14 Fla. L. Weekly Supp. 744b
Attorney’s fees — Insurance — Personal injury protection — Contingency risk multiplier — Error to apply multiplier where testimony that neither medical provider’s counsel nor its expert would have taken case except for prospect of multiplier and that relevant market dictated application of multiplier is insufficient to support conclusion that provider actually had difficulty obtaining counsel — Time spent litigating entitlement to multiplier is not recoverable
Cert. Denied at 33 Fla. L. Weekly Supp. 818c
UNITED AUTOMOBILE INSURANCE COMPANY, a Florida Corporation, Appellant, v. MILLENNIUM DIAGNOSTIC IMAGING CTR, a/a/o TORO, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 02-187 AP. L.T. Case No. 00-8848 SP 26 (1). November 22, 2006.
ORDER GRANTING APPELLANT’S MOTION FOR REVIEW OF ORDERS AWARDING ATTORNEYS’ FEES AND COSTS
(JERALD BAGLEY, J.) THIS MATTER came before the Court upon the Appellant’s Motion for Review of Orders Awarding Attorneys’ Fees and Costs. Having reviewed the Appellant’s Motion, Appellee’s Response, and being otherwise fully advised in the premises therein, this Court hereby finds:
This Personal Injury Protection (“PIP”) benefits case originated as an appeal from a Final Summary Judgment entered in favor of the Appellee Millennium Diagnostic Imaging Center, Inc., (“Millennium”). The Appellant, United Automobile Insurance Company (“United Auto”) appealed the final summary judgment to the Appellate Division of the Circuit Court. The Appellate Court affirmed the final summary judgment and granted attorney’s fees to Millennium as the prevailing party. Shortly thereafter, the trial court held an evidentiary hearing to determine the amount of attorney fees owed to Millennium and Millennium’s entitlement to a multiplier. On August 29, 2003, the trial court entered a final judgment for attorney’s fees and costs on behalf of Millennium. Consequently, United Auto appealed the order awarding attorney’s fees and cost, which the Appellate Court denied. Thereafter, the Appellate Court granted Millennium’s motion for appellate fees incurred in responding to United Auto’s motion for review, and remanded the cause once more to the trial court for determination of the amount of appellate attorney’s fees owed.
The trial court convened a second appellate attorney’s fees hearing. Following that hearing, it entered two separate final judgments awarding appellate attorney’s fees to Millennium. For the time incurred in responding to United Auto’s motion to review appellate attorney’s fees, the trial court awarded appellate fees to Millennium in the amount of $34,234.38 (“Judgment A”). In computing Judgment A, the trial court calculated that 41.5 hours of attorney time was expended at the blended rate of $325 per hour, in addition to 5 hours of paralegal time at $100/hour, for a lodestar of $13,987.50 to which it applied a multiplier of 2.25. Thereafter, the court added $2,762.50 for Millennium’s expert fees resulting in Final Judgment A. The trial court also awarded Millennium $13,275.00 for the time incurred in litigating entitlement to the multiplier (“Judgment B”). When calculating Judgment B, the trial court computed 16 hours of attorney time at $325, 7 hours of paralegal time at $100, for a lodestar of $5,900.00 to which it applied a 2.25 multiplier. United Auto sought a rehearing of both Judgment A and B, which the trial court denied.
Following the trial’s court denial, United Auto filed a motion to review Final Judgments A & B arguing that the trial court abused its discretion by awarding fees for litigating entitlement to a multiplier. Consequently, Millennium filed its response in conjunction with another motion for appellate attorneys’ fees. On August, 2005, Millennium filed both a notice conceding to the applicability of Allstate Indem. Co. v. Hicks, 880 So. 2d 772 (Fla. 5th DCA 2004) and a motion to abate a decision on Final Judgment B, until the Florida Supreme Court resolved the issue of litigating entitlement to a multiplier. After the Florida Supreme Court dismissed Allstate Indem. Co. v. Hicks, 901 So. 2d 120 (Fla. 2005) and later denied review of Mercury Cas. Co. v. Flores, 928 So. 2d 335 (Fla. 2006), Millennium filed a notice to withdraw the previously filed motion to abate and motion for decision on the merits. This Court’s Order follows.
A. The Trial Court Erred When It Applied The Multiplier To Calculate Judgment A
The abuse of discretion standard applies to trial courts setting appellate attorney’s fees. Royal Belge v. New Miami Wholesale, Inc., 858 So. 2d 336, 337 (Fla. 3d DCA 2003). A contingency fee risk multiplier is subject to the court’s discretion. State Farm Fire & Cas. Co. v. Palma, 629 So. 2d 830, 833 (Fla. 1993). However, competent substantial evidence must exist to support the application of a contingency risk multiplier. State Farm Mut. Auto. Ins. Co. v. Cedolia, 571 So. 2d 1386, 1387 (Fla. 4th DCA 1990). When determining whether to apply a contingency risk multiplier, the court must consider whether: (1) the relevant market requires a contingency fee multiplier to obtain competent counsel; (2) the attorney was able to mitigate the risk of nonpayment in any way; and (3) application of any of the factors set forth in Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145, 1151-1152 (Fla. 1985). The court, especially, should consider the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client. Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990).
The ability to obtain competent counsel is the most prominent factor to consider when applying a contingency fee multiplier. Bell v. U.S.B. Acquisition Co., Inc., 734 So. 2d 403, 411 (Fla. 1999) (noting that “[a] primary rationale for the contingency risk multiplier is to provide access to competent counsel for those who could not otherwise afford it); Quanstrom, 555 So. 2d at 834; Progressive Express Ins. Co. v. Schultz, 2006 WL 2986379 (Fla. App. 5 Dist., October 20, 2006) [31 Fla. L. Weekly D2610a]; Progressive Express Ins. Co. v. Chiropractic Clinics, Inc., 2006 WL 3007359 (Fla. 11th Cir. Ct. 2006). The difficulty in obtaining competent counsel is best proven through Plaintiff’s direct testimony. 2006 WL 3007359 at 3; 2006 WL 2986379 at 2. Here Plaintiff did not testify at the fee hearing. There was testimony provided in this instance that neither the plaintiff’s counsel nor its expert would have taken this case, but for the prospect of a multiplier. Furthermore, the testimony was offered that relevant market dictated the application of a multiplier. Even so, such testimony, in this instance, does not support the ultimate conclusion that the Plaintiff actually had difficulty obtaining counsel. Chiropractic Clinics, 2006 WL 3007359 at 3; Mercy Hosp., Inc. v. Johnson, 431 So. 3d 687, 688 (Fla. 3d DCA 1983). An expert witness’ opinion does not provide the proof necessary to justify an award of attorney fees. 2006 WL 3007359 at 3; Johnson, 431 So. 3d at 688. While the record indicates that expert testimony was provided supporting the need for a multiplier, this Court finds the testimony insufficient to support the application of a multiplier. As such, the trial court erred in applying the multiplier to calculate Judgment A.
B. Time Spent Litigating the Appropriateness of a Fee Multiplier is Not Revocable
The law is well settled after Hicks and Flores, regarding payment for the time spent litigating the appropriateness of a fee multiplier. “A party is not entitled to fees for the time spent litigating the propriety of a fee multiplier because the multiplier concerns only the amount of the fee to be awarded, and not the matter of entitlement, and thus is not recoverable.” United Auto Ins. Co. v. Miami Medical Group, Inc., 935 So. 2d 41, 42 (Fla. 3d DCA 2006); see also Progressive Express Ins. Co. v. Physician’s Injury Care Ctr., Inc., 906 So. 2d 1125 (Fla. 5th DCA 2005); Flores, 928 So. 2d at 181, review denied, 928 So. 2d 335 (Fla. 2006); Hicks, 880 So. 2d at 774, review dismissed, 901 So. 2d 120 (Fla. 2005). Accordingly, Final Judgment B should not have been awarded to compensate Appellee Millennium for time spent litigating the applicability of the multiplier.
Millennium urges that Judgment B be uphold under section 57.105, Florida Statutes (2006), even though the calculation of Judgment B was not originally based on section 57.105. Contrary to Millennium’s claim, the record fails to support the award of fees as a sanction. Furthermore, it does not indicate that this case lacked a justiciable issue. When United Auto presented its contention to the trial court that time spent litigating the appropriateness of a fee multiplier was not recoverable, the Fifth District had already ruled on the issue. Since no Third District decision on this matter existed at the time United Auto presented its argument, Hicks was binding on the trial court. Notwithstanding Hicks, the trial court relied on State Farm Fire & Casualty v. Palma, 629 So. 2d 830 (Fla. 1993) and the subsequent decision of Diaz v. SantaFe Healthcare, Inc., 642 So. 2d 765 (Fla. 1st DCA 1994) to justify awarding fees for time spent litigating entitlement to the multiplier. Accordingly, this Court concludes that the trial court’s failure to follow Hicks was an abuse of discretion. Millennium’s subsequent notice conceding to the applicability of Hicks and motion to abate a decision on Final Judgment B indicates that United Auto’s contention that Judgment B should not be awarded was a colorable one. As such, this Court rejects Millennium’s invitation to sustain Judgment B pursuant to section 57.105 as a sanction.
Because the trial court erred in applying the multiplier, Judgment A is REVERSED as to the application of a contingency fee risk multiplier to the amount of attorney’s fees awarded. This means that Final Judgment A should include payment of $13,987.50 plus $2,762.50 for Millennium’s expert, which will result in a Final Judgment of $16,750.00 attorney’s fees. Because no attorney’s fees should have been awarded for time spent litigating the applicability of the multiplier, this Court also concludes that Judgment B is REVERSED. Since the record does not show that this case lacked a justiciable issue, this Court REJECTS the opportunity to award appellate fees as a sanction pursuant to section 57.105, Florida Statutes (2006). Lastly, this matter is REMANDED for further proceedings consistent with the above analysis.
ORDERED and ADJUDGED that:
1. Appellants’ Motion for Review of Orders Awarding Attorney’s Fees and Cost is GRANTED.
2. Final Judgment For Appellate Attorneys’ Fees and Cost incurred in Appellate Proceedings for Review of August 29, 2003 Final Judgment for Appellate Attorneys’ Fees and Cost (Judgment A) is REVERSED as to the application of a contingency fee risk multiplier to the amount of attorney’s fees awarded.
3. Final Judgment for Appellate attorneys’ Fees and Costs Incurred in Litigating Entitlement to a Multiplier in Connection with Appellate Proceedings for Review of August 29, 2003 Final Judgment for Appellate Attorneys’ Fees and Costs (Judgment B) is REVERSED.
4. Appellee, Millennium Diagnostic Imaging Center, Inc.’s Motion for Appellate Attorneys’ Fees is DENIED, and this matter is REMANDED for further proceedings with the above analysis.
