13 Fla. L. Weekly Supp. 621a
Attorney’s fees — Insurance — Personal injury protection — Amount — Hours expended — Time spent litigating entitlement to fees — Medical provider is entitled to attorney’s fees for time spent after insurer conceded that provider was entitled to fees if provider ultimately succeeds in case where insurer did not clearly and unequivocally acquiesce to entitlement — Contingency risk multiplier — Where fee agreement between provider and counsel was pure contingency fee contract, provider’s likelihood of success at outset was more likely than not, relevant market requires multiplier to obtain competent counsel in PIP cases, case involved complex issues of possible overlapping treatment for two accidents and down-coding, counsel was unable to mitigate risk of nonpayment in any way, and counsel obtained excellent result, multiplier of 1.25 is reasonable and appropriate — Prejudgment interest, expert witness fees and costs awarded
FRANCISCO M. GOMEZ, M.D., P.A., a/a/o ZOE ANDRUSYSHYN, Plaintiff, vs. PROGRESSIVE EXPRESS INSURANCE COMPANY, Defendant. County Court, 13th Judicial Circuit, Hillsborough County, Civil Division “J”. Case No. 03-SC-005077. March 17, 2006. Elizabeth G. Rice, Judge. Counsel: Timothy A. Patrick, Timothy A. Patrick, P.A., Tampa, for Plaintiff. Steve Manno, 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 February 7, 2006 (the “Fee Hearing”), on the Plaintiff’s Motion to Tax Attorneys’ Fees and Costs and Legal Assistant Fees and Costs and Apply Contingency Risk Multiplier (“Motion”) filed by the plaintiff, FRANCISCO M. GOMEZ, M.D., P.A., (as assignee of Zoe Andrusyshyn) (“Plaintiff”), against the defendant, PROGRESSIVE EXPRESS INSURANCE COMPANY (“Defendant”). Counsel for Plaintiff, Timothy A. Patrick, and counsel for Defendant, Steven D. Manno, were present. In addition, Roberto R. Alayon, Plaintiff’s expert witness, and Anthony E. Parrino, 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-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 March 3, 2003. The case ultimately involved a dispute between the parties over 10 billing statements in the total amount of $302.40. Defendant declined payment of these invoices on the grounds the medical charges exceeded a reasonable fee in this geographic region. Defendant responded to Plaintiff’s complaint by filing seven responsive motions and a demand for a jury trial. The parties thereafter embarked on a course of significant discovery, as well as discovery disputes.
The parties attended mediation, but no settlement was reached. The parties were then ordered to non-binding arbitration, at which Plaintiff prevailed. Defendant, however, filed a motion for a trial de novo, which was heard on March 29, 2005. On March 30, 2005, Plaintiff filed its motion for summary judgment, and the parties continued their preparations for trial. A hearing was held in June 2005 during which the Court ordered the parties to prepare memoranda and responses regarding their respective positions on the issue of Plaintiff’s entitlement to summary judgment. Indeed, Defendant filed a 19 page memorandum in opposition to Plaintiff’s summary judgment motion. Defendant also served a proposal for settlement for a nominal amount of $100, which Plaintiff declined to accept. Both parties continued to prepare for trial, as well as the continued summary judgment hearing.
On August 29, 2005, this Court issued an oral ruling granting Plaintiff’s motion for summary final judgment. The Court thereafter entered an Order Granting Final Summary Judgment on September 9, 2005, and a final judgment on November 17, 2005. Plaintiff filed its Motion on or about November 23, 2005. Defendant filed a notice of appeal of the final judgment on December 12, 2005.
At the Fee Hearing, Plaintiff’s counsel Timothy A. Patrick (“Patrick”) testified that the parties had reached a stipulation as to the reasonable number of hours expended by Plaintiff’s counsel in prosecuting this case through December 13, 2005. He stated that he and counsel for Defendant, Steven D. Manno (“Manno”), stipulated to 165 hours for Patrick and 17 hours for Matthew Brumley (“Brumley”) for a total of 185 hours. Patrick further testified the parties had stipulated to an hourly rate for Patrick of $250, to an hourly rate for Brumley of $200, to $1,000 in costs, and to an hourly rate of $250 for both expert witnesses. The parties had not reached a stipulation as to any time incurred by Patrick after December 13, 2005.
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 26.9 hours was a reasonable number of additional hours to have been expended litigating the case from December 14, 2005, to January 27, 2006, and 5.9 additional hours was a reasonable number of hours to have been expended from January 27, 2006, through February 6, 2006, for a total of 217 hours. He testified further that in his opinion, Plaintiff was entitled to an award of 217 hours because Defendant had not yet acquiesced to Plaintiff’s entitlement to attorneys’ fees. He also testified a contingency risk multiplier in the range of 1.5 to 2.0 was reasonable and a multiplier of 1.75 should be applied to the fee award in this case given, among other reasons, the existence at the outset of the case of an overlapping treatment issue and Plaintiff’s difficulty in retaining competent counsel to handle this type of PIP claim against this particular Defendant. Alternatively, Defendant’s expert witness Anthony E. Parrino (“Parrino”) testified that based on his review of the time records for Plaintiff’s counsel and applicable case law, he believed 0 hours was a reasonable number of hours to have been expended in litigating the claim after December 13, 2006, as the issue of entitlement had been conceded by Defendant by that date. He also testified no contingency risk multiplier was appropriate because the market at the time Plaintiff filed the case did not require a multiplier and an evaluation of the other required factors did not justify a multiplier being applied.
The primary issues before the Court at this time are (1) whether Defendant had conceded Plaintiff’s entitlement to attorneys’ fees by December 13, 2005, and if not, the number of hours reasonably expended by Plaintiff’s counsel in litigating Plaintiff’s claim to a final resolution after December 13, 2005; (2) 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, the amount of such multiplier; and (3) 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.
Although the parties stipulated to a reasonable number of hours expended by Plaintiff’s counsel from the inception of the case through December 13, 2005, the parties disagree on whether Plaintiff is entitled to a recovery for any time expended after that date and through the date of the Fee Hearing. Plaintiff argues it is entitled to a recovery for this time because Defendant has failed to clearly and unequivocally concede Plaintiff’s entitlement to attorneys’ fees. Defendant argues, alternatively, that it did concede entitlement and that none of the time expended by Plaintiff’s counsel after December 13th was expended in establishing Plaintiff’s entitlement to attorneys’ fees; thus, it would be improper to allow a recovery for any of the disputed time.
In State Farm Fire & Cas. v. Palma, 629 So. 2d 830 (Fla. 1993), the Florida Supreme Court concluded that a party may not recover attorneys’ fees for time expended in litigating the amount of attorneys’ fees to which it is claims entitlement. Id. at 833. Unless and until entitlement has been conceded, the services rendered by counsel are still arguably being rendered in procuring full payment of the client’s judgment. This time expended by counsel consequently is recoverable. See id. at 833.
Defendant takes the position in paragraph three of Defendant’s Initial Response and Objections to Plaintiff’s Notice of Filing Plaintiff’s Affidavit of Attorney’s Fees and Costs that “if the Plaintiff ultimately is successful in this matter, and a verdict is rendered in favor of the Plaintiff, the Plaintiff is entitled to reasonable attorney’s fees and costs.” Defendant contends this position is record proof it has conceded Plaintiff’s entitlement to attorneys’ fees. In Physical Medicine Center (as assignee of Garcia) v. Progressive Express Ins. Co., 12 Fla. L. Weekly Supp. 1182 (Fla. 13th Circuit County Court, October 17, 2005), this Court adopted a bright line rule for conclusively determining when a party has acquiesced to another party’s entitlement to attorneys’ fees. The rule articulated by this Court in Physical Medicine Center is that a party’s acquiescence must be “clear and unequivocal” from the record. None of the parties have presented the Court with any instructive, let alone dispositive, authority in support of their respective positions. The Court therefore finds no reason to depart in this case from its bright-line rule in Physical Medicine Center. Accordingly, this Court must decide whether Defendant’s position that Plaintiff is entitled to attorneys’ fees “if” Plaintiff ultimately succeeds in this case constitutes a “clear and unequivocal” acquiescence to Plaintiff’s entitlement to fees at this time.
The Court concludes Defendant’s acquiescence is not “clear and unequivocal.” It is axiomatic from Defendant’s use of the word “if’ that its acquiescence to Plaintiff’s entitlement to attorneys’ fees is conditional and thus, not unequivocal. Defendant has appealed the entry of the summary final judgment in favor of Plaintiff and no doubt has carefully phrased its position here regarding Plaintiff’s entitlement to attorneys’ fees so as to avoid any inconsistency with its position in the appeal that Plaintiff is not entitled to final summary judgment. Defendant cannot have it both ways. It either concedes Plaintiff is entitled to fees at this time or it does not. Defendant’s position that Plaintiff may be entitled to attorneys’ fees at some future point after an appellate court has decided the merits of the appeal cannot be viewed as a “clear and unequivocal” acquiescence to Plaintiff’s entitlement at this time to attorneys’ fee.
In reaffirming its bright-line approach to entitlement in cases such as this (i.e., PIP cases), the Court concludes its approach brings greater certainty to a process in need of reform. It has been the Court’s experience and observation in this circuit that the award of attorneys’ fees to prevailing plaintiffs in PIP actions is a hotly contested matter. Despite referral of these matters to mediation, they infrequently settle. Battles over discovery wage as often as they did during the litigation of the substantive merits of the case. The parties’ attorneys spend significant hours preparing for a fee hearing which itself lasts no less than half a day and, in many cases, all day. It is not uncommon based on this Court’s experience and observation for a prevailing party to expend 10 or more hours to establish a reasonable fee. In cases involving an insured or a provider against an insurance company with ample resources to fund litigation, the additional expense and delay in recovering attorneys’ fees can create a hardship for a plaintiff’s attorney and a disincentive to accepting these types of cases in the future. A bright line approach helps to eliminate senseless conflict on the issue of when a party is litigating entitlement to attorneys’ fee as opposed to litigating the amount of attorneys’ fees.
Importantly, adoption of a bright-line approach to entitlement comports with the purpose of section 627.428, Florida Statutes, and is consistent with the Palma court’s ruling that fees are recoverable for time expended by an attorney in handling matters which benefit the client. Requiring Defendants to clearly and unequivocally concede entitlement eliminates guesswork and may help to streamline the attorney fee recovery process, which ultimately benefits clients by providing greater incentive for attorneys to accept these types of cases, prosecute them to a judgment or verdict if appropriate and necessary, and resist an early settlement which may be for an amount far less than what the client is actually entitled. If plaintiffs’ attorneys know the recovery of reasonable fees is a realistic prospect, they will be more likely to accept these types of cases in the future which will have the effect of expanding the supply of competent attorneys available to represent plaintiffs in these types of cases. Lastly, adoption of a bright-line approach is consistent with and fosters the policy of the no fault statute by eliminating one area of dispute which could further delay the immediate payment of a valid claim.
As it is clear Defendant here is trying to hedge its bets, the Court concludes that Defendant’s “reservation of rights” does not constitute a clear and unambiguous acquiescence to Plaintiff’s entitlement to attorneys’ fees. Further, as Defendant failed to introduce credible evidence to controvert Alayon’s and Patrick’s testimony as to the reasonable number of hours expended by Plaintiff’s counsel after December 13, 2005, the Court finds Plaintiff is entitled to an additional award of 32.8 hours. In so finding, the Court specifically concludes that this time is recoverable because it directly benefited the client for the reasons articulated above.
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 Plaintiff’s claim to a final resolution is 217 hours and a reasonable hourly rate for Plaintiff’s counsel for this type of litigation is $250 for Patrick and $200 for Brumley.
Applying the loadstar approach, the Court finds Plaintiff is entitled to a reasonable fee award of $52,850.00.
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, 555So. 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 was a pure contingency fee contract. Neither Defendant nor its expert Parrino presented any contradictory evidence. Accordingly, the Court finds that the contract addressing Plaintiff’s counsel’s recovery of attorneys’ fees was 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 more likely than not at the outset of this case, and a contingency risk multiplier of 1.25 is reasonable and appropriate. The Court’s application of the 1.25 contingency risk multiplier is premised on the following specific findings:
a. The Court finds Patrick’s and Alayon’s testimony that the relevant market requires a contingency risk multiplier to obtain competent counsel in PIP cases to be credible. 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 ultimate amount in controversy was approximately $300, making it much less desirable than other types of cases. Defendant presented no credible evidence to refute Patrick’s and Alayon’s testimony.
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. The Court finds Alayon’s testimony as to the complexity of the overlapping treatment issue to be credible and this issue, together with the uncertainty of the down-coding issue, justifies an upward adjustment of the multiplier to a 1.25. Additionally, as this Court has noted in other cases, it seems disingenuous for Defendant to argue here that Plaintiff’s claim against Defendant for improper reduction of the billing statements is a relatively uncomplicated claim when it defended Plaintiff’s motion for summary judgment so vigorously and in fact, has appealed the entry of the judgment to the circuit court.
e. Plaintiff’s counsel attempted to mitigate the risk of nonpayment, but was unable to do so.
f. The use of a multiplier overall 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. Patrick and Alayon testified this case was a riskier case to handle as it was more complicated at its inception than most reduction cases because the assignee had been involved in a second accident and the possibility of overlapping treatment existed. According to Alayon, the possibility of overlapping treatment would make it much easier for the insurer to defend the underlying case on the grounds that the services and treatment at issue were not causally related to the accident alleged in the complaint. This Court finds Alayon’s testimony credible and accordingly concludes this reduction case was riskier than most for Plaintiff to pursue. Given the challenges presented by the issue of overlapping treatment, together with Defendant’s contention several of the CPT codes used by Plaintiff improperly characterized the services he actually performed, the Court likewise concludes that the summary final judgment obtained by Plaintiff in the amount of $302.40 is an excellent result for Plaintiff to achieve in this case. Lastly, as the Court previously noted, the fee agreement between Plaintiff and its counsel was a pure contingency fee agreement which only allowed for the recovery of attorneys’ fees by Plaintiff’s counsel if counsel prevailed in establishing Plaintiff’s claim for damages against Defendant.
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. As this Court has determined that Defendant failed to clearly and unequivocally concede Plaintiff’s entitlement to attorneys’ fees prior to the entry of this final judgment, no award of pre-judgment interest is due.
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 17.72 hours expended by Alayon in preparing for and attending the Fee Hearing is a reasonable number of hours to be expended and that the stipulated hourly rate of $250 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 $4,430 in reasonable expert witness fees.
Reasonable Costs
Based on the parties’ stipulation, the Court determines Plaintiff is entitled to an award of $1,000 in reasonable costs expended in obtaining a final judgment as to its claim in this case.
Summary of Reasonable Fees and Costs
In summary, the Court hereby finds based on the substantial competent evidence presented at the Fee Hearing by Plaintiff, the entire record as a whole, and applicable case law, as follows:
a. reasonable number of hours expended by Plaintiff’s counsel — 217 hours
b. reasonable hourly rate for Plaintiff’s counsel —
-Patrick: $250
-Brumley: $200
c. load star attorneys’ fees — $52,850.00
Patrick: 197.8 hours x $250 = $49,450.00
Brumley: 17.0 hours x $200 = $3,400.00
d. applicable contingency risk multiplier — 1.25
e. total reasonable attorneys’ fees — $66,062.50 (1.25 x $52,850.00)
f. pre-judgment interest — $0
g. reasonable court costs — $1,000.00
h. reasonable expert witness fees — $4,430.00 (17.72 hours x $250/hr.)
i. total reasonable fees, costs, interest, and expert witness fees — $71,492.50
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:
Plaintiff, FRANCISCO M. GOMEZ, M.D., P.A. (as assignee of Zoe Andrusyshyn), shall have and recover against Defendant, PROGRESSIVE EXPRESS INSURANCE COMPANY, the amount of $66,062.50 in reasonable attorneys’ fees; $0 in pre-judgment interest; $1,000.00 in reasonable costs; and $4,430.00 in reasonable expert witness fees, for a total sum due of $71,492.50, that shall bear interest at the rate prescribed in section 55.03, Florida Statutes (2005) of 9% per annum, for all of which let execution issue.
* * *
