6 Fla. L. Weekly Supp. 373a
Insurance — Personal injury protection — Attorney’s fees — No abuse of discretion in amount of attorney’s fees awarded to insured after settlement of dispute over bill for chiropractic treatment — Competent substantial evidence supports determination that 70 hours was reasonable number of hours expended and that $300 was reasonable hourly rate — No abuse of discretion in trial court’s determination that contingency risk multiplier of 2.5 was appropriate — Whether trial court abused its discretion by awarding expert witness fees and by including presuit attorney’s fees in calculating award not preserved for appellate review
FORTUNE INSURANCE COMPANY, Appellant, vs. TERRELL RANDALL, Appellee. 10th Judicial Circuit in and for Polk County. Appeal Number: AA-39. County Case No. 97-CC11-1710. March 31, 1999. Charles A. Davis, Jr., Chief Judge. Counsel: Jerri A. Blair, Tavares, for Appellant. John Hugh Shannon, Lakeland, for Appellee.
OPINION OF THE COURT
This matter came before the Circuit Court for Polk County on appeal from the County Court for Polk County. Fortune Insurance Company (Fortune) appeals a final judgment which awarded attorney’s fees and costs to Terrell Randall (Randall).1 Fortune does not challenge Randall’s right to attorney’s fees, but rather whether the amount awarded by the lower tribunal was reasonable. After reviewing the briefs submitted by the parties, the record of the proceedings below, and being otherwise advised of the merits of this case at oral argument, the court now finds as follows:
BACKGROUND:
On March 19, 1992, Fortune issued an insurance policy for personal injury protection (PIP) to Randall. On June 16, 1992, Randall was injured in an automobile accident. Randall suffered minor soft tissue injuries to his back as a result of the accident. Randall sought chiropractic treatment. Randall’s chiropractor performed several diagnostic tests. The total amount billed by the chiropractor for the diagnostic tests was $2,545.00.
Fortune questioned the necessity of the diagnostic tests, and referred the matter to a peer review board in an attempt to determine whether it should pay for the tests. Meanwhile, in October 1992, Randall submitted to an independent medical examination (IME) performed by Fortune’s own doctor. The IME doctor concluded that additional chiropractic treatment was necessary, and should continue until February 1993. However, the peer review board recommended that Fortune deny coverage for the costs of the diagnostic tests.
In 1993, Fortune paid the chiropractor’s bill for treatments received by Randall, but withheld coverage as to the diagnostic tests. Fortune also neglected to pay interest on the outstanding treatment bills. At some point, Randall assigned his rights against Fortune to his chiropractor. Although Randall had obtained counsel after the accident in 1992, he did not file a suit against Fortune for refusing to cover the costs of the diagnostic tests until June 11, 1997. Before Randall filed his complaint against Fortune, he obtained a revocation of the assignment of his rights.
On November 26, 1997, the parties agreed to settle the case. As part of the agreement to settle the case, Fortune would pay the chiropractor $840.00 for the outstanding bills. In return, the chiropractor agreed to release Randall from paying the remainder of the costs. The release was executed by the chiropractor on February 20, 1998. Pursuant to §§ 627.248(1) and 627.736(8), Florida Statutes (1997), Randall then returned to the county court for an award of reasonable attorney’s fees.2
STANDARD OF REVIEW:
When awarding attorney’s fees pursuant to §§ 627.248(1) and 627.736(8), Florida Statutes (1997), a trial judge must exercise his or her judicial discretion in determining the “reasonable” amount of the fee. The court acknowledges that the question of how much is a reasonable fee in a given case cannot be precisely answered. Universal Underwriters Insurance Company v. Gorgei Enterprisers, Inc., 345 So. 2d 412, 414 (Fla. 2d DCA 1977). Even by following established guidelines, opinions can differ as to what is a reasonable fee in any given case. Id. Thus, attorney’s fee awards in civil cases are generally subject to review under the abuse of discretion standard. PHILIP J. PADOVANO, FLORIDA APPELLATE PRACTICE § 9.5 (2nd ed. 1997).
In Canakaris v. Canakaris, 382 So.2d 1197, 1203 (Fla. 1980), the Florida Supreme Court discussed the abuse of discretion standard of review, stating that trial courts exercise judicial discretion to determine questions for which no hard-and-fast rule applies. Id. The determinations are dependent upon the circumstances of each individual case, and are controlled by the personal judgment of the court. Id.
The test for an abuse of judicial discretion is whether the judicial action is arbitrary, fanciful, or unreasonable. Canakaris, 382 So. 2d at 1203. A decision is said to be arbitrary, fanciful, or unreasonable if no reasonable person would have taken the view of the court. Id. Under this reasonableness test, the appellate court must determine whether there are logic and justification for the trial court’s result which is supported by competent, substantial evidence. Id.
ISSUES:
After reviewing the record of the proceedings below, and the briefs submitted by the parties, the court believes these are the issues that it must resolve in deciding whether to affirm or reverse the decision of the County Court for Polk County. The court notes that its formulation of the issues differs from those raised by the parties in their briefs. However, the court believes these are the correct issues, which are as follows:
(1) whether the “plain language” of § 627.248(1), Florida Statutes (1997), which requires that attorney’s fees be a “reasonable sum,” mandates a reversal because the sum awarded in the instant case does not bear a reasonable relationship to the amount of money obtained in the settlement;
(2) whether the trial court abused its discretion by determining that 70 hours was a reasonable number of hours expended or by deciding that $300.00 per hour was a reasonable hourly rate;
(3) whether the trial court abused its discretion by considering the “desirability” of the case;
(4) whether the trial court abused its discretion in its determination that a contingency risk multiplier of 2.5 was appropriate;
(5) whether the trial court abused its discretion in including pre-suit attorney’s fees in calculating the award; and,
(6) whether the trial court abused its discretion by awarding expert witness fees.
DISCUSSION:
In Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985), the Florida Supreme Court set out the means used by a trial court when awarding a reasonable sum for attorney’s fees when these fees are authorized by statute or have been previously agreed to by the parties. In determining reasonable attorney’s fees, courts should use these criteria set forth in Disciplinary Rule 2-106(b) of The Florida Bar Code of Professional Responsibility. The Florida Supreme Court later revisited the issue of reasonable attorney’s fees, specifically the question of the appropriate contingency multiplier, in Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990). In Quanstrom, the Florida Supreme Court ruled that attorney’s fees cases could ordinarily be placed into one of three categories, including public policy cases, tort and contract cases, and family law and eminent domain cases. Id. at 833.
Issue (1): Whether the “plain language” of § 627.248(1), Florida Statutes (1997), which requires that attorney’s fees be a “reasonable sum,” mandates a reversal because the sum awarded does not bear a reasonable relationship to the amount of money obtained in the settlement.
Citing primarily Security National Insurance Co. v. Sein, 5 Fla. L. Weekly Supp. 523 (Fla. 17th Circuit March 18, 1998), Fortune would have this court conclude that the determination of whether a fee is reasonable can be made by comparing the amount of the fee with the amount of money obtained in a judgment or settlement. The court elects not to read such a holding from the language in Sein. In so ruling, the court notes that the “results obtained” language does not equate with the amount of money obtained in judgment or settlement. Rather, the statutory language refers to the situation in which an insured brings multiple claims for breach of contract against the insurance carrier and only prevails on some of those claims. See Rowe, 472 So. 2d at 1151; compare, Lumberman’s Mutual Casualty Company v. Quintana, 366 So. 2d 529, 530 (Fla. 3d DCA 1979).
Issue (2): Whether the trial court abused its discretion by determining that 70 hours was a reasonable number of hours expended or by deciding that $300.00 per hour was a reasonable hourly rate.
Fortune contends that Randall’s attorney was already familiar with the facts surrounding this case because the attorney had already previously represented Randall in his bodily injury case. Fortune would also have this court believe that a complaint such as the one contained in the record could be drafted in short-order by using a “form complaint.” Thus, Fortune reasons that the 70 hours that Randall’s attorney billed in this case are excessive. In contrast, Randall urges this court to affirm the trial court’s ruling under the abuse of discretion standard.
The court finds that the trial court made specific findings as to why 70 hours were a reasonable number of hours expended. In so ruling, the court refers to the trial court’s written final judgment, the relevant portion of which reads:
“The attorney’s fee award is based upon this Court’s determination that Plaintiff’s attorney has expended 70 hours in the prosecution of Plaintiff’s claims; that the same was necessary; that the number of hours were reasonably expended in the prosecution of this action; and the hourly rate of $300.00 is reasonable, taking into consideration the circumstances and facts of the case, the experience, certifications, and reputation of Plaintiff’s attorney and the rate charged within the legal community for services and representation of this nature. Other factors that the Court considered, but were not limited to; the novelty and difficulty of the factual and legal issues, the skill required to properly perform the legal services, the contingency nature of the contract for attorney’s fees, the amount involved in the lawsuit and the results obtained, as well as the undesirability of the case.”
Although the trial court’s order does not include the specificity that Fortune would suggest is needed, there is competent, substantial evidence in the record to support the trial court’s finding that 70 hours was a reasonable number of hours expended. Consequently, this court must conclude that the trial court did not abuse its discretion in determining that 70 hours were a reasonable number of hours expended.
Next, in determining a reasonable hourly rate for services of the prevailing party’s attorney, a trial court should assume that the fee will be paid regardless of the result, and take into account all factors enumerated in the disciplinary rule governing fees for legal services except time and labor required, novelty and difficulty of question involved, results obtained and whether the fee is fixed or contingent. Rowe, 472 So. 2d at 1150-1151 (emphasis added). After reading the trial court’s written final judgment, the court must again find that the trial court did not abuse its discretion in determining that $300.00 per hour was a reasonable hourly rate. There is competent, substantial evidence in the record, and thus this court cannot say that the trial court’s findings are arbitrary, fanciful, or unreasonable.
Issue (3): Whether the trial court abused its discretion by considering the “desirability” of the case.
Fortune would have this court conclude that by its use of the word “desirability,” the trial court mistakenly evaluated this case under the standards in public policy cases as enunciated in Quanstrom. However, the record is silent as to any evidence or testimony indicating that Randall suggested that this case was a public policy case where desirability should be considered. The “desirability” of a case, as a criterion to be evaluated in public policy cases, refers to the potential damage to the reputation of the attorney in taking such cases. It is clear, after reading the trial transcripts, that the trial court was not listening to testimony of “desirability,” in the sense that the term is used in public policy cases. Rather, the trial court heard testimony regarding whether the relevant market requires a contingency multiplier to obtain competent counsel.
Issue (4): Whether the trial court abused its discretion in its determination that a contingency risk multiplier of 2.5 was appropriate.
Fortune avers that the case at bar was an ordinary PIP case in which it merely had to be “coaxed” into paying off Randall’s claims. That is, this case did not present any new questions of law to be decided by the court. Fortune’s strongest argument against the multiplier of 2.5 is that success in the case was likely from the outset. Although success as to whether Fortune had to pay for the diagnostic tests was uncertain, Fortune argues that Randall had a good chance of winning at least part of its claims at trial based upon the fact that Fortune had not paid interest on the costs of treatments received by Randall. In so arguing, Fortune avers that the contingency risk that must be determined by the trial court is the risk that the attorney will not be paid. In the instant case, Fortune specifically argues that there was little risk that Randall’s attorney would not be paid because Randall was certain to win on the issue regarding unpaid interest.
In contrast, Randall argues that the unpaid interest issue was far from certain. Randall points out that Fortune aggressively defended this lawsuit by filing two motions to dismiss, offering five affirmative defenses in its answer, and by dragging its feet during discovery and in payment of Randall’s claims. Randall also alleges that Fortune threatened to report the chiropractor to the State for alleged unethical billing practices. That is, Randall avers that this allegation made the instant case unique in its preparation of the pleadings and discovery. Randall urges the court to affirm the trial court’s ruling on this issue as a proper exercise of discretion. Randall also suggests that Fortune’s argument is nothing more than a “red herring” designed to lure this court away from the real issues. Instead, Randall points out that payment was uncertain because he did not have the means to pay his attorney at an hourly rate and a contingency risk multiplier was necessary to attract competent counsel.
After reviewing this issue, the court acknowledges that the trial court did state that a 2.5 contingency risk multiplier was appropriate in this case because “the relevant market required a contingency fee multiplier to obtain counsel, and the likelihood of success at the time Plaintiff’s attorney accepted representation was unlikely from the outset.” The court concludes that Fortune’s argument that this case was a “winner” because of unpaid interest is unpersuasive. The court notes that just because Randall may have had a winning issue regarding unpaid interest does not mean that Randall would have obtained fees for the entirety of time spent on this case. Rather, Randall would have been entitled to an award of fees only for those hours spent on litigation related to breach of contract based on the unpaid interest. Payment for time spent litigating other issues was uncertain. Consequently, this court concludes that the trial court did not abuse its discretion in deciding that a 2.5 multiplier was appropriate.
Issue (5): Whether the trial court abused its discretion in including pre-suit attorney’s fees in calculating the award.
Citing U.S. Fidelity and Guaranty Co. v. Rosada, 606 So. 2d 628 (Fla. 3d DCA 1992), Fortune argues that the trial court erred in including pre-suit attorney’s fees in calculating the award. In contrast, Randall argues that this issue has not been properly preserved for appellate review because there was no contemporaneous objection to these fees. Randall also argues that the facts of the instant case, namely Fortune’s unreasonable conduct, necessitated the award of pre-suit attorney’s fees. The court agrees that this issue has not been preserved for appellate review, and thus there is no need to address this issue.
Issue (6): Whether the trial court abused its discretion by awarding expert witness fees.
Fortune argues that the award of expert witness fees in a simple PIP case is erroneous. Fortune points out that the underlying case settled in a relatively short period of time, prior to trial. In contrast, Randall again argues that this issue has not been properly preserved for appellate review, and that the facts of the instant case warrant the award of expert witness fees. Again, the court agrees that this issue has not been preserved for appellate review, and thus there is no need to address this issue.
CONCLUSION:
This court concludes that the trial court did not abuse its discretion in its award of attorney’s fees. Accordingly, it is
ORDERED that the final judgment of the trial court is AFFIRMED. It is further
ORDERED that Randall’s motion for appellate attorney’s fees is DENIED.
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1The trial court’s final judgment included: (1) $52,500.00 in attorney’s fees; (2) $1,711.64 in prejudgment interest; (3) $1,625.00 in expert witness fees; and, (4) $105.50 in court costs. The total amount awarded was $55,942.14.
2When a lawsuit between an insurer and insured regarding personal injury protection settles, the insured is entitled to reasonable attorney’s fees under these statutes. United Auto Insurance Company v. Zulma, 661 So. 2d 947, 949 (Fla. 4th DCA 1995).
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