20 Fla. L. Weekly Supp. 1157b

Online Reference: FLWSUPP 2012ALLFAttorney’s fees — Class actions — Counsel for intervenor — Incentive award — Contingency risk multiplier — Insurance — Personal injury protection — Dispute over PIP insurer’s use of Medicare’s Outpatient Prospective Payment System as basis for payments to MRI providers, which was ultimately expanded to include as class members all Florida health care providers who received other types of allegedly unlawful underpayments pursuant to certain statutory provisions — Intervenor in class action entitled to incentive award in view of intervenor’s successful efforts to improve settlement agreement for other class members and assumption of risks of undertaking those efforts — Intervenor also awarded reasonable fees and costs pursuant to sections 627.736(8) and 627.428 — Overwhelming evidence confirms that intervenor’s efforts in instant case and in appeal to district court substantially improved original settlement, conferred significant benefit on class, and significantly enhanced class’s recovery — Attorney’s fees are properly awardable for Intervenor’s ongoing efforts in litigating entitlement to attorney’s fees — Fees awarded for efforts in separate class action previously filed by intervenor in a different circuit involving the same expanded class of health care providers and the same broad fee schedule issue that was now covered by the settlement agreement in this action — Discussion of reasonable attorney’s fee lodestar and costs concerning instant case and appeal to district court — Lodestar multipliers — Reasonable expert witness fees awarded

ALL FAMILY CLINIC OF DAYTONA BEACH, INC., D/B/A FLORIDA MEDICAL ASSOCIATES, on behalf of itself and all others similarly situated, Plaintiff, and MRI ASSOCIATES OF ST. PETE, INC., d/b/a St. Pete MRI, as assignee, individually, and/or on behalf of all those similarly situated, Intervenor, vs. ESURANCE INSURANCE COMPANY, Defendant. Circuit Court, 7th Judicial Circuit in and for Volusia County. Class Representation. Case No. 2009 32524 CICI. July 22, 2013. Honorable William A. Parsons, Judge. Counsel: Eric Lee, Boca Raton; and Kimberly P. Simoes, Deland, for Plaintiff. Richard P. Cole, and Alejandro Perez, Miami, for Defendant. David M. Caldevilla, Tampa; Scott R. Jeeves, St. Petersburg; Craig E. Rothburd, Tampa; Lorca J. Divales, St. Petersburg; and Robert L. McLeod, St. Augustine, for Intervenor.

FINAL JUDGMENT CONCERNING INTERVENOR’SCLAIMS FOR REASONABLE ATTORNEYS’FEES AND COSTS, AND INCENTIVE AWARD

THIS CAUSE came before the Court for an evidentiary hearing on June 3, 2013 and June 24, 2013, concerning the “Renewed, Amended, and Supplemental Motion for Attorneys’ Fees and Costs” (dated Feb. 15, 2013) and “Motion for Incentive Award” (dated Feb. 22, 2013) filed by the Intervenor, MRI Associates of St. Pete, Inc. After considering the motions, the credibility of the witnesses, the weight of the testimony and other evidence presented, the arguments of counsel, the record, and the parties’ proposed orders, and being otherwise fully advised in the premises, the Court makes the following findings of fact and conclusions of law:

I. Introduction

1. This is a class action lawsuit, involving personal injury protection (“PIP”) benefits. As discussed below, the case has a somewhat complex procedural history.

2. The case was originally filed in 2009 by the Plaintiff, All Family Clinic of Daytona Beach, Inc., who contended the Defendant, Esurance Insurance Company, was unlawfully underpaying PIP benefits to magnetic resonance imaging (“MRI”) providers by using Medicare’s Outpatient Prospective Payment System (“OPPS”) in violation of the Florida PIP statute in effect since January 1, 2008. The OPPS issue is discussed in cases such as Nationwide Mut. Fire Ins. Co. v. AFO Imaging, Inc., 71 So.3d 134 (Fla. 2d DCA 2011) [36 Fla. L. Weekly D1463b].

3. After this Court entered an order granting class certification, the Plaintiff and the Defendant entered into a proposed class action settlement agreement, which greatly expanded the type of claims at issue and the size and membership of the class. The type of claims covered by the proposed settlement was expanded from the OPPS issue, to the issue of whether the Defendant was authorized to calculate PIP benefits based on the fee schedule method of Section 627.736(5)(a)2-5, Florida Statutes. The fee schedule issue is discussed in cases such as Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63 (Fla. 4th DCA 2011) [36 Fla. L. Weekly D1062a], Geico Indemnity, Co. v. Virtual Imaging Services, Inc., 79 So.3d 55 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a] (“Virtual I”), and DCI MRI, Inc. v. Geico Indem. Co., 79 So.3d 840 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D170e]; Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 90 So.3d 321 (Fla. 3d DCA 2012) [37 Fla. L. Weekly D985b] (“Virtual II‘), and Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., ___ So. 3d ___, 2013 WL 3332385 (Fla. July 3, 2013) [38 Fla. L. Weekly S517a] (“Virtual III”).

4. This modification expanded the size and membership of the class from only Florida MRI providers who received OPPS under-payments per subsection 627.736(5)(a)2.f to all Florida health care providers who received other types of allegedly unlawful under-payments per subsections 627.736(5)(a)2-5, and included providers of emergency transportation, emergency hospital services, hospital inpatient, and hospital outpatient services, as well as many other types of health care service providers.

5. The Plaintiff and the Defendant jointly moved for preliminary approval of the settlement agreement, and on March 20, 2012, this Court granted that request and entered a non-final “Order of Preliminary Approval.” That order was jointly drafted and jointly proposed by the Plaintiff and the Defendant, and among other things, it preliminarily approved the settlement agreement, conditionally certified a settlement class pursuant to Florida Rule of Civil Procedure 1.220, enjoined other pending PIP litigation against the Defendant in other state and federal courts, and ordered the Defendant to serve a written notice of the proposed settlement to all class members.

6. The Intervenor, MRI Associates of St. Pete, Inc., was a member of the settlement class established in the preliminary approval order, and was subject to the injunction imposed therein. Moreover, in 2010, the Intervenor had previously filed its own class action against the Defendant in Hillsborough County Circuit Court (the “Hillsborough Case”) involving the same expanded class of health care providers and the same broad fee schedule issue that was now covered by the settlement agreement in this action.

7. After this Court entered the preliminary approval order, the Defendant’s attorneys sent a copy of it to the Intervenor’s attorneys, and suggested that the Hillsborough Case was enjoined from going forward. (See, e.g., T 40).¹ Shortly thereafter, on March 30, 2012, the Intervenor filed a motion to intervene in the above-styled case, and attached a copy of its own pending class action complaint against the Defendant in the Hillsborough Case, as well as an affidavit confirming that the Intervenor was a member of the class described by the preliminary approval order. At the same time, the Intervenor also filed a notice of appeal to the Florida Fifth District Court of Appeal concerning the preliminary approval order (the “Fifth DCA Appeal”).

8. On April 13, 2012, the Intervenor filed its initial brief in the Fifth DCA Appeal. (Intervenor’s Exhibit 48). Among other things, the brief contended that the preliminary approval order did not include the findings required by Florida Rule of Civil Procedure 1.220, that the class notice did not accurately identify the terms of the settlement agreement, and that the injunctive relief contained in the order was unauthorized. This Court has reviewed that brief and finds that the arguments contained therein were meritorious.

9. On April 23, 2013, this Court entered an order granting the Intervenor’s motion to intervene, which was unopposed by the Plaintiff and the Defendant.

10. On May 3, 2013, shortly after being granted leave to intervene, the Intervenor filed a 10-page list of substantive objections to the settlement agreement. This Court has reviewed those objections (Intervenor’s Exhibit 46), and finds the objections raised therein were meritorious.

11. Thereafter, the parties agreed to a series of time extensions and to hold the above-styled case, the Hillsborough Case, and the Fifth DCA Appeal in abeyance, while they engaged in negotiations to address the Intervenor’s objections to the settlement agreement, the class notice, the preliminary approval order, and related documents.

12. On August 16, 2013 (i.e., approximately 4½ months after the Intervenor entered into the above-styled case), the parties entered into their “First Amended Settlement Agreement.” (Intervenor’s Exhibit 50). Attached to the amended settlement agreement were a set of revised exhibits, including a revised class notice form and a revised proposed preliminary approval order.

13. The Intervenor has filed “red-line” reports showing the differences between the original and the amended settlement documents (Intervenor’s Exhibits 51-53). The amended documents include numerous (literally, hundreds) of substantive changes, and it is clear that most, if not all, of those substantive changes are directly linked to the Intervenor’s initial brief and written objections, and that those changes came about as a result of the Intervenor’s efforts.

14. The Intervenor has also filed a table that summarizes some of the more important substantive changes to the settlement documents (Intervenor’s Exhibit 54), and it is clear that the Intervenor’s efforts resulted in significant substantive revisions that were beneficial to the class members who opted to participate in the settlement.

15. On September 4, 2013, after the parties filed the amended settlement documents, this Court rescinded the original preliminary approval order, and entered a new order which preliminarily approved the amended settlement documents, without imposing any injunctive relief against the class members. Ultimately, none of the class members objected to the amended settlement agreement negotiated by the Intervenor, and after conducting a duly noticed final fairness hearing, this Court entered a final judgment approving the amended settlement agreement.

16. As was the case under the original settlement agreement, in the amended settlement agreement the Defendant agreed to pay $465,000 as reasonable attorneys’ fees and costs to the Plaintiff’s counsel. One of the Plaintiff’s lawyers testified that amount was based on an hourly rate of $595 and a multiplier that “was somewhere between 1.5 and 2” at the time of the original settlement agreement (Intervenor’s Exhibit 33 at p. 28-29). In addition, under both the original and amended settlement agreements, the Defendant agreed to pay a $5,000 “incentive award” to the Plaintiff.²

17. However, the Defendant and the Intervenor were unable to reach a settlement concerning the Intervenor’s attorneys’ fees and costs, or an incentive award. Instead, the parties agreed this Court would reserve jurisdiction to resolve those claims. Moreover, the Defendant agreed the Intervenor is entitled to recover its reasonable attorneys’ fees and costs in the Hillsborough Case, but disputed the Intervenor’s entitlement to recover any attorneys’ fees and costs concerning the above-styled case or the Fifth DCA Appeal, and disputed the Intervenor’s entitlement to recover any incentive award.

18. As contemplated by the amended settlement agreement, the Fifth DCA Appeal was withdrawn, but that Court entered an order dated February 12, 2013, which remanded the Intervenor’s motion for appellate attorneys’ fees to this Court “to determine entitlement to and assess reasonable attorneys’ fees for this appellate proceeding.” (Intervenor’s Exhibit 49). Similarly, the Hillsborough Case has been held in abeyance pending this Court’s final determination on the Intervenor’s claims for attorneys’ fees and costs. (Intervenor’s Exhibit 42).

19. On June 3 and 24, 2013, this Court conducted an evidentiary hearing on the Intervenor’s motions for reasonable attorneys’ fees and costs, and for an incentive award. The Intervenor presented the testimony of five witnesses (i.e., David Caldevilla, J. Lester Kaney, J. Michael Lindell, Lorca Divale, and Jeffrey Water) and over 50 exhibits. The Defendant presented the testimony of one witness (i.e., Anthony Parrino) and two exhibits. In reaching the findings of fact contained herein, this Court considered the knowledge of the witnesses and experts and their demeanor and credibility and weighed the evidence accordingly.

II. Intervenor’s Request for Incentive Award

20. In a class action lawsuit, incentive awards are generally intended to compensate a party for its time and efforts, which benefit the class. Courts routinely approve incentive awards to compensate named plaintiffs for the services they provide and the risks they incur during the course of a class action. Perry v. FleetBoston Fin. Corp., 229 F.R.D. 105 (E.D. Pa. 2005); In re Southern Ohio Correction Facility, 175 F.R.D. 270, 272 (S.D. Ohio 1997).

21. An incentive award rewards a representative plaintiff’s work in support of the class, as well as for its promotion of the public interest. Muhammad v. National City Mortgage, Inc., 2008 WL 5377783, 9* (S.D. W. Va. Dec. 19, 2008).

22. The Florida state courts likewise acknowledge the right of a class representative to recover an incentive award. For example, in Altamonte Springs Imaging v. State Farm Insur. Co., 12 So.3d 850, 857 (Fla. 3rd DCA 2009) [34 Fla. L. Weekly D1110a], the court approved a $10,000 incentive award. There are also several published Florida circuit court opinions confirming that Florida trial courts routinely enter incentive awards in class action lawsuits. See, e.g., AFO Imaging, Inc. v. Peak Property & Casualty Ins. Corp., 17 Fla. L. Weekly Supp. 458b (Fla. 13th Jud. Cir. Ct. May 5, 2010) (final judgment reserving jurisdiction to determine the Plaintiff’s claims for reasonable attorneys’ fees and costs, and for serving as a class representative); Clearview Imaging, LLC v. Progressive Consumers Insurance Co., 14 Fla. L. Weekly Supp. 369a (Fla. 13th Jud. Cir. Ct. Aug. 15, 2006) (final judgment reserving jurisdiction to determine Plaintiff’s claims for reasonable attorneys’ fees and costs, and for serving as class representative); Brinkman v. Florida Public Utilities Co., 18 Fla. L. Weekly Supp. 390b (Fla. 15th Jud. Cir. Ct. Feb. 11, 2011) (approving incentive award to class representative for his contribution to the litigation).

23. Like class representatives, objectors and intervenors in a class action are also sometimes entitled to recover an incentive award. See, e.g., In re: Apple, Inc. Securities Litigation, 2011 WL 1877988 (N.D. Cal. 2011); Lonardo v. Travelers Indem. Co., 706 F.Supp.2d 766 (N.D.Ohio 2010); Dewey v. Volkswagen of America, 2012 WL 6586511 (D.N.J. 2012); Hartless v. Clorox Co., 273 F.R.D. 630 (S.D.Ca1.2011); Park v. Thomson Corp., 633 F.Supp.2d 8 (S.D.N.Y.2009); Machulsky v. Lilliston Ford, Inc., 2008 WL 2788073 (N.J.Super.A.D. 2008). In deciding whether an objector deserves an incentive award, the courts consider whether: (a) the objector’s particular efforts conferred a benefit on the class; (b) the objector incurred personal risk; and/or (c) the objector was substantively involved in the litigation. Dewey, 2012 WL at *19. In this case, each of these factors demonstrate that the Intervenor should receive an incentive award.

24. Among other things, the Intervenor’s efforts vastly improved the settlement for the class by objecting to unreasonable terms of the original settlement agreement and class notice, by appealing the preliminary approval of the original settlement agreement and the injunction contained therein, and by renegotiating and substantially rewriting the original settlement agreement (over a 4½ month time period) to refine the size and scope of the class, to increase the available recovery to the class members, to ensure that the class notice accurately described the amended settlement to the class members, to simplify the claims process, to eliminate the burdensome and unfair process for resolving future claims contained in the original settlement agreement, to narrow the release language, and by otherwise working in support of the class. Taking this additional time to object and renegotiate the settlement agreement, instead of simply opting-out of the original settlement, was done at the risk that the Intervenor’s own claims would be delayed indefinitely or rendered moot by the ever-present potential that the PIP benefits involved in those claims would be exhausted during the course of the litigation. (T 70, 198, 244). See, e.g., Sheldon v. United Services Auto. Ass’n, 55 So. 3d 593, 595-596 (Fla. 1st DCA 2010) [36 Fla. L. Weekly D23a] (insurer is not liable beyond PIP policy limit after benefits exhausted); Progressive American Ins. Co. v. Stand-Up MRI of Orlando, 990 So. 2d 3, 4 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D1746a] (absent bad faith, insurer is not exposed beyond policy limits after exhaustion of PIP benefits).

25. Although the Defendant seems to suggest the Plaintiff and the Defendant entered into the original settlement agreement by “mistake” and that the Intervenor merely corrected some “scrivener’s errors” contained in the original settlement agreement (See, e.g., T 24, 31, 78-79, 85-86), that suggestion lacks credibility and is contrary to the overwhelming weight of the evidence. If the original settlement agreement was indeed signed by mistake, the Defendant failed to produce the “correct” version they allegedly intended to sign. Moreover, the red-line reports showing the differences between the original and amended settlement documents, as well as the other exhibits and testimony describing the Intervenor’s renegotiation efforts, clearly confirm that many significant substantive revisions occurred. As such, Intervenor’s role in this case was comparable to that of a class representative, and was certainly not comparable to that of an anonymous class member who reaped an unexpected windfall from a class action settlement without participation or effort.

26. Under the facts and circumstances of this case, and in light of the Defendant’s agreement to pay a $5,000 incentive award to the Plaintiff for its role in securing the original settlement agreement, this Court finds that the Intervenor is entitled to recover an incentive award of $5,000.00, to be paid by the Defendant. This Court further finds that such an award is just, reasonable, and in the public interest, in view of the Intervenor’s successful efforts to vastly improve upon the settlement agreement for other class members and by assuming the risks of undertaking those efforts.

III. Intervenor’s Entitlement to Reasonable Attorneys’ Fees and Costs

27. In the Hillsborough Case, the Fifth DCA Appeal, and in this case, the Intervenor is seeking an award of reasonable attorneys’ fees and costs pursuant to Sections 627.736(8) and 627.428, Florida Statutes.

28. In pertinent part, Section 627.736(8), Florida Statutes states, “With respect to any dispute under the provisions of ss. 627.730-627.7405 between the insured and the insurer, or between an assignee of an insured’s rights and the insurer, the provisions of s. 627.428 shall apply. . . .”

29. Section 627.428(1), Florida Statutes states, “Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured’s or beneficiary’s attorney prosecuting the suit in which the recovery is had.”

30. As used in Sections 627.736(8) and 627.428(1), the word “shall” is mandatory. Fidelity and Deposit Co. of Maryland v. USAFORM Hail Pool, Inc., 465 F.Supp. 478 (M.D. Fla. 1979) (Section 627.428 “mandates the inclusion in the judgment of a reasonable sum as compensation for the claimants’ attorneys’ fees”). See also, State v. Harper, 792 So.2d 1243, 1245 (Fla. 2d DCA 2001) [26 Fla. L. Weekly D2123b] (statute’s use of the mandatory “shall” instead of the permissive “may” signifies required action); Stanford v. State, 706 So.2d 900, 902 (Fla. 1st DCA 1998) [23 Fla. L. Weekly D547b] (normal meaning of the word “shall” is mandatory); Fla. Tallow Corp. v. Bryan, 237 So.2d 308, 309 (Fla. 4th DCA 1970) (“The word ‘shall’ when used in a statute or ordinance has, according to its normal usage, a mandatory connotation”).

31. It is undisputed that in the Hillsborough Case, the Fifth DCA Appeal, and in this case, the Intervenor is an assignee of benefits from the Defendant’s PIP insureds. A health care provider pursuing a claim for PIP benefits as an insured’s assignee is entitled to an award of attorneys’ fees under the foregoing statutes. §627.736(8), Fla. Stat.; Superior Ins. Co. v. Libert, 776 So.2d 360 (Fla. 5th DCA 2001) [26 Fla. L. Weekly D381a].

32. As previously noted, the Defendant has stipulated that the Intervenor is entitled to recover its reasonable attorneys’ fees and costs concerning the Hillsborough Case, but disputes the Intervenor’s entitled to any attorneys’ fees and costs in this case or the Fifth DCA Appeal. The basis for this is the Defendant’s contentions that the original settlement agreement merely had some scrivener’s errors, that the Intervenor’s efforts in did not result in any benefit to the class, and that the Intervenor could have accomplished the changes it negotiated by simply sending a letter to the Plaintiff and the Defendant concerning the problems with the original settlement agreement. (See, e.g., T 24, 31, 78-79, 85-86).

33. This Court rejects the Defendant’s contentions that the Intervenor did not provide a significant benefit to the class and could have accomplished the changes by simply sending a letter. As previously noted, after the Intervenor appeared in this case, it took approximately 4½ months to negotiate the amended settlement documents. Those amended documents contain a legion of substantive changes, and the Intervenor’s efforts clearly benefited the class. Moreover, if, as the Defendant contends, the original settlement documents were simply signed by “mistake” and the changes negotiated by the Intervenor were merely comprised of correcting scrivener’s errors, it is rightly presumed that the Defendant could have (and would have) produced the “correct” settlement agreement they allegedly had intended to sign, signed it, and filed it with the Court, and would have efficiently and abruptly rendered the Intervenor’s objections moot. However, such a “correct” settlement agreement is absent from the record and has never been produced.

34. “An attorney whose actions have conferred a benefit upon a given group or class of litigants may file a claim for reasonable compensation for his efforts.” In re The Prudential Insurance Company of America Sales Practices Litig., 962 F.Supp.572, 593 (D.N.J. 1997). In a class action, “objectors are entitled to compensation for attorney’s fees if the settlement was improved as a result of their efforts.” In re AT&T Corp. Secs. Litigation., 2006 U.S. Dist. LEXIS 69086 (D.N.J. 2006) (quoting In re Prudential Ins. Co. of Am. Sales Practices, 273 F.Supp. 2d 563, 565 (D.N.J. 2003) and In re Domestic Air Transp. Antitrust Litig., 148 F.R.D., 297, 358 (N.D. Ga. 1993)).

35. If the objectors confer a benefit on the class, or “enhance the [class] recovery,” the courts have broad discretion in deciding what fees to award. See, e.g., In re Cendant Corp. Sec. Litig., 404 F.3d 173, 201 n.17 (3d Cir. 2005); Welch & Forbes, Inc. v. Cendant Corp., 243 F.3d 722, 743 (3d Cir. 2001). See also, Cardinal Health, Inc. Sec. Litig. v. This Document Relates To: All Securities Actions, 550 F.Supp. 2d 751, 753 (S.D. Ohio 2008) (“The Court has the discretion to award objector’s reasonable attorney’s fees” (citing Bowling v. Pfizer, Inc., 102 F.3d 777, 779 (6th Cir. 1996))). In short, if the settlement is improved as a result of the objector’s efforts, fees are appropriate and properly awardable by the Court. Spark v. MBNA Corp., 289 F.Supp. 2d 510, 513 (D. Del. 2003).

36. The overwhelming evidence confirms that the Intervenor’s efforts in the instant case and in the Fifth DCA Appeal substantially improved the original settlement, conferred a significant benefit on the class, and significantly enhanced the class’s recovery. Accordingly, the Intervenor is certainly entitled to recover an award of reasonable attorney’s fees and costs for the instant case and the Fifth DCA Appeal.

37. Moreover, because the Defendant has disputed the Intervenor’s entitlement to an award of attorneys’ fees and costs, attorneys’ fees are properly awardable for the Intervenor’s ongoing efforts in litigating the entitlement to attorneys’ fees. When an insurance company contests an insured’s entitlement to attorney’s fees, “this is still a claim under the policy and within the scope of section 627.428” and the attorneys’ services “are rendered in procuring full payment of the judgment, the insured does have an interest in the fee recovered.” See, e.g., State Farm Fire & Casualty Co. v. Palma, 629 So. 2d 830, 833 (Fla. 1993).

IV. Reasonable Attorneys’ Fees and Costs Concerning the Hillsborough Case

38. In making the determinations in this Section and in Sections V, and VI below, this Court has considered the factors set forth in Florida Rule of Professional Conduct 4-1.5(b), as well as the Statewide Uniform Guidelines for Taxation of Costs in Civil Actions.

39. Further, with respect to the determinations in this Section and in Sections V, and VI below, it should be noted that, in the both original and amended settlement agreements, the Defendant agreed it was reasonable to award attorneys’ fees to the Plaintiffs counsel in the amount $465,000. Plaintiff’s attorney testified that $465,000 amount was based on a $595 hourly rate, and a multiplier of 1.5 to 2.0. (Intervenor’s Exhibit 33 at p. 28-29; T 63). It is also noted that neither the Defendant nor the Defendant’s expert witness specifically identified any particular time entry, or group of time entries, or costs, the Defendant contends is unreasonable or otherwise improperly billed by the Intervenor’s attorneys.

40. Based on the time records (Intervenor’s Exhibits 21-25), the time keepers’ resumes (Intervenor’s Exhibits 4-18), affidavits of counsel (Intervenor’s Exhibits 26-30, 34), the expert testimony presented at the hearing, and other evidence presented, this Court finds that the greater weight of the evidence establishes that the reasonable hourly rates and reasonable amount of time expended by the Intervenor’s counsel in the Hillsborough Case are as follows:

Time Keeper	Actual Time Billed	Requested Hourly Rate	Reasonable Time	Reasonable Hourly Rate	Product
Craig E. Rothburd	37.60	$475	37.6	$450.00	$16,920.00
Jennifer Gardner	12.50	$200	12.5	$200.00	$2,500.00
Joshua Fredrickson	11.70	$125	11.7	$125.00	$1,375.00
Vivian Arenas-Battles	1.70	$495	1.7	$450.00	$765.00
David M. Caldevilla	41.30	$495	41.3	$450.00	$18,585.00
Kristin Y. Melton	1.5	$225	1.5	$225.00	$337.50
Michael R. Bray	46.00	$210	46.0	$210.00	$9,660.00
Susan L. Levine	28.00	$125	28.0	$125.00	$3,500.00
Scott R. Jeeves	45.90	$475	45.9	$450.00	$20,655.00
Lorca J. Divale	116.55	$375	116.55	$375.00	$43,706.25
Reasonable Lodestar Amount for Hillsborough Case:	$118,003.75

41. Based on the evidence of the costs incurred by the Intervenor’s counsel (Intervenor’s Exhibits 21-30, 34-35) and other evidence presented, this Court finds that the greater weight of the evidence establishes that the reasonable and necessary costs incurred by the Intervenor’s counsel in the Hillsborough Case are as follows:

Law Firm	Amount Requested	Amount Awarded
Craig E. Rothburd, P.A.	$7,532.18	$1,532.18 *
Jeeves Law Group, P.A.	$3,200.00	$3,200.00
de la Parte & Gilbert, P.A.	$257.88	$257.88
Divale Law Group, P.A.	$1,280.00	$1,280.00
Total Costs Awarded for Hillsborough Case:	$6,270.00

* Reduced by $2,500.00 and $3,500.00 for Kaney and Lindell expert fee advance to avoid duplication.

V. Reasonable Attorneys’ Fee Lodestar and Costs Concerning the Instant Case

42. Based on the time records (Intervenor’s Exhibits 21-25), the time keepers’ resumes (Intervenor’s Exhibits 4-18), affidavits of counsel (Intervenor’s Exhibits 26-30, 34), the expert testimony presented at the hearing, and other evidence received, this Court finds the greater weight of the evidence establishes that the reasonable hourly rates and reasonable amount of time expended by the Intervenor’s counsel in the instant case are as follows:

Time Keeper	Actual Time Billed	Requested Hourly Rate	Reasonable Time Awarded	Reasonable Hourly Rate Awarded	Product
Craig E. Rothburd	139.90	$475	139.9	$450.00	$62,955.00
Joshua Fredrickson	16.60	$125	16.6	$125.00	$2,075.00
David M. Caldevilla	160.40	$495	160.4	$450.00	$72,180.00
Michael R. Bray	18.50	$210	18.5	$210.00	$3,885.00
Christopher C. Johnson	14.00	$140	14.0	$140.00	$1,960.00
Susan L. Levine	120.60	$125	120.6	$125.00	$15,075.00
Scott R. Jeeves	50.00	$475	41.0	$450.00	$18,450.00 *
Lorca J. Divale	46.90	$375	38.9	$375.00	$14,587.50 *
Robert L. McLeod	41.73	$330	41.7	$330.00	$13,761.00
Reasonable “Lodestar” Fee Amount for the Instant Case:	$204,928.50

* Per Kaney testimony

43. Based on the evidence of the costs incurred by the Intervenor’s counsel (Intervenor’s Exhibits 21-30, 34-35) and other evidence presented, this Court finds the greater weight of the evidence establishes that the reasonable and necessary costs incurred by the Intervenor’s counsel in the instant case are as follows:

Law Firm	Amount Requested	Amount Awarded
Craig E. Rothburd, P.A.	$0.00	$0.00
Jeeves Law Group, P.A.	$1,623.44	$1,623.44
de la Parte & Gilbert, P.A.	$4,324.60	$4,324.60
Divale Law Group, P.A.	$0.00	$0.00
The McLeod Firm	$314.694	$314.69
Total Costs Awarded for Instant Case:	$6,262.73

VI. Reasonable Attorneys’ Fee Lodestar and Costs Concerning the Fifth DCA Appeal

44. Based on the time records (Intervenor’s Exhibits 21-25), the time keepers’ resumes (Intervenor’s Exhibits 4-18), affidavits of counsel (Intervenor’s Exhibits 26-30, 34), the expert testimony presented at the hearing, and other evidence presented, this Court finds the greater weight of the evidence establishes that the reasonable hourly rates and reasonable amount of time expended by the Intervenor’s counsel in the Fifth DCA Appeal are as follows:

Time Keeper	Actual Time Billed	Requested Hourly Rate	Reasonable Time	Reasonable Hourly Rate	Product
David M. Caldevilla	10.40	$495	10.4	$450.00	$4,680.00
Nicolas Q. Porter	31.70	$325	31.7	$325.00	$10,302.50
Michael R. Bray	4.30	$210	4.3	$210.00	$903.00
Susan L. Levine	29.30	$125	29.3	$125.00	$3,662.50
Reasonable Lodestar Amount for Fifth DCA Appeal:	$19,548.00

45. Based on the evidence of the costs incurred by the Intervenor’s counsel (Intervenor’s Exhibits 21-30, 34-35) and other evidence presented, this Court finds that the greater weight of the evidence establishes that the reasonable and necessary costs incurred by the Intervenor’s counsel in the instant case are as follows:

Law Firm	Amount Requested	Amount Awarded
Craig E. Rothburd, P.A.	$0.00	$0.00
Jeeves Law Group, P.A.	$0.00	$0.00
de la Parte & Gilbert, P.A.	$626.91	$626.91
Divale Law Group, P.A.	$0.00	$0.00
The McLeod Firm	$0.00	$0.00
Total Costs Awarded for Fifth DCA Appeal:	$621.91

VII. Lodestar Multipliers

46. The Intervenor’s attorneys were retained on a contingency fee basis (Intervenor’s Exhibit 3), and they are seeking the award of a lodestar multiplier or enhancement.

47. In Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla.1985), the Florida Supreme Court adopted the federal lodestar approach for awarding reasonable attorneys’ fees, and addressed the ability to recover a multiplier.

48. The Florida Supreme Court subsequently refined the standards for recovering a multiplier in Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828 (Fla.1990). The Quanstrom decision identified three categories of cases, for purposes of deciding when it is and is not appropriate to apply a lodestar multiplier: (a) public policy enforcement cases, (b) tort and contract cases, and (c) family law, eminent domain, and estate and trust proceedings. Id., 555 So.2d at 833-835.

49. Under the second category of cases described by Quanstrom (tort and contract cases), the trial court must consider three factors in deciding whether to award a multiplier:

The second category concerns principally tort and contract cases. Here, we reaffirm the principles set forth in Rowe, including the code provisions, and find that 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 Rowe 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. We find that the multiplier is still a useful tool which can assist trial courts in determining a reasonable fee in this category of cases when a risk of nonpayment is established.

Id., 555 So.2d at 834. Accord, Bell v. U.S.B. Acquisition Co., 734 So.2d 403, 412 (Fla.1999) [24 Fla. L. Weekly S220a].

50. Post-Quantstrom case law has explained how to go about proving that the relevant market requires a contingency fee multiplier to obtain competent counsel. As explained by the Fourth DCA, in order to prove that factor, “there must be evidence that a contingent fee arrangement was necessary in order for the prevailing party to have obtained competent counsel if a multiplier is to be imposed on the nonprevailing party.” Simmons v. Royal Floral Distributors, Inc., 724 So.2d 99, 99 (Fla. 4th DCA 1998) [23 Fla. L. Weekly D1181a]. This holding from Simmons was subsequently quoted with approval by the Florida Supreme Court in Bell, 734 So.2d at 410. Similarly, in Transflorida Bank v. Miller, 576 So.2d 752, 753 (Fla. 4th DCA 1991) and Pompano Ledger, Inc. v. Greater Pompano Beach Chamber of Commerce, Inc., 802 So.2d 438, 439 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D2909c], the Fourth DCA explained that the question is “whether contingency agreements are customarily used in the type of circumstances involved and whether there is support in the record for a conclusion that the prevailing party would otherwise be unable to afford competent counsel.”

51. Moreover, in Massie v. Progressive Express Insurance Co., 25 So.3d 584, 585 (Fla. 1st DCA 2009) [34 Fla. L. Weekly D2364b], rev. dism., 32 So.3d 60 (Fla.2010), the First DCA held that a client’s testimony is unnecessary, because “expert testimony that a party would have difficulty securing counsel without the opportunity for a multiplier supports a multiplier’s imposition.” Likewise, in McCarthy Brothers Co. v. Tilbury Construction Inc., 849 So.2d 7, 10 (Fla. 1st DCA 2003) [28 Fla. L. Weekly D736b], the First DCA held that a trial court appropriately applied a multiplier because the prevailing party “presented expert testimony that it would have been difficult to find an attorney willing to take its case without the opportunity for a multiplier.”

52. Notably, neither the Florida Supreme Court nor any of the district courts of appeal have ever expressed any disagreement with the standards of proof described in Simmons, Transflorida, Pompano Ledger, Massie, and McCarthy Brothers.⁵

53. As required by Quanstrom, the Intervenor demonstrated that a contingency fee arrangement and multiplier was necessary in order for the Intervenor to have obtained competent counsel, as that factor is described in Quanstrom, Bell, Simmons, Transflorida, Pompano Ledger, Massie, and McCarthy Brothers. Among other things, the overwhelming weight of the evidence established that the Intervenor was unable to afford to retain counsel on an hourly rate basis in litigation such as this (T 69-70, 129, 197-198, 240; Intervenor’s Exhibit 31), that there are a very limited number of class action lawyers familiar with the PIP fee schedule and OPPS issues (T 68, 108, 115-116, 140), and that no class action lawyers would accept a case like this on a contingency fee basis without the potential of receiving a lodestar multiplier or enhancement (T 129-131, 133, 210, 230).

54. It should be noted that this litigation involves the important legal and public policy issue of whether an insurance company can expressly promise in its insurance policy to pay PIP benefits based on the “reasonable” amount of a health care provider’s charges, but then pay a much lower amount based exclusively on a fee schedule methodology not mentioned anywhere in their insurance policy. This issue is also commonly known as “the Kingsway issue” or the “fee schedule issue.”

55. In Kingsway Amigo Ins. Co. v. Ocean Health, Inc., 63 So.3d 63 (Fla.4th DCA 2011) [36 Fla. L. Weekly D1062a], the Fourth DCA held a PIP insurance company cannot pay for health care expenses based on the permissive fee schedule method created in the 2008-2012 versions of Section 627.736(5)(a)2, Florida Statutes when its insurance policy only promises to pay health care expenses based on the reasonable amount method of Section 627.736(1)(a) and (5)(a)1, Florida Statutes. The Kingsway decision was issued on May 18, 2011, long before the instant lawsuit and the Hillsborough Case were filed.

56. The Third DCA subsequently agreed with Kingsway in Geico Indem. Co. v. Virtual Imaging Services, Inc., 79 So.3d 55 (Fla. 3d DCA 2011) [36 Fla. L. Weekly D2597a] (“Virtual I”), and Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., 90 So.3d 321 (Fla. 3rd DCA 2012) [37 Fla. L. Weekly D985b] (“Virtual II”). Most recently, the Florida Supreme Court has ended any possible debate by approving Kingsway and its progeny in Geico Gen. Ins. Co. v. Virtual Imaging Services, Inc., ___ So. 3d ___, 2013 WL 3332385 (Fla. July 3, 2013) [38 Fla. L. Weekly S517a] (“Virtual III”). Of course, none of these decisions were in place when the Intervenor originally filed its class action lawsuit against Esurance in the Hillsborough Case.

57. The great public importance of the fee schedule issue has been acknowledged by Florida appellate courts. In Virtual II, the Third DCA certified the question as a matter of great public importance to the Florida Supreme Court, which accepted the case on that basis in Virtual III. In Virtual III, the Florida Supreme Court allowed numerous amicus curiae briefs on the issues (including that of Intervenor, MRI Associates of St. Pete, Inc. and many other interested parties). Id., 2013 WL 3332385 at fn. 1. Likewise, before the question was certified as a matter of great public importance to the Florida Supreme Court, the issue had previously been certified as a matter of great public importance by many county court judges, including those described in Kingsway, 63 So.3d at 64, Virtual I, 79 So.3d at 56, and Virtual II, 90 So.3d at 322.

58. Thus, this litigation is not an ordinary “run-of-the-mill” PIP case as was implied. To the contrary, this was an exceptional case, with significant public policy implications and a genuine potential for non-recovery. The Intervenor’s attorneys were retained on a contingency fee basis (Intervenor’s Exhibit 3), and they were unable to mitigate the risk of non-payment if the claim did not succeed. (T 70, 133-134, 198, 202, 244). Accordingly, this case easily qualifies under Quanstrom as a public policy enforcement category case, or a tort and contract category case.

59. The Florida Supreme Court has approved multiplier awards in important cases like these. Indeed, both Quanstrom and State Farm Fire & Casualty Co. v. Palma, 555 So.2d 836 (Fla. 1999) [28 Fla. L. Weekly D688b] were both PIP disputes where the Florida Supreme Court approved multiplier awards.

60. Accordingly, assuming arguendo the public policy enforcement category does not apply, this Court finds that the greater weight of the evidence established the relevant market requires a contingency fee multiplier to obtain competent counsel; that the Intervenor and its counsel were unable to mitigate the risk of nonpayment; and that the factors outlined in Rowe and Florida Rule of Professional Conduct 4-1.5(b)(1)(A)-(H), (including but not limited to the amount involved, the results obtained, and the existence of a contingency fee arrangement between the Intervenor and its counsel) weigh heavily in favor awarding a multiplier to the Intervenor.

61. Under the guidelines set forth in Quanstrom, the amount of the multiplier awarded is determined as follows:

(a) If the trial court determines that success was more likely than not at the outset, it may apply a multiplier of 1.0 to 1.5;

(b) if the trial court determines that the likelihood of success was approximately even at the outset, it may apply a multiplier of 1.5 to 2.0; and

(c) if the trial court determines that success was unlikely at the outset of the case, it may apply a multiplier of 2.0 to 2.5.

62. The appropriate time frame for determining entitlement to a multiplier is when the client is seeking to employ counsel. Michnal v. Palm Coast Development, Inc., 842 So.2d 927, 934 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D688b]. This is important because the Hillsborough Case was filed before the Kingsway decision was issued on May 18, 2011, and the Intervenor appeared in this case and filed the Fifth DCA Appeal after that date.

63. The Intervenor’s expert witness, J. Michael Lindell, Esquire, opined that: (a) for the Hillsborough Case, the likelihood of success was approximately even at the outset and that a reasonable multiplier should be 1.75; (b) for the instant case, the likelihood of success was approximately even at the outset and that a reasonable multiplier should be 1.50; and (c) for the Fifth DCA Appeal, success was more likely than not at the outset and that a reasonable multiplier should be 1.25. (T 135-137). The Defendant’s expert, Anthony Parrino, Esquire, contended that no multiplier should be awarded, and therefore, he offered no opinions concerning the Intervenor’s likelihood of success or the appropriate multiplier, if awarded.

64. Likelihood of Success for Hillsborough Case: This Court finds that the Intervenor’s likelihood of success at the outset of the Hillsborough Case was as follows:

__X__ Success was more likely than not at the outset (Range: 1.0 to 1.5).

_____ Success was approximately even at the outset (Range: 1.5 to 2.0).

_____ Success was unlikely at the outset (Range: 2.0 to 2.5).

Accordingly, the Court finds, based on the greater weight of the evidence, that a reasonable and appropriate multiplier to be awarded to the Intervenor for the Hillsborough Case is 1.5 .

65. Likelihood of Success for the Instant Case: This Court finds that the Intervenor’s likelihood of success at the outset of the instant case was as follows:

__X__ Success was more likely than not at the outset (Range: 1.0 to 1.5).

_____ Success was approximately even at the outset (Range: 1.5 to 2.0).

_____ Success was unlikely at the outset (Range: 2.0 to 2.5).

Accordingly, the Court finds, based on the greater weight of the evidence, that a reasonable and appropriate multiplier to be awarded to the Intervenor for the instant case is 1.3 .

66. Likelihood of Success for the Fifth DCA Appeal: This Court finds that the Intervenor’s likelihood of success at the outset of the Fifth DCA Appeal was as follows:

__X__ Success was more likely than not at the outset (Range: 1.0 to 1.5).

_____ Success was approximately even at the outset (Range: 1.5 to 2.0).

_____ Success was unlikely at the outset (Range: 2.0 to 2.5).

Accordingly, the Court finds, based on the greater weight of the evidence, that a reasonable and appropriate multiplier to be awarded to the Intervenor for the Fifth DCA Appeal is 1.1 .

VIII. Reasonable Expert Witnesses Fees

67. In addition to the foregoing, the Court finds that the Intervenor is entitled to an award of fees for the services rendered by its expert witnesses, J. Lester Kaney, Esquire and J. Michael Lindell, Esquire, in the following amounts, which the Court finds are reasonable:

Expert	Actual Time Billed	Requested Hourly Rate	Reasonable Time Awarded	Reasonable Hourly Rate Awarded	Amount Awarded
J. Lester Kaney	Approx. 16.0	$330.00	16.00	$330.00	$5,280.00
J. Michael Lindell	Approx. 15.0	$325.00	15.00	$325.00	$4,875.00
Reasonable Expert Witness Fees:	$10,155.00

IX. Conclusion

68. In conclusion, the Intervenor’s “Renewed, Amended, and Supplemental Motion for Attorneys’ Fees and Costs” (dated Feb. 15, 2013) and “Motion for Incentive Award” (dated Feb. 22, 2013) are hereby GRANTED.

69. The following is a summary of the incentive award, attorneys’ fees, and costs set forth above and awarded herein:

Item	Amount Awarded
Incentive Award (See Section II above)	$5,000.00
Hillsborough Case—Lodestar attorney’s fee amount, enhanced by multiplier (See Sections IV and VII above)	$177,005.62
Hillsborough Case—Costs (See Section IV above)	$6,270.00
Instant Case—Lodestar attorneys’ fee amount, enhanced by multiplier. (See Sections V and VII above)	$266,407.05
Instant Case—Costs (See Section V above)	$6,262.73
Fifth DCA Appeal—Lodestar attorneys’ fee amount, enhanced by multiplier (See Sections VI and VII above)	$21,502.80
Firth DCA Costs (See Section VI above)	$621.91
Expert Fees (See Section VIII)	$10,155.00
Total Award:	$493,225.17

70. Accordingly, the Intervenor shall recover from the Defendant the total sum of $493,225.17, which shall bear interest at the rates established by the Florida Department of Financial Services pursuant to Section 55.03, Florida Statutes (see, www.myfloridacfo.com/Division/AA/Vendors/default.htm), for which sum, let execution issue.

71. The Defendant may tender its check payable to “de la Parte & Gilbert, P.A. Trust Account,” and deliver it in care of David M. Caldevilla, Esquire, P.O. Box 2350, Tampa, FL 33601-2350, and Mr. Caldevilla shall be responsible for disbursing the proceeds among the Intervenor and its respective attorneys and experts.

__________________

¹Citations herein to “T” refer to the transcript of the hearing conducted on June 3 and 24, 2013.

²See, Section II herein for a discussion of incentive awards.

³See, McLeod’s “Second Supplemental Affidavit of Attorneys’ Fees and Costs” dated July 9, 2013.

⁴See, McLeod’s “Second Supplemental Affidavit of Attorneys’ Fees and Costs” dated July 9, 2013.

⁵The case of Progressive Express Ins. Co. v. Schultz, 948 So.2d 1027 (Fla. 5th DCA) [31 Fla. L. Weekly D2610a], rev. den., 966 So.2d 968 (Fla. 2007), is distinguishable from the instant case. Schultz involved a situation where a health care provider was awarded $193,750, based on a 2.5 multiplier, in a single PIP suit concerning a $1,315 amount in controversy. The Fifth DCA held that the underlying PIP dispute was “hardly unusual” and “fairly unremarkable,” and that there was no evidence “to suggest that [the health care provider] had any difficulty obtaining competent counsel to pursue his PIP claim. . . .” Schultz, 948 So.2d at 1030. Ultimately, the Fifth DCA found that the award was a “manifest injustice” and “offends even the most hardened appellate conscience[.]” Id. at 1033. The instant case involves class action litigation, and the overwhelming weight of the evidence established that the Intervenor was unable to afford to retain counsel on an hourly rate basis in litigation such as this (T 69-70, 129, 197-198, 240; Intervenor’s Exhibit 31), that there are a very limited number of class action lawyers familiar with the PIP fee schedule and OPPS issues (T 68, 108, 115-116, 140), and that no class action lawyers would accept a case like this on a contingency fee basis without the potential of receiving a lodestar multiplier or enhancement (T 129-131, 133, 210, 230).

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