9 Fla. L. Weekly Supp. 619b
Insurance — Attorney’s fees — Contingency risk multiplier of 2 is awarded where multiplier was necessary to attract competent counsel because insured’s attorneys could not mitigate risk of non-recovery by insureds who could not afford to pay attorney’s fees, chance of success in claim against insurer denying coverage due to insured’s failure to disclose on application that daughter who is a licensed driver resided in his home was fairly unlikely at outset, and results obtained were maximum available under policy — Reasonable hourly rates determined — Costs, including expert witness fee, awarded — Prejudgment interest awarded from date insurer agreed to insured’s entitlement to attorney’s fees and costs
AUDRIS PIERRE, ICLEDA PIERRE, and IRLANDE PIERRE, Plaintiffs, vs. NEW HAMPSHIRE INDEMNITY COMPANY INC., Defendant. Circuit Court, 15th Judicial Circuit in and for Palm Beach County. Case No. CA 01-07682 AF. July 15, 2002. Lucy Chernow Brown, Judge. Counsel: Diego C. Asencio, Diego C. Asencio, P.A., North Palm Beach. Richard A. Giardino, Davis & Giardino, P.A., West Palm Beach.
ORDER ON PLAINTIFF’S MOTION TO TAXATTORNEYS’ FEES AND COSTS WITH INTEREST
THIS CAUSE came to be heard June 27, 2002 on the Plaintiffs’ Motion to Tax Attorneys’ Fees and Costs with Interest. The parties were able to agree on most of the facts. The sole issues left for the court’s determination were: 1) the market rate for attorney Diego C. Asencio, 2) the market rate for attorney Terry Freeman, 3) whether the court should apply a contingency risk multiplier, 4) the amount of that multiplier, and 5) the costs in pursuit of fees.
The Court received in evidence the deposition testimony of Eric Luckman (the expert witness for the Plaintiffs) as well as the deposition testimony of James Mayfield (the expert witness for the Defendant). The court heard live testimony from Diego C. Asencio (co-counsel for the Plaintiffs), Terry Freeman (co-counsel for the Plaintiffs), Iceleda Pierre (co-Plaintiff) and Irlande Pierre (co-Plaintiff). The court also received numerous exhibits in evidence.
Having duly considered all of the evidence admitted at the attorney fee hearing, together with the arguments of counsel, the court makes the following findings of fact and conclusions of law:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. THE UNDERLYING COVERAGE ISSUES
The facts constituting the underlying coverage issues are not disputed by either side. This action was brought by the Pierre family against their own auto insurer New Hampshire Indemnity Company, Inc. (hereinafter New Hampshire Indemnity) for declaratory relief seeking coverage for an auto accident which occurred on October 25, 2000. New Hampshire Indemnity voided their policy claiming that Plaintiff Audris Pierre (hereinafter Mr. Pierre) omitted material information in the original application for insurance he signed on December 3, 1998. Mr. Pierre lived with his wife Icelda Pierre (hereinafter Icelda) and his daughter Irlande Pierre (hereinafter Irlande). Irlande was a licensed driver. Mr. Pierre did not disclose his daughter on the application for insurance. It is clear that Mr. Pierre could have and should have disclosed her as a driver and resident. The failure to disclose Irlande was the crux of whether this was a risky case for counsel at the outset of the representation.
The time period of representation ran from October 30, 2000 to December 26, 2001. Originally, the Plaintiffs were represented solely by Mr. Terry Freeman (hereinafter Mr. Freeman) for personal injuries to Icleda and Irlande arising from the auto accident of October 25, 2000. Mr. Pierre also made a claim with New Hampshire Indemnity for property damage to the family’s car.
New Hampshire Indemnity early on in the claims handling process reserved all rights to deny coverage. It quickly followed that up with an unequivocal denial of coverage.
On May 24, 2001 Mr. Freeman wrote to Mr. Pierre enclosing with that letter a copy of F.S. §627.409 and the case of Independent Fire Ins. Co. v. Arvidson, 604 So.2d 854 (Fla. 4th DCA 1992) (Plaintiffs’ exhibit #’s 8 & 18). Both F.S. §627.409 and the Arvidson case enclosed with the letter to Mr. Pierre appeared to strongly support New Hampshire Indemnity’s position that the policy should be voided ab initio. Nevertheless, Mr. Freeman left the decision on whether to proceed with the case to Mr. Pierre stating in the letter “I would be happy to refer your case to another law firm in this area that would review your case.”
Mr. Freeman at that time believed this was a high risk case for counsel.
2. FILING OF SUIT AND CONFESSION OF JUDGMENT
However, the Plaintiffs chose to continue to pursue the matter. The Pierre family’s pastor brought Mr. Pierre to Mr. Asencio on June 11, 2001. Mr. Asencio explained all of the risks of going forward on the case. Then Icelda and Irlande came with the pastor and Mr. Pierre to see Mr. Asencio on July 23, 2001. Again Mr. Asencio explained all of the risks of going forward. That same day following the office conference, Mr. Asencio sent the Pierre family a letter enclosing their contracts and stating “I explained that this is a very difficult case and that the chances of prevailing are not good.”
This action was filed July 25, 2001. The complaint was served on New Hampshire Indemnity August 3, 2001. Mr. Asencio diligently prosecuted the case from July 25, 2001 to November 9, 2001 mostly in the form of discovery and motion practice. It surprised Mr. Asencio when New Hampshire Indemnity indicated that it wished to settle on November 9, 2001. This was the very first time it had indicated any willingness to resolve the coverage issues by settlement. Prior to that time Mr. Asencio believed that this case would most likely be a hotly contested matter.
Ultimately, New Hampshire Indemnity agreed to completely withdraw its coverage defenses and allow a judgment to be entered establishing coverage for liability insurance, PIP and collision. The court entered final judgment November 16, 2001. The court reserved jurisdiction for attorneys’ fees and costs. Plaintiffs served a motion to tax attorneys’ fees and costs December 21, 2001.
Almost immediately upon settling, New Hampshire Indemnity agreed that it was liable for attorneys’ fees and costs. Before the attorneys’ fees hearing New Hampshire Indemnity agreed 44.80 hours had been reasonably and necessarily spent by Mr. Asencio and 17.00 hours had been reasonably and necessarily spent by Mr. Freeman.
3. NEED FOR A MULTIPLIER AND RISK AT THE OUTSET
In tort and contract cases, the factors to be considered by a trial court in determining whether a contingency fee multiplier is appropriate are 1) whether relevant market requires such multiplier to obtain competent counsel, 2) whether the attorney was able to mitigate risk of nonpayment in any way, and 3) whether any of factors set forth in Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985) are applicable (especially amount involved, results obtained, and type of fee arrangement between attorney and his client). See Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828, 829 (Fla. 1990).
Both Plaintiffs’ attorneys agreed to represent the Pierre family upon the understanding that, if they were successful, they would be entitled to a fee which would be set by the court pursuant to F.S. §627.428. Under Quanstrom, such a contingency fee agreement requires that this court consider a multiplier based on the likelihood of success. If the court determines that success was more likely than not at the outset, it may apply a multiplier of 1 to 1.5. If the court determines that the likelihood of success was approximately even at the outset, the court may apply a multiplier of 1.5 to 2.0. If the court determines that success was unlikely at the outset of the case, it may apply a multiplier of 2.0 to 2.5.
A multiplier in the appropriate amount should be awarded when factually supported. Speer v. Mason, 769 So.2d 1102 (Fla. 4th DCA 2000).The multiplier must be based on the risk at the outset. Dreese v. Craftman Auto Electric, 620 So.2d 1097 (Fla. 4th DCA 1993). At the outset of this case, the likelihood of recovery was not good. Mr. Freeman testified that he did not think success was likely and that the case needed an “expert” in insurance matters. He said that is why the case ultimately ended up with Mr. Asencio.
Mr. Asencio testified that Mr. Pierre was a very nice forty-eight (48) year old Creole speaking Haitian man who earned his living as a sugar cane cutter in Belle Glade. Mr. Pierre could not speak English very well. The Pierre family could not afford to pay an attorney any hourly rate only the possibility of a contingency risk multiplier enabled Mr. Pierre to obtain competent counsel.
Mr. Asencio specifically evaluated the risk of non-recovery at the outset. His billing statement records success as “unlikely” (Plaintiffs’ exhibit #11). Mr. Asencio considered his theory that New Hampshire waived voiding the policy by failing to act when Irlande crashed the family’s car on February 6, 1999 as the only viable means to obtain coverage for the Plaintiffs. Mr. Pierre did in fact fail to disclose his daughter as a household member and licensed driver. Mr. Pierre did not deny that the insurance agency asked for him to list all persons living in the household. Mr. Pierre simply failed to comply with their request. His excuse that she was planning to move to Pompano was legally insufficient.
As to the possibility of success based upon waiver, Mr. Asencio did not believe that this was a “sure thing.” It was not possible for Mr. Asencio (in advance of filing suit) to know what information was contained within the claim files of New Hampshire Indemnity.
Eric Luckman (hereinafter Mr. Luckman) testified in deposition (at page 11) that “the multiplier should be around the 2.0” and that “the risk of non-payment was fairly high.
James Mayfield (hereinafter Mr. Mayfield) testified in deposition there was “just simply is no reasonable basis for the belief or the conception that in order to obtain good counsel in personal injury protection, you have to entice them with a multiplier here” (at page 13). He said that there are “a plethora of competent attorneys in Palm Beach County” and that there are “attorneys in Palm Beach County that do nothing but personal injury protection work” (at page 12). However, Mr. Mayfield obtained a defense verdict on behalf of his insurance company client on the only non-disclosed driver case which he ever tried (at page 30-31).
The court hereby finds that a multiplier is necessary on a case like this one in order to attract competent counsel. The court finds that both Mr. Freeman and Mr. Asencio could not mitigate the risk of non-recovery. The Pierre family could not afford to pay attorneys’ fees. The risk was substantial at the outset. The court finds that success was fairly unlikely based on the facts known at the outset. Even Mr. Mayfield did not know why New Hampshire Indemnity changed its position and finally agreed to afford coverage. Without reading the 1999 claim file, its reasons for settling remain unknown.
The amount involved will not necessarily dictate the amount of fees that can be obtained in a PIP case. PIP cases usually involve smaller sums of money. Coverage is limited to $10,000.1 Mr. Asencio testified that he was able to secure $10,000 in liability insurance coverage for any liability claims against Mr. Pierre. He also obtained total payments for the Pierre Family of $12,643.002. Twelve thousand dollars is, comparatively speaking, a small amount. However, that is larger than most awards in PIP actions. Larger fees have been awarded when the PIP benefits in dispute were less. For example, State Farm Fire & Cas. Co. v. Palma, 524 So.2d 1035 (Fla. 4th DCA 1988) involved a fee of $253,500.00 for litigating a $600.00 thermography bill. The results here were excellent since the Pierre family received the maximum available under their coverage with New Hampshire Indemnity for all of their claims.
4. MARKET RATE FOR PLAINTIFFS’ COUNSEL
In determining the market rate for the attorneys’ fees in this case, the court must consider the market rate for the hourly fees charged in the Palm Beach County area by lawyers of reasonably comparable skill, experience and reputation performing similar services as those performed by Plaintiffs’ counsel.
Mr. Asencio has been board certified in civil trial law since 1989, has been in practice for nearly twenty (20) years and has acquired expertise in insurance litigation. He is well known for his seminars and publications on insurance. The resume received into evidence as Plaintiffs’ exhibit #1 contains extremely detailed information that justifies an award of $300.00 per hour for Mr. Asencio.
Mr. Freeman has been in practice even longer than Mr. Asencio having been admitted to the Florida bar in 1973. He has served as chairman and vice chairman of the 15th Judicial Circuit’s Grievance Committee and is a well respected member of our bar. His areas of expertise, however, were such that he required the services of Mr. Asencio as an expert in area of insurance law. The Court finds a reasonable hourly rate for Mr. Freeman in this case is $250.00.
The court is aware of numerous comparable attorneys in the Palm Beach County area whose market rates are comparable to these.
5. EXPERT WITNESS FEES AND TAXABLE COSTS
Plaintiffs are seeking as a cost the expert witness fees charged by Mr. Luckman under F.S. § 92.231. Mr. Asencio agreed to pay Mr. Luckman $300.00 per hour (Mr. Luckman’s deposition at page 38, Plaintiffs’ exhibit #16). Mr. Luckman testified that he expended 4.5 hours including his time in preparing and testifying. Accordingly, the court awards the 4.5 hours at $300.00 per hour. The court awards these fees to Plaintiffs as a cost. See Stokus v. Phillips, 651 So.2d 1244 (Fla. 2d DCA 1995) (expert witness taxed as cost under F.S. §92.231); Mangel v. Bob Dance Dodge, Inc., 739 So.2d 720 (Fla. 5th DCA 1999). Thus, Plaintiffs shall receive $1,350.00 for Mr. Luckman’s fees.
The court also awards the costs for the underlying coverage matter in the amount of $351.00 as stipulated on page nine (9) of Mr. Luckman’s deposition. The court also awards the costs incurred by Plaintiffs in pursuit of the attorneys’ fees including the cost of the court reporter’s per diem for the fee hearing ($120.00) , the cost of the Plaintiffs’ interpreter ($243.75), the cost of Mr. Mayfield’s deposition ($357.40) and the cost of Mr. Luckman’s deposition ($409.35). 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). The court finds that all of these costs were reasonably necessary. Thus, the court taxes these total costs of $1,130.50.
6. PREJUDGMENT INTEREST ON THE FEES AND COST
Plaintiffs are entitled to prejudgment interest on attorneys’ fees and costs from the date New Hampshire Indemnity agreed to their entitlement to attorneys’ fees and costs. Prejudgment interest on attorneys’ fees includes prejudgment amounts in a merged total, with post-judgment interest then accruing on the merged total. See Quality Engineering Installation v. Higley South, Inc., 670 So. 2d 929 (Fla. 1996). The parties agree that New Hampshire Indemnity conceded entitlement to fees and costs on November 9, 2001. The Plaintiffs have agreed to have the court apply the 9% interest rate which went into effect on December 31, 2001. Thus, prejudgment interest on attorneys fees shall accrue interest at the rate of 9% from November 9, 2001. Likewise, prejudgment interest on the costs from the underlying dispute will accrue at the rate of 9% from November 9, 2001. No prejudgment interest will be awarded on the costs awarded for the pursuit of the attorneys fees as their entitlement was in dispute.
Based on the above, the court finds and it is ORDERED AND ADJUDGED that the reasonable attorneys fees, costs and interest in this case are as follows:
A. Attorney time of 44.8 hours for Mr. Asencio (number of hours reasonably and necessarily expended) X $300.00 per hour (reasonable hourly rate) = $13,440.00 (Loadstar) X 2.0 (Contingency Risk Multiplier) = $26,880.00 total attorneys fees.
B. Attorney time of 17.00 hours for Mr. Freeman (number of hours reasonably and necessarily expended) X $250.00 per hour (reasonable hourly rate) = $4,250.00 (Loadstar) X 2.0 (Contingency Risk Multiplier) = $8,500.00 total attorneys fees.
C. $351.00 total costs reasonably spent on the dispute.
D. $1,350.00 cost of expert witness fees for Mr. Luckman.
E. $1,130.50 total costs reasonably spent in pursuit of the attorneys’ fees.
F. Total fees and costs of $35,731.00 (A, B, & C) shall accrue 9% interest from November 9, 2001 to June 27, 2002.
G. In addition, the Court finds the following shall be awarded as additional costs: expert witness fees and costs as set forth in Paragraphs D and E above, totaling $2,680.50, which shall accrue interest at the current legal rate from the date of this Order. The Court shall enter judgment on these amounts upon counsels’ submission of a proposed final judgment, including prejudgment interest calculations in accordance with findings herein.
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1PIP limits are $8,000 when a $2,000 deductible is chosen. International Bakers Insurance Company v. Arnone, 552 So.2d 908 (Fla. 1989).
2$11,473.31 in PIP benefits for Iceleda and Irlande Pierre and $1,169.69 to repair Mr. Pierre’s ’85 Toyota.
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