15 Fla. L. Weekly Supp. 118a
Attorney’s fees — Insurance — Personal injury protection — Contin-gency risk multiplier — Abuse of discretion to award multiplier where, although medical provider’s attorney and expert testified that attorney would not have taken case had there not been potential for multiplier, there was no testimony from provider that he would have had substantial difficulty in obtaining competent counsel in relevant market without fee enhancement, and attorney testified that provider could have hired another lawyer — Further, multiplier was not warranted where attorney could mitigate risk of nonpayment by being retained in provider’s numerous other cases, and insurer’s expert refuted claim that case was novel or difficult
UNITED AUTOMOBILE INSURANCE COMPANY, Appellant, v. EDUARDO J. GARRIDO, D.C., P.A., Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 06-524 AP. L.C. Case No. 03-4779 SP 26. December 5, 2007. An appeal from the County Court for Miami-Dade County, Bronwyn C. Miller, Judge. Counsel: Betsy E. Gallagher and Michael J. Neimand, United Automobile Insurance Company, Office of the General Counsel, for Appellant. Christian Carrazana, Panter, Panter & Sanpedro, P.A., for Appellee.
(Before SCHUMACHER, SIGLER, and RODRIGUEZ, JJ.)
(PER CURIAM.) The Appellee, Eduardo J. Garrido, D.C., P.A., a/a/o Elivar Sosa (hereinafter, collectively, “Garrido”), brought a successful personal injury protection (PIP) action against the Appellant, United Automobile Insurance Company (hereinafter, “United”). After the trial, the court entertained Garrido’s motion for attorney fees. After an evidentiary hearing, the court awarded Garrido his fees at a rate of three hundred dollars ($300.00) per hour and applied a 1.5 contingent fee multiplier thereto, the court finding that “based on the expert testimony adduced at the hearing . . . the relevant market required a contingency fee multiplier for Plaintiff to obtain competent representation. Furthermore, the Court has determined that a 1.5 multiplier is reasonable and appropriate.” United appeals the award of the multiplier, alleging that the court’s decision to award same was not supported by substantial competent evidence, and the court, therefore, abused its discretion.
We agree with United and reverse the attorney fee award inasmuch as the trial court applied a multiplier. Accordingly, we remand the matter back to the trial court with instructions to enter a fee award based on the loadstar amount only.
At the hearing, the attorney for Garrido, Christian Carrazana, testified that he would not have taken the case but for the potential of a contingency fee multiplier. He also stated that, from his review of the file, he knew that there was going to be a coverage issue and that there was a possibility that United had rescinded the contract and, therefore, he knew that he was “looking at an uphill battle at the outset of the case.” However, Carrazana, under cross examination, testified that he filed the case “blindly, uncertain of whether or not you [United] were going to raise material misrepresentation or any other typical coverage issues.” Carrazana then testified that he had a long standing relationship with Garrido, handling many of his cases, and that he had hopes of getting future business from him. However, Carrazana also testified that Garrido could have hired another lawyer and that he, Carrazana, was not the only competent lawyer to handle such cases.
Carrazana’s expert, Marc Goldman, also testified that Carrazana would not have taken the case had there not been a potential for a multiplier. Further, although somewhat contradictory to Carrazana’s admission on cross, Goldman testified that Carrazana reviewed two documents sent to the insured by United, as well as an Examination Under Oath (EUO) which led him, Carrazana, to believe that United had “the issue of material misrepresentation and recission” at the outset of Carrazana’s representation of Garrido. Goldman ended his testimony by stating that the case was novel, and that the relevant market for this type of case required a multiplier in order for a plaintiff to obtain competent counsel.
In arguing that the multiplier should not be applied, United’s expert, Jeffery Kaplan, testified that lawyers are “lining up” to take United cases not because of the possibility of multipliers but rather because of the premium hourly rate the attorneys receive from litigating the routine issues involved therein. Kaplan testified that there is a “limited universe” on the issues which come up in these cases. Kaplan further testified that there was no competent evidence that Carrazana was aware that the issue of material misrepresentation was actually raised or actually outstanding at the time his representation of Garrido was initially undertaken.
The seminal case which established the standard for determining whether an attorney fee multiplier should be applied and the amount of that multiplier is Standard Guarantee Insurance Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990). In Quanstrom, the Supreme Court recognized the following factors to be considered in determining whether a contingency fee multiplier should be applied, stating:
(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel; (2) whether the attorney was able to mitigate the risk of nonpayment in any way; and (3) whether any of the factors set forth in Rowe1 are applicable, especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client. Evidence of these factors must be presented to justify the utilization of a multiplier.
Quanstrom, 555 So. 2d at 834. However, in later cases, the ability to obtain competent counsel rose to prominence in determining under what circumstances a multiplier was necessary and appropriate. See Bell v. U.S.B. Acquisition Co., Inc., 734 So. 2d 403, 411 (Fla. 1999) (holding that “[a] primary rationale for the contingency risk multiplier is to provide access to competent counsel for those who could not otherwise afford it”).
At the outset, it is clear that Carrazana’s and Goldman’s testimony that Carrazana would not have taken Garrido’s case had there not been the potential for a multiplier does not satisfy Quanstrom‘sfirst prong. In the recent case of Progressive Express Ins. Co. v. Schultz, 948 So. 2d 1027, 1030 (Fla. 2d DCA 2007), the court stated:
[a] second reason for denying application of the multiplier . . . is the Quanstrom limitation: the market conditions must be shown to require it. In other words, it must be proved that but for the multiplier, plaintiff could not have obtained competent counsel in the area. Plaintiff’s counsel attempted to make this showing by himself[,] testifying that he would not have taken the case without the multiplier. Since the test is whether plaintiff would have had substantial difficulty in obtaining . . . competent counsel within the area to take the case without the multiplier, whether plaintiff’s counsel would have taken the case only on that basis is immaterial. The question is whether other competent counsel would have done so.
(quoting Tetrault v. Fairchild, 799 So. 2d 226, 234 (Fla. 5th DCA 2001) (Harris, J., concurring specially) (emphasis supplied). As was the case in Schultz, other than Carrazana’s and Goldman’s bare assertions, there was no testimony from Garrido himself or someone on his behalf to the effect that he, Garrido, would have had substantial difficulty in obtaining competent counsel in the relevant market without a fee enhancement. Indeed, it was Carrazana’s own testimony that Garrido could have hired another lawyer and that he, Carrazana, was not the only competent lawyer able to handle such cases. Finally, as testified to by Kaplan (as well as observable by some form of judicial notice), PIP lawsuits are immensely common in this legal community.
With respect to Quanstrom‘ssecond prong, Carrazana’s testimony that he had a long-standing relationship with Garrido, and that he hoped to maintain Garrido’s business is evidence that Carrazana was able to mitigate any risk of nonpayment by Garrido. In Craig Lichtblau, M.D., P.A. v. Nationwide Mutual Fire Insurance Co., 11 Fla. L. Weekly Supp. 466, 469 (Fla. 15th Jud. Cir. Feb. 23, 2004), the court found that the plaintiff had enough assigned PIP cases “to justify a longstanding retainer agreement” with its attorneys. In ruling that no multiplier applied, the court held that “[m]oreover, Plaintiff’s retainer agreement shows that Plaintiff’s counsel is able to mitigate the risk of nonpayment in any one case by being retained on a volume of cases with this client alone.” Id. at 470. Although Lichtblau is not an Eleventh Judicial Circuit Court case, we, in the absence of contrary controlling authority, deem it persuasive.
Lastly, with respect to the Rowe factors, there was evidence from Goldman that this case had novelty and difficulty from the outset, but this was refuted by Kaplan. Further, PIP lawsuits, by their nature, do not typically involve a lot of money, as PIP benefits are statutorily limited. As testified by Kaplan, PIP suits usually involve the same routine issues. However, Carrazana’s fee was not fixed but contingent; however, it is clear that this alone does not mandate a multiplier. See Sun Bank of Ocala v. Ford, 564 So. 2d 1078, 1079 (Fla. 1990). We, therefore, conclude that, taken as a whole, the trial court could not have found that the third factor inured to Garrido’s benefit, necessitating a multiplier.
As such, based on analysis of the three Quanstrom factors, there was no substantial competent evidence for the trial court to apply a multiplier in this case. Thus, in granting the multiplier, the trial court abused its discretion.
Reversed and remanded with instructions consistent herewith.
__________________
1Fla. Patient’s Comp. Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). These factors are:
(1) The time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly.
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.
(3) The fee customarily charged in the locality for similar legal services.
(4) The amount involved and the results obtained.
(5) The time limitations imposed by the client or by the circumstances.
(6) The nature and length of the professional relationship with the client.
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services.
(8) Whether the fee is fixed or contingent.
