16 Fla. L. Weekly Supp. 427a
Online Reference: FLWSUPP 165SAJET
Insurance — Personal injury protection — Attorney’s fees — Contingency risk multiplier is available under section 627.428, despite fact that it is fee-shifting statute — Court declines to award multiplier where it finds it is almost inconceivable that competent counsel could not be found to take routine PIP claim with guaranteed lodestar determination of fees for successful insured in absence of multiplier — Limited expert witness fee is awarded where, although expert is not required for court to determine whether to apply multiplier and hourly rate was stipulated to, stipulation did not occur until date of hearing
IRITH SAJET, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant. Circuit Court, 17th Judicial Circuit in and for Broward County. Case No. 07-36638 (04). March 18, 2009. Robert B. Carney, Judge. Counsel: Michael S. Bendell, Law Office of Michael Bendell, P.A., Boca Raton. Jason Moussa and Michael Rudd. Brad Winston.
ORDER GRANTING ATTORNEY’S FEES TO PLAINTIFF
There are two issues presented for the court’s review. The court has previously determined an entitlement to fees pursuant to F.S. 627.428. The parties further stipulate that the hours and the rate claimed are fair and reasonable. What is at issue is whether the court should apply a multiplier. This presents two questions: 1. can the court apply a multiplier with a fee shifting statute and 2. if the answer to that is yes, should the court apply a multiplier.
The first issue is whether the court can apply a risk multiplier as requested by Plaintiff. Although the matter has been certified to the Supreme Court of Florida in Bluegrass Art Cast, Inc. v. Consolidated Erection Services, Inc., 870 So. 2d 196 (Fla. 5th DCA 2004); Holiday v. Nationwide Mutual Fire Insurance, 864 So.2d 1215 (Fla. 5th DCA 2004) and Mercury Casualty Company v. Flores, 905 So.2d 179 (Fla. 3rd DCA 2005), only the court in Flores has so far made a specific ruling whether a multiplier can be applied under a fee shifting statute such as 627.428 in light of the recent Supreme Court’s ruling in Allstate v. Sarkis, 863 So.2d 210 (Fla. 2003).
In Sarkis the court determined that a risk multiplier could not be used in an award of fees under the Offer of Judgment statute, F.S. 768.79. The court observed:
Throughout the statutory and rule history of offers of judgment, the use of a multiplier has never been expressly authorized. Neither section 768.79 nor rule 1.442 authorizes the use of a multiplier in determining the amount of attorney’s fees as a sanction for rejection of an offer. Applying a strict construction of the statute and rule, a multiplier therefore cannot be applied under section 768.79 or rule 1.442, and the trial court’s application of a multiplier in this case was error.
Sarkis, 863 So.2d at 223.
The implication of that finding seems clear. Fees in this case are available via statutory fee shifting in F.S. 627.428 which like 768.79 does not authorize the use of a multiplier in determining the amount of fees. As in Sarkis, a strict construction of the statute leads inescapably to a determination that application of a risk multiplier would be error. Fee statutes are strictly construed, and they either authorize a multiplier or they don’t.
F.S. 627.428 provides for the awarding of a reasonable fee. In determining what is a reasonable fee Florida has adopted the federal lodestar methodology. Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985). Application of the lodestar provides a strong presumption that the fee is reasonable. Once again it is important to note that this is all that the statute authorizes — a reasonable fee. Application of Rowe meets that requirement and is a necessary first step in any event. This is what the statute and Florida law require. Subsequent application of multiplier immediately goes outside the limiting language of the statute and turns a reasonable fee into a windfall for the attorney in derogation of clear statutory language. See also, Progressive Express Insurance Company v. Schultz, 948 So.2d 1027 (Fla. 5th DCA 2007) where the court noted that Florida uses a lodestar to determine a reasonable fee and that 627.428 only authorizes a reasonable fee. Unfortunately, the court chose to disallow the multiplier for other reasons without making a definitive decision based on Sarkis.
A compelling argument for retiring contingency fee multipliers can be found in Rethinking the Application of Contingency Risk Multipliers in Fee Awards Should Florida Recede from Quanstrom?,Florida Bar Journal, Volume 79, No. 9, October 2005.
Having said that, in the absence of a conflicting opinion with Flores, this court is bound by the determination of the Third District. In Flores the court held:
We conclude that Sarkis has not overruled sub silentio the Florida Supreme Court’s earlier precedent which authorizes a multiplier for attorney’s fees awards under section 627.428. The Florida Supreme Court’s leading case regarding multipliers, Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990) was a case decided under section 627.428. See Quanstrom, 555 So.2d at 829. The Florida Supreme Court has made clear that it does not intentionally overrule its earlier cases without saying so. See Puryear v. State, 810 So.2d 901, 905 (Fla. 2002).
The Third District also certified this question to the Supreme Court. But for the fact that this court is bound by the Flores decision, this court would find that Sarkis now precludes a contingency fee multiplier as a matter of law under F.S. 627.428.
Since this court is bound by Flores, the next step is a Quanstrom analysis. The first step is determining whether the relevant market requires a contingency fee multiplier to obtain competent counsel. In this case the attorney was guaranteed, at a minimum, a reasonable attorney’s fee under 627.428. A contingency fee is prerequisite to a risk multiplier. Superior Insurance Company v. Cordle, 851 So.2d 207 (Fla. 1st DCA 2003). While there might have been a “contingency fee” agreement, the only contingency was lack of payment for unsuccessful prosecution of the claim. There was no contingency at all if the plaintiff were successful. The attorney would receive in that case the full amount of reasonable compensation for his or her time regardless of the amount of the win. This is in stark contrast to one who takes a case on a contingency fee where a win only entitles the attorney to a percentage of the recovery.
What the court finds troubling here is the fact that there is a statutory lodestar computation of fees for the successful plaintiff’s attorney. The only benefit to applying a multiplier with a statutory fee shifting is to increase the reward for the less meritorious claim. Phrased bluntly, the application of multiplier would serve no purpose other than to encourage the bringing of lawsuits for claims that have little chance of success. This hardly seems a laudable goal or the purpose of a contingency fee risk multiplier. Indeed, the genesis of the fee multiplier began with the U.S. Supreme Court.1 When faced with fee shifting statutes, the Supreme Court quickly receded2 eliminating the entire underpinning of Florida’s basis for adopting a fee multiplier.
While the reason expressed above may be a philosophical reason for not applying a multiplier, it bears saying even in the face of Flores. There is, however, a more legal and practical reason for denying a multiplier. On a routine insurance claim with a guaranteed lodestar determination of fees for the successful plaintiff, the court finds almost inconceivable that competent legal counsel would not take this case absent a multiplier. That a particular attorney might not is of no moment. Again the guarantee is not a percentage of recovery, it is reasonable fees based on a lodestar analysis. That is a huge and attractive incentive.
Having determined that there are competent counsel who would take this case without the application of a multiplier, the court declines to award a multiplier in this case. Otherwise the rate and time of the attorney are not challenged. The time is 73.25 hours and the rate is $400/hour for a total of $29,300. Prejudgment interest dates from the finding of entitlement on July 1, 2008 in the amount of $1,953.86. Agreed taxable costs amount to $271.
The only remaining issue is what fees should be paid to the Plaintiff’s fee expert. The parties stipulated in October of 2008 that the time of the plaintiff’s attorney was reasonable. An expert is not required for the court to determine whether to apply a multiplier. That leaves only the rate of the Plaintiff’s attorney as an issue for expert testimony. While that was stipulated to also, that stipulation did not occur until the date of the hearing. Consequently, the court will award fees to the expert. What the expert asks for is $6,000 or 12 hours at $500/hour. For the limited requirements of saying that $400/hour is a reasonable rate for the Plaintiff’s attorney in this case, the court finds that 2 hours at $500/hour or $1,000 is a reasonable fee.
Accordingly, this court awards $32,524.86 plus statutory interest from the date of this order as fees and costs to the Plaintiff for which let execution issue.
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1Blanchard v. Bergeron, 489 U.S. 87, 109 S.Ct 939 (1988) and Delaware Valley Citizen’s Council for Clean Air, 483 U.S. 711 (1987).
2City of Burlington v. Dague, 505 U.S. 557 (1992).
