8 Fla. L. Weekly Supp. 251c
Insurance — Attorney’s fees — Plaintiffs having prevailed by reason of confession of judgment or settlement, in case involving cancellation of plaintiffs’ insurance coverage, are entitled to recover reasonable attorney’s fees and costs — Factors considered in determining the hourly rates and contingency risk multiplier are contingency fee agreement between parties, number of hours reasonably spent, complexity of case and possibility of recovery, and level of experience of expert witnesses — Hours — Number of hours reasonably spent included pre-suit hours spent preparing the case, hours spent dealing with criminal aspect of plaintiffs’ problem, and hours spent on preparing bad faith claim — In considering the reasonableness of hours spent by plaintiffs’ counsel, court considered the number of hours spent by defense counsel which included about 25 percent more hours for less work
MAHBUBUR RAHMAN and ROKSHANA SHARIFA, Plaintiffs, vs. GATEWAY INSURANCE CO., Defendant. County Court, 15th Judicial Circuit in and for Palm Beach County, Civil Division RF. Case No. MC-99-19651-RF. November 28, 2000. Robert S. Schwartz, Judge. Counsel: Eric Luckman, West Palm Beach. Mark Humphrey, Tampa.
FINAL JUDGMENT FOR ATTORNEY FEES AND COSTS
THIS MATTER WAS BEFORE THE COURT pursuant to a hearing regarding attorney fees and the court, having examined the entire court file, and being otherwise fully advised, hereby rules as follows.
The plaintiffs having prevailed in the case by reason of a confession of judgment or settlement, in a case regarding insurance coverage, they are entitled to recover reasonable attorney fees and costs pursuant to Florida law. The factors that went into the determination of the various amounts and to the multiplier are:
1. There was a valid contingency fee agreement between the parties which differed from a “pure” contingency contract only in a provision for payment of fees based upon a schedule, should the Plaintiffs unilaterally (without counsel) agree to settle the case without allowing for attorney fees as a part of the settlement (or in other words, try to “cut” him out of reasonable compensation for his work).
2. The number of hours reasonably spent on the case included hours that were disputed by the Defense as not related or recoverable, inter alia, pre-suit hours spent in preparing the case, hours spent in dealing with criminal aspects of the Plaintiffs’ problem, as well as hours spent in preparing a bad faith claim.
While pre-suit hours spent are not generally allowable, they should be, and in the view of this Court are in this case. First, it makes no sense and is against public policy for an attorney to rush to file a suit with little or no merit just to enhance the number of billable hours. This case was one where, facially, it appeared that the Plaintiffs had little to no chance of recovery, therefore, Plaintiffs’ counsel would have been foolish in not proceeding carefully, pre-suit; to have filed this case without careful preparation would have been asking to have been personally liable for attorney fees under F.S. 57.105.
The case that was cited on the propriety of fees for pre-suit hours was United States Fidelity and Guaranty Co. v. Rosado, 606 So.2d 628 (3rd DCA 1992). This case held that the trial court had to determine whether the pre-suit work was necessitated by the insurer’s unreasonable conduct. Here, the insurer knew, or should have known through the use of due diligence, that their cancellation of the Plaintiffs’ policy, based upon their underwriting criteria, was mistaken. The criteria used to cancel their policy was the fact that the Plaintiffs hadn’t had a drivers license in Florida for at least 2 years, whereas, their actual policy allowed the addition of the time a driver had a license in other states. It is difficult to believe that the Defendant did not know that the Plaintiffs had a license in other states plus the year and one half they had in Florida. They either negligently applied their own criteria, or ignored the time in other states. This mistake caused the Plaintiffs to be liable to two other insurance companies for subrogated losses, criminally liable for the driver’s failure to have had proper insurance at the time of driving, and to have a liability to pay for damages to their own vehicle, necessitating their hiring a lawyer.
The hours spent on the bad faith claim were reasonable as they would tend, according to expert testimony, to induce early settlement and there are certain factors that a reasonable attorney should explore to determine whether such a claim is appropriate under the circumstances presented in this case. Clearly, but for the mistake of the Defendant, the charge of Driving Without Valid Insurance would not have been brought. This charge, while only a minor one, carries a heavy fine and license suspension upon adjudication, as a minimum.
Another minor factor in considering the reasonableness of the hours spent by the Plaintiffs’ counsel, were the number of hours spent by the Defendant’s counsel in the defense. The number of hours spent by the Defense counsel, which did not include any discovery demands, included about 25 percent more hours for less work. Though there are differences in the kind of requirements placed on the defense, such as travel, and reporting to his principal more often, it is hard to justify the position that spending 10 less hours on the prosecution of a case than on the defense is unreasonable.
3. This case on its face would appear to be one where the Plaintiffs could not prevail. Their policy of insurance had been canceled 2 months before the accident based upon facially valid criteria, not known in detail to the Attorney. The Plaintiffs were aware of the cancellation, having received correspondence and had time to acquire substitute coverage. The Plaintiffs were the cause of the accident, there were two other insurance companies with valid, subrogated claims against them, and a prosecution for the lack of insurance. The amount of damages recoverable would not have supported the hiring of counsel paid per hour and but for the chance for attorney fee recovery with the possibility of a multiplier, this mistake by the Defendant would have stood causing the Plaintiffs significant potential, uncovered, liability. On the face of things, at the time the case was presented to counsel, it would appear to be a complex case with little hope of recovery, requiring quite a bit of discovery before there could be any hope. There was a possible, but not likely, agency estoppel claim and an unlikely improper cancellation claim.
Based upon the above considerations and the testimony of a very experienced and well-versed expert witness, Mr. Diego Asencio, Esquire, who has written many of the attorney help guides in this area of law, plus other factors considered by the court, such as the relative inexperience of the “expert” utilized by the Defendant (18 years experience for Mr. Asencio versus 4 years insurance litigation experience by Mr. Katz; Mr. Katz’s lack of board certification, relative lack of relevant trial experience in the area, among other factors) the court finds that as to Eric Luckman, 43.5 hours at the rate of $250.00 is reasonable, with a contingency risk multiplier of 2.0; prejudgment interest from June 16, 2000 at the rate of 10% per annum should be added1, along with paying Mr. Asencio’s fees, at the rate of $250 for 5 hours should be recovered including costs of $473.02. Therefore, it is,
ORDERED AND ADJUDGED that Plaintiffs, Mahbubur Rahman and Rokshana Sharifa, shall recover from the Defendant attorney fees and prejudgment interest in the amount of $22,728.75, together with expert fees incurred by the Plaintiffs in the amount of $1250, and costs of $473.02, that shall bear interest at 10% per annum, for which let execution issue.
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1Part of the time between the settlement and the hearing was caused by the mistake of the court in setting the hearing for less time than needed. This resulted in more time in which to figure interest. However, during this period, the Defendant had the use of the money that would be awarded to Mr. Luckman, and he did not have such use.
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