19 Fla. L. Weekly Supp. 319b
Online Reference: FLWSUPP 1905LEVYInsurance — Personal injury protection — Attorney’s fees — Contingency risk multiplier — No merit to argument that multiplier cannot be applied when party seeking multiplier fails to personally testify that she had difficulty obtaining competent counsel — Expert testimony demonstrating that market required multiplier in order to obtain competent counsel was sufficient to support application of multiplier despite fact that insured did not testify that she had actual difficulty in obtaining competent counsel
GARRISON PROPERTY AND CASUALTY INSURANCE COMPANY, Appellant, vs. CRYSTAL LEVY, Appellee. Circuit Court, 4th Judicial Circuit (Appellate) in and for Duval County. Case No. 16-2011-AP-00043-XXXX-MA, Division FM-C. L.T. Case No. 16-2008-CC-20314-XXXX-MA, Division Q. December 12, 2011. Appeal from the County Court, in and for Duval County. Honorable Dawn K. Hudson, Judge. Counsel: Douglas H. Stein, Miami, for Appellant. Jessie L. Harrell, Bryan S. Gowdy, and D. Scott Craig, Jacksonville, for Appellee.
OPINION
(MCCALLUM, Judge.) This cause is before the Court upon direct appeal from the Duval County Court, where the Order and Final Judgment Awarding Attorneys’ Fees and Costs was entered in favor of the Appellee, CRYSTAL LEVY, on March 23, 2011. This Court has jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c). The Court, having considered the record, briefs, oral arguments of counsel, applicable case law, and otherwise being duly advised in the premises, finds as follows:
I. Factual Background and Procedural History
The Appellee filed a complaint on December 5, 2008, alleging that the Appellant, who insured the Appellee under an insurance policy providing Personal Injury Protection (“PIP”) coverage, failed to pay the full amount of her medical bills for services rendered to the Appellee by her medical provider. A summary judgment was entered in favor of the Appellant on the defense that the Appellee failed to properly complete a standard disclosure and acknowledgment form as required by section 627.736, Florida Statutes. The Appellee successfully appealed, and the Circuit Court reversed the judgment with directions that a judgment be entered in the Appellee’s favor. The Circuit Court also ordered that the Appellee was entitled to an award of appellate attorney’s fees. The Appellee subsequently filed motions in the County Court seeking an award for both trial and appellate attorney’s fees, with the application of a 2.0 contingency fee multiplier. A hearing was held on the motions, with both parties calling experts to testify as to the appropriateness of a contingency fee multiplier. After the hearing, the County Court, applying the factors set forth in Standard Guaranty Ins. Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990), found that a contingency fee multiplier was appropriate in this case, and applied a 2.0 multiplier to both the Appellee’s trial and appellate counsel attorney’s fees.
On appeal, the Appellant asserts that the trial court erred in applying the contingency fee multiplier to the attorney’s fees for both the Appellee’s trial and appellate counsel. Specifically, the Appellant contends that a contingency fee multiplier cannot be applied when the party seeking the multiplier fails to personally testify that she had difficulty obtaining competent counsel. The Appellant maintains that expert testimony alone is insufficient to provide competent substantial evidence to support the application of a contingency fee multiplier.
II. Standard of Review
When determining whether a contingency fee multiplier is appropriate in tort and contract cases, the trial court should consider the following factors in determining whether a multiplier is necessary: (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 Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla.1985), are applicable, especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990). Evidence of these factors must be presented to justify the utilization of a multiplier. Id. It is well established in Florida that competent substantial evidence must exist to support an application of a contingency fee multiplier. Eckhardt v. 424 Hintze Management, LLC, 969 So. 2d 1219, 1223 (Fla. 1st DCA 2007) [32 Fla. L. Weekly D2966a] (citing State Farm Mutual Auto. Ins. Co. v. Cedolia, 571 So. 2d 1386, 1387 (Fla. 4th DCA 1990)).
III. Application of Standard of Review
The sole issue here is whether the presentation of expert testimony is sufficient to provide competent substantial evidence that the application a contingency fee multiplier is appropriate, or if the party seeking the multiplier must testify that she had actual difficulty obtaining competent counsel. Thus, the discussion here involves the proper application of the first Quanstrom factor, i.e., whether the relevant market requires a contingency fee multiplier to obtain competent counsel.
There is a split of authority on this issue between the First and Fifth District Courts of Appeal. The Appellant relies on the Fifth District’s opinion in Progressive Express Ins. Co. v. Schultz, 948 So. 2d 1027 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D548b]. The court in Schultz reversed a trial court order awarding a multiplier because the plaintiff did not personally testify that he had difficulty in securing competent counsel to represent him in the cause without a multiplier. Id. The court stated that because the plaintiff did not testify at the fee hearing, there was no evidence demonstrating that the plaintiff had any difficulty obtaining competent counsel to pursue his PIP claim. Id. at 1030. The court noted that, in its view, that lack of evidence alone may be fatal to the claim for a multiplier. Id.
The First District has addressed this issue on three separate occasions. In McCarthy Bros. Co. v. Tilbury Const., Inc., 849 So. 2d 7, 10 (Fla. 1st DCA 2003) [28 Fla. L. Weekly D736b], a contract case, the court held that expert testimony stating that it would have been difficult for the plaintiff to find an attorney willing to take its case without the opportunity for a multiplier was sufficient to support the application of a multiplier. Subsequently, in Eckhardt v. 424 Hintze Management, LLC, 969 So. 2d 1219 (Fla. 1st DCA 2007) [32 Fla. L. Weekly D2966a], the trial court awarded the plaintiff attorney’s fees and cost and applied a multiplier to the award. At the hearing on the attorney’s fees, each side presented expert testimony as to the appropriateness of a multiplier. In reversing the trial court, the First District noted that a multiplier should not have been applied, finding that competent substantial evidence to support the application of the multiplier did not exist. The court stated:
Because the landlord did not testify at the hearing, there was no evidence to suggest that the landlord had difficulty securing competent counsel. Further, there was no evidence that the relevant market of landlords were unable to secure competent representation without the application of a contingency multiplier. Finally, as discussed above, this case was not complex, and the landlord achieved limited recovery. Thus, the Rowe factors weigh against application of a contingency multiplier, and the trial court reversibly erred in applying the multiplier.
Id. at 1223.
Most recently, in Massie v. Progressive Exp. Ins, Co., 25 So. 3d 584 (Fla. 1st DCA 2009) [34 Fla. L. Weekly D2364b], the sole issue presented was whether the petitioner’s attorney was entitled to a contingency fee multiplier on her attorney’s fees award in a PIP action. The circuit court on direct appeal, relying upon the Fifth District’s opinion in Schultz, reversed the trial judge’s order awarding a multiplier because the petitioner did not testify at the fee hearing that she had difficulty securing counsel to represent her in the cause without a multiplier. In reversing the circuit court, the First District noted that it previously held in McCarthy Brothers that expert testimony stating that a party would have difficulty securing counsel without the opportunity for a multiplier supports a multiplier’s imposition. Massie, 25 So. 3d at 585,.Thus, the court held that because such expert testimony was presented, the circuit court departed from the essential requirements of law by applying the principle of law set forth by the Fifth District in Schultz, rather than the law previously enunciated in McCarthy Brothers. Id.
Here, the Appellant asserts that the First District’s opinion in Eckhardt and Massie conflict. Therefore, the Appellant contends that there is an unresolved intra-district conflict, so Massie is not binding upon this Court. Thus, the Appellant urges that this Court should apply the rule set forth by the Fifth District’s decision in Schultz.
Upon review of the cases discussed supra, this Court finds that the First District’s opinions in Massie and Eckhardt do not conflict, and may be read in conjunction with one another. As an initial matter, it does not appear that the court in Eckhardt relied on the Fifth District’s holding in Schultz in reaching his decision. The court in Eckhardt simply cited to Schultz in order to highlight the trend of courts focusing on the ability of a plaintiff to obtain competent counsel when determining whether a multiplier is necessary and appropriate. Eckhardt, 969 So. 2d at 1223. The court in Eckhardt considered the fact that the plaintiff did not testify at the fee hearing as just one of several factors in determining that the application of a multiplier was inappropriate. Id. In addition to the fact that the plaintiff did not testify, the court also noted that there was no evidence that the relevant market of landlords were unable to secure competent representation without the application of a multiplier. Id. Therefore, Eckhardt did not establish a bright-line rule that a party’s failure to testify that she had difficulty obtaining competent counsel without the prospect of a multiplier is an automatic bar to the application of a contingency fee multiplier. As such, Eckhardt and Massie do not conflict, and the holding in Massie is binding on this Court.
Applying Massie, it is clear that the Appellee has provided competent substantial evidence to support a finding that the relevant market required a contingency fee multiplier in order for the Appellee to obtain competent counsel in this case, both at the trial and appellate levels. At the fee hearing held on February 3, 2011, Appellee’s trial counsel, Mr. Craig, testified that in deciding whether to take the case, he determined that it would be a tough case, and that it would be one in which a multiplier would be warranted. Mr. Camerlengo, one of the Appellee’s expert fee witnesses, testified that by 2007, due to changes in the law, the number of attorneys in the area representing plaintiffs in PIP cases had significantly dwindled. Mr. Camerlengo testified that in 2008, it was his opinion that PIP cases involving standard acknowledgment and disclosure forms were “unwinnable” in Duval County. Therefore, Mr. Camerlengo determined that a contingency fee multiplier was warranted in the instant case. He noted that at the time this case was initially filed in the trial court, Mr. Craig and one other attorney were the only two people that he was aware of in the market taking these particular PIP cases. Finally, Mr. Camerlengo testified that had the Appellee approached him to take this case in 2008, he would have deemed the case an “absolute loser” in Duval County.
Regarding appellate counsel, the Appellee presented the testimony of fee expert Michael Tanner. Mr. Tanner testified that at the time the appeal was filed, the local market of appellate attorneys would not have taken this case without the prospect of a multiplier in order to protect against the risk of delayed payment or nonpayment. Furthermore, he testified that his firm would not have represented the Appellee on appeal in this matter without the prospect of a multiplier. Brian Gowdy, the Appellee’s appellate counsel in this case, testified that he would not have taken this case without the possibility of a multiplier. He testified that it would not make financial sense to represent the Appellee in this matter without a multiplier.
Unlike the factual scenario in Eckhardt, there was considerable evidence presented to the lower court in this case demonstrating that the market required a multiplier in order to obtain competent counsel. The witnesses presented by the Appellee at the fee hearing were all local attorneys with considerable knowledge of the local legal market. This Court finds that the evidence presented was more than sufficient to satisfy the first Quanstrom factor, despite the fact that the Appellee did not testify that she had actual difficulty in obtaining competent counsel.
Based on the above, it is:
ORDERED AND ADJUDGED that the March 23, 2011, Order and Final Judgment Awarding Attorneys’ Fees and Costs is hereby AFFIRMED.
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