence or concession to entitlement must be clear and unequivocal from the record — In case at issue, it is unclear from evidence in record that letter from defendant’s counsel to plaintiff’s counsel was intended as an unequivocal acquiescence to plaintiff’s entitlement to attorney’s fees — Contingency risk multiplier of 1.5 is reasonable where likelihood of success at outset was approximately even, relevant market requires contingency risk multiplier to obtain competent counsel in PIP cases, defendant aggressively litigates its cases, so that a case against this particular defendant is less desirable than cases against other insurers, and plaintiff’s counsel was unable to mitigate risk of nonpayment — Other factors also justify use of multiplier, including amount of risk involved, results obtained, and type of fee arrangement between attorney and client — Prejudgment interest, expert witness fees, and reasonable costs awarded

PHYSICAL MEDICINE CENTER, INC., (as assignee of Anne Marie Garcia), Plaintiff, vs. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 13th Judicial Circuit of Hillsborough County, Civil Division. Case No. 02-SC-027003, Division J. October 17, 2005. Elizabeth G. Rice, Judge. Counsel: Timothy A. Patrick, Tampa, for Plaintiff. Jeffrey R. Davis, Kingsford & Rock, P.A., Tampa, for Defendant.

ORDER GRANTING PLAINTIFF’S MOTION TO TAX ATTORNEYS’ FEES AND COSTS AND APPLY CONTINGENCY RISK MULTIPLIER

This case came before the Court for hearing on April 13, 2005, and on August 19, 2005 (collectively, the “Fee Hearing”), on the Motion to Tax Attorney’s Fees, Legal Assistant Fees and Costs (“Motion”) filed by the plaintiff, PHYSICAL MEDICINE CENTER, INC., (as assignee of Anne Marie Garcia) (“Plaintiff”), against the defendant, PROGRESSIVE EXPRESS INSURANCE COMPANY (“Defendant”). Counsel for Plaintiff, Timothy A. Patrick, and counsel for Defendant, Jeffrey R. Davis, were present. In addition, Roberto R. Alayon, Plaintiff’s expert witness, and Scott W. Dutton, Defendant’s expert witness, were present. The Court having considered the Motion, together with the entire court file and record; having considered the sworn testimony of Plaintiff’s counsel and the parties’ expert witnesses; having heard argument of counsel; and having considered the pre- and post-Fee Hearing memoranda submitted by the parties and other applicable law; it is

ORDERED as follows:

Background Facts and Issues

Plaintiff filed this case against Defendant on November 7, 2002. The case ultimately involved a dispute between the parties over Defendant’s failure to pay the entire amount of various billing statements submitted by Plaintiff to Defendant for payment. Defendant filed on December 19, 2005, a motion seeking to dismiss the action, but the Court denied the motion. Plaintiff thereafter filed an Amended Complaint on May 15, 2003, and Defendant filed its Answer and Affirmative Defenses to Amended Complaint on September 2, 2003.

The parties attended mediation on June 6, 2003, but no settlement was reached. The parties subsequently attended a non-binding arbitration on June 1, 2004, at which the arbitrator ruled in favor of Defendant. Plaintiff then moved for a trial de novo, and a two-day trial eventually was set to commence on November 17, 2004. Prior to trial, both Defendant and Plaintiff filed motions for summary final judgment. An order denying Defendant’s motion was entered on November 22, 2004. A ruling on Plaintiff’s motion was deferred and the matter was referred to a special master for determination.

On the eve of trial, the parties reached a settlement in principal. By letter dated November 11, 2004, Defendant’s counsel at the time, Alan Scharf, communicated Defendant’s acceptance of Plaintiff’s settlement offer to Plaintiff’s counsel. Defendant agreed to pay Plaintiff the sum of $1,500 in full payment of any benefits and interest due Plaintiff. Defendant, however, failed to tender the settlement payment to Plaintiff, and Plaintiff’s counsel thereafter was forced to send Defendant a letter on December 2, 2004, requesting payment of the settlement proceeds, and file a motion on December 13, 2004, to enforce the settlement agreement and for sanctions.

Plaintiff filed its Motion for attorneys’ fees and costs on November 17, 2004, together with its first request for admissions to Defendant in connection with the issues raised in the Motion (“Request for Admissions”). Paragraph 12 of the request asks Defendant to admit or deny whether “Plaintiff is entitled to attorneys’ fees for all time reasonably and necessarily expended.” Defendant filed its response to Plaintiff’s request for admissions on December 20, 2004, and responded “Denied” to paragraph 12 of Plaintiff’s request. The Fee Hearing on the Motion subsequently was set for April 13, 2005. It ultimately concluded on August 19, 2005.

In support of its Motion, Plaintiff filed the following three affidavits: (1) Affidavit of Attorney’s Fees and Costs reflecting a total of 213.3 hours expended and $3,565.55 in costs incurred in litigating the case for the period commencing 10/22/02 through 12/29/04; (2) Affidavit of Matthew D. Brumley, Esq. as to Attorney’s Fees reflecting a total of 99.9 hours expended in litigating the case for the period commencing 9/23/03 through 12/10/04; and (3) Supplemental Affidavit of Attorney’s Fees reflecting a total of 57.9 hours expended in litigating the case for the period commencing 1/18/05 through 7/14/05.

At the April 13th segment of the Fee Hearing, Plaintiff’s counsel Timothy A. Patrick (“Patrick”) testified, based on his previously filed affidavit as to fees and costs, that 202.3 hours were reasonably expended in litigating the case through December 29, 2004. At the August 19th segment of the Fee Hearing, Patrick testified an additional 57.9 hours were reasonably expended in litigating the case from January 18, 2005, through July 14, 2005. Patrick also testified he was admitted to The Florida Bar in 1992, and has been practicing in the area of personal injury protection (“PIP”) for most of his legal career. Plaintiff’s expert witness Roberto R. Alayon (“Alayon”) testified that based on his review of the time records for Plaintiff’s counsel and applicable case law, he believed 189.7 hours was a reasonable number of hours for Patrick to have expended in litigating the case through December 29, 2004; 55.5 hours was a reasonable number of hours for Patrick to have expended in litigating the case during the period commencing January 18, 2005, through July 14, 2005; 83.5 hours was a reasonable number of hours for Matthew D. Brumley (“Brumley”) to have expended in litigating the case through December 10, 2004; .7 hours was a reasonable number of hours for Elba Martin (“Martin”) to have expended in litigating the case through December 29, 2004; 2.5 hours was a reasonable number of hours for Erik Gillespie (“Gillespie”) to have expended in litigating the case through December 29, 2004; and 2.5 hours was a reasonable number of hours for Jeffrey Coleman (“Coleman”) to have expended in litigating the case through December 29, 2004; a total of 278.9 hours was reasonably expended by Plaintiff’s counsel in litigating the case through December 29, 2004; a total of 334.4 hours was reasonably expended by Plaintiff’s counsel in litigating the case during the period commencing January 18, 2005, through July 14, 2005; a rate in the range of $250 to 275 per hour was a reasonable rate for Patrick; a rate in the range of $225 to 250 per hour was a reasonable rate for Brumley; and a rate of $225 per hour was a reasonable rate for Coleman. He also testified a contingency risk multiplier in the range of 1.75 to 2.0 should be applied to the fee award based on, among other reasons, the uncertainty of outcome at the outset of the case and Plaintiff’s difficulty in retaining competent counsel to handle this type of PIP claim against this particular Defendant.

Alternatively, Defendant’s expert witness Scott W. Dutton (“Dutton”) testified that based on his review of the time records for Plaintiff’s counsel and applicable case law, he believed 131.8 hours was a reasonable number of hours for Patrick to have expended in litigating the case up to November 11, 2004; 35 hours was a reasonable number of hours for Patrick to have expended from January 18, 2005, to July 14, 2005, for a total of 166.80 hours; and $175 to $225 per hour was a reasonable rate for Patrick. He also testified no contingency risk multiplier was warranted based on the facts of this case.

As to the reasonable number of hours to have been expended in litigating the case by Brumley and his reasonable hourly rate, Defendant stipulated during the continued Fee Hearing and hearing on Defendant’s motion to continue the Fee Hearing held on July 9, 2005, that Brumley reasonably expended 92 hours at the rate of $225 per hour in litigating this case.

Accordingly, the primary issues now before the Court are (1) the number of hours reasonably expended by Plaintiff’s counsel in litigating this case to a final resolution; (2) the reasonable hourly rate to be awarded for Plaintiff’s counsel for this type of litigation; (3) whether the Court should apply a contingency risk multiplier to any fees awarded pursuant to sections 627.428 and 627.736(8), Florida Statutes, and if so, (4) the amount of such multiplier; and (5) whether expert witness fees may be taxed as a cost against Defendant, and if so, in what amount.

For the reasons set forth below and pursuant to sections 627.428 and 627.736(8), Florida Statutes, Plaintiff’s Motion is GRANTED.

Reasonable Attorneys’ Fees

In determining the amount of reasonable attorneys’ fee to award Plaintiff, the Court must utilize the criteria and guidelines for determining reasonable fees articulated by the Florida Supreme Court in Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). In Rowe, the court adopted the federal loadstar approach as an objective means to calculate fees to assist courts in setting reasonable attorney fee awards. 472 So. 2d at 1150. Accordingly, in computing a reasonable fee under the loadstar approach, the Court must first, determine the number of hours reasonably expended in the litigation; second, determine the reasonable hourly rate for the prevailing attorney’s services; and third, multiply the reasonable number of hours by the reasonable hourly rate. See Id. at 1150-51. The court in Rowe also identified eight criteria set forth in Disciplinary Rule 2-106(b) of the Florida Bar Code of Professional Responsibility that courts should consider in determining a reasonable attorney fee. See Id.

Utilizing the criteria outlined in Rowe and based on the competent evidence presented at the Fee Hearing and the entire record, the Court finds a reasonable number of hours for Plaintiff’s counsel to have expended in litigating this case to a final resolution and their respective, reasonable hourly rates are as follows:

 Attorney              Hours         Hourly Rate           Total  Patrick               224.7            $250           56,175.00 Brumley                92.0            $225           20,700.00 Martin                   .7            $175              122.50 Gillespie               2.5            $175              437.50 Coleman                 2.5            $175              437.50 TOTAL                 322.4                           77,872.50 

The number of hours determined by this Court above to have been reasonably expended by Plaintiff’s counsel specifically includes work performed during the period ending July 14, 2005, and specifically includes time expended by Plaintiff’s counsel due to the continuation of the Fee Hearing at Defendant’s request. In particular, the Court finds Patrick reasonably expended 224.7 hours during the period commencing 10/22/02 and ending 7/14/05.¹ In this case, there is no clear or credible evidence that Defendant acquiesced to Plaintiff’s entitlement to attorneys’ fees at any time prior to the Fee Hearing. To the contrary, the only credible evidence in the record regarding the issue of entitlement is the answer to paragraph 12 of Plaintiff’s Request for Admissions filed by Defendant’s prior counsel, Molhelm & Fraley, P.A., denying Plaintiff’s entitlement to “attorneys’ fees for all time reasonably and necessarily expended.” “Florida courts have recognized that when a party fails to acquiesce to entitlement, the movant party is entitled to recover all fees, including those fees incurred with post-trial discovery.” See Dr. Richard Merritt d/b/a Chiropractic Health Center v. Progressive Express Ins. Co., 12 Fla. L. Weekly Supp. 238a, 239 (Fla. 10th Cir. Ct. 2004); State Farm Mutual Auto Ins. Co. v. Gurney, 12 Fla. L. Weekly Supp. 700, 701 (Fla. 9th Cir. Ct. 2005) (emphasis added).

The mere entry of an arbitration award, rendition of a final judgment, or (as in this case) sending of a settlement letter silent on the issue of entitlement is insufficient proof of acquiescence. In the case of an arbitration award and final judgment, acquiescence cannot be implied in light of Florida Rule of Civil Procedure 1.525. Even if a final judgment is rendered in favor of a party, a party may not be entitled to attorneys’ fees if the party fails to timely file a motion under Rule 1.525. Rule 1.525 creates a bright line rule for the award of fees. This Court likewise embraces a bright line rule for entitlement, especially in cases involving settlement offers, and rules that a party’s acquiescence or concession to entitlement must be clear and unequivocal from the record. In this case, it is unclear from the evidence in the record that Mr. Scharf’s November 11, 2004, letter to Patrick was intended as an unequivocal acquiescence to Plaintiff’s entitlement to attorneys’ fees, particularly in view of Defendant’s failure to timely remit the settlement proceeds, Defendant’s denial of paragraph 11 of Plaintiff’s Request for Admissions, and the possibility an award of fees may have been denied on procedural grounds had Plaintiff failed to properly seek the recovery of such fees.

Applying the loadstar approach, the Court accordingly finds Plaintiff is entitled to a reasonable fee award of $77,872.50.

Contingency Risk Multiplier

In Rowe, the court likewise concluded that in contingency fee cases, the loadstar figure calculated by the court is entitled to enhancement by an appropriate contingency risk multiplier. 427 So. 2d at 1151. The Rowe court’s ruling regarding the application of a contingency risk multiplier subsequently was modified in Standard Guaranty Ins. Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990), and in Bell v. U.S.B. Acquisition Co., Inc., 734 So. 2d 403 (Fla. 1999). In Quanstrom, the Florida Supreme Court reaffirmed the principles in Rowe and found that a trial court should consider the following factors in determining whether to apply a multiplier in contract cases, such as this one:

(1) whether the relevant market requires a contingency 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 client.

Quanstrom, 555 So. 2d 828, 834; Bell, 734 So.2d 403, 411. The Quanstrom court went on, however, to modify the multiplier in Rowe. The court announced that a trial court may in a case (1) apply a multiplier of 1 to 1.5 if it determines success was more likely than not at the outset; (2) apply a multiplier of 1.5 to 2.0 if it determines the likelihood of success was approximately even at the outset; and (3) apply a multiplier of 2.0 to 2.5 if it determines that success was unlikely at the outset of the case. 555 So.2d at 834.

Both Patrick and Alayon testified at the Fee Hearing that the attorneys’ fee agreement between Plaintiff and Plaintiff’s counsel is a pure contingency fee contract. Neither Defendant nor its expert Dutton presented any credible contradictory evidence. Accordingly, the Court finds that the contract addressing Plaintiff’s counsel’s recovery of attorneys’ fees is a pure contingency fee contract and thus, the Court must consider applying a contingency risk multiplier to the amount of fees this Court has determined were reasonably incurred by Plaintiff. Utilizing the criteria set forth in Rowe, Quanstrom, and Bell, this Court accordingly finds Plaintiff’s likelihood of success was approximately even at the outset of this case, and a continency risk multiplier of 1.50 is reasonable and appropriate. The Courts’s application of the 1.5 contingency risk multiplier is premised on the following specific findings:

a. The relevant market requires a contingency risk multiplier to obtain competent counsel in PIP cases. As the Florida Supreme Court noted in Bell, “[a] primary rationale for the contingency risk multiplier is to provide access to competent counsel for those who could not otherwise afford it.” 734 So. 2d 403, 411 (Fla. 1999). The Court notes that local courts are awarding multipliers in cases handled by leading, local PIP attorneys. Indeed, “[c]ontingency risk multipliers are part of the expectation of practicing PIP law for Plaintiff’s lawyers at this point.” Francisco M. Gomez, M.D., P.A., (as assignee of Mohamed Koraitim v. Nationwide Mutual Fire Ins. Co., 11 Fla. L. Weekly Supp. 457c (Fla. 13th Cir. County Court, March 18, 2004). Likewise, as Justice Grimes emphasized in Lane v. Head, 566 So. 2d 508, 513 (Fla. 1990), “[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 513 (Grimes, J., concurring). This is especially true in a case like this where the initial amount in controversy was approximately $1,700, making it much less desirable than other types of cases.

b. The Court is aware from its own experience and its own review of a significant number of reported decisions in this area of the extremely litigious and contentious nature of PIP cases. In this regard, the Court finds credible Alayon’s testimony that this particular Defendant aggressively litigates its cases and that a case against this particular Defendant is much less desirable than cases against other insurers.

c. Despite Dutton’s testimony that there was nothing novel about this case and that had it gone to trial, it would have been easy to prove, the facts in this case and this Court’s own knowledge and experience regarding Plaintiff’s success rates before a jury in PIP cases fail to support such contention. Indeed, it was Defendant, not Plaintiff, that prevailed at the nonbinding arbitration in this case. It is clear from the record as a whole that Defendant, from the outset, was doing more than merely defending against any deficiencies in Plaintiff’s complaint. Defendant initially filed a motion to dismiss Plaintiff’s complaint, which was denied, and thereafter filed a motion for summary judgment. Defendant is entitled to aggressively defend its position. However, it seems somewhat disingenuous for Defendant to argue now that the case was a simple one and that there was nothing “novel” about it when the evidence clearly demonstrates Defendant aggressively defended the case and even prevailed at the non-binding arbitration.

e. Plaintiff’s counsel attempted to mitigate the risk of nonpayment, but was unable to do so.

f. The use of a multiplier is justified based on factors such as the amount of risk involved, the results obtained, and the type of fee arrangement between the attorney and client. Given Defendant’s tenacity in defending the case, the nature of the services at issue, and the amounts involved, Plaintiff’s settlement recovery was an excellent result. Lastly, as the Court previously noted, the fee agreement between Plaintiff and its counsel is a pure contingency fee agreement.

Pre-judgment Interest

Pursuant to Quality Engineered Installation, Inc. v. Higley South, Inc., 670 So. 2d 929 (Fla. 1996) and Boules v. Florida Dept. of Transportation, 733 So. 2d 959 (Fla. 1999), pre-judgment interest on an attorney fee award accrues from the date entitlement to attorneys’ fees is fixed through agreement, arbitration, or court determination. Plaintiff therefore is entitled to pre-judgment interest on the attorneys’ fees awarded at the statutory rate of 7% from the August 19, 2005.

Expert Witness Fees

As to the issue regarding the award of Plaintiff’s expert witness fees, the Court finds an award of fees to Plaintiff is appropriate pursuant to the courts’ rationale in Travis v. Travis, 474 So. 2d 1184 (Fla. 1985); Stokes v. Phillips, 651 So. 2d 1244 (Fla. 2d DCA 1995); and Mandel v. Bob Dance Dodge, Inc., 739 So. 2d 720 (Fla. 5th DCA 1999). Accordingly, the Court finds that the 22.1 hours expended by Alayon in preparing for and attending the Fee Hearing (9.3 hours expended in preparing for and attending the April 13th segment of the Fee Hearing, 5.5 hours expended in preparing for and attending the July 9, 2005, Fee Hearing which ultimately was continued, and 7.3 hours expended in preparing for and attending the August 19th segment of the Fee Hearing) is reasonable and that the hourly rate of $225 per hour is a reasonable expert witness hourly rate for Alayon. The Court further finds based on Alayon’s testimony that he intended and expected to be compensated for his time expended as an expert witness in this case. Plaintiff therefore is entitled to an award of $4,972.5 in reasonable expert witness fees.

Reasonable Costs

The Court has considered the costs affidavit submitted by Plaintiff in this case and determines that Plaintiff is entitled to an award of $3,485.05 in reasonable costs incurred in prevailing in this case as these costs were necessarily and reasonably incurred by Plaintiff. See

Willey v. M. K. Roark, Inc., 616 So. 2d 1140 (Fla. 4th DCA 1993); Orlando Regional Medical Center, Inc. v. Chmielewski, 573 So. 2d 876 (Fla. 5th DCA 1990); Winn-Dixie Stores, Inc. v. Vote, 463 So. 2d 459 (Fla. 2d DCA 1985). Defendant introduced no credible evidence to contradict the reasonableness of these costs.

Summary of Reasonable Fees and Costs

In summary, the Court hereby finds based on the evidence presented at the Fee Hearing, the entire record as a whole, and applicable case law, as follows:

a. reasonable number of hours expended by Plaintiff’s counsel — 322.4

(1) Patrick 224.7

(2) Brumley 92.0 (stipulated amount)

(3) Martin .7

(4) Gillespie 2.5

(5) Coleman 2.5

b. reasonable hourly rates for Plaintiff’s counsel —

(1) Patrick $250

(2) Brumley $225 (stipulated rate)

(3) Martin $175

(4) Gillespie $175

(5) Coleman $175

c. load star attorneys’ fees — $77,872.50

d. applicable contingency risk multiplier — 1.5

e. total reasonable attorneys’ fees — $116,808.75 (1.5 x $77,872.50)

f. pre-judgment interest — $880.87 (59 days @ $14.93 per diem)

g. reasonable court costs — $3,485.05

h. reasonable expert witness fees — $4,972.50 (22.1 hours x $225/hr.)

I. total reasonable fees, costs, interest, and expert witness fees — $126,147.17

FINAL JUDGMENT OF ATTORNEYS’ FEES AND COSTS AGAINST DEFENDANT

Based on the foregoing findings of fact and conclusions of law, the Court hereby ADJUDGES as follows:

1. Plaintiff, PHYSICAL MEDICINE CENTER, INC., (as assignee of ANNE MARIE GARCIA), shall have and recover against Defendant, PROGRESSIVE EXPRESS INSURANCE COMPANY, the amount of $116,808.75 in reasonable attorneys’ fees; $880.87 in pre-judgment interest; $3,485.05 in reasonable costs; and $4,972.50 in reasonable expert witness fees, for a total sum due of $126,147.17, that shall bear interest at the rate prescribed in section 55.03, Florida Statutes (2004), of 7% per annum, for all of which let execution issue.

__________________

¹The Court additionally finds Patrick reasonably expended 189.7 hours during the period commencing October 22, 2002, and ending December 29, 2004.

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