4 Fla. L. Weekly Supp. 180a
Attorney’s fees — Insurance — Attorney’s fees awarded to plaintiff in action to collect personal injury protection benefits after considering relevant factors, including novelty and complexity of case, counsel’s skill, customary fee, results obtained, and time limitations imposed by the circumstances — Use of contingency risk multiplier is appropriate under circumstances — No fees awarded for time spent preparing for litigation of entitlement issue
ROGES LORJUSTE, Plaintiff, v. ARMOR INSURANCE COMPANY, Defendant. In the County Court in and for Palm Beach County, Civil Division. Case No. MC-94-10807-RB. January 22, 1996 and February 28, 1996. Paul O. Moyle, Judge.
ORDER ON PLAINTIFF’S MOTION FOR ATTORNEYS FEES, PARALEGAL FEES AND COSTS
THIS CAUSE came to be heard upon the Plaintiff’s Motion for Attorneys Fees, Paralegal Fees and Costs and the Court having heard the testimony of Diego C. Asencio, Esquire (Board Certified Civil Trial Lawyer with over thirteen years of experience), Gary Russo, Esquire (A civil trial lawyer with over twelve years experience), Peter Cooksey (A civil trial lawyer with over ten years experience), and defendant’s attorney fee expert witness, Mark Rutledge (an experienced and competent defense attorney) and having further considered the billing statements from Plaintiff’s counsel, the billing statements from defense counsel, and all of the exhibits submitted into evidence, the court makes the following findings of fact:
FINDINGS OF FACT
1. FACTS OF CASE
A. PRE-SUIT
Plaintiff was injured in a car accident November 2, 1991. He was one of five black Haitian males that were occupying the rear portion of a pick up truck driven by another black Haitian male. Plaintiff claimed that the driver had been his roommate for the two months prior to the accident. He had a different address on his driver’s license. He claimed that he did not drive and only used the driver’s license as identification. He was provided with a PIP application and affidavit on or about December 11, 1991. He hired counsel Varner, Stafford and Seaman and filed his PIP application January 16, 1992. Bills were recorded as received by Defendant January 21, 1992. More bills were sent in between January of 1992 and May of 1992. None of the bills were paid. An IME exam was set up for May 22, 1992. Plaintiff did not attend. Several disputes arose thereafter regarding whether or not coverage should be afforded to the Plaintiff. Defendant had requested a sworn statement from Plaintiff 6/23/92, 7/10/92 and 7/21/92. Reservation of rights was sent to the Plaintiff 12/2/92 for failure to cooperate in not giving sworn statement and not attending IME. On 12/2/92 and 12/29/92 the Plaintiff’s attorney was advised that Defendant had never received a PIP application or affidavit from Plaintiff. A memo was sent by Defendant to Plaintiff’s counsel denying coverage for PIP due to alleged lack of cooperation of named insured and misrepresentation of named insured on application. On June 13, 1993 Plaintiff’s bodily injury claim under the liability portion of the case was settled by the Varner law firm for $2,500 even though no PIP benefits had been paid and there was over $5,000 in outstanding benefits. The bodily injury liability claim was settled for a complete release of Guy Saul, Defendant’s named insured, and the Defendant and its adjusting department, CISCO. The result of settlement under those circumstances was that the proceeds of the settlement were stuck in trust until the PIP case could be resolved. September 23, 1993 Defendant alleged in a letter to Plaintiff’s counsel that the second PIP application that had been submitted had been lost. The letter of September 22, 1993 also stated that it had been confirmed from other sources that Plaintiff had moved in with Guy Saul after the accident and that he would have to give a sworn statement before benefits were paid. Finally, the Defendant sent a letter dated April 11, 1994 in which it stated that more inconsistencies were created by the Defendant’s investigation and that it would require submission of all bills to date to consider an offer. There is no evidence that any action was taken from April 11, 1994 until July 7, 1994 when attorney Peter Cooksey first reviewed this matter for possible legal representation. At the outset it appeared that each and everyone of the above disputes remained unresolved when attorney Peter Cooksey first evaluated whether or not to take the case. Plaintiff had not been paid any PIP benefits or interest when Peter Cooksey accepted the case on July 8, 1994.
B. POST-SUIT
On July 8, 1994 Plaintiff’s counsel, Peter Cooksey, filed a Complaint with discovery that included a request to produce, interrogatories and a request for admissions July. Defendant filed an answer and affirmative defenses. The affirmative defenses raised numerous defenses to any payment under the policy. The affirmative defenses claimed Plaintiff was not dealing in good faith, failure to cooperate, failure to attend an IME, failure to attend an examination under oath, failure to give a recorded statement, failure to meet conditions precedent, failure to give proper notice of the claim, failure to mitigate damages by submitting expenses that were unreasonable, unnecessary and not related to the accident. A defense based upon alleged material misrepresentations in the application for insurance of the named insured, Saul Guy, was also raised. This defense under F.S. §627.409, if meritorious, would have meant that the entire policy would have been void, ab initio. Thus, there would have been no claim under which to make a claim. Plaintiff filed a Reply to the affirmative defenses and a motion to strike the affirmative defenses alleged in paragraphs 16, 17, 17A, 18, 20, and 21. Defendant apparently in response to the Plaintiff’s Motion to Strike filed a Motion for Leave to Amend Affirmative Defenses and sought to drop the 627.409 affirmative defense. However, the Defendant never set the motion for leave to amend for hearing. There was never any ruling on the amending of the affirmative defenses. Defendant objected to the Plaintiff’s request to produce on or about September 16, 1994 and produced only a portion of its claim file objecting to the rest of it on the basis of work product privilege. Plaintiff’s counsel, Diego C. Asencio, filed a notice of appearance and a motion for in camera inspection in the case on or about September 23, 1994. Defendant answered interrogatories on or about September 28, 1994. Numerous witnesses were listed as having handled the claim. The defense listed included the failure to attend the IME exam and the failure to give an examination under oath. Defendant further asserted in answer that the policy required these as a condition precedent to payment of PIP benefits. Plaintiff’s counsel attempted to obtain an agreement that the file be copied and numbed so that an in camera inspection could take place. Letters were sent by Plaintiff’s counsel to get an agreed order. Defendant’s counsel would not agree. Plaintiff’s counsel went forward with the hearing on the motion to compel and for in camera inspection. At the hearing Plaintiff’s counsel argued that the numerous defense could not be adequately addressed without assurance that all communication and investigation of the Defendant could be accounted for. Defendant vigorously defended copying of its claim file claiming it was burdensome and unnecessary. Plaintiff’s counsel obtained a detailed order that required very specific procedures for the securing of a complete copy of the claim file including adjuster log notes, memorandum, and other documentation to which the Defendant objected on the grounds that it was developed in anticipation of litigation. The entire claim file was ordered produced to a court reporter and the pages copied. The order was entered in November but the Defendant had not complied with the order until January 1995. Even though the claim file was delivered to a court reporter for copying many of the items were in fact withheld on the basis of work product and attorney/client privilege. Specifically withheld from discovery were the interoffice memorandum, claims investigation, investigation of vehicle ownership, and claims history investigation. After production of portions of the claim file, Plaintiff’s counsel sought to obtain independent investigation from the Florida Department of Insurance. After obtaining information from independent sources, Plaintiff’s counsel sent a second volley of discovery which included a new request to produce and a new set of interrogatories. At the same time Plaintiff’s counsel noticed this matter for trial. A trial readiness conference was set for July 10, 1995. It was at the trial readiness conference that the Defendant first indicated its willingness to enter into settlement negotiations. However, Plaintiff’s counsel was asked to calculate all of the benefits and interest. After Plaintiff spent considerable time piecing together the benefits and interest due based upon the discovery and other information available, a specific amount was relayed to Defendant which was accepted.
2. TIME AND LABOR
Plaintiff was represented by counsel, Peter Cooksey, for fourteen (14) months from the first contact with the Plaintiff on July 8, 1994 to the receipt of the checks representing full payment of benefits and interest on September 11, 1995. Plaintiff was represented by counsel, Diego C. Asencio for twelve months from initial conference on September 19, 1994 until September 11, 1995. Suit was filed in July of 1994. Plaintiff has submitted detailed billing statements showing the amounts of work performed by his attorneys. Defendant has contested both the hourly rate for attorneys as requested by Plaintiff’s counsel and the amount of hours reasonably necessary to perform the services. Plaintiff claims that his attorneys reasonably and necessarily expended approximately thirty-six hours for attorney time.
3. NOVELTY, COMPLEXITY AND REQUIRED SKILL
The case was novel and complex. This was also a case of first impression. There was no Florida appellate authority to guide the court. ARMOR INSURANCE COMPANY raised numerous affirmative defense coverage issues. These included:
A. Plaintiff was not dealing in good faith;
B. Failure to cooperate;
C. Failure to attend an IME;
D. Failure to attend an examination under oath;
E. Failure to give a recorded statement;
F. Failure to give proper notice of the claim;
G. That the above fulfillment of the above constituted a condition precedent to the filing of suit;
H. Failure to mitigate damages by submitting expenses that were unreasonable, unnecessary and not related to the accident;
I. The policy was void under F.S. §627.409 for misrepresentations.
Prior to the filing of suit, Defendant in numerous letters requested sworn statements. Later it was repeatedly asserted that there was no coverage for failure to cooperate and for failure to attend the IME exam. However, the Plaintiff’s physician had sent his final report and had concluded that the Plaintiff was MMI on June 4, 1992. Most, if not all, of the medical bills and documentation predate the date of any request for an IME or any request for a sworn or recorded statement. However, Defendant also claimed that it had not received the Plaintiff’s application or affidavits in 1992, that it did not receive or lost the Plaintiff’s application and affidavit in 1993, that all bills had to be signed by the Plaintiff or they could not be considered, that there were inconsistencies in the statements given by the different persons involved in the accident regarding the resident relative status, that there was no coverage due to the lack of cooperation by the named insured, Guy Saul, and that there was no policy at all since the named insured had made material misrepresentations in the application for insurance. Any of the last four defenses could have proven fatal to the Plaintiff’s claim if meritorious notwithstanding that many of the bills had all been received before May 22, 1992.
On the issues of non-cooperation of the named insured and condition precedent for nonattendance at the IME and sworn statement, there were no appellate decisions on PIP that were dispositive. In fact, with regard to the issue of a condition precedent, that issue had been determined adversely to an insured in an insurance claim arising under a fire case. Goodman v. State Farm Fire General Ins. Co., 660 So.2d 300 (Fla. 4th DCA 1995). Any one of these issues based on the defense arguments could have been fatal to Plaintiff’s claim for PIP coverage. Plaintiff’s counsel had to take each and every one of these defenses seriously. Since the motion for leave to amend had never been set for hearing by the defense, all of the defenses, including the defense under F.S. §627.409 were still very much a part of the case.
4. CUSTOMARY FEE IN THE COMMUNITY
Testimony was received concerning the customarily hourly fee charged in the Palm Beach County area by lawyers of reasonable comparable skill, experience and reputation performing similar services to those performed by plaintiff’s counsel. The testimony ranged from $150 per hour to $175 per hour for attorneys who were not very skilled; $175 an hour to $200 an hour for experienced and skilled attorneys; and $250 and higher for attorneys of great skill and ability. Plaintiff’s counsel, Diego C. Asencio, is a Board Certified Civil Trial Lawyer. He has fourteen (14) years of experience. He has been lecturing on no fault cases since 1989. His reasonable comparable skill, experience and reputation is in the highest range of trial attorneys as relates to the specific issues in this case. The $250 per hour requested by Plaintiff’s counsel is well within the ranges of fees charged within the community for similar difficult and complex work. The court finds the rate of $250 per hour to be reasonable for attorney Diego C. Asencio. Attorney James Peter Cooksey has been a litigation attorney for over ten (10) years who has handled over fifty contested bench trials. He also has had extensive experience in dealing with black Haitian clients and working on PIP cases. He has worked a co-counsel with Mr. Asencio on an equal basis when it comes to matters relating to the client and to pre-trial procedures. The testimony of these attorneys is that they work as a team because they are both essentially in solo practice and that all duplication of effort is avoided. The court finds that the reasonable hourly rate for attorney Cooksey is $200 per hour.
5. AMOUNTS INVOLVED AND RESULTS OBTAINED
The Plaintiff was involved in an accident involving multiple claimants under unusual circumstances. His resident relative status was questioned. He was questioned regarding his non-cooperation. His claim was also questioned regarding the non-cooperation of the named insured and misrepresentations by the named insured in the application. His settlement funds from his bodily injury claim had been stuck in trust with his previous attorneys, the Varner firm since June of 1993. He stood a high risk of losing this case, not recovering any money and having to pay all of his bodily injury settlement to his physicians. If he were to lose the case he would have to pay the costs of the defense. Under these circumstances a compromise settlement would cause him to recover no money even though his physician, Dr. Kaplan, was of the opinion he had suffered a permanent injury. Given the circumstances, the results obtained were excellent. Plaintiff was paid all of his benefits plus interest from 1991.
6. TIME LIMITATIONS IMPOSED BY THE CIRCUMSTANCES
Time was of the essence. ROGES LORJUSTE was in need of his benefits in order to release funds from trust that he was holding for his physicians. Plaintiff’s attorneys wasted no time. Suit was filed immediately. A plan of attack to recover all benefits was devised. It was promptly executed. When discovery information was obtained it was followed up by independent investigation. After investigation was obtained it was followed up by more discovery and a notice to set the matter for trial.
7. CONTINGENT NATURE OF FEE, RELEVANT MARKET, AND MITIGATION OF RISK
Plaintiff had a pure contingent fee contract with the undersigned law firms. The contracts provide only for a fee to be determined by the court. Plaintiff was not and is not obligated to pay any fee whatsoever absent a court award. Under these circumstances application of a contingency risk multiplier to the Loadstar is within the sound discretion of this court. The Defendant has argued that a contingency risk multiplier is not appropriate in the run-of-the-mill PIP case. This position is correct. U.S. Security Insurance Company v. LaPour, 617 So.2d 347 (Fla. 3rd DCA 1993). The defense argues that this was a “slam dunk” PIP case because the benefits should have been paid within thirty (30) days of the date of their receipt. However, the court finds that it has been amply shown by Plaintiffs that this was not such a run-of-the-mill case. The court specifically notes that the leading cases on attorneys fee Florida Guaranty Insurance Company v. Quantrom, 555 So.2d 828 (Fla. 1990) and State Farm v. Palma, 555 So.2d 836 (Fla. 1990) were both PIP coverage cases. The first involved whether or not a vehicle owned by an insured was an inoperable motor vehicle. The second dealt with whether or not a thermography bill was reasonable. The court finds that it would be difficult to obtain an attorney with the skill and reputation of Plaintiffs’ counsel without the contingency contract. Attorneys of similar skill and reputation would not accept PIP cases with the complex coverage issues involved herein without the availability of a contingency risk multiplier. Without a contingency risk multiplier cases such as the one involved herein would be highly undesirable. ROGES LORJUSTE was an individual of modest means. He was a black Haitian man who had been in an accident were five other black Haitian men had been riding as occupants and another black Haitian man was driving. He claimed to have lived with the driver of the car for only two months before the accident. The Defendant claimed inconsistencies. Defendant claimed that Plaintiff had only moved in with the driver after the accident. This case went unresolved from January of 1992 until July of 1994 pre-suit. The court finds that there was no way for the Plaintiff’s attorney to request a retainer or otherwise mitigate the risk of the loss of the case and thus Plaintiff’s counsel bore the entire risk of getting no fee on this case. The court finds that this is the sort of case that an attorney would not file suit on unless there was a multiplier. The court finds that this case does require a multiplier.
8. CONTINGENCY RISK MULTIPLIER
In State Farm v. Palma, 19 FLW S2 (Fla. December 23, 1993) a 2.5 multiplier was found to be “proper because of the extraordinary circumstances present”. Due to the fact that this case involved both difficult and novel issues of first impression Plaintiff urges the likelihood of success in this case was less than 50/50 at the outset. Both of Plaintiff’s counsel testified that in their opinion the likelihood of success was less than 50/50 at the outset. Plaintiff’s expert witness, Gary Russo, testified that the case had no greater chance of success than 50/50 and that he would not have taken the case even considering the multiplier. Russo further stated that his opinion was absolute. Russo said that had no doubt whatsoever that he would not have accepted the case. Russo explained that his experience has shown him that insurers tend to be more suspicious of black Haitian claimants especially if they are involved in accident with multiple claimants who are also black and Haitian. Russo further explained that Plaintiff attorneys are sensitive to the issue of representation of this minority group as it may affect how they are perceived and affect their reputation. Attorney Peter Cooksey testified that a large portion of his clients are black Haitians because of the location of his office and that he has suffered scorn and ridicule from insurers because of this. He testified that he would not have accepted the case if it had not been for the prospect of a multiplier. Defendant’s expert witness, Mark Rutledge, on the other hand was of the opinion that the case was easy and that coverage should not have been denied. It is true that the Defendant gave up. It is true that there was no trial. However, the court is required to look at the risk as it appeared to the Plaintiff’s attorneys at the outset when the case was accepted and not with the 20/20 hindsight of a Defendant’s surrender. J.E. Stack v. Lewis, 641 So.2d 969 (Fla. 1st DCA 1994) (appellate attorneys fees should include multiplier based on risk when case was first accepted); Dreese v. Craftman Auto Electric, 620 So.2d 1097 (Fla. 4th DCA 1993) (multiplier should still be awarded based on risk when case first accepted even if recovery was achieved thru default). Accordingly, the Court finds the contingency risk multiplier in this case to be appropriate.
9. FEES FOR LITIGATING ENTITLEMENT TO FEES.
Plaintiff has also requested in his motion that the court to award attorneys fees for the time expended by plaintiffs’ counsel in litigating the issue of entitlement to attorneys fees. State Farm v. Palma, 629 So.2d 830 (Fla. 1992). The court presided over the almost six (6) hours during which the case was presented. The court awards no time for any preparation of any entitlement issue.
10. REASONABLE COSTS
Under F.S. §627.428 and F.S. §57.041 Plaintiffs are entitled to an award of reasonable costs. The court finds reasonable cost in this matter to be $215.00. Taxing of costs is within the sound discretion of the court and costs may be taxed if a prevailing party can demonstrate the cost was reasonably necessary. Willey v. Fidelity & Deposit Co. of Maryland, 616 So.2d 1140 (Fla. 4th DCA 1993); Tremack Co. v. Federal Ins. Co., 600 So.2d 38 (Fla. 3rd DCA 1992); Orlando Regional Med. Ctr. v. Chmielewski, 573 So.2d 876 (Fla. 5th DCA 1990); Otis Elevator v. Brian, 490 So.2d 1189 (Fla. 1st DCA 1986); Winn Dixie v. Vote, 463 So.2d 459 (Fla. 2nd DCA 1985); Schumacher v. Wellman, 415 So.2d 120 (Fla. 4th DCA 1982); State Farm v. Sanpaio, 374 So.2d 617 (Fla. 4th DCA 1979); Miller Yacht Sales, Inc. v. Scott, 311 So.2d 762 (Fla. 4th DCA 1975) cert. den. 328 So.2d 343 (Fla. 1976).
11. ATTORNEYS FEES FOR EXPERT WITNESS ON FEES
In the normal run of the mill PIP case an expert fee would not be appropriate. USF&G v. Rosado, 606 So.2d 628 (Fla. 3rd DCA 1992). The court also heard unrebutted testimony that expert witness Mr. Russo values his time at $200 per hour. Accordingly, the court awards the expert witness $200 per hour for four (4) hours expended in this matter which the Court finds to be reasonable.
Based on the above findings of the Court IT IS ORDERED AND ADJUDGED that the Plaintiffs shall recover attorneys fees and paralegal fees and costs as follows:
A. Attorney time of 16 hours for Diego C. Asencio (number of hours reasonably and necessarily expended) x $250 per hour (reasonably hourly rate) = $4,000 (Loadstar) x 2.0 (contingency risk multiplier) = $8,000 (total attorney fees).
B. Attorney time of 13 hours for Peter Cooksey (number of hours reasonably and necessarily expended) x $200 per hour (reasonably hourly rate) = $2,600 (Loadstar) x 2.0 (contingency risk multiplier) = $5,200 (total attorneys fees).
C. Attorneys time of 4 hours for Gary Russo at $200 per hour for expert witness time = $800.
D. Costs in the amount of $215.00.
Based on the foregoing, the Defendant ARMOR INSURANCE COMPANY, shall be ordered to pay to the Plaintiff attorney’s fees and costs in the amount of $13,415.00 Dollars and an Expert Witness Fee of $800.00 Dollars for Gary Russo, Esquire. The Court shall enter Judgment in the amount of $14,215.00 Dollars which will bear interest in the amount as prescribed by F.S. 55.03 pro annum.
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AMENDED FINAL JUDGMENT
Pursuant to the attorney fee hearing held in this matter and the order on attorneys fees and costs rendered in this action,
IT IS ORDERED AND ADJUDGED that the Plaintiff, ROGES LORJUSTE, recover from the Defendant, ARMOR INSURANCE COMPANY, the sum of $14,215.00 which will bear interest in the amount as prescribed by F.S. 55.03, for which sums let execution issue. Plaintiff’s claim for pre-judgment interest is denied.
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