15 Fla. L. Weekly Supp. 167a
Attorney’s fees — Insurance — Personal injury protection — Amount — Reasonable hourly rates for attorneys representing medical provider are $300 and $350, and reasonable hourly rate for paralegal is $85 where case spanned more than 5 years and involved novel issue of necessity and reasonableness of dynamic motion x-ray test that required complex litigation on trial and appellate level — Contingency risk multiplier — Where evidence establishes that competent counsel cannot be attracted and retained in community in PIP cases without contingency risk multiplier, provider has personally experienced difficulty in finding attorneys in past but now had established relationship with counsel, counsel were not able to mitigate risk of nonpayment, case involved novel issue and posed substantial risk of loss to counsel, multiplier of 2.0 is appropriate — Costs, expert witness fee and prejudgment interest awarded
J. MARK RENFROE, D.C. dba RENFROE SPINAL CENTER, Plaintiff, vs. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. County Court, 1st Judicial Circuit in and for Escambia County. Case No. 2002 SC 000193, Division 5. November 12, 2007. Pat Kinsey, Judge. Counsel: Eric D. Stevenson, Whibbs, Rayboun & Stone, Pensacola; and David Sellers, for Plaintiff. Charles Beall, for Defendant.
ORDER GRANTING PLAINTIFF’S ATTORNEY’S FEES
At a hearing in open court on October 31, 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, Brian Kirkland, David Sellers, Eric Stevenson and reviewed the deposition of Dr. J. Mark Renfroe, various other court transcripts, the stipulation of the parties, and reviewed the four volumes of the official clerk’s file, 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 2007), Progressive v. Schultz, 948 So.2d 1027 (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 September 7, 2001. The case ultimately resolved after a jury trial where the plaintiff prevailed and appeal to the Circuit Court and the First DCA. The underlying case involved the defendant’s refusal to pay for their insured’s Dynamic Motion X-Ray (DMX) diagnostic test performed by plaintiff. Defendant’s position was that the DMX test was not medically necessary or reasonable. Since the plaintiff ultimately prevailed, the case has been remanded to the county court for assessment of attorney’s fees and costs.
The parties stipulated prior to the hearing that Mr. Stevenson, the plaintiff’s primary attorney, documented with sufficient detail 184.1 hours, Mr. Sellers 28.8 hours, and their paralegal documented with sufficient detail 83.95 hours and that the time requested is reasonable. There has also been a stipulation as to costs in the amount of $5,165.02 which includes 32.5 hours for Ms. Segars’ work at $100.00/hour pursuant to the stipulation of the parties. This leaves only two issues for the court: the reasonable hourly rates for Mr. Stevenson, Mr. Sellers and their paralegal and whether or not a multiplier is required in this case.
The court finds reasonable and credible the testimony of plaintiff’s expert, Robert Heath. The court has personally observed Mr. Heath’s experience, reputation, diligence and ability in representing various clients. Mr. Heath has more than twenty-five years of experience and carries a reputation in the community as one of the top attorneys in his age group in the personal injury area. 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 and 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. He is one of the few local attorneys in the Escambia/Santa Rosa Bar who regularly handles PIP cases.
Mr. Heath states a reasonable rate for Mr. Stevenson is $300.00/hour, for Mr. Sellers is $350.00/hour and for their paralegal is $85.00/hour and the court agrees. This case spanned more than five years, a novel issue (the DMX), complex litigation on both the trial (jury) and appellate (both Circuit and 1st DCA) level, fighting five affirmative defenses and required an attorney with the talent, experience, tenacity and willingness to accept and meet the challenges presented. The jury trial became a “battle of the experts” requiring the attorneys to acquire unique, complex, technical knowledge and present it in a simple, understandable and winning manner to the jury.
Mr. Sellers brought over twenty-five years legal experience including 100 jury trials to the table. Mr. Stevenson has nearly ten years experience and has become one of the premier PIP attorneys in Northwest Florida achieving excellent results for his clients. Together, they brought this case to the jury and won against the odds. In addition, they had to possess not only courtroom talent, but the experience and legal ability to control the case through an appeal to the Circuit Court and then the First DCA. The court agrees with Mr. Heath’s assessment of the reasonable rates for Mr. Stevenson and Mr. Sellers based not only on Mr. Heath’s expertise, but also on the quality of work performed in this case.
In this community paralegal fees range from $65.00/hour up to $150.00/hour as established through various attorney fee hearings before this court over the years. The rate requested of $85.00/hour for paralegal work is in the low to middle range for the community and the court agrees with Mr. Heath and finds this to be reasonable.
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 for years such as in this case where it has been pending for more than five years. 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. Stevenson and/or Mr. Sellers were not able to mitigate the risk of nonpayment in any way other than by litigating this case through jury trial and appeal to the Circuit Court and appeal to the First DCA and back to the Circuit Court. Over nearly six years, 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 issue was novel and a case of first impression for Escambia County. There may have been one other case filed about this same time, but this was the first to go to trial. The defendant’s Answer generally denied coverage and asserted four Affirmative Defenses in addition to disputing the medical necessity of the DMX. There was no question in reviewing the four volumes of clerk’s file, that State Farm was not going to pay its insured’s medical bill without an aggressive defense of its position. State Farm hired not just chiropractic experts but also MD’s to help fight the medical necessity/validity of the DMX diagnostic test. Plaintiff was forced to respond with medical experts of their own. The exposure for the plaintiff was extensive as the defendant continued to push the case.
Because attorneys in the Escambia-Santa Rosa legal community generally decline to accept PIP cases, this case posed even more problems for Dr. Renfroe, the plaintiff, as the DMX issue created even more reasons for an attorney to refuse representation. A new diagnostic tool in the chiropractic field, the history of the videofluorscopy (the predecessor to the DMX technology) resulting in defense verdicts, the lack of medical literature for use of the DMX and comparison to relatively inexpensive standard x-rays only increased the risk. Also, the Tran decision raised the risk in this case. The bottom line is that this was not a “run of the mill” PIP case by any stretch of the imagination.
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. Stevenson and Mr. Sellers in taking the case. Over nearly six years, plaintiff’s attorneys have spent time on this case guiding it through both a jury trial and appeals to both the Circuit Court and the First DCA. The time spent, on a novel issue, against five affirmative defenses in what could only be described as a marginal case at best, is time and money not being spent on a case far more likely to succeed with significantly lower risk and less effort required for developing a presentation for a new and complex issue. From the beginning, based on the small sum at controversy, the pure contingency fee contract and the defendant’s apparent confidence in denying coverage, this case posed a substantial risk. Mr. Sellers and Mr. Stevenson accepted this case knowing there was a substantial probability that they would not prevail despite their perceived merits of this case.
When evaluating the Quanstrom-imposedmodification 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. The defendant made it very clear from the beginning with an Answer containing five affirmative defenses, that they had absolute faith in their defenses. From the outset, it appears that defendant had good reason to be confident. The expensive DMX test did not have the support of extensive medical literature or extensive legal testing in the PIP arena. Few physicians were intimately acquainted with the technology, plaintiff had the only DMX “machine” in the area and the defendant had a chiropractic opinion that it was not a medically reasonable or necessary diagnostic tool.
The court further gave great weight to Mr. Heath’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. Renfroe 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, may sometimes step in and fight for the PIP benefits as well. Otherwise, Dr. Renfroe 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. Stevenson/Mr. Sellers on earlier cases, Dr. Renfroe now has an existing relationship with plaintiff’s counsel. However, it is documented in his deposition, that this was initially a time-consuming process, where the plaintiff struggled to find any attorney who would handle PIP referrals. Because Dr. Renfroe has been in practice for more than twenty-years now, and has been forced to help his clients fight for their PIP benefits over the years, he now knows the “. . . three, maybe four attorneys that I know of, that do that kind of work now . . .” and he has the ability to go directly to one of the remaining attorneys to handle PIP cases without wasting his time calling the list of 800 or more attorneys in the two county area.
Defendant argues that under Schultz, because the plaintiff, in this instance, was able to rely on the existing relationship with Mr. Stevenson “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. Renfroe after initial struggles to find someone to help his patients with their PIP claims, now has a relationship with Mr. Stevenson, should not penalize Mr. Stevenson. Under the defendant’s interpretation of the Schultz case, Mr. Stevenson would probably be forced to terminate his relationship with Dr. Renfroe as he could not expect a multiplier in Dr. Renfroe’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. Stevenson, by luck, on their first call would create a case of the first-tier where Mr. Stevenson would not be entitled to a multiplier. Other insureds, by random calling, would not get to Mr. Stevenson (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. This was not the “run of the mill” case described in Schultz. This case is more like State Farm Fire & Casualty Co. v. Palma, 555 So.2d 836 (Fla. 1990) where State Farm decided to “go to the mat” over the bill for “thermographic studies.” There the court found “extraordinary circumstances present” because this was not controversy over an “incidental medical bill” because the results of the case could carry weight throughout the state or even nationally. As a result, Palma is more closely related to the instant case than Schultz. As in Palma, here the plaintiff was not the primary cause of the extensive litigation. Because State Farm did not believe DMX was a “necessary medical treatment” they decided to “stand and fight over the charge.” Palma at 837. Plaintiff did not “inflate this small case into a larger one; its protraction resulted from the stalwart defense.” Palma at 837. State Farm made “a business decision for which it should have known a day of reckoning would come should it lose in the end.” Palma at 837.
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 through extensive discovery, a jury trial and two appeals, the plaintiff eventually prevailed and all benefits were paid. Therefore, the court awards plaintiff an attorney’s fee of $119,991.50, for the underlying case which is the product of Mr. Seller’s 28.8 hours at $350.00/hour plus Mr. Stevenson’s 142.6 hours and 83.95 paralegal hours at $85.00/hour times a 2.0 multiplier. In addition Mr. Stevenson is entitled to 41.5 hours as stipulated for his appellate time at the reasonable rate determined by the court as $300.00/hour times a 2.0 multiplier for $24,900.00.
Therefore, the total due plaintiff for attorney’s fees and costs is $144,891.50. Interest from the date of entitlement would be an additional $48,108.52 for a total amount due of $193,700.02.
In addition, plaintiff incurred costs for Mr. Heath’s services as an expert witness. Mr. Heath documented 4.6 hours of time reviewing the file and preparing the affidavit at a rate of $350.00/hour for a total of $1,610.00. Mr. Heath’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 $1,610.00. 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.
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 $203,775.04 which shall accrue interest at the rate of 11% per annum for which let execution issue.
