12 Fla. L. Weekly Supp. 327a
Attorney’s fees — Insurance — Personal injury protection — Prevailing party — Confession of judgment — No error in finding that medical provider was prevailing party entitled to award of attorney’s fees where insurer confessed judgment by paying bills within 8 days after PIP suit was filed, but still defended suit based on lack of notice of intent to initiate litigation — Demand letter — Error to enter final judgment in favor of medical provider despite lack of notice of intent to initiate litigation where insured received medical treatment after October 1, 2001, and her policy was renewed after effective date of section 627.736(11) and, therefore, statute was applicable and notice of intent to initiate litigation was required — Issue of notice of intent is moot, however, due to insurer’s full payment of medical bills prior to entry of final judgment — Contingency risk multiplier — Abuse of discretion to award multiplier where Quanstrom requirements were not met
UNITED SERVICES AUTOMOBILE ASSOCIATION, Appellant, vs. AFFILIATED HEALTH CARE, INC., a/o/a SARAH SHOEMAKER, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Consolidated Case Nos. 03-208 AP & 03-429 AP. L.C. Case No. 02-004708 SP 26. January 11, 2005. An Appeal from the County Court for Miami-Dade County, Lawrence King, Judge. Counsel: Miriam R. Merlo, Gaebe, Mullen, Antonelli, Esco, & Dimatteo, for Appellant. Marlene S. Reiss, Stephens, Lynn, Klein, La Cava, Hoffman & Puya, for Appellee.
(Before ROBERT N. SCOLA, JR., RONALD DRESNICK, LEON M. FIRTEL, JJ.)
(FIRTEL, J.) The Appellant, United Services Automobile Association, (USAA) appeals a final summary judgment and a final judgment taxing attorney’s fees and costs, both entered in favor of the Appellee, Affiliated Health Care Center, Inc., (Affiliated). For the following reasons, we do not reach the merits of the first judgment and affirm the second judgment below with the exception of the award of a contingency risk multiplier.
The insured, Sarah Shoemaker, sustained injuries in an automobile accident. She assigned her personal injury protection (PIP) benefits in her automobile insurance policy to Affiliated, her health care provider. Affiliated filed a PIP suit for payment of the insured’s outstanding medical bills. USAA, the insurer, did not pay them within the statutory prescribed time.
Both parties conceded during oral argument that USAA fully paid all of the outstanding medical bills just eight days after the PIP suit was filed. We affirm concluding that a confession of judgment occurred below prior to the lower court entering the first judgment above. See Wollard v. Lloyd’s & Co. of Lloyds, 439 So. 2d 217, 218 (Fla. 1983) (voluntary payment by an insurer to insured is equivalent to a confession of judgment); Magnetic Imaging Systems I, Ltd. v. Prudential Property & Cas. Ins. Co., 847 So. 2d 987, 989 (Fla. 3d DCA 2003) (voluntary payment by an insurer to medical provider is settlement equivalent to a confession of judgment). Despite full payment, USAA still defended the PIP suit based on a lack of a notice of intent to initiate litigation. Based on the above cases, we find that the lower court did not err below in finding that Affiliated, as the prevailing party, was entitled to attorney’s fees under §627.428, Fla. Stat.
We find it necessary to comment on the proceedings below in two areas notwithstanding the confession of judgment that occurred even though the parties, especially USAA, seem hesitant to intone the words. It seems that the litigation went on without purpose since the medical bills that were the subject of the PIP suit were already paid so that the proverbial situation of one hand not knowing what the other was doing propelled this case. See Wollard, 439 So. 2d at 218. All that was necessary was for either side to advise the other, and the court below, that the bills had been paid, voila end of case, minimal attorneys fees incurred and ordered or surprise, surprise — agreed or settled. What a waste! Ultimately the burden must fall on USAA, because it had the medical bills, was served with the suit papers and then paid the bill, but ostensibly did not advise Affiliated, its counsel or the court until after the first judgment, of this fact, whether or not it wanted to call its own act a confession of judgment.
We do not reach the merits of the first judgment because it is moot in that a confession of judgment existed. Notwithstanding the foregoing, we find it necessary to address the defense of a notice of intent to initiate litigation. As a matter of public importance, we find the effective date of Section 627.736(11), Fla. Stat. (2001) as being June 19, 2001, rather than October 1, 2001. See State Farm Mut. Auto. Ins. Co. v. West Gables Open MRI Services, Inc., 846 So. 2d 538, 540 (Fla. 3d DCA 2003). The statute, by its express terms applies to cases in which the insured received medical treatment after October 1, 2001. However, unlike in West Gables, there was no express or specific effective date given in the statute itself. As Ms. Shoemaker received medical treatment after October 1, 2001 and her policy renewed after the effective date, the statute was applicable to this litigation and a notice of intent to initiate litigation was required. But again, this point is moot as full payment of the disputed medical bill occurred prior to the entry of the first judgment.
As to the amount of attorney’s fees awarded in the second judgment above, we affirm the reasonable hourly rate and number of hours — ridiculously expended though they might be. However, we find that the award of a contingency risk multiplier was not supported by the evidence below and that the requirements in Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990) were not met. We therefore find that an abuse of discretion occurred in awarding a multiplier and remand the case for lower court to enter the amount of attorney’s fees awarded without the multiplier. Furthermore, USAA’s motion for appellate attorney’s fees is denied. Affiliated’s motion for appellate attorney’s fees pursuant to §627.428, Fla. Stat. is granted and remanded to the lower court below to determine such amount. AFFIRMED. (SCOLA, JR., J. concurs in separate opinion and DRESNICK, J. concurs in part and dissents in part with directions.)
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(Scola, Jr., J., concurring.) I concur with Judge Firtel that the payment of the medical bill by USAA after the filing of the lawsuit constituted a confession of judgment by USAA. I agree that the effective date of Section 627.736(11), Fla. Stat. (2001) is June 19, 2001 and that the provisions of that statute apply to Shoemaker, whose insurance policy took effect in August 2001. I further agree that the award of reasonable and necessary attorney’s fees should be affirmed without the contingency risk multiplier.
I write separately to address the legitimate concerns of Judge Dresnick in his dissent. While I believe that the attorney’s fees in this case far exceeded those one might reasonably expect under the circumstances of this case, a full and complete evidentiary hearing on the reasonableness of the fees was conducted by the trial court below. If USAA had evidence to suggest that Affiliated and/or its attorneys were responsible for the unnecessary attorneys’ fees, it had the opportunity to present that evidence to the trial court during the evidentiary hearing on Affiliated’s motion for attorneys’ fees. If USAA disagreed with the court’s finding on that issue it had the opportunity to appeal that finding. USAA did not appeal the issue of the reasonableness of the hours expended, only the legality of the application of the multiplier. The failure to appeal that issue constitutes a waiver by USAA and cannot be a basis for reversal.
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(Dresnick, J., concurring in part and dissenting in part.) I concur with Judge Firtel in his finding of a confession of judgment by Appellant and in his finding that the Court below erred by applying a contingency risk multiplier to the attorney fee. I dissent, however, from Judge Firtel’s opinion affirming the lower court’s granting of attorney’s fees and costs in favor of Appellee. I agree the matter of attorney’s fees should be remanded, but not just for the trial court to determine the amount of the fee. I would order the trial court to conduct a hearing to determine whether fees more than the minimal amount necessary to file this lawsuit and to continue it for the eight days it took the Appellant to pay the medical bill was necessary and to thereafter order attorney’s fees based only on the amount of legal work that was reasonably required to prosecute this action.
This case arose as a result of Appellant failing to timely pay medical bills in the amount of $336.00 incurred by Sarah Shoemaker as a result of an automobile accident which occurred on August 29, 2001. Ms. Shoemaker was insured by Appellant. Ms. Shoemaker’s medical treatment was received in December, 2001. Ms. Shoemaker assigned her rights to payment to Appellee. The case below was filed after timely notice on May 28, 2002. The total medical bill was paid within eight days of the filing of the lawsuit. The fact of the payment of that medical bill is the reason this Court has affirmed the trial court’s judgment in favor of Appellee, treating the payment as a confession of judgment.
Despite the fact that the Appellant paid and Appellee received the $336.00 payment (the only issue about which this litigation concerned) the attorneys for each party continued to battle to the point the trial court awarded attorney’s fees of $26,809.05. That is $26,809.05 in fees to collect a bill of $336.00 that was paid within eight days of the beginning of the litigation.
To make the point of the reason for this opinion, it is necessary to detail the needless litigation which followed the payment of the medical bill. The Appellant/Defendant answered on June 28, 2002 alleging affirmative defenses including the failure to submit a notice of intent to litigate. Payment was never raised as an affirmative defense. On the same day, the Defendant filed a request for production and a request for admissions including a request for the Appellee/Plaintiff to admit that it never received a denial of payment by the Defendant. On July 5, 2002, the Plaintiff responded to the request for admissions and served its first set of interrogatories. On July 24, 2002, the Defendant filed a second request for production which requests the Plaintiff to produce a copy of the denial of payment and a copy of all bills unpaid at the time of filing suit. The next day, the Defendant responded to the Plaintiff’s first request to produce by attaching copies of all bills and by stating that the original bills are available at its offices.
On August 2, 2002, the Plaintiff asked for mediation. On August 5, 2002, the Defendant served answers to the Plaintiff’s first set of interrogatories. The following day, in what can best be described as a waterfall of motions, the Plaintiff filed a second request to produce to which the Defendant responded. The Defendant then filed two separate motions to compel the Plaintiff’s response to its first and second request for production as well as a motion to dispense with mediation. It is hard to imagine that had there been a mediation the parties would not have learned the bill had been paid long ago. Lastly, the Plaintiff filed a motion to compel the Defendant to respond to its production request as well as submitting a notice of taking a deposition.
On September 23, 2002, two agreed orders were entered granting Defendant’s motions to compel Plaintiff’s responses to its first and second requests for production. Two days later, the Defendant’s request to dispense with mediation was also granted. The following day, the Plaintiff filed a third motion to compel for the Defendant to produce its representative for deposition as well as a motion for time to respond to a proposal for settlement by the Defendant that is not included in the record.
The Defendant had arduously fought to avoid the deposition by its representative as evident by its motion for a protective order the day before. In a dual cross order on October 7, 2002, the lower court granted Plaintiff’s motion for extension of time while denying Defendant’s motion for a protective order from deposition. On October 22, 2002, the Defendant struck back by filing a motion to compel and for sanctions for failing to respond to its first and second production requests. On November 12, 2002, the Plaintiff finally responded to these requests for production. However, an unnecessary agreed order was subsequently entered on November 18, 2002 which granted Defendant’s motion to compel and deferring sanctions.
On December 3, 2002, the Plaintiff propounded its first request for admissions and the Defendant filed a response twenty days later. What is interesting to note about these admission requests is that one of them asks the Defendant to admit that it paid other claimed medical bills for other DOS from the Plaintiff without a notice of intent. The Defendant’s subsequent answer states in relevant part that“Defendant admits that other bills and the subject bill, have been paid without a notice of intent. However, the notice of intent is only an issue as to whether the lawsuit filed is premature.” What was this litigation all about?
On December 4, 2002, the Defendant filed a motion for summary judgment which was subsequently denied on January 8, 2003. Although the record does not indicate when, the Plaintiff also filed a motion for summary judgment. It is not until after filing its motion that the Plaintiff learned from the Defendant that payment has already been made. This fact was not made known to the lower court as it entered final summary judgment in favor of the Plaintiff on March 13, 2003 on the affirmative defense of the notice of intent. Thereafter a series of motions to tax attorney’s fees and costs with attendant request for production and attorney fee interrogatories were filed. Also filed were an emergency motion for a continuance of the fee hearing, a notice of deposition, motions for sanctions and other motions for continuances of the fee hearing.
It was not until May 29, 2003, over a year after the payment of the bill about which all of this litigation resulted, that the Plaintiff finally filed a motion for confession of judgment. On July 8, 2003, a final judgment taxing attorney’s fees and costs is entered for the Plaintiff. An execution of this judgment issued on August 11, 2003 for $26,809.05 in attorney’s fees and costs and the next day an order was entered granting Defendant’s emergency motion to stay execution.
In addition to the thousands of dollars expended in needless attorney’s fees and costs, this unbelievably prolonged and protracted litigation created an onerous and absurd burden on the lower court’s resources. The unanswered question is, why. Why did opposite sides of a point in contention engage in this orgy of litigation over nothing. Several answers come to mind and none of them is satisfying. Is it too cynical to believe that the Appellant/Defendant’s attorney knowing from the beginning the bill had been paid also believed that he had prevailed and therefore under sec. 627.428, Fla. Stat. he would be entitled to attorney’s fees. Or maybe these two lawyers were so busy running around creating litigation that they never took the time to check the facts.
Two facts are clear, someone from the Appellant’s organization authorized a check to be drawn, signed and mailed, and someone from the Appellee’s organization received, deposited and booked the payment. The only answer to the question offered by either side at the oral argument was simply that the left hand did not know what the right hand was doing. Frankly, this answer is simply not acceptable. Each attorney has an obligation not only to his or her respective client to insure their money is not squandered. Moreover, each has an obligation to the court not to engage in needless litigation. To accept the answer that this merely fell through the cracks, would be to accept a level of mediocrity that we as a society simply cannot and should not accept. It is for this reason I would remand to the trial court to not only conduct a hearing on attorney’s fees but to also find the answer to the question posed why did this needless litigation occur and who should bear the responsibility for it?
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