9 Fla. L. Weekly Supp. 769a
Attorney’s fees — Insurance — Personal injury protection — Claim that billing for intra-office conferences and memos between attorney and paralegal amounts to over-billing is rejected — $300 is reasonable hourly rate for attorney with considerable experience and expertise, and $75 is reasonable hourly rate for paralegal with extensive PIP experience — Contingency risk multiplier of 2.0 is justified where evidence establishes that insureds could not obtain competent counsel in PIP cases without a contingency multiplier, insured’s counsel was not able to mitigate the risk of nonpayment in any way other than by litigating case to the point of trial, case involved substantial risk to counsel since it would come down to a battle of medical experts, and success was unlikely at outset — Costs and expert witness fees awarded
PAULA SMITH, Plaintiff, vs. DIRECT GENERAL INSURANCE COMPANY, Defendant. County Court, 1st Judicial District in and for Escambia County. Case No. 2001 SC 4571, Division 5. September 4, 2002. Patricia A. Kinsey, Judge. Counsel: Robert N. Heath, Jr., Robert N. Heath, P.A., Pensacola, for Plaintiff. Louis D. Kaye, for Defendant.
ORDER GRANTING PLAINTIFF’S ATTORNEY’S FEES
At a hearing in chambers on September 4, 2002, the court heard the Plaintiff’s Motion for Fees and Costs.
It is undisputed that plaintiff’s attorney is entitled to an award of attorney’s fees and costs. The court, having heard the testimony and argument of counsel, the testimony of expert witnesses, reviewed the exhibits and case law presented, makes the following determinations in accord with Florida Patients Compensation Fund v. Rowe, 472 So.2d 1145 (Fla. 1985), Standard Guaranty Insurance Company v. Quanstrom, 555 So.2d 828 (Fla. 1990) and The Florida Rules of Professional Conduct Rule 4-1.5(b).
This case revolves around an automobile collision which occurred on September 8, 2000. The plaintiff was represented by attorney Robert Heath who filed a Complaint on September 21, 2001. The defendant filed an Answer asserting ten (10) affirmative defenses. The defendant stopped medical payments to the plaintiff’s treating chiropractic physician based on a compulsory medical examination performed by Dr. Eric Frank two months post-accident. During the course of the case, the plaintiff had to set two separate hearings to compel discovery. The case settled when defense counsel contacted the treating chiropractic physician ex-parte and negotiated a 50% reduction in the invoiced amount of the outstanding medical bills.
First the court reviewed the time spent by Mr. Heath. Mr. Heath documented with sufficient detail a total of 18.85 hours of his time plus 26.3 hours of paralegal time. The plaintiff’s expert, after a review of the defense file and time sheets, testified that the records appeared to be accurate and reasonable with “no puffing” observed.
This case presented issues which were fairly typical for a PIP case. However, the defendant was so confident of their position, that they immediately demanded a jury trial, denying all of plaintiff’s assertions except that defendant was a corporation doing business in Escambia County, Florida and adding ten (10) affirmative defenses. Throughout the pendency of the case, the defendant never changed their position… never wavered in their position that coverage was denied1. The defendant issued subpoenas for the plaintiff’s medical, employment and academic records and fought production of those records requested by the plaintiff forcing plaintiff to file successive motions to compel. The defendant maintained substantial control over the amount of time plaintiff’s counsel was required to spend litigating this case. Plaintiff’s file, at the conclusion of the case, had grown to at least eight to ten inches of documentation. Although defense counsel argues that billing for intra-office conferences and memos amounts to double billing and asks the court to reduce the total number of hours by 17.1 hours2, the court rejects this argument finding that plaintiff’s counsel adequately explained the necessity for these meetings and work performed by both he and his paralegal. Therefore, the court finds 18.85 hours for Mr. Heath and 26.3 hours for his paralegal reasonable.
Next the court must determine a reasonable hourly rate for Mr. Heath and his paralegal. The court finds reasonable and credible the testimony of plaintiff’s expert, Arthur Shimek. Mr. Shimek has eighteen years of personal injury and insurance related experience. In the past, a substantial part of his practice has been spent handling PIP cases. Mr. Shimek’s reputation in the civil arena is one of the best. Mr. Shimek’s more than eighteen years of experience, his reputation in the community (“among the top attorneys in his age group in the personal injury area”) and the results he has forged in very difficult cases, confirms his skill and expertise. For this case, he reviewed the plaintiff’s file, refreshed his memory and information regarding other legal firms within the local community and the state of Florida, relied on his own personal knowledge and experience, and testified that the prevailing market rate for an attorney with Mr. Heath’s reputation, knowledge and experience is $300.00/hour.
The court reviewed the testimony, the court file and has personally observed Mr. Heath’s experience, reputation, diligence and ability in representing his clients. Mr. Heath’s more than twenty-one years of experience, his reputation in the community (“among the top, if not the top, attorney in PIP litigation”) and the results he forged from what appeared at first to be a case in which the defendant believed they enjoyed ten affirmative defenses, reflect brightly on his skill and expertise.
Mr. Heath has been board certified by the Florida Bar as well as the National Board of Trial Advocacy as a Civil Trial Lawyer since 1990. Although Mr. Heath has both criminal and civil trial experience, since 1984 his practice has been primarily civil. Since 1986, his practice has been exclusively civil. His practice has been substantially devoted to PIP cases since 1996, and in the last four years, he has handled more than 250 PIP cases. Mr. Heath is a published author on PIP issues and is a frequent seminar presenter concerning PIP and related issues.
Therefore, based on the issues involved, Mr. Heath’s considerable experience and expertise, the prevailing market and standards within this community, and the quality of the legal work performed, the court finds that a reasonable rate for Mr. Heath is $300.00/hour.
Although it may seem that $75.00/hour for paralegal work is on the high side for the community, it was also proved (and undisputed) that $75.00/hour for Ms. Stoner’s paralegal work is a reasonable rate. Ms. Stoner has extensive PIP and civil experience. Prior to his untimely death, Ms. Stoner assisted Leff Mabie, Jr. in his extraordinary civil practice. She has more than twenty years experience handling both complex and the more routine legal cases. Her reputation in the legal community is well established as an exceptional legal assistant and her services are in high demand.
The court next examined whether or not a multiplier is justified in this case. It is well established that because of the small sums involved, litigants may be discouraged if they cannot recover an amount sufficient to cover their loss and attorney’s fees. See Quanstrom at 833-834. Since PIP cases almost always involve a small sum, case law supports the application of a multiplier to attract good and competent attorneys who are willing to accept the risk of non-payment. Mere hourly wages could never fairly compensate for the risk involved where a fee is dependant upon the successful outcome of a case. The evidence and the record establishes that in this community one could not attract or obtain competent counsel in cases such as this one without a contingency multiplier.
In applying the Quanstrom factors, the court finds that the evidence established Mr. Heath was not able to mitigate the risk of nonpayment in any way other than by litigating this case to the point of trial. Over a ten month period, the insurance company continued to deny coverage and push the case to the next level. This case was very hotly contested with the defendant never conceding the necessity of the medical care and never backing down from their position that they would prevail at trial. In fact, based on the plaintiff’s two prior accidents and two prior findings of permanent impairment, when combined with the defense’s choice of experts, Dr. Eric Frank, Mr. Heath gave serious consideration to declining the plaintiff’s case. Mr. Heath candidly admitted that he has declined to represent PIP clients in the past once he learned Dr. Frank did the compulsory medical examination due to Dr. Frank’s exceptionally good trial presentation and chiropractic expertise. Mr. Heath had to weigh this disadvantage with the inherent impeachment problems brought to the case by the plaintiff’s treating doctor. Even though the case presented these obstacles to success, Mr. Heath decided to handle the case and the result is a reflection of his hard work, expertise and persistence.
In its analysis, the court then applied the factors set forth in Rowe. The use of a multiplier is further justified by the substantial risk to Mr. Heath in taking the case. He devoted nearly 19 hours of his time and nearly $300.00 of his money over a ten month period. From the beginning, based on the small sum at controversy, the pure contingency fee contract and the defendant’s apparent confidence in denying coverage, the case posed a substantial risk to Mr. Heath. Mr. Heath accepted this case knowing there was a substantial probability that he would not prevail despite his perceived merits of the case.
For example, the case would undoubtedly come down to a battle of medical experts plus the jury’s view of the credibility of the insurance adjuster. When faced with pure credibility issues in presenting a case, the odds are 50-50 at best. When faced with these specific experts, the case fell well below the 50-50 odds for the plaintiff.
When evaluating the Quanstrom imposed modification on Rowe to determine the likelihood of success at the onset of the case, the court notes several very important factors. Perhaps the best way of evaluating the “likelihood of success at the onset of the case” is the defendant’s own evaluation. Defense counsel made it very clear that from the beginning, he had no less than ten affirmative defenses. This claim can only be interpreted as defendant’s determination that the case, at the onset, fell into the category of “success was unlikely.” Furthermore, the defendant had the advantage of the “best” expert and the advantage of using the plaintiff’s two prior accidents and permanent impairment ratings.
The court further gave great weight to Mr. Shimek’s expert testimony that even with the possibility of a multiplier, out of the approximately 750 attorneys practicing in the two-county area, only about six attorneys litigate PIP cases on a regular basis. Because of the inherent problems in dealing with PIP cases under the current statute and case law, many of the more experienced and prominent physicians and attorneys in the two-county area decline to accept PIP cases. Without the incentive of a multiplier, this number of skilled attorneys would undoubtedly dwindle even more. Although the amounts in controversy are normally very small, the issues in PIP cases can be complex. The District Courts of Appeal frequently differ on their approaches and the Supreme Court is often forced to resolve these issues. Without a multiplier, the skilled and experienced attorneys like Mr. Shimek and Mr. Heath would decline to handle PIP cases.
Although it is clear to the court that his case should probably fall within the “unlikely to succeed” category, the plaintiff presented testimony that it should fall within the even-chance category. Although labeled as subject to ten affirmative defenses at the onset by the defendant, ultimately the plaintiff prevailed. Therefore, the court awards plaintiff an attorney’s fee of $15,255.00, which is the product of Mr. Heath’s 18.85 hours at $300.00/hour times a 2.0 multiplier plus 26.3 paralegal hours at $75.00/hour times a 2.0 multiplier.
Further, the court finds the plaintiff is entitled to recover costs totaling $283.93 and interest at the rate of 9% per annum from July 31, 2002 in the amount of $134.10. Therefore, the total due plaintiff for attorney’s fees, costs and interest is $15,673.03.
In addition, plaintiff incurred costs for Mr. Shimek’s services as an expert witness. Mr. Shimek documented 6.2 hours of time reviewing the file and preparing for the hearing and testifying at the attorney’s fee hearing at the rate of $250.00/hour, for a total of $1,550.00. Mr. Shimek’s testimony reflected the amount of time, research, and expertise he brought to the court. The court finds his time is reasonable and a reasonable fee for his services is $1,550.00. See Travieso v. Travieso, 474 So.2d 1184 (Fla. 1985); Stokus v. Phillips, 651 So.2d 1244 (Fla. 2d DCA 1995).
The parties have stipulated that the benefits owed to the plaintiff have been paid in the amount of $750.00 on July 31, 2002.
ORDERED AND ADJUDGED that the total judgment, excluding benefits which have already been paid, for attorney’s fees, taxable costs, expert witness fee and prejudgment interest shall be $17,223.03 which shall accrue interest at the rate of 9% per annum for which let execution issue.
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1Plaintiff’s counsel testified that it came as a complete surprise when defense counsel negotiated a settlement directly with the medical provider on an ex-parte basis.
2The total number of hours consists of 6.9 hours for Mr. Heath plus 3 hours for Ms. Stoner for intra-office memos and conferences plus 7.2 hours for “double billing” for drafting documents.
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