17 Fla. L. Weekly Supp. 538a
Online Reference: FLWSUPP 1707GOMEZAttorney’s fees — Insurance — Personal injury protection — Contingency risk multiplier — No abuse of discretion in applying 2.0 multiplier, despite absence of evidence that medical provider actually experienced difficulty in obtaining counsel, where provider’s attorney testified that he would not have taken case without possibility of multiplier and expert witness testified that he would not have taken case and that it would have been difficult to obtain counsel without possibility of multiplier
UNITED AUTOMOBILE INSURANCE COMPANY, Appellant, v. PHYSICIAN’S FIRST CHOICE INTERPRETATION, INC., A/A/O JULIAN GOMEZ, Appellee. Circuit Court, 17th Judicial Circuit (Appellate) in and for Broward County. Case No. 07-15938 CACE 02. L.T. Case No. 07-229 COCE 54. March 5, 2010. Counsel: Michael Neimand and Lara J. Edelstein, United Automobile Insurance Company, The Office of the General Counsel, Coral Gables. Amir Fleischer, Marks & Fleischer, P.A., Ft. Lauderdale. Joseph R. Littman, Kane & Kane, Boca Raton. Jill Carabotta, Office of the General Counsel, United Automobile Insurance Company Miami.
OPINION
(BOWMAN, Judge.) THIS CAUSE comes before the Court upon Appellant’s, United Automobile Insurance Company’s (UAI), appeal of a Final Judgment awarding attorney’s fees and costs; UAI’s request for oral argument; and UAI’s motion to supplement the record. The Court having considered same, the record, applicable case law, and otherwise being duly advised in the premises finds and decides as follows:
This case involves a contingent fee agreement for attorney’s fees. The agreement specifically provided that Appellee’s counsel would represent Appellee in cases against insurance companies for failing to pay claims of benefits and “accept the amount awarded by the court or negotiated with the insurance carrier as full satisfaction of any fees.” The agreement explained that the employment relationship between Appellee’s counsel and Appellee was based upon a “contingent fees basis,” and that “if no recovery [was] made, [Appellee would] not be indebted to [Appellee’s counsel] for any sum whatsoever as attorney’s fees.” Thus, in order to recover an attorney’s fee award, pursuant to section 627.428, Florida Statutes, Appellee’s counsel had to prevail in its action against UAI, which he subsequently did. Appellee obtained a judgment against UAI for $263.01, plus interest, and then sought recovery of his fees and costs by a separate motion.
At an evidentiary hearing on Appellee’s motion for attorney’s fees and costs, the trial court heard evidence from Appellee’s counsel, Appellee’s expert, and UAI’s expert. First, UAI’s expert testified that it would be “extremely difficult to win” this case and very “unlikely” if: (1) Appellee did not provide UAI an acknowledgment and disclosure form; (2) the patient’s attorney withdrew from the case, making it hard to locate the patient and get the patient’s cooperation in recovering the amount in dispute; (3) another attorney in a companion case also withdrew; (4) UAI had already closed its file based on a SIU investigation done in this case; (5) the case involved mobile x-rays and nothing in the file indicated that they were done for the benefit of the patient; and (5) only one person was listed as a driver on the insurance declarations page when more than one person over the age of 18 lived in the insured’s household. Although not actually known by UAI’s expert at the time of testifying, all of the previous examples did in fact occur in this case.
Next, Appellee’s counsel testified that given all of these factors, he would not have taken the case without the possibility of securing a fee multiplier. Appellee’s counsel explained that not only did the case involve mobile x-rays, but UAI had closed the file after an SIU investigation, which rarely happens in a case. According to Appellee’s counsel, this scenario made it “impossible to win.” Appellee’s counsel also noted that Appellee failed to provide an acknowledgment and disclosure form to UAI, which further made the case “impossible to win.” In addition, Appellee’s counsel explained that he could not locate the attorney that withdrew from the case or the patient to assist him in preparing for the case. However, Appellee’s counsel pursued the matter because his client wanted him to, knowing that the chance of success was unlikely at the outset.
Finally, Appellee’s expert testified that as an experienced P.I.P. attorney, who handled thousands of cases against UAI, he personally would not have taken the case and most people would not have taken the case. Appellee’s expert explained that success was “highly unlikely” for the following reasons: (1) the patient obtained a mobile x-ray and nothing in the file indicated the patient could not walk or drive to an x-ray machine instead; (2) the patient failed to show up for an EUO; (3) the initial lawyer dropped the case, making it hard to get information on the case and to get the patient to work with the then current attorney (Appellee’s counsel) on obtaining recovery; (4) another lawyer dropped a companion file to this case; (5) Appellee’s attorney was unable to locate the patient to discuss the current status of the case; (6) UAI closed its file at the outset based on its SIU investigation, which is rarely done, indicating that UAI had discovered something unfavorable on this case; (7) and Appellee failed to provide UAI with an acknowledgment and disclosure form, which some courts require prior to awarding any recovery. Appellee’s expert went on to suggest that a multiplier between 2 and 2.5 was necessary given that the likelihood of success from the outset was less than fifty percent and it was a “tough case.”
In addition, the parties stipulated at the hearing that a reasonable hourly rate for appellee’s counsel was $375 and that the costs were $270. The trial court found that Appellee’s counsel reasonably expended 29.05 hours on the case, making the total lodestar fee award to be $10,893.75 ($375 x 29.05). The trial court also awarded pre-judgment interest in the amount of $505.47.
The trial court then exercised its discretion and adjusted the fee award upward applying a 2.0 contingency risk multiplier to the attorney’s fee award, pursuant to section 627.428, Florida Statutes, making the final attorney fee award to Appellee’s attorney as $22,562.97. In its order awarding the multiplier, the trial court explained:
1. The relevant market place did require the application of a multiplier in order to find competent counsel;
2. [Appellee’s] attorney [was] not able to mitigate the risk of non-payment[1];
3. The factors announced in Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145, 1150 (Fla. 1985), including the time and labor involved; the novelty and complexity of the issues involved; and the ability, experience and reputation of the attorneys, warrant the application of a contingency fee multiplier.
Based upon the undisputed testimony of both the [Appellee’s] and [UAI’s] Experts that the likelihood of success at the outset was unlikely, this court finds that the likelihood of success was unlikely.
On appeal, UAI challenges the trial court’s application of the 2.0 contingent fee multiplier, arguing that Appellee failed to provide competent substantial evidence that: (1) the relevant market conditions required the fee multiplier to obtain competent counsel; and (2) Appellee’s counsel could not mitigate the risk of non-payment. UAI argues that because Appellee did not actually testify that it actually had difficulty securing counsel without a multiplier, but had its expert testify, that it “would have” had difficulty securing counsel to represent it in this case without a multiplier, Appellee failed to provide competent substantial evidence that the relevant market required the application of the fee multiplier. This Court disagrees.
In Standard Guaranty Insurance, Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990), the Florida Supreme Court upheld the application of a contingency fee multiplier in P.I.P. cases, pursuant to section 627.428, Florida Statutes, concluding that its application was discretionary rather than mandatory when determining the appropriate attorney’s fees to be paid to a prevailing insured. Moreover, in Massie v. Progressive Express Insurance Company, 2009 WL 3817929 [34 Fla. L. Weekly D2364b] (Fla. 1th DCA 2009), the First District concluded that “expert testimony [alone] that a party would have difficulty securing counsel without the opportunity for a multiplier support[ed] [the] multiplier’s imposition.” Id.; cf. Sun Bank of Ocala v. Ford, 564 So. 2d 1078, 1079 (Fla. 1990) (citing Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 483 U.S. 711, 107 S. Ct. 3078, 97 L. Ed. 2d 585 (1987) (“Before adjusting for risk assumption, there should be evidence in the record, and the trial court should so find, that without risk-enhancement[,] plaintiff would have faced substantial difficulties in finding counsel in the local or other relevant market.”) (emphasis added). Massie found that it was not necessary for a prevailing party to also testify that it actually had difficulty obtaining representation without the possibility of a multiplier. Id.
In this case, the trial court heard competent substantial evidence not only from Appellee’s counsel that he would not have taken the case, but for the multiplier, but also from Appellee’s expert, an experienced P.I.P. attorney who had handled thousands of cases against UAI. Appellee’s expert testified that he personally would not have taken the case and that Appellee would have had difficulty obtaining representation without the possibility of a multiplier. UAI’s own expert, who had also handled P.I.P cases in the past, even acknowledged that there were numerous problems with the case from the outset that made recovery very “unlikely.” Relying on the numerous factors enunciated in Quanstrom and Rowe, as outlined in the trial court’s order, this Court finds that the trial court did not abuse its discretion in applying a 2.0 multiplier to the attorney fee award in this case.
It is therefore,
ORDERED AND ADJUDGED that the June 22, 2007 Final Judgment awarding attorney’s fees and costs is AFFIRMED; UAI’s request for oral argument is DENIED; and UAI’s motion to supplement the record is GRANTED.
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1There are no Florida district court cases that specifically address the second Quanstrom factor, mitigation of the risk of non-payment. However, the Quanstrom factors were patterned after its federal counterpart, Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 483 U.S. 711, 107 S. Ct. 3078, 97 L. Ed. 2d 585 (1987). In Delaware Valley (II), the Supreme Court observed that when a party is ultimately liable for its attorney’s fees, win or lose, the attorney has not assumed the risk of nonpayment; and therefore, there is no basis for adjusting the lodestar fee upwards. Id. at 716. Thus, one can surmise from the Court’s decision that if an attorney can recover their fee, regardless of the results from the case, they have mitigated the risk of non-payment. Accordingly, mitigation can be measured by the fee agreement involved in the case. In the case at hand, according to the contingent fee agreement, Appellee’s counsel can only receive his attorney’s fees, pursuant to section 627.428, Florida Statutes, if he is the prevailing party in the matter.
