15 Fla. L. Weekly Supp. 708a

Attorney’s fees — Insurance — Personal injury protection — Amount — Hourly rate — Reasonable hourly rates set for insured’s attorney and paralegal — Contingency risk multiplier — Where no attorney in community would accept PIP case without multiplier, attorney was not able to mitigate risk of nonpayment, case posed substantial risk to attorney, and insured’s chances of success at outset were even at best, multiplier of 1.5 is appropriate — No merit to argument that, because insured easily found attorney to handle her personal injury case and thereafter attorney suggested PIP case to recover medical expenses, insured had no difficulty obtaining counsel and is not entitled to multiplier where there is no evidence that insured could have found attorney to handle PIP case without expectation of multiplier — Costs, expert witness fees and prejudgment interest awarded

MALINDA NOYES, Plaintiff, vs. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. County Court, 1st Judicial Circuit in and for Escambia County. Case No. 2007 CC 002291, Division V. February 13, 2008. Pat Kinsey, Judge. Counsel: Nicole Kessler Ferry, for Plaintiff. James C. Rinaman, III, for Defendant.

FINAL JUDGMENT FOR COSTS AND ATTORNEYS’ FEES

On January 16, 2008, in open court, the parties appeared through counsel. The PIP case settled on September 19, 2007, the day scheduled for Defendant’s Motion for Summary Judgment. It is before the court for an award of attorneys’ fees and costs. This is a PIP case resulting from injuries sustained in an October 24, 2005 motor vehicle collision. Defendant Progressive paid their insured’s medical bills for a period of time without incident. However, the amounts paid were reduced and plaintiff’s provider wished further compensation for his services.

It is undisputed that plaintiff’s attorney is entitled to an award of attorney’s fees and costs the case. The court, having considered argument of counsel, reviewed the affidavits of Eric Stevenson, Scott Dutton, Nicole Ferry and Keith Benefiel, Jr. and reviewed the depositions filed, and reviewed 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), The Florida Rules of Professional Conduct Rule 4-1.5(b), United Auto. Ins. Co. v. Garrido, Case No. 06-524 (11th Cir. Ct. Dec. 5, 2007) [15 Fla. L. Weekly Supp. 118a] and Eckhardt v. 424 Hintze Mgt., LLC Case No. 1D07-56 (Fla. 1st DCA December 17, 2007).

The court finds reasonable and credible the testimony of plaintiff’s expert, Eric Stevenson. The court has personally observed Mr. Stevenson’s experience, reputation, diligence and ability in representing various clients. Mr. Stevenson has more than nine years of experience, with an excellent reputation in the legal community in the personal injury area. Mr. Stevenson has both criminal and civil trial experience. He is one of the few local attorneys in the Escambia/Santa Rosa Bar who regularly handles PIP cases.

Mr. Stevenson states a reasonable rate for Ms. Ferry is $300.00/hour. Mr. Stevenson further establishes a reasonable rate for Ms. Ferry’s paralegal is $100.00/hour and the court agrees. In this community paralegal fees appear to range from $75.00/hour up to $150.00/hour based on various attorney fee hearings before this court over the years. The court agrees with Mr. Stevenson that the rate requested of $100.00/hour for Lisa Crepeau’s paralegal work is in the middle range for the community and finds this to be reasonable.

Ms. Ferry originally requested $350.00/hour for her time. After discussing this with her expert, she reduced the amount to $300.00/hour. This was her first PIP case. She only did the work because it was an existing client (on the related personal injury claim) and she could not find any other way to help her client other than to pursue PIP benefits. Ms. Ferry charges $200.00/hour on her family law cases. She charges a flat fee to handle criminal cases. Since this is her first PIP case, she did not have a baseline hourly rate. Today, the few lawyers who handle PIP cases present a case for between $300.00/hour to $350.00/hour at the fee hearings. Based on her level of experience, certainly, Ms. Ferry should be at the bottom of this spectrum. Defendant insists she should be entitled to no more than she charges for family law cases. However, this presumes that the hourly rate charged by attorneys is fixed for all types of cases. There is no evidence to support this assumption. The evidence is undisputed that Ms. Ferry charges different rates for different types of cases. Based on the results of this case, there is no reason to believe that she should be entitled to less than the lowest typical rate requested and awarded in the most recent past.

Ms. Ferry testified she would not accept a PIP case without the expectation of a multiplier, and her expert’s affidavit establishes the undisputed fact that he does not know of any attorney in the two county area who would. The undisputed evidence is that no attorney in the relevant market would accept a PIP case without the expectation of a multiplier.

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 nonpayment. 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 fact, there is no evidence to the contrary.

In applying the Quanstrom factors, the court finds that the evidence established Ms. Ferry was not able to mitigate the risk of nonpayment in any way other than by litigating this case. Pre-suit she was able to reduce the amount Progressive withheld from plaintiff’s medical provider from about $7,000.00 down to about $3,000.00. However, without filing suit, there appeared to be an impasse. From the outset, plaintiff’s counsel’s concerns were primarily technical in nature. Defendant’s Answer included three affirmative defenses: failure to serve a valid pre-suit demand letter, original disclosure and acknowledgment form and valid assignment of benefits.

If defendant was correct, Progressive was in an excellent position to succeed from the outset. In fact, Progressive proceeded to Summary Judgment within twenty-four hours of filing an Answer in this case.

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 Ms. Ferry in taking the case. The time spent, on 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 in pursuing new experience in PIP litigation. 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. Ms. Ferry accepted this case knowing there was a substantial probability that they would not prevail despite the perceived merits of the case. In fact, it seems that she only accepted the case because she was trying to help her client with medical bills far in excess of her Personal Injury award. Ms. Ferry testified that she only knew of one attorney who did PIP cases, and therefore felt she would try to help the plaintiff herself.

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. The defendant made it very clear that from the beginning with their persistent refusal to admit their responsibility for payment of their insured’s medical bills, that they felt confident in their position. From the outset, it appears that defendant had good reason to be confident. They filed their Motion for Summary Judgment within twenty-four hours of filing an Answer in this case. Their defense of the case was purely technical in nature and if they were correct, they should have prevailed in this case. The court will never know the validity of the defenses raised, as the parties settled in the hours preceding the summary judgment hearing.

The court further gave great weight to Mr. Stevenson’s expert testimony that even with the possibility of a multiplier, out of the approximately 800 attorneys practicing in the two-county area, only about 1% litigate PIP cases on a regular basis. In fact, there is no evidence before the court of any attorney who would take a PIP case without the expectation of a multiplier, and there is ample evidence that there are no attorneys who would. 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.

Defendant argues that under Schultz, because the plaintiff, in this instance, based her selection for competent counsel to handle her case based on her “personal” feelings about Ms. Ferry rather than by finding her to be more competent than others, there is no justification for a multiplier. Further, because she found Ms. Ferry after only a few phone calls, to handle her personal injury case, and then Ms. Ferry suggested the PIP case as a means of recovering her medical expenses, the plaintiff had no difficulty in finding a “PIP lawyer.” 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 plaintiff may or may not have found Ms. Ferry without significant hardship, should not penalize Ms. Ferry. Under the defendant’s interpretation of the Schultz case, Ms. Ferry would probably be forced to turn away any further cases from Ms. Noyes as she could not expect a multiplier after the first PIP case. 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 multiplier¹. 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 Ms. Ferry, by luck, on their first call, would create a case of the first-tier where Ms. Ferry would not be entitled to a multiplier. Other insureds, by random calling, would not get to Ms. Ferry (or one of the other few attorneys who would agree to handle a PIP case) 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.

Further, it is important to note that the Fifth DCA’s original version of Schultz emphatically stated that plaintiff’s failure to testify “is fatal to the claim for a multiplier” but later changed the word “is” to “may be” in the final version of the opinion. Here there is sufficient evidence that the expectation of a multiplier is the only way this plaintiff found a competent attorney to handle her case. There is no competent evidence that she could have found an attorney to handle her PIP case without the expectation of a multiplier.

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 despite the fact that there will be no compensation until and unless the case is resolved in plaintiff’s favor.

It is clear to the court that this case falls within the “even at best” category. Although labeled without merit at the onset by the defendant who elected, after notice, not to pay the benefits until the plaintiff filed this lawsuit and filed for summary judgment immediately on being served, the plaintiff eventually prevailed and the benefits were paid. Therefore, the court awards plaintiff an attorney’s fee which is the product of Ms. Ferry’s 21.25 hours at $300.00/hour and times a 1.5 multiplier for a total of $9,562.50, plus 14.5 hours of paralegal time at $100.00/hour for a total of $1,450.00.

In addition, plaintiff incurred costs for Mr. Stevenson’s services as an expert witness. Mr. Stevenson documented 5.9 hours of time reviewing the file and preparing the affidavit at a rate of $325.00/hour for a total of $1,917.50. In addition, he spent two hours preparing for deposition which was ultimately never taken. Mr. Stevenson’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 $2,567.50. 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. The court finds the cost expense as requested is reasonable at $509.01.

ORDERED AND ADJUDGED that the total judgment (excluding benefits which have already been paid) for attorney’s fees, taxable costs, expert witness fee and prejudgment interest of $517.44 shall be $14,606.45 which shall accrue interest at the rate of 11% per annum for which let execution issue.

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¹The evidence before the court is that there is no attorney of which anyone connected with this case is aware of, who would accept a PIP case without an expectation of a multiplier.