14 Fla. L. Weekly Supp. 500b

Attorney’s fees — Insurance — Personal injury protection — Contingency risk multiplier — Where medical provider presented evidence that provider’s counsel was only local attorney willing to sue insurer and was not able to mitigate risk of nonpayment by payment of hourly fees or otherwise, that no attorney in circuit was willing to accept case without prospect of earning a multiplier, that case involved twelve affirmative defenses litigated aggressively, and that provider’s likelihood of success at outset was at best 50% and more likely 25 – 40%, provider is entitled to 1.5 multiplier

GULF COAST INJURY CENTER, LLC (as assignee of Ashlee Butcher), Plaintiff, vs. PROGRESSIVE AUTO PRO INSURANCE COMPANY, Defendant. County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 06-CC-001798, Division M. March 15, 2007. Paul L. Huey, Judge. Counsel: Timothy A. Patrick, Nicholas, Lipscomb & Patrick, P.A., Tampa. Robert Oxendine, Oxendine & Oxendine, Tampa.

ORDER GRANTING PLAINTIFF’S MOTION FOR ATTORNEY’S FEES

THIS CAUSE came on for hearing on the 1st day of March, 2007, on Plaintiff’s Motion for Attorney’s Fees and, after reviewing the exhibits, hearing all of the testimony and argument of Counsel, and researching the law, the Court finds as follows:

1. That the parties stipulated to an attorney’s fee loadstar of $15,655.50, and costs of $508.55.

2. That the only issue is whether Plaintiff is entitled to a multiplier. There have been some significant PIP-related multiplier decisions recently. See, e.g., Progressive Express Insurance Company v. Schultz, Case No. 5D06-444, (Fla. 5th DCA Feb. 2007) [32 Fla. L. Weekly D548b]; U.S. Security Insurance Co. v. Physical Therapy Walk-In Clinic, P.A., Case No. 02-18932-SC, (13th Judicial Circuit, Oct. 2005) [14 Fla. L. Weekly Supp. 28b]; Progressive Express Insurance Co. v. Chiropractic Clinics, Inc., Case No. 05-008540, 13th Judicial Circuit (August 30, 2006). In reaching its decision, the Court has reviewed not only those decisions, but also Florida Patients Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla.1985); Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828 (Fla.1990); Lane v. Head, 566 So. 2d 508 (Fla. 1990); Sun Bank of Ocala v. Ford, 564 So. 2d 1078 (Fla. 1990); Kuhnlein v. Department of Revenue, 662 So. 2d 309 (Fla. 1995) and Bell v. U.S.B. Acquisition Co., Inc., 734 So. 2d 403 (Fla. 1999). The Florida Supreme Court in Bell v. U.S.B. Acquisition Co., Inc. 734 So. 2d 403, 411 (Fla. 1999) reiterated:

A primary rationale for the contingency risk multiplier is to provide access to competent counsel for those who could not otherwise afford it. In Rowe, we observed that the benefit of the contingent fee system is to provide a party with “increased access to the court system and the services of attorneys.” 472 So.2d at 1151. We recognized in Rowe that the availability of attorney’s fees would have the effect of encouraging plaintiffs to bring meritorious claims that would not otherwise be economically feasible to bring on a noncontingent fee basis. Id. at 1149. These goals are consistent with the Florida Constitution. See art. I, § 21, Fla. Const. (providing that courts shall be open to every person for redress of any injury).

Similarly, in his concurring opinion in Lane, Justice Grimes emphasized that “[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 . . . may not be able to obtain legal services.” 566 So.2d at 513 (Grimes J., concurring). The importance of this policy consideration is highlighted by the fact that the very first factor listed in Quanstrom for courts to consider in determining if a multiplier should be utilized in tort and contract cases is “whether the relevant market requires a contingency fee multiplier to obtain competent counsel.”555So. 2d at 834 (emphasis supplied).

We perceive no policy concern that would prevent a court’s consideration of a contingency multiplier when the parties to a contract agree to have the court award reasonable attorney’s fees. Instead, we find that the primary policy that favors the consideration of the multiplier is that it assists the parties with legitimate causes of action . . . in obtaining competent legal representation even if they are unable to pay on hourly basis. In this way, the availability of the multiplier levels the playing field between the parties with unequal abilities to secure legal representation. While a prevailing party’s attorney’s fee provision in a contract may be a powerful sword in the hands of those who can afford an attorney, a party who would be faced with substantial difficulties in obtaining an attorney without a contingency arrangement ought to be able to claim a multiplier in the appropriate case, if the evidence justifies it.

3. That the record contains extensive testimony regarding the Quanstrom and Rowe factors. Significantly, unlike the typical pre-Schultz case, Plaintiff’s counsel actually had his client testify about, and among other issues, Quanstrom factors 1 and 2. Scott Drummond, Plaintiff’s Chief Operating Officer, testified with facts, not just conclusionary statements, that (a) the relevant market requires a contingency fee multiplier to obtain competent counsel and (b) Plaintiff’s attorney was not able to mitigate the risk of nonpayment by payment of hourly fees or otherwise. Further, Plaintiff’s expert witness, attorney Helen Stratigakos, testified without opposition that there was not one attorney in the 13th Judicial Circuit who was willing to accept this case, or any case like it, without the prospect of earning a multiplier. Plaintiff’s Exhibit 1 is the Contingency Contract for Legal Services between Plaintiff and its counsel. The undisputed record is that this is a pure contingency fee contract. Paragraph 4.B. thereof provides, in part: “Client further acknowledges that Attorneys only accept these difficult and risky cases based upon the opportunity to obtain a contingency risk multiplier of its attorney’s fees. Client acknowledges that in this market such potential for a multiplier is necessary in order to obtain competent representation in these cases”. Although such language is not conclusively binding on this judge (See, Tetrault v. Fairchild, 799 So. 2d 226, 234 (Fla 5th DCA 2001) (Harris, J. concurring)) it is relevant to the issues here.

4. That Bell affirms Quanstrom‘sedict that the first critical question is whether the multiplier was necessary to obtain competent counsel in the relevant market. Plaintiff’s counsel and Plaintiff’s expert answered that question affirmatively. Although Defendant’s expert testified that there were other competent Plaintiff’s PIP counsel in the circuit, he missed the point when he did not testify that any of them would take this case without the expectation of a multiplier. Although he named a dozen Plaintiffs’ PIP attorneys whom he claims still file PIP cases in this circuit, Defendant did not subpoena even one of those attorneys to counter Plaintiff’s evidence. Sometimes silence speaks the loudest.

5. That plaintiff’s counsel testified that he was only one of a few lawyers who would sue any Progressive Insurance entity. The Court notes that it has not observed any attorney other than Mr. Patrick bringing a suit against Progressive in more than a year. The Court has also received expert testimony in other Attorney Patrick attorney fee hearings within the last 12 months that no other local PIP plaintiff’s attorney is willing to sue Progressive. These last two observations are not controlling in this Court’s reasoning, but they do lend credibility to the testimony of all of Plaintiff’s witnesses.

6. That this Court is well aware that the primary rationale for the contingency risk multiplier is to provide access to competent counsel for those who could not otherwise afford it in order to level the playing field. This is especially apropos in PIP cases where the amount in controversy will always be small, and the financial leverage of the defendant will always be comparatively great. This leverage is further magnified by the application of the Offer of Settlement rules to PIP cases.(See, e.g., U.S. Security Insurance Co. v. Cahausqui, 760 So. 2d 1101 (Fla. 3rd DCA 2000)). As Mr. Drummond testified, one loss to a Defendant which prevailed on an Offer of Settlement would cost Plaintiff more than the value of the principal recovered in hundreds of other PIP cases.

7. That because Mr. Drummond did testify, this case is factually distinguished from Shultz, Chiropractic Clinics, Physical Therapy Walk-In Clinic and every other case cited by Defendant. Nevertheless, the Court will address the other pertinent issues raised in those cases should they be meaningful on appeal. Unlike in Schultz, the parties here have stipulated to the value of the Plaintiff’s counsel’s time. Thus, there is no outrageous $1000.00 per hour fee at issue.

8. That this case involves four dates of service for which Plaintiff’s bills were paid at a reduced rate or not at all. However, for all of Defendant’s argument that the case was a slam dunk for the Plaintiff, it raised twelve affirmative defenses, litigated aggressively and only resolved the case after applying the pressure of an offer of settlement for approximately 70% of the value of the case.

9. That the amount in controversy is relevant, but only in regard to the relative recovery and not the raw amount. Again, by definition the amount at issue in every PIP case is small, yet the legislature never wrote that the multiplier would not be applicable for this reason alone. If the amount at issue were solely controlling, then the playing field afforded by the PIP statute to health care providers and insureds would be tilted, if not slanted, not level.

10. That in Physical Therapy Walk-In Clinic, the judge, following Bell, asked “whether a multiplier was really necessary for the healthcare provider to obtain competent counsel?” Like in Shultz there was no record evidence from the client on this issue. That is not the situation here. Again, the evidence here to the contrary is uncontradicted. Also, in Physical Therapy Walk-In Clinic, the defendant “had virtually no meaningful defense.” Here, four dates of service were at issue. For some, payment was denied altogether and for some it was reduced or recoded. Although Defendant’s adjuster eventually admitted when forced to do so at deposition that one denial was baseless from the outset, no testimony was presented that the defenses to the other three claims lacked viability. Because this case was not tried, nor defenses resolved by summary judgment, the Court has to follow the law by assuming that the defenses were brought and litigated in good faith.

11. That the uncontradicted testimony of Plaintiff’s expert was that “at the outset of the case, the Plaintiff’s likelihood of success was at best 50:50 and probably less, more like 25 to 40%.”

12. That in Chiropractic Clinics, like here, the only issue was application of the multiplier. Like in Schultz, but unlike here, there was no testimony from the Plaintiff’s representative as to the critical Quanstrom factors. Here, the Plaintiff’s Chief Operating Officer testified as to the underlying facts, without dispute, and then Plaintiff’s expert gave opinions based on these facts.

13. That the risk of nonpayment must also be assessed. Defendant’s expert testified, before taking the case, that if Plaintiff’s counsel asked his client to pay an hourly fee, and the client refused, then Plaintiff’s counsel could successfully argue that it could not mitigate the risk¹. Because both Plaintiff and Plaintiff’s attorney so testified, Plaintiff must prevail on this prong of the Quanstrom analysis. As dicta, this Court notes that some judges have found the fact that Plaintiff’s counsel does or expects to represent Plaintiff in other cases may be a basis for mitigating the risk of nonpayment. See, e.g., Chiropractic Clinics at page 4 and cases cited therein. This Court finds that position lacks merit for at least three reasons. One, other cases have nothing to do with payment for the time and costs spent in this case. Two, the client can unilaterally fire the lawyer at any time. Three, the assumption is by definition based on speculation, which cannot form the basis for a legal finding. Indisputably, no reputable bank would lend against such unknowable, risky, contingent hopes, at least not without other hard collateral and/or unconditional guarantees. Thus, the contingency exists unabated. If potential paid the bills, we would all be rich.

14. That having found that Plaintiff met its burden regarding Quanstrom factors 1 and 2, the Court turns to factor 3, the Rowe or the Rules of Professional Conduct factors. For the reasons already stated and to be stated, the Court finds that Plaintiff met its burden as to Rowe and Florida Rule of Professional Conduct, Rule 4-1.5(b) factors 2, 3, 4, 7, and 8, but not as to 1, 5, and 6.

15. That, finally, the Court deals with the issue of applying multipliers in small claims cases. As the Court noted in Chiropractic Clinics, there is no express, binding holding that, by definition, the multiplier does not apply to small claims or PIP cases. PIP is a creature of statute. The legislature knows how to include and exclude when it authors law. The PIP statute is amended almost annually. It has been amended at least 16 times since Rowe. Each time, the legislature could have rewritten the attorney fee provision, but repeatedly it chose not to do so. Until the legislature excludes the possibility of multipliers in PIP, by doing this the Court is constrained to find that it intends not to do so and will not act as a gratuitous legislator. Because the Court cannot find a definition of what is the rule and what is the exception with respect to whether a multiplier is applicable, especially as the case was not tried before it, the Court will follow the longstanding multiplier law set forth in the Florida Supreme Court cases listed above. The Court is well versed in PIP litigation. It lives it every week. All counsel and their experts were very able in PIP law. Based on all the testimony, the Court finds that as best the chance of success at the outset was 50:50. Thus, in light of all its other conclusions and findings set forth above, it finds that Plaintiff is entitled to a 1.5 multiplier, for a total fee of $23,483.25.

16. This Court makes it perfectly clear that this award is not being entered to punish the Defendant for its strategy. It is a fact specific ruling limited to the particular record before it. As Schultz and Chiropratic Clinic could have been decided differently had the records there been different, so could have been the decision here.

17. If Defendant does not pay the $23,483.25, plus costs of $508.55, within 10 days from the date hereof, Counsel for the Plaintiff shall provide the Court a Final Judgment in accord with these findings and conclusions. Plaintiff does not need to reiterate all these findings, but rather provide only a simple judgment.

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¹Defendant’s expert was sequestered during the testimony of Mr. Drummond, Mr. Patrick and Ms. Stratigakos.