4 Fla. L. Weekly Supp. 805a
Insurance — Personal injury protection — Attorney’s fees — Contingency multiplier — Time and labor — Plaintiff may obtain attorney’s fees for litigating entitlement to attorney’s fees, but not for litigating the amount of the fee — Establishing entitlement to the use of a multiplier is an entitlement issue in which the client retains an interest — Issues of multiplier, prejudgment interest, and market rate found to be issues of entitlement — Time and labor — Duplication of effort — Where the billing statements of co-counsel are consistent with efforts to properly coordinate activities to save time and maximize the talents of each attorney to better represent the client, there is no duplication of effort and the attorneys made efficient use of their time and labor — Novelty of issues — Where a case involves several novel issues, which if supported by the facts will result in losing the case, the time spent is justified — An attorney’s requested hourly rate that is well within the range of fees charged in the community for similar work and by attorneys of similar skill and reputation is reasonable — Contingency risk multiplier — A multiplier is appropriate in cases where the insurance company contests a PIP case and the court finds that it would have been difficult if not impossible for PIP plaintiff to get proper legal representation on a contested PIP case without a contingency contract, and that attorneys of skill and reputation would not accept such cases without a contingency fee multiplier — Where co-counsel shared the work and risk and testified they could not have achieved the same results without working as a team, they should share the same multiplier — Expert witness fees — Court has no discretion to deny the attorney expert witness fees — Prejudgment interest on attorney’s fees and costs shall accrue from the date of resolution of the case
DELOUIS LALOI, Plaintiffs, vs. PROGRESSIVE AMERICAN INSURANCE COMPANY, Defendant. In the County Court of the 15th Judicial Circuit in and for Palm Beach County, Civil Division. Case No. MC-95-17152 RK. June 4, 1997. Deborah Dale Pucillo, Judge.
ORDER ON PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES AND COSTS
THIS CAUSE came to be heard upon the Plaintiff’s Motion for Attorneys’ Fees and Costs. Based upon the evidence presented, the Court makes the following findings:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1.ENTITLEMENT TO ATTORNEYS FEES AND COSTS
The issue for the Court’s determination with regard to entitlement was whether there was an unequivocal stipulation as to all issues of entitlement prior to the hearing on the matter of attorneys’ fees and costs. The Court finds that while it appeared that the defense agreed that there may be some fee owing, there was no agreement on whether the Plaintiff was entitled to prejudgment interest on the fee award, whether the Plaintiff was entitled to a multiplier, and whether the market rate requested by the Plaintiff was appropriate.
There was also discovery after June 14, 1996 which reveals that there was an ongoing dispute as to entitlement issues. More specifically, the Defendant denied in response to the Plaintiff’s Request for Admissions on fees: a) that the Court should award a contingency risk multiplier in this case (RFA#25); b) that Plaintiff is entitled to a Lodestar multiplier in the instant case (RFA#26); c) that Plaintiff is entitled to attorneys’ fees for litigating entitlement to prejudgment interest on the attorneys’ fees award (RFA#27); d) that Plaintiff is entitled to attorneys’ fees for litigating entitlement to a Loadstar multiplier (RFA#28); e) that Plaintiff’s expert witness on attorneys’ fees is entitled to a fee in preparing for and in testifying at the fee hearing (RFA#29); f) that the market rate for Cooksey should be $250 per hour (RFA#35) and; g) that the market rate for Diego C. Asencio should be $250 (RFA#36). Also, in response to the question as to whether it would be contesting entitlement to a loadstar multiplier, Defendant answered: “Yes” (INT#15).
The majority of the litigation over the attorneys’ fees centered around the multiplier and the number of hours. The Court finds that the litigation concerning the amount of the hours is not compensable. State Farm v. Palma, 629 So.2d 830 (Fla. 1992). The Palma case holds that a Plaintiff may obtain attorney’s fees for litigating entitlement to attorney’s fees in a PIP case but not for litigating the amount of the fee. However, the Plaintiff has a fee contract that specifically permits litigation on the amount of the fee notwithstanding the Palma decision. Whether such a contract can provide for attorney’s fees on amount issues has never been addressed by any District Court of Appeals decision. Also in the recent circuit court opinion of Judge Kroll in the entitlement hearing in Palma v. State Farm, 3 FLW Supp. 231 (April 7, 1995) the issue of what constitutes “entitlement” was discussed. One “entitlement” issue was whether or not to award a multiplier. The Court held that “[d]ebate as to an appropriate multiplier, if any, is a legal issue and falls under `entitlement’ ”. The Court also held the parties were entitled to interest on the fee awards.
Diaz v. Santafe Health Care, Inc., 642 So.2d 765 (Fla. 1st DCA 1994) is the only district court case after Palma that addresses the issue of fees for establishment of a multiplier as an “entitlement issue”. In Diaz the Court stated at page 766 that “[i]n an appropriate case, the fee award may include time spent establishing entitlement to the use of a multiplier if the trial court is of the opinion that such time was of benefit to the client”. However, Diaz suggests that in certain circumstances the Court may award fees for time spent in establishing the amount of the fee. Diaz was also based upon F.S. §448.08 (attorney’s fees for litigation over collection of wages). Thus, the issue of whether fees should be awarded under F.S. §627.428 for the litigation over whether a multiplier should be used is still one of first impression.
The issue of whether the multiplier is an entitlement issue was recently discussed by Palm Beach County Court Judge Peter Blanc in a PIP case wherein he awarded attorney’s fees for time spent on establishment of the use of a multiplier. Erick Joseph v. Allstate Ins. Co., 4 FLW Supplement 325 (Fla. County Court, Palm Beach County, October 3, 1996). The Court recognized that this is an issue of first impression. The Court further recognized that the distinction between entitlement and amount is often difficult, if not impossible, to apply in the context of an actual fee hearing. With regard to whether the use of a multiplier benefits an insured, the Court stated at page 326:
While the application of a multiplier to an attorney’s fee clearly does not affect the entitlement to a fee, it is a factor in increasing the availability of quality legal services thereby creating a benefit to all potential clients. Both attorney and client benefit from the application of a multiplier.
The earlier case law from the Florida Supreme Court on attorney’s fees would also tend to support an argument that the use of a multiplier is an entitlement issue in which the client retains an interest. In Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990) the Florida Supreme Court recognized that one of the factors in determining a fee award is “whether the relevant market requires a contingency fee multiplier to obtain competent counsel”. Thus, this is an issue in which a client always retains an interest since failure to award a multiplier would make it impossible for insureds to obtain competent counsel. As stated by Judge Blanc in Joseph v. Allstate “it is a factor in increasing the availability of quality legal services” and “[b]oth attorney and client benefit from the application of a multiplier”.
This Court finds that there was an issue of entitlement as to the multiplier, the prejudgment interest and the market rate. By the time of the attorneys’ fee hearing the issues of prejudgment interest and costs had been stipulated. However, there was no agreement reached prior to the commencement of the hearing. While the Defendant claimed there was no dispute as to entitlement, the Defendant also never made an unconditional offer of any undisputed amount. If the Defendant had made such an unconditional offer, it would have stopped interest from running except as to the disputed amount. Quality Engineering Installation v. Higley South, Inc., 670 So. 2d 929 (Fla. 1996). Thus, the Defendant sought to withhold payment of fees (unless the Plaintiff’s counsel would agree to a final settlement of all fees) and at the same time claimed that there was no issue on entitlement to fees.
2.TIME AND LABOR
The Court finds that all the time for Attorney Diego C. Asencio of 46.85 hours up and until the time of the settlement of the payment of his client’s bills was reasonable and necessary. The Court finds all the time spent by James P. Cooksey, Esquire up and until settlement to be reasonable and necessary and will allow 40.10.
The defense argued that it should not have to pay for the time of two attorneys working on the case. The defense expert witness disallowed much time for any communication between co-counsel on the case under the theory that no paying client would accept such “double billing”. The defense relies on the case of Zuckerman v. Hofrichter, 676 So.2d 41 (Fla. 3rd DCA 1996). That case requires expert witness testimony on the efforts of co-counsel to make efficient use of time when there are two attorneys. The testimony of Attorneys Asencio and Cooksey is that they coordinate efforts to maximize the talents that each attorney has. The Plaintiff’s expert witness, Yvette Murray, also testified that the Plaintiff’s attorneys did maximize the time spent by each attorney to better represent the Plaintiff. In order to coordinate the work the Plaintiff’s attorneys needed to communicate.
This Court in carefully reviewing the billing statements of both attorneys side by side does not find that there is duplication of effort. The billing statements are more consistent with efforts to properly coordinate activities to save time. The Court also notes that the two attorneys for the Plaintiff did most of the work in the file writing far more letters and far more pleadings in this matter page for page than the defense. There were a total of seven (7) truly lengthy substantive pleadings by the Plaintiff to the defense’s five (5). There was a total of at least four hearings. There were two depositions and a mediation. The Plaintiff’s counsel also made far more telephone calls than the defense. Specifically, Asencio made sixty (60) calls and Cooksey made thirty (30). Nevertheless, prior to the deposition of the adjuster Wendy Smith the defense hours expended were forty-three (43) as compared to the total fifty-five (55) of the Plaintiff. The Plaintiff’s attorneys made efficient use of their time and labor in this matter. The time of the Plaintiff’s attorneys increased substantially in preparation for trial when it appeared there was no chance of settlement.
3.NOVELTY, COMPLEXITY AND REQUIRED SKILL
The Court finds that this case was somewhat novel. There were several contested issues. One issue was whether the treating doctor in this case, a chiropractic physician, should have accepted reductions based upon his contract with Medview, a separate company, not directly affiliated with the Defendant. At the outset of the case the Plaintiff’s attorneys knew that the doctor had a Medview contract but they were attempting to challenge the contract on several grounds. There was also another novel issue of whether or not the Plaintiff had standing to bring a county court action since the doctor had marked the bills “assignment accepted”. Finally, there was the issue of the termination of Plaintiff’s chiropractic benefits based upon Dr. Stanley Lynn’s examination of the Plaintiff in August, 1995, after Plaintiff had been treated in excess of fifty (50) times by his treating physician.
The Court finds that it was reasonable for the Plaintiff’s counsel to take the defenses seriously. The Court agrees with the testimony of Attorney Asencio that the defenses, had the facts supported them, would have meant that the Plaintiff would not prevail at all. Thus, all of the time spent was justified because of the somewhat novel issues that appeared in the case.
4.MARKET RATE FOR FEES IN THE COMMUNITY
The Court finds that the market rate for the hourly fees charged in the Palm Beach County area by lawyers of reasonable comparable skill, experience and reputation performing similar services as those performed by Plaintiff’s counsel ranges between $200 per hour to $300 per hour. Plaintiff has requested $250 per hour for Diego C. Asencio, Esquire and $200 per hour for James P. Cooksey, Esquire. This is well within the range of fees charged in the community for similar work.
5.AMOUNTS INVOLVED AND RESULTS OBTAINED
The Court finds that, while the amount involved indeed was small, having a dispute go on for a year about your bills is frustrating. While the amount may not seem like much to the legal community, it is understandable that these amounts may seem very great to the Plaintiff. Ultimately the Defendant did pay $1,357.56 in overdue PIP benefits and $144.65 in interest on the overdue benefits.
6.TIME LIMITATIONS IMPOSED BY THE CIRCUMSTANCES
The Court finds that this factor is not applicable to this case. While this appears to have been a time consuming case and attorney Yvette Murray testified that she avoids such cases so that she can handle more lucrative personal injury work, both Attorney Cooksey and Attorney Asencio agreed that they accept such cases because of the prospect of a multiplier. There was no testimony from either Attorney Asencio or Attorney Cooksey that they would have turned down other work specifically because of this case.
7.CONTINGENT FEE, RELEVANT MARKET, AND MITIGATION OF RISK
Plaintiff had a pure contingent fee contract with the law firm of Diego C. Asencio, P.A. and Diego C. Asencio assumed representation under that contract on a pure contingency. Attorney James P. Cooksey also had a pure contingency fee contract. Both Diego C. Asencio and James P. Cooksey undertook the entire risk of the loss of recovery in this case. The contract only allowed for a fee to be determined by the Court. Plaintiff was not obligated to pay any fee whatsoever absent a court award. Therefore, the application of a contingency risk multiplier to the Loadstar is within the sound discretion of the court. While a contingency risk multiplier is not appropriate in a run of the mill insurance case such as U.S. Sec. Ins. Co. v. Lapour, 617 So.2d 374 (Fla. 3rd DCA 1993), it has been amply shown this was not such a run of the mill case. The Court notes that, the leading case of Quanstrom v. Standard Insurance, 555 So.2d 828 (Fla. 1990) was itself a nondescript simple PIP case involving the issue of whether or not PIP coverage was available to an insured when he owned an inoperable motor vehicle. Another leading case, Palma, involved a fee of over $200,000 for litigating a $600 thermography bill. The Court believes that the Palma case illustrates that a simple dispute such as whether to pay a few bills for an auto accident can be turned into a major case when an insurance company chooses to do so.
The Court finds that it would have been difficult if not impossible for someone like Mr. Laloi to get proper legal representation on a contested PIP case without the use of a contingency contract and the fee multiplier. Attorneys of skill and reputation similar to Diego C. Asencio and James P. Cooksey will not accept contested PIP cases and go to trial without the possibility of a multiplier. The Court heard the testimony of attorney Asencio and attorney Cooksey that the multiplier persuaded them to enter into the area of PIP litigation. The Court finds that attorneys of skill and reputation will not choose to pursue such cases. Without a contingency fee multiplier such cases are highly undesirable. If the insurance company has made up its mind that it will contest the case, the risk of loss will always be present. This is exactly the type of case that requires a multiplier. In Palma a multiplier of 2.5 was found not to be excessive.
The Court finds that success was unlikely at the outset. Pursuant to Quanstrom a multiplier of 2.0 to 2.5 is appropriate. When balancing all factors, the Court finds a multiplier of 2.0 to be appropriate in this case.
The Court finds that the attorneys for the Plaintiff worked as a team. They shared the risks and they shared the work. The Court heard the testimony of Diego Asencio that they could not achieve the same results without working as a team. The Court finds that they should also share the same multiplier. It would be impractical to attempt to arrive at a separate multiplier for each attorney.
8.CONTINGENCY RISK MULTIPLIER
Plaintiff’s expert witness Yvette Murray testified that the likelihood of success in this case was less than 50/50 from the outset. There were various factors that made the case a greater risk. The Plaintiff in this case was a young, Black and Haitian male. There was testimony that attorney Cooksey, because of his location on Blue Heron Boulevard and Broadway in Riviera Beach, had many clients who were Black and Haitian. Cooksey also explained that this was a practice with its own practical problems. Many of his Black Haitian clients had poor paying jobs and no means of reliable transportation. Many of the clients would disappear for long periods of time. Some of them had questionable immigration status. Such clients did often leave the country without any indication of whether they would return. According to the testimony, the Plaintiff, Mr. Laloi, was typical of such clients.
There were also other risk factors involved in this case. They included: minor impact and little damage to the vehicle Plaintiff was occupying at the time of the accident, no complaints of injury at the scene of the accident, no emergency room visit, mostly chiropractic care, preexisting conditions, conditions that were difficult to relate to the accident, undisclosed drivers in the household, claims of lack of cooperation, claims of lack of notice of the accident, claims of lack of supporting documentation for the claims. The Court finds that success was unlikely at the onset.
9. FEES FOR LITIGATING ENTITLEMENT TO FEES
Plaintiff has also requested the Court to award attorneys’ fees for the time expended by Plaintiff’s counsel in litigating the issue of entitlement to attorneys’ fees. Under the case of State Farm v. Palma, 629 So.2d 830 (Fla. 1993) the Court ruled such an award must be considered in so far as it related to the “entitlement” as opposed to the “amount”. From the evidence presented it is not possible to determine exactly how much post June 14, 1996 time was related solely to the issue of entitlement to a multiplier. From a review of Attorney Ascencio’s and Attorney Cooksey’s affidavits and the post June 14, 1996 filings in the court file, the Court finds that this issue was involved in nearly all time spent after June 14, 1996. Because the exact amount of time spent on the entitlement to a multiplier issue cannot be determined, the Court will award half of all time spent after June 14, 1996. The total time after June 14, 1996 includes 20.90 for Diego Asencio and 15.50 for James P. Cooksey.
10.REASONABLE COSTS
The Court finds that under F.S. §627.428 and F.S. §57.041 Plaintiff is entitled to an award of reasonable costs in this matter. The Court does not have to determine the amount of reasonable costs as the parties have stipulated that Cooksey is entitled to recover his costs of $606.00 and Asencio is entitled to recover his costs of $2,652.30. The defense stipulated to these costs in open court. Accordingly, these costs shall be awarded.
11.EXPERT WITNESS FEES OF ATTORNEY
When the expert witness in a fee hearing expects to be paid for his time in preparing and testifying, the Court has no discretion to deny the attorney an expert witness fee. Stokus v. Phillips, 651 So.2d 1244 (Fla. 2nd DCA 1995). Yvette Murray testified without contradiction that she expended fifteen (15) hours for meeting with Attorney Asencio, reviewing Attorney Asencio’s file in preparation for the testimony and in testifying. Attorney Murray also testified without contradiction that her hourly rate for such testimony is $175 per hour. The defense also stipulated to this cost in open court. Accordingly, the Court finds that Plaintiff is entitled to $2,625.00 for the expert witness fee of Yvette Murray.
12.PREJUDGMENT INTEREST ON ATTORNEYS’ FEES AND COSTS
Plaintiff is entitled to prejudgment interest on attorneys’ fees and costs from the date of resolution of the case. Quality Engineering Installation v. Higley South, Inc., 670 So. 2d 929 (Fla. 1996). The case was not resolved until payment of the benefits and interest on June 14, 1996. Thus prejudgment interest on attorneys’ fees and costs shall accrue interest at the rate of 10% from that date. The parties have stipulated to the accrual date and to the amount of the interest. Accordingly, the interest shall be assessed in the final judgment in the amount of 10% on the award of attorneys’ fees incurred prior to June 14, 1996 from that date.
Based on the above, the Court finds and it is ORDERED AND ADJUDGED that the reasonable attorneys’ fees, paralegal fees and costs in this case are:
A. Attorney time of 46.85 for Diego C. Asencio (number of hours reasonably and necessarily expended) X $250 per hour (reasonable hourly rate) = $11,712.50 (Loadstar) X 2.0 (Contingency Risk Multiplier) = $23,425.00 total attorney’s fees.
B. Attorney time of 40.10 hours for James P. Cooksey (number of hours reasonably and necessarily expended) X $200 per hour (reasonable hourly rate) = $ 8020.00 (Loadstar) X 2.0 (Contingency Risk Multiplier) = $16,040.00 total attorney’s fees.
C. Attorney time of 10.45 hours for Diego C. Asencio (number of hours reasonably and necessarily expended on entitlement to attorneys’ fees issues) X $250 = $5,225.00.
D. Attorney time of 7.75 hours for James P. Cooksey (number of hours reasonably and necessarily expended on entitlement to attorneys’ fees issues) X $200 = $3,100.00.
E. Total costs of $606.00 for Cooksey and $2,652.30 for Asencio per stipulation.
F. Expert witness fees of Yvette Murray of $2,625.00 per
stipulation.
G. Grand total of all fees prior to June 14, 1996 of $39,465.00 and the costs of $3,258.30 shall accrue interest from June 14, 1996 to the date of the entry of judgment at the rate of 10% (per diem to be determined by counsel by agreement or separate hearing). Grand total of all fees after June 14, 1996 for entitlement issues of $8,325.00 and expert witness fees of $2,625.00 with interest accrued as allowed by law.
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