14 Fla. L. Weekly Supp. 823a
Attorney’s fees — Insurance — Personal injury protection — Hours — Abuse of discretion to award fees to insured’s attorney for 20 hours less than insurer’s expert testified was reasonable — Error to calculate prejudgment interest from date other than date agreed upon by parties and to deny insured’s motion for additional hearing time to consider time spent litigating issue of entitlement to fees — Timeliness of motion — No abuse of discretion in granting motion to enlarge time for filing motion for attorney’s fees where attorney’s affidavits established excusable neglect — Contingency risk multiplier — No abuse of discretion to award 2.0 multiplier where insured signed contingency fee agreement, and there was testimony that market required multiplier to secure competent counsel due to complexity of case and lack of competent counsel in market and that there was no way to mitigate risk of nonpayment
DIANA L. BARCUS, Appellant(s), vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellee(s). Circuit Court, 18th Judicial Circuit (Appellate) in and for Seminole County. Case No. 05-118-AP. L.C. Case No. 00-CC-2529. June 18, 2007. Appeal from County Court, Seminole County, Honorable John R. Sloop. Counsel: Charles J. Kane, Kane & Kane, Boca Raton; and Steven L. Barcus, Altamonte Springs, for Appellant. Robert A. Kingsford, Kingsford & Rock, Maitland, for Appellee.
(PERRY, J.) Diana Barcus appeals a final judgment for fees and costs, and State Farm cross-appeals the final judgment. Pursuant to the reasoning provided herein, this Court reverses.
This case involves a lengthy procedural history pursuant to a $1,250.00 medical claim. As a result of the lengthy procedural history, Barcus was awarded a six-figure award for trial and appellate attorney’s fees and costs, upon which Barcus now appeals, and State Farm cross-appeals.
Barcus, who was insured by the Appellee, State Farm, was injured in an automobile accident. As a result or her injuries, Barcus’ physician prescribed an MRI for diagnosis and for treatment of her injuries. Barcus underwent the procedure, and executed a Direct Payment Authorization without Assignment of Benefits permitting the MRI facility to submit her claim to State Farm. The facility submitted the claim to State Farm, but State Farm declined to pay the bill contending that an illegal fee splitting scheme pursuant to section 817.505 had occurred. Thereafter, Barcus filed suit against State Farm for the unpaid benefits. After discovery, Barcus filed a motion for summary judgment, and the trial court entered summary judgment in favor of Barcus for $1250.00 finding:
Barcus never assigned her benefits to MMGO and is a stranger to any business dealings between that and third parties that State Farm asserts are illegal. The defense of illegality or violation of public policy obtains only where the party seeking relief is culpable in the transgression. State Farm has alleged no such transgression by Barcus. Levasseur’s admissions on behalf of State Farm establish a prima facie case for Barcus.
* * *
State Farm argued it gave Barcus its undertaking to indemnify her for any claim brought against her by MMGO and that this indemnification shows she has no damage or somehow excuses State Farm’s failure to pay. An insured may be damaged by an insurance company’s failure to pay a claim even though the insured has not paid or been sued by the medical provider . . . .* * *
State Farm admitted $1250 is a reasonable amount. Any other argument asserting charges from MMGO are unreasonable are not material as the price is admitted to be reasonable.* * *
There is no doubt or dispute that Barcus incurred a debt to MMGO and received exactly the necessary product and services her treating physician ordered. No showing or allegation has been made that Barcus has no liability for the necessary testing services and interpretations she received.
Clearly she is entitled to no windfall. Similarly, neither is State Farm. State Farm has no standing to assert defenses only available, if at all, to Barcus.
* * *
Accordingly, summary final judgment is awarded to Diana Barcus against State Farm Mutual Automobile Insurance Company in the principal amount sum of $1250.
State Farm appealed the Final Summary Judgment, and on July 8, 2003, this Court, sitting in its appellate capacity,1 affirmed the county court’s decision holding that, “the summary judgment on behalf of Barcus was appropriate.” Although State Farm contended that Barcus filed an untimely motion for appellate fees, this Court entered an order granting Barcus entitlement to appellate attorney’s fees and remanded the case to county court to determine the amount.
On May 5, 2005, the county court heard the Plaintiff’s Motion to Tax Fees and Costs. After the hearing, the court awarded Barcus $112,182.29 in attorney’s fees and costs.2 It is this order that Barcus appeals.
On appeal, Barcus contends that the trial court erred and abused its discretion by awarding an inadequate amount for attorney’s fees. First, Barcus argues that the trial court abused its discretion in awarding attorney’s fees upon which the trial court awarded 20 hours less than State Farm’s own expert witness testified should have been awarded.
A trial court has broad discretion in awarding attorney’s fees, but such discretion is not an unbridled one. Cowart v. Gilson, 271 So. 2d 821 (Fla. 1st DCA 1973). In this case, during the attorney’s fees hearing, Barcus presented evidence that attorney Kane, who was lead counsel for the trial and appellate phases of this case, expended 38.3 hours during the trial court phase, and 74 hours in the appellate phase for a total of 112.3 hours. State Farm presented its expert witness and testified that 76.5 of the 112.3 hours was reasonably expended by Attorney Kane. The amount that State Farm testified was an amount reasonably expended did not include time expended by Attorney Kane that State Farm’s expert inadvertently failed to include. To the contrary of both witnesses’ testimony, including State Farm’s testimony, the court awarded Attorney Kane 55.6 hours, which is 20 hours less than what State Farm’s expert testified was reasonable. It is well-settled that an award of fees constitutes an abuse of discretion not only where the fee is found to be excessive, but also where it is found to be inadequate. See Flagela Corporation v. Hamm, 302 So. 2d 195 (Fla. 1st DCA 1974). In this case, the court abused its discretion when it awarded an attorney’s fee award for 20 hours less than what State Farm’s own expert testified was reasonable. See Larsen v. Larsen, 429 So. 2d 725 (Fla. 3d DCA 1983) (award of $14,000 in attorney’s fees to wife’s lawyer was an abuse of discretion where expert testimony, including husband’s own expert, estimated the value of legal services at $20,000 to $24,000).
Next, Barcus argues that the pre-judgment interest award was erroneous because the trial court used the wrong date in calculating interest. In this case, the parties stipulated that the date used to calculate pre-judgment interest would be April 2, 2002; however, the trial court used the date of April 8, 2004 to calculate the interest. Interest on an attorney’s fee award accrues from the date entitlement to attorney fees fixed through agreement, arbitration award, or court determination, although the amount of the award has not yet been determined. See Quality Engineered Installation, Inc. v. Higley South, Inc., 670 So. 2d 929 (Fla. 1996). Therefore, the trial court erred in using the wrong date in calculating pre-judgment interest.
Finally, the trial court erred in denying Barcus’ ore tenus motion for additional hearing time to consider Barcus’ counsel’s time spent litigating the issue of entitlement to attorney’s fees. See State Farm Fire & Casualty Co. v. Palma, 629 So. 2d 830 (Fla. 1993) (attorney’s fees may be awarded under section 627.428 for litigating the issue of entitlement for the award of attorney’s fees).
On cross appeal, State Farm raises several issues. First, State Farm contends that Barcus is not entitled to attorney’s fees at the trial court level because her motion for enlargement of time to file her motion for fees was untimely. In this case, the trial court entered its final judgment in favor of Barcus on April 2, 2002. Thereafter, approximately 69 days later on June 11, 2002, Barcus filed a motion for attorney’s fees and costs. State Farm contends that the deadline for Barcus filing the attorney’s fees and costs was thirty days from the final entry of judgment, May 2, 2002. Subsequently in September 2003, Barcus filed a motion for enlargement of time, contending excusable neglect, which State Farm argues was extraordinarily late because over 500 days had lapsed.3 The county court entered an order finding excusable neglect and entitlement to attorney’s fees.4 Additionally, State Farm contends that the trial court erred in granting Barcus’ motion for enlargement of time because there was an insufficient showing of excusable neglect.
The standard of review as to a trial court’s finding of excusable neglect for failing to timely request attorney’s fees is an abuse of discretion. Smith v. Smith, 902 So. 2d 859 (Fla. 1st DCA 2005). In Carter v. Lake County, 840 So. 2d 1153 (Fla. 5th DCA 2003), the Fifth District Court of Appeal held that the proper standard for determining whether excusable neglect has been shown under rule 1.090(b) is the more liberal standard utilized to determine excusable neglect under rule 1.540.
In the instant case, the court was presented with Barcus’ motion for enlargement of time to file her motion for attorney’s fees and costs pursuant to Rule 1.090(b)(2), which permits a motion to be filed after the expiration of the specified period if the failure to act was the result of excusable neglect. Both of Barcus’ attorneys filed affidavits with the court to establish excusable neglect. Assuming that State Farm’s argument that there was an insufficient showing of excusable neglect, and that this argument is preserved for review and is not barred by the doctrine of res judicata pursuant to the Fifth District Court of Appeal’s rulings and this Court’s rulings in this case, after review of the record, this Court finds that the trial court did not abuse its discretion in enlarging the time for Barcus to file her motion for attorney’s fees and costs.
Finally, State Farm argues that the trial court erred in awarding a 2.0 multiplier to Barcus’ attorneys. The award of attorney’s fees is a matter committed to sound judicial discretion, and such an award will not be disturbed on appeal absent a showing of a clear abuse of discretion. DiStefano Construction, Inc. v. Fidelity and Deposit Co. of Maryland, 597 So. 2d 248, 249 (Fla. 1992). In determining a party’s entitlement to a contingency risk multiplier, a court should consider the following factors:
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 Rowe5 are applicable, especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client.
Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990). In this case, at the attorney’s fees hearing, Barcus presented testimony of her counsel. Both attorneys testified that Barcus signed a contingency fee agreement wherein she retained them as co-counsel in the action. Barcus’ experts testified that a contingency risk multiplier was necessary to obtain competent counsel to pursue this case because of the complexity of the case and the lack of competent counsel in the market willing to accept the case. There was testimony presented that there was no way to mitigate their risk of non-payment and that the relevant market required a multiplier to secure competent counsel. In the instant case, there was substantial, competent evidence to support the lower court’s ruling concerning an entitlement to a multiplier. Therefore, the lower court did not abuse its discretion in awarding a 2.0 multiplier.
For the reasoning provided herein, the final judgment awarding attorney’s fees and costs is AFFIRMED in part, and REVERSED in part, and the cause is REMANDED to the trial court for further proceedings in accordance with the reasoning provided herein. The trial court shall recalculate Barcus’ attorney’s fees pertaining to hours reasonably expended and calculate the pre-judgment interest from the date of April 2, 2002.
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1State Farm initially filed its appeal with the Fifth District Court of Appeal; however, the Fifth District declined to accept jurisdiction and transferred the case to the circuit court.
2Barcus retained two attorneys. For attorney Kane, the court awarded a lodestar amounting to $6,475 for the trial phase and $13,912.50 for the appellate phase. The court applied a 2.0 multiplier totaling $40,775.00, plus $4,192.50 for pre-judgment interest. For attorney Barcus, the trial court awarded Barcus $21,700 in attorney’s fees and costs for the trial phase, and applied a 2.0 multiplier, totaling the award to $43,400, plus $9,776.29 in pre-judgment interest.
3This Court notes that an appeal was pending for a portion of this time period.
4Pursuant to the county court entering an order enlarging the time for Barcus to file a motion for attorney’s fees and finding an entitlement to fees, State Farm filed a petition for writ of certiorari with the Fifth District Court of Appeal. The Fifth District denied State Farm’s petition on the merits, with prejudice, and awarded entitlement to appellate fees to Barcus.
5See, e.g., Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985).
