14 Fla. L. Weekly Supp. 476a
Attorney’s fees — Insurance — Personal injury protection — Amount — Hourly rate — $350/hr is reasonable rate for most experienced and effective PIP plaintiff’s attorney in two-county area, and $95/hr is reasonable rate for paralegal with extensive PIP and civil experience — Contingency risk multiplier — Where evidence established that competent counsel could not be obtained in like cases in community without multiplier despite medical provider’s existing relationship with counsel, counsel was unable to mitigate risk of nonpayment, and chance of success at outset was even, multiplier of 2.0 is awarded
EDGE FAMILY CHIROPRACTIC, P.A. a/a/o Doris Korecky, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 1st Judicial Circuit in and for Escambia County. Case No. 2006 SC 003343, Division 5. March 22, 2007. Pat Kinsey, Judge. Counsel: Robert N. Heath, Jr., McDonald, Fleming, Moorhead, Pensacola, for Plaintiff. Douglas S. Woodward, Moore, Hill & Westmoreland, P.A., Pensacola, for Defendant.
ORDER GRANTING PLAINTIFF’S ATTORNEY’S FEES
At a hearing in open court on March 15, 2007, the court heard the Plaintiff’s Motion for Fees and Costs. The parties appeared through counsel. It is undisputed that plaintiff’s attorney is entitled to an award of attorney’s fees and costs. The court, having heard the argument of counsel, reviewed the case law presented, reviewed the affidavits of Robert Heath, L.L. “Roy” Roane, III and Arthur A. Shimek, reviewed the deposition of Ingrid Edge, D.C., the stipulation of the parties, and reviewed the official clerk’s file in general, makes the following determinations in accord with Florida Patients Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985), Standard Guaranty Insurance Company v. Quanstrom, 555 So.2d 828 (Fla. 1990), Bell v. U.S.B. Acquisition Co., Inc., 734 So.2d 403 (Fla. 1999), Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air et al., 483 U.S. 711 (1987), Progressive Express Insurance Company v. Schultz, 31 Fla. L. Weekly D2610 (Fla. 5th DCA 2006) and The Florida Rules of Professional Conduct Rule 4-1.5(b).
This case resulted from an automobile collision which occurred on April 7, 2004. The case ultimately resolved when the defendant conceded and paid for plaintiff’s medical care. The parties stipulated prior to the hearing that Mr. Heath, the plaintiff’s attorney, documented with sufficient detail 6.95 hours and his paralegal documented with sufficient detail 10.0 hours and that the time requested is reasonable. Therefore the first issue to be resolved by the court is the reasonable hourly rate for Mr. Heath and his paralegal.
The court finds reasonable and credible the testimony of plaintiff’s expert, Arthur Shimek. Mr.Shimek has twenty-three years of legal experience practicing primarily in the areas of personal injury/wrongful death, insurance litigation and medical malpractice. He is one of the few local attorneys in the Escambia/Santa Rosa Bar who regularly handles PIP cases. For this case, he reviewed the plaintiff’s file, refreshed his memory and information regarding other legal firms within the local community, relied on his own personal knowledge and experience, and testified that the prevailing market rate for an attorney with Mr. Heath’s reputation, knowledge and experience is $350.00/hour.
In addition, the court has personally observed Mr. Heath’s experience, reputation, diligence and ability in representing his client. Mr. Heath’s more than twenty-five years of experience, his reputation in the community (among the top attorneys in the personal injury area) and the results he forged from what appeared at first to be, according to the defendant, a case which the defendant was confident they could win, reflect brightly on his skill and expertise. In fact, it is probably Mr. Heath’s reputation in the area of PIP litigation which eventually led to the excellent result for the plaintiff in this particular less than optimal case.
Mr Heath is board certified by the Florida Bar as well as the National Board of Trial Advocacy as a Civil Trial Lawyer. Although Mr. Heath has both criminal and civil trial experience, since 1984 his practice has been primarily civil. Since 1986, his practice has been exclusively civil. His practice has been substantially devoted to PIP cases since 1996. Mr. Heath is a published author on PIP issues and frequently lectures at seminars concerning PIP and related issues. Over the past ten years, Mr. Heath has represented more PIP plaintiffs than any other attorney in this area. He is widely acknowledged as the most experienced and effective PIP plaintiff’s attorney in the two-county area.
Therefore, based on the issues involved, Mr. Heath’s experience and expertise, the prevailing market and standards within this community, and the quality of the legal work performed, the court finds that a reasonable rate for Mr. Heath is $350.00/hour. Mr. Heath has been awarded $350.00/hour multiple times within the last year for his services in PIP cases and has charged similar hourly rates in other non-PIP related cases.
Although it may seem that $95.00/hour for paralegal work is on the high side for the community, it was also proved (and undisputed) that Ms. Rogers has extensive PIP and Civil experience. She has more than twenty years experience handling both complex and the more routine civil cases. She has an A.S. degree in Paralegal Studies with a concentration in civil litigation. Her reputation in the legal community is well established as an exceptional legal assistant and her services are in high demand. She has recently been awarded $95.00/hour in at least three cases for which the fee has been contested and regularly bills at that level. There are others who command more, and certainly Ms. Rogers’ talents and experience would place her in this upper tier of paralegals, but since $95.00 is the requested amount in this case, the court finds that $95.00 is a reasonable rate.
The court next examined whether or not a multiplier is justified in this case. It is well established that because of the small sums involved, litigants may be discouraged if they cannot recover an amount sufficient to cover their loss and attorney’s fees. See Quanstrom at 833-834. Since PIP cases almost always involve a small sum, case law supports the application of a multiplier to attract good and competent attorneys who are willing to accept the risk of non-payment. Mere hourly wages could never fairly compensate for the risk involved where a fee is dependant upon the successful outcome of a case — and payment for costs as well as attorney’s fees typically delayed for in excess of a year, and more frequently, years at a time. The evidence and the record establishes that in this community one could not attract or obtain competent counsel in cases such as this one without a contingency multiplier.
In applying the Quanstrom factors, the court finds that the evidence established Mr. Heath was not able to mitigate the risk of nonpayment in any way other than by litigating this case until it eventually settled. Over a nine month period, the insurance company continued to deny coverage and push the case to the next level as is understandable based on the specific facts of this case. The plaintiff is an eighty-three-year-old woman who treated regularly (at least one time per week for the past ten years) with Dr. Edge prior to falling out of her vehicle and breaking her wrist. Her initial complaints pertained to the broken wrist and only later manifested themselves in her neck and back. She suffers from chronic osteo-arthritis and at the time of her IME, had returned to treating one time per week as she did pre-incident. Relying on the IME, the defendant terminated coverage. The defendant’s Answer generally denied coverage and asserted two Affirmative Defenses.
In its analysis, the court then applied the factors set forth in Rowe. The use of a multiplier is further justified by the substantial risk to Mr. Heath in taking the case. Although he spent only about seven hours of his time and about $200.00 of his money over a nine month period Mr. Heath is generally acknowledged as the PIP expert in this two-county area, and time he spends on what appeared at first to be a marginal case at best, is time and money not being spent on a case more likely to succeed. From the beginning, based on the small sum at controversy, the pure contingency fee contract and the defendant’s apparent confidence in denying coverage, the case posed a substantial risk to Mr. Heath. Mr. Heath accepted this case knowing there was a substantial probability that he would not prevail despite his perceived merits of the case.
For example, the case would undoubtedly come down to a battle of medical experts plus the jury’s view of the credibility of the insurance adjuster. When faced with pure credibility issues in presenting a case, the odds are 50-50 at best. However, here the defendant has the advantage of a chiropractic neurologist as the IME physician. This may well have tipped the scales in favor of the defendant as to the credibility battle.
When evaluating the Quanstrom imposed modification on Rowe to determine the likelihood of success at the onset of the case, the court notes several very important factors. Perhaps the best way of evaluating the “likelihood of success at the onset of the case” is the defendant’s own evaluation. Defense counsel made it very clear that from the beginning, he had absolute faith in his defense — and at first glance, from the outset, it appears that defendant had good reason to be confident. No doubt, the defendant factored into their decision not to pay additional PIP benefits in this case, the insured’s age, origin of the injury (wrist fracture from falling out of a car), and chronic extensive pre-existing condition and treatment history.
The court further gave great weight to Mr. Shimek’s expert testimony that even with the possibility of a multiplier, out of the approximately 800 attorneys practicing in the two-county area, only four or five attorneys litigate PIP cases on a regular basis. The plaintiff in this case has for years experienced difficulty in finding any attorney, let alone a competent attorney, to handle the problems they encounter in treating PIP patients. Dr. Edge learned after years of dealing with patients that come to them for help after an automobile collision (PIP patients) that occasionally their patients have a relationship with one of the few attorneys who handle BI as well as PIP cases. When the PIP benefits are cut-off, the patient’s BI attorney, in these rare cases, can step in and fight for the PIP benefits as well. Otherwise, Dr. Edge has to help find an attorney who will attempt to get the medical bills paid. This plaintiff’s plight is not an isolated experience. Because of the inherent problems in dealing with PIP cases under the current statute and case law, many of the more prominent physicians and attorneys in the two-county area decline to accept PIP cases. Over the years, after being ultimately referred to Mr. Heath on earlier cases, Dr. Edge now has an existing relationship with plaintiff’s counsel. However, this was initially a time-consuming process, where the plaintiff struggled to find any attorney who would handle PIP referrals.
Defendant argues that under Schultz, because the plaintiff, in this instance, was able to rely on the existing relationship with Mr. Heath “to obtain competent counsel” by simply making a phone call, there is no justification for a multiplier. However, this would lead to the absurd result that a plaintiff who struggles to find counsel the first time, and then remembers the ultimate answer that works and goes back to that “successful find” the second time without struggling through the selection process again, would result in a penalty to the attorney. This is surely not the intent of Schultz. The fact that only about 1% of the 800 or so attorneys in this two-county area regularly handle PIP cases and the fact that Dr. Edge, after initial struggles to find someone to help his patients with their PIP claims, now has a relationship with Mr. Heath, should not penalize Mr. Heath. Under the defendant’s interpretation of the Schultz case, Mr. Heath would probably be forced to terminate his relationship with Dr. Edge as he could not expect a multiplier in Dr. Edge’s cases. Since only a few attorneys handle PIP cases and since these attorneys have finite time to spend on cases, they would not accept cases where they know they could not expect a multiplier. Thus the Schultz case, under defendant’s interpretation, would remove those few competent attorneys from the PIP litigation field very quickly — clearly an absurd result which the Fifth DCA could not have intended in their very fact specific case.
The other absurd result which would be an unintended consequence of defendant’s interpretation of Schultz would be to have a two-tiered fee structure for PIP cases. Insureds who suffer injury from an automobile collision and need legal help in getting their PIP benefits for medical care and open the phone book to start calling attorneys and find Mr. Heath, by luck, on their first call would create a case of the first-tier where Mr. Heath would not be entitled to a multiplier. Other insureds, by random calling, would not get to Mr. Heath (or one of the other few PIP attorneys) for many, many calls resulting in a second-tier PIP case where the attorney would be entitled to a multiplier because the attorney was not discovered until the 4th or 5th or more attempt. Surely this is not what the Fifth DCA intended. . .and yet it is a natural consequence of the defendant’s interpretation.
This court finds that the Fifth DCA in Schultz did not intend these consequences. The ultimate issues resolved by Schultz are two-fold: first, recognition of whether or not the insured is able to find competent counsel to help them claim the benefits they are entitled to receive without a multiplier and, two, a fair and reasonable fee to the attorney who, after careful consideration, agrees to help them.
Although it is clear to the court that his case should probably fall within the “unlikely to succeed” category, the plaintiff presented evidence through affidavit that it should fall within the even-chance category. Although labeled without merit at the onset by the defendant who elected, after notice, not to pay the benefits, but instead to proceed to a lawsuit, the plaintiff eventually prevailed and all benefits were paid. Therefore, the court awards plaintiff an attorney’s fee of $6,765.00, which is the product of Mr. Heath’s 6.95 hours at $350.00/hour times a 2.0 multiplier plus 10.0 paralegal hours at $95.00/hour times a 2.0 multiplier.
Further, the court finds the plaintiff is entitled to recover fees and costs totaling $209.03 as stipulated by the parties. Therefore, the total due plaintiff for attorney’s fees and costs is $6,974.03. Interest is due at the rate of 9% per annum for 61 days and 11% per annum for 81 days for an additional amount of $165.13.
In addition, plaintiff incurred costs for Mr. Shimek’s services as an expert witness. Mr. Shimek documented 2.0 hours of time reviewing the file and preparing the affidavit at a rate of $325.00/hour for a total of $650.00. Mr. Shimek’s testimony reflected the amount of time, research, and expertise he brought to the court. The court finds his time is reasonable and a reasonable fee for his services is $650.00. See Travieso v. Travieso, 474 So.2d 1184 (Fla. 1985); Stokus v. Phillips, 651 So.2d 1244 (Fla. 2d DCA 1995).
The parties have stipulated that the benefits owed to the plaintiff have been paid in the amount of $1,764.00.
ORDERED AND ADJUDGED that the total judgment (excluding benefits which have already been paid) attorney’s fees, taxable costs, expert witness fee and prejudgment interest shall be $7,789.16 which shall accrue interest at the rate of 11% per annum for which let execution issue.
