27 Fla. L. Weekly Supp. 88a
Online Reference: FLWSUPP 2701ESCAInsurance — Attorney’s fees — Contingency risk multiplier of 1.5 awarded — Expert witness fees — Taxable costs — Case involving denial of insurance coverage based on alleged material misrepresentation in application for insurance
CARLOS ESCALONA, Plaintiff, v. WINDHAVEN INSURANCE COMPANY, Defendant. County Court, 13th Judicial Circuit in and for Hillsborough County, Civil Division. Case No. 16-CC-032531. April 30, 2019. Daryl M. Manning, Judge. Counsel: Timothy A. Patrick, Patrick Law Group, P.A., Tampa, for Plaintiff.
FINAL JUDGMENT AWARDINGATTORNEY’S FEES AND COSTS
THIS CAUSE came before the Court for evidentiary hearings on February 27, 2018, April 19, 2018 and April 20, 2018 on Plaintiff’s Motion to Tax Attorney’s Fees and Costs pursuant to Section 627.428, Florida Statutes. After observing the demeanor and credibility of the witnesses, weighing the testimony and other evidence presented, and being otherwise fully advised in the premises, it is hereby
ORDERED AND ADJUDGED as follows:
A. Introduction
1. Together with the legal standards for attorney’s fees and contingency fee multiplier awards established in Florida, the Court considered the arguments of counsel, the parties’ written submissions in the record, the affidavit and testimony of Timothy Patrick, Esq., testimony of Bradley Souders, Esq., and testimony of Scott Dutton, Esq., the exhibits entered into evidence during the hearing, the advocacy skills displayed by counsel in this case, the complexity of the issues in this case, as well as the Court’s own knowledge about the skills, experience, and reputation of comparable attorneys.
2. In reaching the findings contained in this judgment, the Court has considered the credibility and demeanor of the witnesses, weighed the evidence, and complied with the requirements of Florida Rule of Professional Conduct 4-1.5(b)(1) and (2), the Statewide Uniform Guidelines for Taxation of Costs in Civil Actions, and applicable case law, including but not limited to, Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985) and Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990).
B. Reasonable Hourly Rate
3. The greater weight of the evidence presented demonstrated that the reasonable hourly rates are as follows:
Timothy A. Patrick, Esq. – $500.00 per hour
Paralegal/Administrative – $175.00 per hour
C. Reasonable Hours
4. The greater weight of the evidence presented demonstrated that the following number of hours are reasonable:
Timothy A. Patrick, Esq. – 50 hours.
Paralegal/Administrative – 10 hours.
D. Contingency Risk Multiplier
5. Based on the controlling case law and the greater weight of the evidence, the Court finds that the Plaintiff is entitled to a contingency fee multiplier in this case.
6. 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 introduced the ability to recover a multiplier. 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).
7. In Quanstrom, the Florida Supreme Court 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. Under ordinary circumstances, only the first two categories are eligible to receive a multiplier. Id.
8. Under the first category of cases described by Quanstrom (public policy enforcement cases), the following 12 factors (also found in Florida Rule of Professional Conduct 4-1.5(b)(1)(A)-(H)) should be considered to determine a reasonable attorney’s fee:
. . . (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.
Quanstrom, 555 So.2d at 834.
9. Under the second category of cases described by Quanstrom (tort and contract cases), the trial court must also consider three additional factors when 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]. The foregoing additional factors do not apply to public policy enforcement cases.
10. This case fall within the “tort and contract” category of cases described by Quanstrom. The greater weight of the evidence demonstrates that a contingency fee arrangement and multiplier was necessary in order for the Plaintiffs to have obtained competent counsel, as that factor is described in Quanstrom, and its progeny. For example, Plaintiff’s fee expert (Brad Souders, Esq.) credibly testified that a contingency risk multiplier was necessary based upon the expert having interviewed local attorneys who refuse to accept these type of cases without the possibility of a multiplier. In addition, Plaintiff’s counsel credibly testified that he would not have taken this case without the possibility of a contingency risk multiplier.
11. The greater weight of the evidence demonstrates that Plaintiff’s counsel was not able to mitigate risk of non-payment in any way. Among other things, the Plaintiff could not afford to pay a retainer, and there was no meaningful way for Plaintiff’s counsel to mitigate the risk of non-payment in this case.
12. The Plaintiff had a pure contingency contract with his counsel. That contract included a provision specifically stating that Plaintiff’s counsel only accepts these difficult and risky coverage denial cases based upon the possibility of a contingency risk multiplier.
13. Plaintiff obtained a declaration of coverage in the face of Defendant’s denial of coverage based upon an alleged material misrepresentation by the Plaintiff in the application for insurance. Cases involving denial of coverage are difficult and complex at times, including policy interpretation, application of exclusion language, agency law and other issues. Moreover, these cases are vigorously defended by carriers in many instances. In this case, Plaintiff had to address and successfully overcome this defense. In the end, despite competing motions for summary judgment on this defense, Plaintiff prevailed on summary judgment and subsequently, the Defendant ultimately confessed judgment, and that resulted in a total victory for the Plaintiff.
14. 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.
15. The appropriate time frame for determining a multiplier is when the party is seeking the employ of counsel. Michnal v. Palm Coast Development, Inc., 842 So.2d 927, 934 (Fla. 4th DCA 2003) [28 Fla. L. Weekly D688b].
16. The greater weight of the evidence demonstrated that at all times, the Defendant alleged and maintained that the named insured failed to accurately list her marital status and failed to list her husband as a resident living in the household on the application for insurance, and that this was a material misrepresentation on the insurance application, giving rise to the rescission of the insurance policy. The Plaintiff’s expert witness testified such cases are very difficult and risky, and that the likelihood of success from the onset is unlikely from the outset of the litigation. The Plaintiff’s expert witness added he himself has had experience with such cases, the same issues, same defenses; and on most prior occasions, had to voluntary dismiss such cases, closing such cases at a loss. The Court also heard such cases typically involve vigorous litigation by the defense, including low proposals for settlement to the Plaintiff and motions for sanctions against the Plaintiff for bringing such an action. Thus, Plaintiff’s counsel had to take these things into consideration before agreeing to represent the Plaintiff in this case.
17. The First District Court of Appeal has 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. Massie v. Progressive Express Insurance Co., 25 So.3d 584,585 Fla. 1st DCA 2009) [34 Fla. L. Weekly D2364b]; see also, McCarthy Brothers Co. v. Tilbury Construction Inc., 849 So.2d 7, 10 (Fla. 1st DCA 2003) [28 Fla. L. Weekly D736b]. Moreover, the Second District Court of Appeal recently acknowledged the Massie standard in Citizens Property Insurance Corp., v. Anderson, 43 Fla. L. Weekly D353b (Fla 2d DCA, February 14, 2018). Here, Plaintiff’s expert testified that the Plaintiff’s personal injury attorney did not want to represent the Plaintiff in a difficult coverage denial case against this Defendant. Moreover, he testified that it is extremely difficult to try and find competent counsel to represent Plaintiff’s in these type of actions and that Mr. Patrick is one of the few first party coverage lawyers who would accept this difficult case against this Defendant.
18. This Court finds that the greater weight of the evidence presented establishes that the Plaintiffs’ likelihood of success at the outset of the representation was as follows:
Success was more likely than not at the outset (1.0 to 1.5)
X Success was approximately even at the outset (1.5 to 2.0)
Success was unlikely at the outset (2.0 to 2.5)
Accordingly, under the facts and circumstances of this case, the greater weight of the evidence demonstrates that a reasonable and appropriate multiplier to be awarded to the Plaintiff in this case is 1.5.
E. Expert Witness Fees
19. In addition to the foregoing, the Court finds that the Plaintiff is entitled to an award of a reasonable fee for the services rendered by his expert witness, Bradley Souders, Esq., in the amount of $4,725.00, based upon a reasonable rate of $525.00 per hour, and a reasonable amount of time of 9 hours. Plaintiff’s counsel credibly testified that he had already paid Mr. Souders $3,150.00 for six (6) hours of time at the rate of $525.00 per hour for his preparation and court testimony on February 27, 2018.
F. Taxable Costs
20. Aside from expert witness fees, the parties stipulated to taxable costs of $1,384.50.
G. Total Amount of Attorney’s Fees, Paralegal/Administrative Fees, Expert Witness Fees and Costs Awarded Under Section 627.428, Fla. Stat.
21. In summary, based on the foregoing determinations, the total reasonable attorney’s fees and costs awarded to Plaintiff are as follows:
| Attorney/Expert Witness/ Paralegal/Administrative | Reasonable Hourly Rate | Reasonable Number of Hours | Total |
| Timothy A. Patrick, Esq. | $500.00 | 50 | $25,000.00 |
| Bradley D. Souders, Esq. | $525.00 | 9 | $4,725.00 |
| Paralegal/Administrative | $175.00 | 10 | $1,750.00 |
| Total Reasonable Lodestar Amount | $25,000.00 | ||
| Contingency Fee Multiplier | 1.5 | ||
| Total Reasonable Attorney’s Fees, after application of Contingency Fee Multiplier | $37,500.00 | ||
| Reasonable Expert Witness Fees | $4,725.00 | ||
| Stipulated Taxable Costs | $1,384.50 | ||
| Total Reasonable Attorney’s Fees and Costs | $45,359.50 |
22. Accordingly, final judgment is hereby awarded in favor of the Plaintiff, Carlos Escalona, who shall recover from the Defendant, Windhaven Insurance Company, the sum of $45,359.50 in reasonable attorney’s fees and costs, that shall bear interest at the rate of 5.53% per annum beginning on December 21, 2017 until the date of receipt of settlement check, which rate shall thereafter adjust annually on January 1 of each year pursuant to section 55.03(3), Fla. Stat., FOR WHICH SUM LET EXECUTION ISSUE.
23. The Defendant shall deliver its payment to Plaintiff’s counsel and make its check payable to Patrick Law Group, P.A. Trust Account within 30 days of this order.
