27 Fla. L. Weekly Supp. 925b

Online Reference: FLWSUPP 2711FELDInsurance — Personal injury protection — Attorney’s fees — Attorney who was discharged by medical provider before suit for PIP benefits was filed may not recover attorney’s fees against insurer who ultimately settled suit with provider — Section 627.428 precludes recovery of pre-suit fees, insurer did not act unreasonably so as to justify award of pre-suit fees, and charging lien does not compel insurer to pay pre-suit fees when attorney’s work did not produce positive result for provider

MARK J. FELDMAN, P.A. and MARK J. FELDMAN, ESQ., Appellants, v. INFINITY ASSURANCE INSURANCE COMPANY, Appellee. Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County. Case No. 2019-46-AP-01. L.T. Case No. 14-8681-SP-25. December 31, 2019. On Appeal from the County Court in and for Miami-Dade County, Linda Diaz, Judge. Counsel: Mark J. Feldman, P.A. and Mark J. Feldman, for Appellant. Law Offices of Deborah N. Perez & Assoc., and Alina Hart, for Appellee.

(Before TRAWICK, WALSH and REBULL, JJ.)

OPINION

(WALSH, J.) Appellants Mark J. Feldman, P.A. and Mark J. Feldman, Esq. (Collectively “Feldman”) appeal the trial court’s order striking a charging and retaining lien and denying entitlement to attorney’s fees. Feldman, who was discharged by his client before any lawsuit was filed, argues that Appellee, Infinity Assurance Insurance Company (“Infinity”), should pay his pre-suit attorney’s fees, pursuant to Section 627.428, Florida Statutes. Feldman also complains that the trial judge improperly denied him the right to conduct discovery on the amount of his fees.

On December 6, 2013, Feldman sent a demand letter to Infinity on behalf of his client, Apple Medical Center, for personal injury protection (PIP) benefits. Two months later, Apple Medical Center discharged Feldman and hired a new lawyer. After he was fired, Feldman filed a charging and retaining lien to secure payment of his pre-suit attorney’s fees. Successor counsel mailed his own pre-suit demand letter to Infinity, and later, filed a complaint for breach of contract. Two years later, the parties settled.

Feldman then moved for payment of his pre-suit attorney’s fees and served voluminous discovery on the amount fees. The trial court struck his charging lien, denied his entitlement to fees and denied him the right to conduct discovery.

The standard of review of an order determining entitlement to attorney’s fees under Section 627.428, Florida Statutes is de novo. Do v. GEICO General Ins. Co., 137 So. 3d 1039 (Fla. 3d DCA 2014) [39 Fla. L. Weekly D455b]. The standard of review of an order denying discovery is abuse of discretion. Gold, Vann & White, P.A. v. DeBerry By and Through DeBerry, 639 So. 2d 47 (Fla. 4th DCA 1994).

Feldman may not recover his attorneys fees against the insurer for pre-suit work because (1) the plain language of Section 627.428, Florida Statutes, precludes recovery for pre-suit attorneys’ fees, (2) the insurer did not act unreasonably to justify awarding pre-suit fees and (3) a charging lien does not compel an insurer to pay pre-suit attorney’s fees where the attorney’s work did not produce a positive result for his client. Regarding his claim that he was entitled to conduct discovery on the amount of fees, Feldman was not a party to any lawsuit¹ and was therefore not entitled to engage in discovery on the amount of fees.

No Entitlement to Fees Under Plain Language of Section 627.428, Florida Statutes

Section 627.428, Florida Statutes, shifts the burden of paying attorney’s fees to the insurer when an insured receives a judgment, decree or succeeds on appeal against the insurer. In such case, the trial or 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.” (emphasis added) Feldman’s claim to entitlement to his pre-suit fees turns upon the meaning of this provision.

Recently, the Supreme Court of Florida clearly explained how to interpret the meaning of a statute:

A court’s determination of the meaning of a statute begins with the language of the statute. Lopez v. Hall, 233 So. 3d 451, 453 (Fla. 2018) [43 Fla. L. Weekly S11a] (citing Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984)). If that language is clear, the statute is given its plain meaning, and the court does not “look behind the statute’s plain language for legislative intent or resort to rules of statutory construction.” City of Parker v. State, 992 So. 2d 171, 176 (Fla. 2008) [33 Fla. L. Weekly S671a] (quoting Daniels v. Fla. Dep’t of Health, 898 So. 2d 61, 64 (Fla. 2005) [30 Fla. L. Weekly S143a]).

Lieupo v. Simon’s Trucking, Inc., 2019 WL 6904130 (Fla. Dec. 19, 2019) [44 Fla. L. Weekly S298a].

Feldman’s work submitting a demand letter — a demand which was never used to form the basis for a suit — does not fall within the plain language of this phrase. The phrase “prosecuting the suit in which the recovery is had” includes three separate elements: “prosecuting,” “the suit” and “in which the recovery is had.” Feldman was never “prosecuting” because he was fired. He certainly did not prosecute “the suit” because he never filed a suit. And he was not the lawyer who prosecuted the suit “in which the recovery was had” — successor counsel was. The plain language of the phrase “prosecuting the suit in which the recovery is had” therefore excludes payment for submitting unsuccessful, pre-suit demand letters.

Two federal judges construing the plain language of Section 627.428 concluded that all legal work done prior to drafting and filing the complaint is not compensable. In Kearney v. Auto-Owners Ins. Co., 2010 WL 3119380 at *8 (M.D. Fla. Aug. 4, 2010), the court opined,

[T]he word “prosecute” also limits fees to work on a lawsuit. “Prosecute” means “to commence and carry out a legal action.” [Blacks’ Law Dictionary 1237 (7th ed.1999)] The term specifically excludes pre-suit work. As the U.S. District Court for the Southern District of Florida found: “The narrow sense of the statute’s use of the phrase ‘prosecuting the suit’ should only include those fees incurred after the Plaintiff’s formal initiation of their litigation and no pre-suit activities.”

(quoting Dunworth v. Tower Hill Preferred Ins. Co., 2006 WL 889424 (S.D. Fla. Feb. 14, 2006) (Unpublished decision)) In Dunworth, another federal judge fractionally reduced the total amount of attorney’s fees sought, excluding fees for “time either not permitted, e.g., pre-suit activities, or not related . . . .” Id. at *3.

Because Feldman was not the lawyer who “prosecuted the suit in which the recovery was had,” his claim for fees was properly stricken.

Feldman Failed to Establish the Insurer’s Unreasonable Conduct to Justify Payment of Pre-Suit Fees

This Court must abide by the holding in U.S. Fidelity and Guar. Co. v. Rosado, 606 So. 2d 628, 629 (Fla. 3d DCA 1992), that entitlement to fees hinges upon “a determination whether the pre-suit work, particularly those legal services rendered prior to providing the insurer with proof of claims, was necessitated by the insurer’s unreasonable conduct.”² Feldman did not claim in his motion for fees that the insurer did anything unreasonable; he simply argued that he filed a demand letter, that the claimant ultimately prevailed and therefore, he was entitled to fee-shifting compensation for preparing and mailing his demand letter. But Infinity’s failure to pay a claim set forth in a demand letter is conduct common to every insurance company named in every PIP lawsuit. If this is Feldman’s theory, every insurer named in every PIP lawsuit would be liable for pre-suit work, surely not what the Court in Rosado meant by an insurer’s “unreasonable conduct.”

In United Automobile Insurance Company v. Affiliated Health Centers, Inc., a/a/o Jacqueline Olivas, 22 Fla. L. Weekly Supp. 687a (Fla. 11th Jud. Cir. Jan. 16, 2015), in the context of a prevailing party issue, another panel discussed the meaning of an insurer’s “unreasonable conduct” which would entitle prevailing plaintiff’s counsel to pre-suit fees. The court concluded that failing to pay a claim until the demand letter was filed is not “unreasonable conduct” which would justify pre-suit fees, even though there was no doubt the attorney had done the work. In Apple Medical Ctr. v. Progressive Select Ins. Co., 25 Fla. L. Weekly Supp. 748a (Fla. 11th Jud. Cir., Aug. 27, 2015), a trial judge rejected a similar Feldman pre-suit fee claim, explaining under Rosado and the plain language of 627.428, pre-suit fees were not compensable. Likewise, here, Infinity’s failure to pay Feldman prior to or after his demand letter, standing alone, does not establish the kind of unreasonable conduct which should result in the penalty of payment of pre-suit fees.

Feldman Failed to Satisfy Prerequisite for Charging Lien

Additionally, Feldman failed to satisfy the prerequisites of a charging lien in order to recover his fees. Feldman argues that he has satisfied the elements of a charging lien: “(1) an express or implied contract between attorney and client; (2) an express or implied understanding for payment of attorney’s fees out of the recovery; (3) either an avoidance of payment or a dispute as to the amount of fees; and (4) timely notice.” Daniel Mones. P.A. v. Smith, 486 So. 2d 559, 561 (Fla. 1986). However, Feldman failed to establish that he obtained a positive result for his former client.

The Third District Court of Appeal explained in Litman v. Fine, Jacobson, Schwartz, Nash, Block & England, P.A., 517 So. 2d 88, 91 (Fla. 3d DCA 1987), “[i]t is not enough . . . . to support the imposition of a charging lien that an attorney has provided his services; the services must, in addition, produce a positive judgment or settlement for the client, since the lien will attach only to the tangible fruits of the services.” (emphasis added) See also Walia v. Hodgson Russ LLP, 28 So. 3d 987, 989 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D552a] (where litigation has not yet produced a positive judgment, charging lien is not established).

Feldman did nothing to “produce a positive judgment or settlement for the client.” Feldman’s demand letter was not used in the lawsuit. Successor counsel mailed a new demand letter and filed the complaint which led to the settlement. Feldman’s demand letter thus served no part in producing the positive judgment in this case.

We also reject Feldman’s claim that he should have been entitled to conduct discovery on the amount of his fee. The rules of civil procedure do not provide for a non-party to serve discovery. Feldman was correctly denied the right to intervene as a party. He was therefore not permitted to engage in discovery. See Rule 1.280(b)(1), Fla. R. Civ. P. Moreover, because Feldman was not entitled to attorney’s fees for his pre-suit work, his right to discovery on this matter is moot.

Accordingly, we AFFIRM. (TRAWICK and REBULL, JJ., concur.)

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¹The trial court denied his motion to intervene as a party plaintiff, and that order was affirmed on December 4, 2018 in a separate appeal in 2016-355-AP-01.

²The Rosado opinion cites Wollard v. Lloyd’s & Cos. of Lloyd’s, 439 So. 2d 217 (Fla.1983), at 219 n. 2. However, the court in Wollard did not address entitlement to pre-suit fees under a fee-shifting statute.