26 Fla. L. Weekly Supp. 637a
Online Reference: FLWSUPP 2608ZUNIInsurance — Homeowners — Water intrusion — Attorney’s fees — Contingency multiplier — Multiplier permitted in award of fees where liability in case was certain to be contested and evidence showed relevant market required the prospect of multiplier to secure competent counsel — Court’s findings that client was unable to pay hourly fees and could proceed only on pure contingency fee basis also support application of multiplier — Where, from the vantage point of counsel, prospect of recovery was “more likely than not” the court has discretion to award a multiplier of 1 to 1.5
ROMAN SILVA ZUNIGA, Plaintiff, v. CITIZENS PROPERTY INSURANCE CORPORATION, Defendants. Circuit Court, 11th Judicial Circuit in and for Miami-Dade County. Civil Division. Case No. 16-10932 CA 22. October 11, 2018. Michael A. Hanzman, Judge.
FINAL JUDGMENT FOR ATTORNEY’S FEES AND COSTS
Plaintiff, Roman Silva Zuniga (“Zuniga”), brought this first party breach of contract action against his homeowner’s insurer, Citizens Property Insurance Company (“Citizens”), seeking to recover damages for a water loss that — according to Zuniga — was caused by a wind/rain event. Citizens denied coverage upon concluding that this loss was caused not by a “covered peril,” but due to ordinary “deterioration, wear and tear.” So the single issue litigated was whether the water damage to Zuniga’s home resulted from a “peril created opening” and was thus “covered,” or from ordinary “wear and tear” and therefore “excluded” under the policy. On July 10, 2017 the case proceeded to trial, resulting in a verdict awarding Zuniga the sum of $18,657.69. On July 28, 2017 the Court’s predecessor (Judge Ruiz) entered Final Judgment in favor of Zuniga for the amount of $20,771.05.
Zuniga (or more appropriately his counsel) now seeks “reasonable” attorney’s fees and costs pursuant to Florida Statute § 627.428, which provides:
(1) 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.
Id. As a “reasonable” fee Zuniga asks for a “Lodestar” of $208,000 and a contingency fee “multiplier.” See Florida Patient’s Comp. Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985); Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990). Zuniga also seeks costs in the amount of $19,189.24.1
The Court has on two occasions expressed its views on contingency fee multipliers in general and — in particular — when one may be warranted. See Jurado v. Fidelity National Property and Casualty Insurance Co., 24 Fla. L. Weekly Supp. 223a (11th Jud. Cir., April 22, 2016) (Hanzman, J); Coley v. Gulfstream Property and Casualty Insurance Co., 25 Fla. L. Weekly Supp. 1008a (11th Jud. Cir., Mar. 9, 2018) (Hanzman, J). Without repeating those views again, it will suffice to say that multipliers are intended to “level the playing field” and should be applied only when record evidence establishes that: (a) the client required contingency fee representation; and (b) competent counsel could not be secured on a contingency fee basis sans the prospect of recovering a reasonable fee paid by the defendant together with a “multiplier.” See Michnal v. Palm Coast Dev., Inc., 842 So. 2d 927 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D688b]; Joyce v. Federated Nat’l Ins. Co., 228 So. 3d 1122 (Fla. 2017) [42 Fla. L. Weekly S852a] (the proper question to be considered is “whether there are attorneys in the relevant market who both have the skills to handle the case effectively and who would have taken the case absent the availability of a contingency fee multiplier”).
As the Court noted in Coley, the most obvious case where a “multiplier” may be justified is one where “proving liability will be difficult and the potential recovery is small,” as “[i]n such a case the lawyer’s ‘upside’ (absent the possibility of a multiplier to be paid by her client’s adversary) would be either a percentage of a modest recovery or a ‘lodestar’ award pursuant to a fee shifting statute.” Coley, supra. As a result, “the prospect of a multiplier to be paid by the client’s adversary might be needed to secure representation because, quite simply, most law firms are not in the habit of taking on difficult contingent fee cases when the greatest possible ‘upside’ is receipt of their regular hourly rates if successful.” Id. This is arguably such a case, as liability was certain to be contested and the potential recovery was modest. It also is undeniable that Zuniga required a pure contingency fee contract, and the evidence persuades the Court (barely) that the relevant market required the prospect of a contingency fee multiplier to secure competent counsel. Joyce v. Federated Nat’l Ins. Co., 228 So. 3d 1122 (Fla. 2017) [42 Fla. L. Weekly S852a]. The Court also finds that: (a) because Zuniga was unable to pay hourly fees, and thus could proceed only on pure contingency fee basis, counsel was not able to mitigate the risk of nonpayment “in any way,” Id. at 1128; and (b) that the factors outlined in Florida Patient’s Comp. Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985) support the application of a multiplier.
Having concluded that a “multiplier” is permitted here, the Court first notes that whether to award one is within its discretion, as “trial judges are not required to use a multiplier. . .” Joyce, supra at 1128. If the Court exercises its discretion, and elects to award a “multiplier,” it must do so consistent with — and in furtherance of the purpose of — the “fee-authorizing statute or rule.” Id. The Court must also adhere to the parameters adopted in Quanstrom:
If the trial court determines that success was more likely than not at the outset, it may apply a multiplier of 1 to 1.5; if the trial court determines that the likelihood of success was approximately even at the outset, the trial judge may apply a multiplier of 1.5 to 2.0; and 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.
Quanstrom, 555 so. 2d at 834.
For purposes of this analysis, this Court has concluded that in a case such as this the likelihood of “success” at the outset must be viewed from the vantage point of the lawyer, not the client, as: (a) the client has no stake in the fee dispute; (b) the lawyer is the only party that assumed the “risk” for which a multiplier is intended to compensate; and (c) under Florida Statute §627.428 any recovery (i.e., $1) entitles counsel to reasonable fees. See Jurado. Thus, to receive their full hourly rates (and a possible multiple thereof) counsel achieves “success” so long as any recovery is secured, even if that ultimate recovery might not be perceived by the client as a “successful” result. And looking at this case objectively at the outset, and from the vantage point of counsel, the Court concludes that “success” (i.e., the prospect of a recovery) was “more likely than not.” It may therefore award a “multiplier” of 1 to 1.5. Quanstrom, supra.
In deciding what multiplier, if any, should be awarded here the Court has taken into account the entire record, including the fact that counsel is being compensated with a $208,000.00 “lodestar” for securing a $20,000.00 judgment. The Court has also taken into account all of the pertinent Rowe factors including: (a) the time and labor required; (b) the novelty and complexity of the questions litigated; (c) the skill requisite to perform the legal services; (d) the results obtained; (e) the reputation and ability of counsel; and (f) the fees customarily charged in our community for similar legal services. Based upon the totality of the circumstances presented, including the evidence presented at the fee hearing, the Court concludes that a multiplier of 1.1 times counsel’s “lodestar” is appropriate, and the total amount awarded represents the high end of what a paying client could reasonably expect to be charged — and would reluctantly agree to pay — for the legal services rendered.
This Court has no doubt that the total fee to be awarded ($228,800.00) more than adequately compensates counsel for the services provided and the “risk” undertaken in this case. Due to one-way fee shifting statutes lawyers who bring these cases against solvent insurance carriers are assured of receiving compensation at full hourly rates (and the possibility of a multiplier) so long as they secure any recovery for their client. And despite this Court’s finding (based on the “evidence” presented here) that the prospect of a “multiplier” to be paid by the carrier was necessary to secure competent counsel in this case, there is clearly no shortage of lawyers willing to bring first party insurance suits in Miami-Dade County. Our circuit court is “flooded” with first party water intrusion cases (pun intended), and a cadre of local lawyers are lined up not only to file them, but to devote hundreds of thousands of dollars of time in pursuit of modest claims, knowing they will receive at least their full hourly rates from a solvent carrier so long as they secure any recovery. This Court would venture to say that these cases would likely continue to “pour into” our courthouse even if the Legislature (or courts) eliminated multipliers altogether. Put another way, this Court suspects that there are many attorneys in the “relevant market” who would accept most “run of the mill” first party insurance cases even “absent the availability of a contingency fee multiplier,” Joyce, supra, confident of securing some recovery and, a fortiori, payment for all time reasonably expended at full hourly rates.
While counsel — knowing that they will likely recover compensation for all hours spent at generous hourly rates — may have the luxury of devoting substantial time to these cases without regard to the amount in controversy, they are not necessarily free to “shift” that luxury onto their client’s adversary. Rather, this Court must ensure that the amount awarded pursuant to a “fee shifting” statute is “reasonable” in light of the circumstances presented.
For the foregoing reasons, it is hereby ORDERED AND ADJUGDGED:
1. Plaintiff’s counsel is awarded $228,800.00 in reasonable attorney’s fees, representing their agreed upon “lodestar” of $208,000.00, together with a multiplier of 1.1.
2. Plaintiff’s counsel are awarded costs in amount of $19,189.24.
__________________
1Zuniga initially claimed a “lodestar” of $238,439.50, while Citizens insisted that the “reasonable” value of the time spent by counsel was $178,720.25. In order to simplify matters, and at the Court’s urging, the parties commendably stipulated to a “lodestar” of $208,000.00. Citizens also does not challenge the costs Zuniga seeks to recover. Thus, the only remaining dispute is whether a multiplier is warranted and, if so, the appropriate multiplier to be employed.
