3 Fla. L. Weekly Supp. 231a
Insurance — Attorney’s fees — Fee award to counsel for insured in action against insurer — In determining whether attorney’s fees may be awarded for litigation of issue of attorney’s fees, debate as to appropriate multiplier is a legal issue pertaining to entitlement to fees — Contingency risk multiplier may be applied to fees for litigating fee issues
MARGARITA J. PALMA, Plaintiff, vs. STATE FARM FIRE & CASUALTY CO., etc., Defendants. 15th Judicial Circuit in and for Palm Beach County, Civil Division. Case No. 83-4113 AE. April 7, 1995. Kathleen J. Kroll, Judge.
ORDER
This matter, concerning attorney fees, came before this Court pursuant to orders and opinions entered by the Fourth District Court of Appeal and the Florida Supreme Court, finalized in a remand for reconsideration under State Farm v. Palma, 629 So.2d 830 (Fla. 1993).
It all began in 1983 when plaintiff, Margarita J. Palma, was injured in an automobile accident. She sent her $600.00 doctor’s bill for a thermographic examination to her insurance company, defendant, State Farm. State Farm refused payment on the ground that thermographic examinations did not constitute necessary medical services within the purview of the Florida No Fault Act, Section 627.736, Fla. Stat. (1983). Palma brought suit against State Farm to recover the $600.00 and State Farm counterclaimed for declaratory relief. After a six day trial, the trial court ruled in favor of State Farm. Palma appealed and the Fourth District reversed (see Palma v. State Farm Fire and Casualty Co., 489 So.2d 147 (Fla. 4th DCA), rev. denied, 496 So.2d 143 (Fla. 1986)).
The case was remanded to the trial court for the purpose of awarding attorney’s fees to plaintiff’s counsel pursuant to Section 627.428, Fla. Stat. Following an evidentiary hearing, the trial court awarded $253,000.00; finding 650 hours* at a rate of $150.00 per hour was reasonable. The trial court then enhanced this lodestar figure under authority of Florida Patients’ Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1987) by a contingency risk multiplier of 2.6.
State Farm appealed the issue of entitlement to a multiplier and the Fourth District Court affirmed in State Farm Fire & Casualty Co. v. Palma, 524 So.2d 1035 (Fla. 4th DCA 1988). The Court emphasized that State Farm vigorously contested the case, which added to the complexity of the issues and the increased effort of Palma’s counsel. Plaintiff’s attorney, Ronald V. Alvarez, spent 90.8 hours litigating this appeal. On October 28, 1988 at State Farm’s request the Florida Supreme Court accepted discretionary jurisdiction to address the attorney’s fees issue.
On January 11, 1990, the Supreme Court affirmed Judge Downey’s Fourth District Court of Appeals decision granting Palma fees and remanded the case to the trial Court to determine fees on the appeal (see State Farm v. Palma, 555 So.2d 836 (Fla. 1990)). Plaintiff’s appellate counsel, Larry Klein, spent 35.5 hours and attorney Alvarez spent 21.95 hours. Alvarez also spent 27.25 hours on the appellate jurisdiction issue.
At the Circuit Court fee hearing, Palma was awarded the following:
Alvarez: 153.85 hrs. at $225.00/hour x 2.6 = $90,002.00
Klein: 35.5 hrs. at $250.00/hour x 2.6 = $22,750.00
Burlington (expert witness): 4.5 hrs. at $200.00/hour = $900.00
Attorney Alvarez spent 26.35 hours in preparation for this hearing. The Court noted the awards were only for hours expended on “entitlement” issues. Attorney Alverez now concedes that 41.1 hours of the awarded 153.85 hours were related to preparation of fact issues on amount and therefore should not be included in any award now before this Court.
State Farm appealed yet again the issue of attorney fees. The Fourth District Court of Appeals was asked to decide whether plaintiff’s attorneys should be awarded fees for litigating entitlement to fees and whether there should be a multiplier applied to any such fees. Judge Hersey of the Fourth District affirmed the trial Court order as to the number of hours for fees and hourly rate, but took exception to the appropriate multiplier. Attorney Klein spent 31 hours litigating the appeal. On remand to correct the multiplier and assess fees for the appeal, the trial Court awarded the following:
Alvarez: 153.85 hrs. at $225.00/hour x 2.2 = $76,140.00
Klein: 35.5 hrs. at $250.00/hour x. 2.2 = $19,246.00
Klein: 31 hrs. at $250.00/hour x 2.2 = $16,500.00
Expert: 4.5 hrs. at $200.00/hour = $900.00
State Farm then appealed the Hersey opinion to the Florida Supreme Court. The Supreme Court in State Farm v. Palma, 629 So.2d 830 (Fla. 1993) held:
Accordingly, we hold that attorney’s fees may properly be awarded under Section 627.428 for litigating the issue of entitlement to attorney’s fees. However, we do not agree with the District Court below that attorney’s fees may be awarded for litigating the amount of attorney’s fees. Page 833.
. . .
Accordingly, we quash the decision below to the extent that it authorizes attorney’s fees under Section 627.428 for litigating the amount of fees. We also disapprove Moore to the extent that it can be read as not permitting attorney’s fees for litigating entitlement to fees. We remand the case with directions that the trial Court redetermine the attorney’s fees pursuant to the rationale of this opinion. (e.s.) Page 834.
This Court must first determine whether any portions of the previous fee awards are not disturbed by the last Supreme Court holding. In following the directions of the Supreme Court, this Court must note the logistical mess created. The Supreme Court asks for a clear distinction between “entitlement” and “amount”. This Court finds entitlement issues are legal issues to determine the correct formula in calculating a reasonable fee. Amount issues are disputed issues of fact over the reasonable number of hours and prevailing market hourly rates. Debate as to an appropriate multiplier, if any, is a legal issue and falls under “entitlement”.
In the instant case, there were several orders granting fees for appellate efforts which were remanded for “amount” only. State Farm does not contest the fact that Attorney Alvarez incurred 90.8 hours in the Downey appeal before the Fourth District. Since there is no dispute on the amount of these hours or the amount of a reasonable hourly rate or multiplier, Attorney Alvarez’s entitlement to these fees is the law of the case and should be entered and awarded by this Court. As well, expert witness Philip Burlington’s award of fees of 4.5 hours at $200.00 an hour in the trial Court’s order of August 22, 1990 should not be disturbed.
A review of the 1990 Supreme Court opinion and the two Fourth District Court of Appeals opinions raises two legal issues concerning the formula to be used in calculating fees. The first issue is whether or not an attorney can get attorney’s fees for litigating the issue of attorney fees. The second issue on entitlement is whether or not a contingency risk multiplier should be used or applied to fees for litigating fees. There was never a dispute in these opinions about the amount of hours or the hourly rate. This Court notes since 1983 State Farm has refused to pay any (emphasis added) attorneys’ fees for litigating fees, whether relating to entitlement or amount issues.
Based on the evidence and argument at the fees hearing before this Court, a review of the files and law, it is the finding of the Court that this Court’s Amended Final Judgment dated January 2, 1992 is hereby amended as follows:
1. As to Ronald V. Alvarez, Esq., that:
a. 112.75 hours are reasonable as law of the case and all related to entitlement issues.
b. The hourly rate of $225.00 per hour is reasonable.
c. Based upon the evidence and law of this case, the contingency risk multiplier of 2.2 is applicable.
d. Based upon the above, the total attorney’s fees that the plaintiff is entitled to recover for the appellate work performed before the Fourth District Court of Appeal and the Florida Supreme Court is $55,811.25.
2. As to Larry Klein, Esq., for services rendered in the Florida Supreme Court:
a. Entitlement to recovery of attorney’s fees is based upon 627.428, Fla. Stat. (1983).
b. 35.5 is a reasonable number of hours and all relate to entitlement issues.
c. $250.00 per hour is a reasonable hourly rate.
d. Based upon the evidence and the law of this case, the contingency risk multiplier of 2.2 is applicable.
e. The attorney’s fees that plaintiff is entitled to recover on behalf of her attorney for the appellate work performed before the Florida Supreme Court is $19,246.00.
3. As to Larry Klein, Esq., for services rendered on the appeal in the Fourth District:
a. 31.0 is a reasonable number of hours and all relate to entitlement issues.
b. $250.00 per hour is a reasonable hourly rate.
c. Based on the evidence and the law of this case, the contingency risk multiplier of 2.2 is applicable.
d. The attorney’s fee that plaintiff is entitled to recover on behalf of her attorney for the appellate work performed before the Fourth District Court of Appeal is $16,500.00.
4. As to Philip Burlington, Esq., that:
a. Entitlement to recover of expert witness fees is based upon Travieso v. Travieso, 474 So.2d 1184 (Fla. 1985).
b. 4.5 hours is a reasonable number of hours.
c. $200.00 per hour is a reasonable hourly rate.
d. The expert witness fee that plaintiff is entitled to recover on behalf of her expert witness for testimony before the trial Court with regard to the motion for attorneys’ fees is $900.00.
5. As to Rod Tennyson, Esq., for services rendered in this proceeding:
a. 25.0 hours is a reasonable number of hours and all relate to entitlement issues.
b. $200.00 per hour is a reasonable hourly rate.
c. The attorney’s fee for the plaintiff is entitled to recover on behalf of her attorney for this proceeding before the Court is $5,000.00.
Final judgment is hereby entered against defendant State Farm in favor of Ronald V. Alvarez in the amount of $55,811.25, Larry Klein in the amount of $19,246.00, and Philip Burlington in the amount of $900.00, nunc pro tunc as of August 22, 1990, so that these amounts will also carry interest at the legal rate from August 22, 1990. Gilmore v. Morrison, 341 So.2d 779 (Fla. 4th DCA 1976) and Gorman v. Largo Hospital Owners, Ltd., 435 So.2d 8972 (Fla. 2d DCA 1983).
In addition, final judgment is also entered against defendant State Farm in favor of Larry Klein for services rendered for the appeal in the Fourth District in the amount of $16,500.00, nunc pro tunc as of January 2, 1992 for purposes of interest calculation as stated above.
In addition, final judgment is also entered against defendant State Farm in favor of Rod Tennyson for services rendered in this proceeding on entitlement issues in the amount of $5,000.00.
Any payment of amounts owed under this judgment shall be paid to Rod Tennyson, P.A. Trust Account for disbursement to the appropriate parties.
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*The Court noted State Farm’s counsel had expended 731 hours for the same proceedings.
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