25 Fla. L. Weekly Supp. 136a
Online Reference: FLWSUPP 2502TRUDAttorney’s fees — Proposal for settlement — Trial court did not err in denying insured’s claim for attorney’s fees under section 768.79 based on insurer’s rejection of insured’s proposal for settlement of ongoing litigation over amount of attorney’s fees awardable to insured under section 627.428 following insured’s successful action against insurer — Insured could not recover fees incurred in litigating amount of fees
JEFFREY K. TRUDELL, Appellant, v. THE TRAVELERS HOME AND MARINE INSURANCE COMPANY, Appellee. Circuit Court, 10th Judicial Circuit (Appellate) in and for Hardee, Highlands, and Polk County. Case No. 2011AP-000007. L.T. Case No. 2009CC-001869. December 21, 2016. Robert Fegers, Judge. Counsel: Thomas C. Saunders, Saunders Law Group, Bartow, for Appellant. Michael C. Clarke, Kubicki Draper, P.A., Tampa, for Appellee.
[Lower Court Order Published at 19 Fla. L. Weekly Supp. 200a]
OPINION OF THE COURT
(JACOBSEN, Judge.) This is an appeal from the County Court of Polk County, Judge Robert Fegers presiding. Appellant, Jeffrey K. Trudell appeals the Order Granting Defendant’s Motion to Strike and Response to Plaintiff’s Motion for Entry of Final Judgment for Attorney’s Fees and Cost Pursuant to Proposal for Settlement, entered by the trial court on October 14, 2011. This Court has jurisdiction. See Fla. R. App. P. 9.030(c).Issues
Appellant asserts that the trial court erred in denying his claim for attorney’s fees under §768.79, Florida Statutes, as a sanction against Appellee for its failure to accept a demand for judgment. Appellant argues that the fees were proper as a sanction because the judgement against Appellee was far greater than at least 25% of the offer to settle.Facts
Sometime during the night of May 21, 2008, or into the early morning of May 22, 2008, Appellant’s vehicle was stolen from his driveway. Within a week of the theft, Appellant’s stolen vehicle was recovered. An inspection of the vehicle revealed that it had sustained both body damage and engine damage.
At the time of the theft, Appellant was insured under a policy of insurance issued to him by Appellee (an insurance carrier). Appellant filed a claim with Appellee for the damages sustained by his motor vehicle. After Appellee investigated the claim, it determined that the body damage sustained by the vehicle was covered by the insurance policy, but that the engine damage sustained by the vehicle was not covered because it was pre-existing. Appellee refused to cover the pre-existing portion of the claim.
The repair for the body damage was calculated to be $643.28 and the estimate for repair of the engine damage was $3,355.89. In light of Appellee’s conclusion that the engine damage was “pre-existing”, it offered Appellant only $143.28 in damages ($643.28 for repair of the body damage minus a $500.00 deductible). Appellee refused to cover the estimated $3,355.89 for engine repair. As a result, Appellant sought the services of an attorney to prosecute his claim. Eventually, attorney Thomas C. Saunders, Esquire, of the Saunders Law Group, undertook representation of Appellant.
On April 8, 2009, Mr. Saunders filed a complaint on Appellant’s behalf in the Small Claims Court of the Tenth Circuit, in and for Polk County, Florida. The Complaint sought damages in the amount of $3,355.87 for the cost of repairs to the vehicle’s engine. In addition, Appellant’s Complaint also sought attorney’s fees pursuant to §627.428, Florida Statutes, against Appellee.
Appellee initially did not respond to the Complaint and a Motion for Default was filed on May 29, 2009. A Default was entered by the clerk on June 2, 2009. On October 1, 2009, Appellee filed a Motion to Set Aside Default. The Motion to Set Aside Default was granted by the trial court’s order of May 12, 2010.
In December 2010, Appellee agreed to satisfy Appellant’s claim for the engine damage sustained by his vehicle, together with interest. Appellee also stipulated that Appellant and his attorney were entitled to statutory attorney fees pursuant to §627.428, Florida Statutes. Appellee paid Appellant his entire claim and it was agreed that the trial court would retain jurisdiction for the determination of the amount of attorney’s fees to be paid to Mr. Saunders. Litigation and discovery then ensued concerning the amount of attorney’s fees to be awarded to Mr. Saunders.
During the attorney’s fee stage of the proceedings, Appellant propounded to Appellee a Proposal for Settlement (offer of judgment) pursuant for §768.79, Florida Statutes, and Florida Rules of Civil Procedure 1.442. In it, Mr. Saunders offered to resolve the ongoing litigation for $10,000 in attorney’s fees to be paid by Appellee to the Saunders Law Group. Appellee did not accept the Proposal for Settlement. As a result, the parties engaged in a significant, and very voluminous, amount of discovery. Eventually a hearing was conducted for the determination of the amount of attorney’s fees to be awarded to the Saunders Law Group for its representation of Appellant at the trial level. The hearing extended over a 3 day period beginning on April 27, 2011, and continuing on April, 29, 2011 and May 2, 2011.
On June 17, 2011, Judge Fegers entered a 27 page Final Judgment as to Attorney Fees and Costs in which he concluded that the Saunders Law Group was entitled to reasonable attorney’s fees in the amount of $8,602.00, based on the time spent at a reasonable billing rate. In light of the fact that the Saunders Law Group had undertaken its representation of Appellant on a contingency fee basis, the trial court was requested to consider an enhancement of the attorney’s fees award pursuant to Standard Guarantee Insurance Company v. Quanstrom, 555 So. 2d 828 (Fla. 1990). Thus, the $8,602.00 determined to be a reasonable attorney’s fee became the lodestar figure. Under the Quanstrom decision, a court is directed to use a multiplier from 1.0 to 2.5 if the court determines that a multiplier is appropriate. In this case, Judge Fegers determined that a multiplier was appropriate and concluded that the multiplier should be 2.25. Thus, the trial court awarded the Saunders Law Group $19,354.50 for attorney’s fees and an additional $869.85 for taxable costs, resulting in a total final judgment of $22, 224.35.
On June 22, 2011, Appellant filed with the court a copy of the Proposal for Settlement (in the amount of $10,000) which had been propounded upon Appellee after Appellee had satisfied Appellant’s insurance claim, but before the protracted discovery occurred concerning the amount of attorney’s fees to be awarded to Appellant’s attorneys pursuant to §627.428, Florida Statutes. A hearing was conducted by the trial court on August 18, 2011, in regard to Appellant’s claim for attorney’s fees pursuant to §768.79, Florida Statutes, and Appellee’s response thereto. On October 14, 2011, the trial court entered its Order Granting Defendant’s Motion to Strike and Response to Plaintiff’s Motion for Final Judgment for Attorney’s Fees and Costs Pursuant to Proposal for Settlement.
Standard of Review
The standard of review for trial court’s ruling on a motion to tax attorney’s fees and costs pursuant to an offer of judgement statute is de novo. See Jacksonville Golfair Inc. v. Grover, 988 So. 2d 1225 (Fla. 1st DCA 2008) [33 Fla. L. Weekly D2026a].
Analysis/Conclusion
Appellant argues that the trial court erred by denying his claim for attorney’s fees under §768.79, Florida Statutes. Appellant claims that the fees are a sanction against Appellee for its unreasonable refusal to accept his Proposal for Settlement in the amount of $10,000.00 for attorney’s fees under §627.428, Florida Statutes. Recently, the Fourth District Court of Appeals stated that “the purpose of §768.79 is to lead litigants to settle by penalizing those who decline offers that satisfy the statutory requirements. Encouraging settlement lowers litigation costs for the parties, and reduces the fiscal impact of litigation on the court system”. MYD Marine Distributor Inc. v. International Paint Ltd., 187 So. 3d 1285, 1286 (Fla. 4th DCA 2016) [41 Fla. L. Weekly D2364a] (citing Allstate Property & Casualty Insurance Company v. Lewis, 14 So. 3d 1230, 1235 (Fla. 1st DCA 2009) [34 Fla. L. Weekly D1326c]). Here, Appellee’s refusal to settle resulted in the expenditure of a huge amount of time and effort, and eventually led to a Final Judgment for Attorney’s Fees and Court Costs in the amount of $22,224.35.
In State Farm Fire & Casualty Co. v. Palma, 629 So. 2d 830 (Fla. 1993), the Florida Supreme Court previously held that attorney’s fees are not available for the time spent litigating the amount of fees to be awarded. In Oruga Corporation, Inc., v. AT&T Wireless of Florida, 712 So. 2d 1141, 1145 (Fla. 3d DCA 1998) [23 Fla. L. Weekly D1401a] (citing Palma, 629 So. 2d at 833)), the Third District Court of Appeals stated:
We do not believe that an award of attorney’s fees for litigating the amount of attorney’s fees, comports with the purpose of this statute [F.S. 768.79]. Such work inures exclusively to the attorney’s benefit and does not serve to encourage the parties to expeditiously resolve their differences short of a trial.
Further, it has been held that the time spent litigating the appropriateness of a fee multiplier in an action for no-fault benefits (awardable pursuant to Standard Guarantee Insurance Company v. Quanstrom, 555 So.2d 828 (Fla. 1990)) is not recoverable. State Farm Mutual Automobile Insurance Company v. Trevino, 904 So.2d 495 (Fla. 2d DCA 2005) [30 Fla. L. Weekly D1239b].
Appellant asserts that the Palma line of cases do not control the situation presently before the court because §768.79, Florida Statutes, provides for a sanction to be imposed when a party unreasonably rejects a proposal for settlement and necessitates the expenditure of time and expense to reach a conclusion of the litigation. Appellant argues that he did not seek to recover attorney’s fees for the time and effort spent litigating the amount of his fees or the appropriateness of a multiplier under §627.428, Florida Statute. Instead, Appellant maintains that he sought to recover attorney’s fees as a sanction against Appellee for rejecting the Proposal for Settlement that was 25% less the eventual final judgment for attorney’s fees and court costs imposed against Appellee.
Appellant relies on Condren v. Bell, 853 So. 2d 609, 610 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D2176b], wherein the Forth District Court of Appeals allowed for the imposition of a fee award for litigating the issue of fees as a sanction because it did “not run afoul of State Farm Fire & Cas. Co. v. Palma, 629 So.2d 830 (Fla. 1993) . . . .” However, in Cox v. Great American Insurance Company, 88 So. 3d 1048 (Fla. 4th DCA 2012) [37 Fla. L. Weekly D686a], the Forth District Court of Appeals explained and receded from its earlier Condren decision. Furthermore, the Condren opinion was also distinguished by the Second District Court of Appeal in Wight v. Wight, 880 So. 2d 692 (Fla. 2d DCA 2004) [29 Fla. L. Weekly D1046b].
The issue of seeking fees for fees, where the fees being sought are sanctions to be imposed, was most recently addressed by the Forth District Court of Appeal in Palm Beach Polo Holdings v. Stewart Title Guaranty Company, 132 So. 3d 858, 862 (Fla. 4th DCA 2014) [39 Fla. L. Weekly D139a]. There, the Forth District Court of Appeal concluded that “[a]lthough fees incurred in litigating entitlement to attorneys’ fees under section 768.79 are authorized, fees incurred in litigating the amount of fees are not recoverable.” The Court cited to Oruga Corp v. AT&T Wireless of Fla. Inc., 712 So.2d 1141 (Fla. 3d DCA 1998) [23 Fla. L. Weekly D1401a], and State Farm Fire & Casualty Co., v. Palma, 629 So. 2d 830 (Fla. 1993), as establishing the law in Florida that one cannot recoup attorney’s fees for the time and effort spent in establishing those fees.
Based on the above, the trial court’s Order Granting Defendant’s Motion to Strike and Response to Plaintiff’s Motion for Entry of Final Judgment for Attorney’s Fees and Cost Pursuant to Proposal for Settlement is AFFIRMED.
