15 Fla. L. Weekly Supp. 706a
Attorney’s fees — Insurance — Personal injury protection — Amount — Reasonable hourly rates set for most effective and experienced PIP plaintiff’s lawyer in area and exceptional paralegal — Amount of time spent on case pre-suit was professionally responsible and effective — Contingency risk multiplier — Where evidence established that plaintiffs could not obtain competent counsel in PIP cases in area without expectation of multiplier, attorney was not able to mitigate risk of nonpayment, case was problematic due to multiple issues, attorney accepted case despite substantial probability that he would not prevail, and medical provider stipulated that it had even chance to succeed at outset of case, 2.0 multiplier is appropriate — No merit to argument that multiplier is not justified where provider, who had difficulty obtaining competent counsel in past cases until he found and retained current attorney, had no difficulty obtaining counsel in this case — Costs, prejudgment interest and expert witness fee awarded
CORDOVA INJURY CLINIC, P.A. d/b/a CORDOVA INJURY CLINIC, a/a/o Miranda Jimenez, Plaintiff, vs. PROGRESSIVE SELECT INSURANCE COMPANY f/k/a Progressive Auto Pro Insurance Company, Defendant. County Court, 1st Judicial Circuit in and for Escambia County. Case No. 2007 SC 002992, Division 5. December 16, 2007. Pat Kinsey, Judge. Counsel: Robert N. Heath, for Plaintiff. William D. Anderson, for Defendant.
ORDER GRANTING PLAINTIFF’S ATTORNEY’S FEES
At a hearing in open court on November 28, 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, Scott Ward Dutton and Arthur A. Shimek, reviewed the depositions filed, the stipulations 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 Co. v. Schultz, 31 Fla. L. Weekly D2610 (Fla. 5th DCA 2007) and The Florida Rules of Professional Conduct Rule 4-1.5(b).
This case resulted from an automobile collision which occurred on April 28, 2005. The case ultimately resolved when the defendant conceded and paid for plaintiff’s medical care. The parties could agree on little in this case. This case involves both a reduction of the amounts paid and eventual termination of all payments pursuant to a compulsory medical examination, also known as an IME performed by Dr. John Kurpa.
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. Despite three pre-suit demand letters, defendant would not pay the invoices submitted. It was not until Mr. Heath filed suit that the defendant relented and paid.
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 $105.00/hour for paralegal work is on the high side for the community, it was also proved (and undisputed) that Ms. West 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. There are others who command more, and certainly Ms. West’s talents and experience would place her in this upper tier of paralegals.
As to a reasonable amount of time expended in this case, the court considered a number of different factors as well as the affidavits submitted, the court file and the argument of counsel. In this case, plaintiff’s counsel had to prepare for and address two areas of PIP litigation: the IME cut-off performed by Dr. Kurpa as well as the reduction in the amount of various billings. Defendant settled this case by paying in full five days before the Pre-Trial Conference. Now defendant seeks to penalize the plaintiff for spending so much time on this case pre-suit.
Defendant’s arguments totally ignore the time constraints imposed by the Small Claims Rules. The court is required to set a small claims case for trial within sixty days of the Pre-Trial Conference. Perhaps even more important, since the parties can waive the sixty-day requirement, is the recent ruling that the defendant may file a Proposal for Settlement in small claims cases. Therefore it could be argued that it is malpractice for plaintiff’s counsel not to prepare for and proceed to trial within the “sixty-day period” which avoids this exposure for plaintiff’s client. To do so, especially in a case like this one where the reductions had to be addressed, required an extensive amount of pre-suit work. This could have been avoided had defendant paid — as they eventually did — upon receipt of the demand letters rather than waiting until suit was filed. They assumed the risk that plaintiff would have to spend time preparing the case for suit and therefore cannot now complain that plaintiff’s counsel did his job in a professionally responsible and effective manner.
The court finds that attorney Robert Heath reasonably expended 9.83 hours at $350.00/hour and paralegal Lisa West reasonably expended 32.5 hours at $105.00/hour.
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 the expectation of 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. Three demand letters did not entice the defendant to pay and although they did pay once the plaintiff filed suit, it appeared that Mr. Heath’s involvement was the only way to push for the payment plaintiff was apparently entitled to receive from the beginning. Defendant relied on the IME of a chiropractic neurologist to terminate payments after reducing earlier invoices by re-coding the charges to a purported “200% medicare” or “200% worker’s comp” configuration. Plaintiff was forced to employ an expert consultant to decipher the various techniques used by defendant to avoid payment as charged in this case.
This case was problematic from the outset due to multiple issues. The plaintiff would have to help the jury understand complex medical coding procedures, overcome the inherent prejudices against chiropractic care, overcome a layperson’s “common sense” approach to reduced cost creating “extra” benefits and the comparison between the qualifications of Dr. Kurpa’s special designation as a chiropractic neurologist vs. Dr. Moulds’ treating chiropractic training and experience. In addition, the insured, Ms. Jimenez, had pre-existing low back symptoms from a prior motor vehicle collision about three years before this incident.
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 ten hours of his time and about $1,000.00 of his money over a seven 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 problematic 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.
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, less than eight attorneys litigate PIP cases on a regular basis. The plaintiff in this case expressed specific distress in attempting to get a competent attorney to file against Progressive. He specifically stated in his deposition that he “somehow ended up with Robert Heath, and I think it’s because he was kind of the last stop.” Dr. Moulds 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. Moulds or his office staff 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. More specifically, Dr. Moulds had at least two attorneys decline to handle this PIP lawsuit.
Defendant argues that under Schultz, because the plaintiff, in this instance, did not have an exceptionally hard time finding Mr. Heath, that is, “to obtain competent counsel,” 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. Moulds, after initially struggling to find someone to help his patient with their PIP claim, through a few referrals found 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. Moulds as he could not expect a multiplier in Dr. Moulds’ 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 whereMr. 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. Finally, the court agrees with Mr. Heath’s other arguments as expressed in the Attorney’s Fee hearing and adopts them as stated as part of this order.
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 this 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 $13,706.00, which is the product of Mr. Heath’s 9.83 hours at $350.00/hour times a 2.0 multiplier plus 32.5 paralegal hours at $105.00/hour times a 2.0 multiplier. Pre-judgment interest would be $644.45.
In addition, plaintiff incurred costs for Mr. Shimek’s services as an expert witness. Mr. Shimek documented 3.75 hours of time reviewing the file and preparing the affidavit at a rate of $325.00/hour for a total of $1,218.75. 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 $1,218.75. See Travieso v. Travieso, 474 So.2d 1184 (Fla. 1985); Stokus v. Phillips, 651 So.2d 1244 (Fla. 2d DCA 1995). Further, the court finds the plaintiff is entitled to recover fees and costs totaling $1,333.50. Therefore, the total due plaintiff for attorney’s fees and costs is $16,902.70.
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 $16,902.70 which shall accrue interest at the rate of 11% per annum for which let execution issue.
