9 Fla. L. Weekly Supp. 480b

Insurance — Uninsured motorist — Attorney’s fees — Contingency risk multiplier — Where insured’s chance of success in recovery on uninsured motorist claim was unlikely at outset due to extremely late notice to insurer and credibility issues on part of insured as to whether there was a phantom vehicle that had run him off the road as he rode his bicycle, and market requires multiplier to obtain competent counsel in this type case, multiplier of 2.0 is awarded — Hours claimed by insured’s two attorneys are reduced because there must necessarily have been some duplication of effort — Costs — Fees of insured’s expert attorney’s fees witness are awarded where witness testified that case presented a hardship

ROBERT BELL, Plaintiff, vs. ALLSTATE INSURANCE COMPANY, Defendant. Circuit Court, 17th Judicial Circuit in and for Broward County. Case No. 00005808 (25). May 23, 2002. George A. Bresher, Judge. Counsel: Diego C. Asencio, Diego C. Asencio, P.A., North Palm Beach. Leslie D. Glenn, Boca Raton. John Donahoe, Donahoe, Pecaro & Vollender, P.A., Ft. Lauderdale.

ORDER ON PLAINTIFF’S MOTION TO TAXATTORNEYS FEES AND COSTS WITH INTEREST

THIS CAUSE came to be heard on May 8, 2002 upon the Plaintiff’s Motion to Tax Attorneys Fees and Costs with interest. The parties were able to agree on most of the facts necessary to this court’s determination of the attorneys fees, costs and interest in this matter. The sole disputed issues left for the court’s determination were: 1) the number of hours reasonably and necessarily expended by each counsel for the Plaintiff on the uninsured motorist coverage issues, 2) the multiplier, 3) the amount of interest and 4) the amount of costs.

The Court heard the testimony of Mark McCollem (the expert witness for the Plaintiff), Leslie Duberstein-Glenn (co-counsel for the Plaintiff), Chris Cannon (the expert witness for defense) and Diego C. Asencio (co-counsel for the Plaintiff). The court also received into evidence the time records of counsel for the Plaintiff as well as documents framing the underlying UM coverage dispute. Having duly considered all of the evidence adduced 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

The time period during which attorneys fees and costs were incurred for services related to the UM coverage issues ran from November 24, 1999 to November 30, 2000. On November 30, 2000 ALLSTATE INSURANCE COMPANY (hereinafter ALLSTATE) conceded UM coverage. On December 1, 2000 ALLSTATE agreed it was liable for attorneys fees and costs related to the coverage dispute. However, ALLSTATE has not as of yet paid any UM benefits to its insured, the Plaintiff, ROBERT BELL (hereinafter MR. BELL). The issue of whether there was a negligent uninsured motorist who caused injury to MR. BELL remains unresolved and is set for trial at a later date.

The facts of the accident are basically that MR. BELL was injured when he fell off his bicycle as he was peddling down the Atlantic Boulevard bridge on May 31, 1996. MR. BELL claimed that an unidentified motor vehicle ran him off the north west side of the road at the base of the bridge. ALLSTATE insured MR. BELL for UM. MR. BELL suffered a broken jaw and lost some teeth as a result of that accident. MR. BELL did not contact ALLSTATE about that accident whatsoever. The reason MR. BELL did not contact ALLSTATE was that he did not understand that this was an “auto related” accident since he was not driving any car he insured with ALLSTATE. MR. BELL had been drinking at the time of the accident.

Co-counsel for MR. BELL, Leslie Duberstein-Glenn, notified ALLSTATE of the PIP and UM claims for the very first time on December 28, 1999. A signed PIP application was submitted February 2, 2000 (Plaintiff’s exhibit #11). Ms. Duberstein- Glenn first learned of the accident when MR. BELL was giving a deposition on an unrelated claim which arose from an altercation at a bar upon questioning about prior accidents. Ms. Duberstein-Glenn presented PIP and UM claims to ALLSTATE despite that more than three (3) years had passed since the first accident.

This action by MR. BELL was for UM coverage after an unequivocal denial of UM coverage by ALLSTATE. ALLSTATE denied UM coverage on January 14, 2000 (Plaintiff’s exhibit #8)¹. ALLSTATE adjuster Fredi Goldman advised there is “no coverage for Uninsured Motorist benefits.” ALLSTATE based its coverage denial of UM on its assertion that MR. BELL had failed to notify the police about the accident within 24 hours and that he also failed to notify ALLSTATE about the accident within 30 days. ALLSTATE relied on the following provisions in the policy of insurance (Plaintiff’s exhibit #14) as the basis to deny uninsured motorist coverage to MR. BELL:

An uninsured auto is:

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(4) A hit and run motor vehicle which causes bodily injury to a person insured as the result of a motor vehicle accident. The identity of either the operator or the owner of the vehicle must be unknown. The accident must be reported within 24 hours to the police. We must be notified within 30 days. If the hit-and-run motor vehicle caused injury without physical contact with the person insured or the vehicle the person was occupying, the facts of the accident must be proved. We will only consider competent evidence other than the testimony of a person making claims under this or any similar coverage. If the person was occupying the insured motor vehicle at the time of the accident, we have a right to inspect it.

ALLSTATE initially stuck to its coverage denial in this action. It denied coverage in its answer (Plaintiff’s exhibit #10) and in response to request for admissions (Plaintiff’s exhibit #12). There was no actual physical contact with the unidentified motor vehicle. At the outset of the case, the only evidence that there was an unidentified motor vehicle was the testimony of MR. BELL. ALLSTATE’s policy provides by its own terms that it will “only consider competent evidence other than the testimony of a person making claims.” While it did appear that the accident was “reported” since the were police somehow called to the scene, it was questionable whether it was reported to anyone as a “hit and run” type accident. There was nothing in any police report, ambulance report, paramedic report (Plaintiff’s exhibit #13), hospital record (Plaintiff’s exhibit #15), or doctor’s note which corroborated MR. BELL’s account of a “phantom vehicle.”

The clauses in policies which require physical contact for UM coverage to apply are void. Brown v. Progressive, 249 So.2d 429 (Fla. 1971). However, a “hit and run” vehicle must be timely reported and a UM 24 hour reporting clause may be valid. See Allstate v. Korschun, 350 So.2d 1081 (Fla. 3d DCA 1977) cert. den. 359 So.2d 1216 (Fla. 1978) (non-compliance with reporting provision prejudiced insurer); Accord Torres v. Protective, 358 So.2d 109 (Fla. 3d DCA 1978). In other words, ALLSTATE could not deny coverage based on a total lack of physical contact with the phantom vehicle but it could base denial on failure to report the accident. Interestingly, unlike the UM provisions in Brown, ALLSTATE sought to control the quantum of proof required when there is no physical contact (as opposed to eliminating UM coverage altogether).

The testimony was unrefuted that at the time of the representation MR. BELL could not afford to pay an attorney an hourly rate. The only way MR. BELL could get representation was on a contingency basis. ALLSTATE does not dispute that a multiplier should be applied to the case. MR. BELL did sign contingency fee contracts with his attorneys (Plaintiff’s exhibits #’s 1 and 2). Ms. Duberstein-Glenn testified she considered this to be a very difficult case and she sought out the assistance of attorney Diego C. Asencio who was more experienced in contested first party insurance coverage cases. Mr. Asencio said he evaluated the case at the outset as “unlikely to succeed” but chose to proceed on the basis that he would be entitled to receive the maximum multiplier.

This court must consider the multiplier based on the risk involved at the outset. J.E. Stack v. Lewis, 641 So.2d 969 (Fla. 1st DCA 1994) (appellate attorneys fees should include multiplier based on risk when case was first accepted); Dreese v. Craftman Auto Electric, 620 So.2d 1097 (Fla. 4th DCA 1993) (multiplier should still be awarded based on risk when case first accepted even if recovery was achieved thru default).

Mr. McCollem testified that the range of multiplier for a case which appears unlikely to success at the outset is 2.0 to 2.5. This is correct. See Quanstrom v. Standard Insurance, 555 So.2d 828 (Fla. 1990). Mr. McCollem was of the opinion that this case further required the maximum multiplier based on the degree of difficulty. Mr. Cannon on behalf of ALLSTATE testified that this case had an even chance of success and that the multiplier should be 1.5.

Clearly, the risk was substantial at the outset. Prejudice is presumed (but can be rebutted) when there is late notice. Macias v. Bankers Ins. Co., 475 So.2d 1216 (Fla. 1985). The risk at the outset was substantial due to the extremely late notice (more than three years) as well as the credibility issues on the part of MR. BELL as whether there was a “phantom vehicle” at all. The court finds that success was unlikely at the outset. The court further finds that the market requires a multiplier for this type of case in order for MR. BELL to obtain competent counsel. The court based on the difficult nature of the case awards a multiplier of 2.0.

Mr. Asencio requested 12.5 hours for his time and Ms. Duberstein-Glenn requested 26.8 hours for her time. The parties stipulated to an hourly rate of $300.00 for Mr. Asencio and an hourly rate of $250.00 for Ms. Duberstein-Glenn. ALLSTATE argued that a more reasonable number of hours for Mr. Asencio would be 6.5 and that a more reasonable number of hours for Ms. Duberstein-Glenn would be 20.00. The court finds that there must necessarily have been some slight duplication of effort having two attorneys for MR. BELL despite the testimony that they coordinated their efforts. Accordingly, the court finds that 10 hours were reasonably and necessarily spent by Mr. Asencio and 25 hours were reasonably and necessarily spent by Ms. Duberstein-Glenn.

MR. BELL also requests that the court allow an expert witness fee for Mr. McCollem pursuant to F.S. §92.231. Mr. McCollem testified that the case presented a hardship and that Mr. Asencio had agreed in writing to pay him an hourly fee of $250.00 per hour. Accordingly the court awarded the 8.5 hours spent by Mr. McCollem to prepare and testify. Stokus v. Phillips, 651 So.2d 1244 (Fla. 2d DCA 1995) (expert witness taxed as costs under F.S. §92.231); Also see Mangel v. Bob Dance Dodge, Inc., 739 So.2d 720 (Fla. 5th DCA 1999). The court awards these fees to MR. BELL as costs.

The court also awards the costs for the underlying coverage matter in the amount of $344.00 and the cost of the court reporter’s per diem for the fee hearing in the amount of $260.00.

Plaintiff is entitled to prejudgment interest on attorney fees and costs from the date ALLSTATE agreed to entitlement to attorneys fees and costs. Quality Engineering Installation v. Higley South, Inc., 670 So. 2d 929 (Fla. 1996). The parties agree that ALLSTATE conceded entitlement to attorneys fees and costs on December 1, 2000. Thus, prejudgment interest on attorneys fees and costs shall accrue interest at the rate of 11% from that date.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:

A. Attorney time of 10 for Diego C. Asencio (number of hours reasonably and necessarily expended) X $300.00 per hour (reasonable hourly rate) = $3,000.00 (Loadstar) X 2.0 (Contingency Risk Multiplier) = $6,000.00 total attorneys fees.

B. Attorney time of 25 hours for Leslie Duberstein-Glenn (number of hours reasonably and necessarily expended) X $250.00 per hour (reasonable hourly rate) = $6,250.00 (Loadstar) X 2.0 (Contingency Risk Multiplier) = $12,500.00 total attorneys fees.

C. Total costs of $344.00 for the underlying UM dispute.

D. Expert witness fees for attorney Mark McCollem of $2,125.00.

E. Court reporter’s per diem for hearing of $260.00.

F. Total fees and costs of $18,844.00 (A, B & C) shall accrue interest from December 1, 2000 to May 8, 2002 at the rate of 11% (per diem of $5.68 for 515 days = $2,924.69).

G. The total combined figure of attorneys fees, costs and interest in the sum of $21,768.69, the expert witness fees of $2,125.00 (D) and the court reporter per diem of $260.00 (E) in the total sum of $24,153.69 shall bear interest at the rate of 9% from the date of the hearing on May 8, 2002 (per diem of $5.96).

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¹Initially ALLSTATE denied PIP coverage as well. Then the PIP coverage was conceded on January 13, 2000 (Plaintiff’s exhibit # 9) after a PIP suit was filed.

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FINAL JUDGMENT

Pursuant to the attorney fee hearing held in this matter and the order on attorneys fees and costs rendered in this action,

IT IS ORDERED AND ADJUDGED that the Plaintiff, ROBERT BELL, recover from the Defendant, ALLSTATE INSURANCE COMPANY, the sum of $24,272.80 with 9% interest as provided in F.S. §55.03, for which sums let execution issue.

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