5 Fla. L. Weekly Supp. 522b
Attorney’s fees — Insurance — Insured prevailing in action against insurer — Error to include in award the time spent litigating applicability of contingency risk multiplier after entitlement to reasonable fee had already been determined
COLONIAL INSURANCE COMPANY OF CALIFORNIA, APPELLANT, v. SENSORY NEURODIAGNOSTIC, INC., APPELLEE. 13th Judicial Circuit in and for Hillsborough County. General Civil Division. Case No. 97-5330. Division: B. County Case No. 96-16940. April 17, 1998. Appeal from the County Court in and for Hillsborough County; Manuel Lopez, Judge. Counsel: David D. Neiser, for Appellant. Wendy Coxhead, for Appellee.
OPINION REVERSING JUDGMENT AS TO ATTORNEY FEES
This matter came before this court on appeal from the final judgment of the county court entered June 20, 1997, which awarded Appellee (Sensory) attorney fees pursuant to Section 627.428, Fla. Stats. (1995). This award included fees for time spent litigating the applicability of a risk multiplier to the award of attorney fees. Appellant, Colonial Insurance Company of California (Colonial), argues that the county court erred by including within the attorney fees award that time expended by Sensory’s counsel in litigating the application of a risk multiplier.
Colonial and Sensory reached a settlement agreement in the underlying suit on November 7, 1996. At that time both parties agreed that Sensory’s counsel was entitled to an award for reasonable attorney fees and costs pursuant to Section 627.428. Thereafter the parties were unable to agree on the amount of attorney fees. A fee hearing was held before the county court and the court entered its judgment which includes in its calculation of the attorney fees award time which Sensory’s counsel spent in the post-settlement litigation (i.e., after Colonial agreed that Sensory was entitled to an attorney fee award).
Colonial rightly points out that in State Farm Casualty v. Palma, 629 So. 2d 830, 833 (Fla. 1993), the Florida Supreme Court distinguished between time spent litigating entitlement to an award of fees and time spent litigating the amount of attorneys’ fees once entitlement has been determined. The Supreme Court held that, under Section 627.428, an insurer who loses suit to an insured and contests the insured’s entitlement to attorney fees may be held liable for attorney fees incurred in litigating the issue of entitlement to fees, but not for time spent litigating the amount of fees.
Sensory asserts that because Colonial contested Sensory’s entitlement to the application of a risk multiplier pursuant to Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985), modified, Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990), the time spent litigating that issue is properly included in an award of fees. Colonial argues that it did not contest Sensory’s entitlement to the application of a risk multiplier, but rather merely asserted that a multiplier of 1.0 would be appropriate; thus, the issue was one of ‘amount.’ Sensory counters that Colonial did, indeed, contest applicability of a multiplier and even if Colonial had merely argued for a multiplier of 1.0, that is essentially no multiplier and the matter becomes an issue of ‘entitlement.’ The county court found that plaintiff’s entitlement to a contingency fee multiplier was contested and that ‘all work reasonably expended by plaintiff in litigating its entitlement to a multiplier is clearly an entitlement issue where attorneys fees may be awarded.’
Unfortunately there is a lack of clear precedent to provide guidance in this area. The issue is further clouded by the use of the word ‘entitlement.’ Although the parties may have been contesting Sensory’s ‘entitlement’ to a multiplier, semantics aside, the fact remains that entitlement to fees had already been conceded as of the settlement of November 7, 1996. Entitlement to a reasonable fee had already been determined when the county court conducted its fee hearing to decide whether to apply a multiplier, and if so, to determine what that multiplier should be. Litigation as to the application of a multiplier once entitlement to a reasonable attorney’s fee has already been determined would appear to be an ‘amount’ issue, not an ‘entitlement’ issue. Consequently, fees incurred litigating the applicability of a risk multiplier are not properly included in an award of attorneys’ fees. Accordingly, this cause is,
REVERSED AND REMANDED for further action consistent with this opinion.
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