9 Fla. L. Weekly Supp. 212a
Insurance — Personal injury protection — Attorney’s fees — Appeal of 2.25 contingency risk multiplier awarded to insured in action for PIP benefits for TMJ treatment after automobile accident so minor that it did not damage insured’s vehicle — Difficulties and complications in case which arose after attorney agreed to represent insured have no bearing on the assessment of a contingency risk multiplier — No abuse of discretion in finding that success was unlikely at outset of case based on factors that were present at the outset — Although facts in case may not be as unique as those warranting multiplier in State Farm Fire & Casualty v. Palma, no abuse of discretion in finding that insured’s case presented a situation where success was unlikely at outset — Where results obtained for insured were 100% and parties agree there was contingency agreement, trial court’s finding that this is a case in which few attorneys would venture without the possibility of a multiplier will not be disturbed — No merit to argument that insured’s attorney was able to mitigate the risk of non-payment by the volume of PIP cases he handles which end in court awarded fees — Argument that standard jury instruction 6.2(b) militated against the award of a multiplier is not properly before appellate court where insurer did not appeal the jury instructions — Appellate attorney’s fees — No award of appellate fees will be granted where only issue appealed was the application of multiplier, which addresses the amount of fees rather than the entitlement to fees
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. KAREN BROCK, Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. CVA1-00-4. L.C. Case No. SO-98-483. October 24, 2001. Appeal from the County Court for Orange County, Jerry L. Brewer, Judge. Counsel: Hans Kennon, Rissman, Weisberg, Barrett, Hurt, Donahue & McLain, P.A., Orlando, for Appellant. Stephen W. Carter, Winter Park, for Appellee.
(Before Coleman, Strickland, and Rodriguez, JJ.)
ORDER AFFIRMING LOWER COURT’S ORDER ANDORDER DENYING MOTION FOR APPELLATEATTORNEY’S FEES AND COSTS
(PER CURIAM.) Appellant State Farm Mutual Automobile Insurance Company (State Farm or Appellant), Defendant in the lower court, timely filed this appeal of the Orange County Court’s “Final Judgment Awarding Attorney’s Fees and Costs.” This Court has jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c)(1)(A).Factual and Procedural Background
On October 5, 1996, Plaintiff/Appellee Karen Brock (Brock or Appellee), while riding as a back-seat passenger, was involved in an automobile accident. At the time of the accident, Brock was insured by State Farm and her insurance included personal injury protection (PIP). Brock received treatment for injuries, which allegedly were a result of the accident. On January 27, 1998, Brock filed suit, wherein she alleged that State Farm had failed to pay benefits within thirty days of billing as is required by section 627.736(4)(b), Florida Statutes.
In May of 1998, State Farm filed a proposal for settlement in the amount of $3,200, which was to include attorney’s fees and costs to date. Brock responded by filing a Motion to Strike Proposal for Settlement, which was denied. Unable to reach a settlement agreement, on October 4, 1999, the parties proceeded to trial. At issue was whether the treatment for TMJ rendered to Brock by Dr. Weinstock, an Orlando dentist, was related to the automobile accident of October 5, 1996, and whether that treatment was medically necessary and reasonable. The jury returned a verdict in Brock’s favor, finding that the treatment was related, necessary, and reasonable.
Following trial, Brock filed her motion for attorney’s fees with attachments, detailing costs, as well as work hours for Attorney Jeffrey W. Albert and Attorney Don McKeever. State Farm filed a response to Brock’s affidavit of time and costs expended, wherein it charted Brock’s expenses and attorney work hours and listed the amount State Farm found equitable for each. State Farm also attached copies of bills from the chiropractor, Dr. Michael R. Bigley, in the amount of $1200 and from the dentist, Dr. Michael L. Weinstock, in the amount of $3400.
On December 9, 1999, the trial court held a hearing on the issue of costs and attorney’s fees. In its “Final Judgment Awarding Attorney’s Fees and Costs,” the court found that a reasonable hourly rate for Attorney Albert was $200 and that a reasonable number of hours was 204.9 hours. The court found that a reasonable hourly rate for Attorney McKeever was $250 and that a reasonable number of hours was 51 hours. The court also awarded a 2.25 multiplier and pre-judgment interest in the amount of $2,014.87, for a total award of $122,907.37. The court taxed costs in favor of Brock in the amount of $6,354.74. Finally, the court awarded expert witness fees to Attorney Stephen W. Carter in the amount of $300 per hour for 10 hours, for a total of $3,000. The court arrived at a total to be recovered from State Farm by the law firm of McKeever, Albert & Barth of $132,262.11, to bear interest at the rate of 10% per annum from December 10, 1999. On January 10, 2000, State Farm filed its Notice of Appeal.Standard of Review
Appellant State Farm seeks to have the amount of attorney’s fees awarded reduced by eliminating the 2.25 continency risk multiplier, which was granted by the trial court. Therefore, the standard of review on appeal is whether the trial court abused its discretion, after determining the amount of attorneys’ fees, by applying a 2.25 continency risk multiplier to those fees. DiStefano Construction, Inc. v. Fidelity and Deposit Company of Maryland, 597 So. 2d 248, 250 (Fla. 1992) (finding that “the award of attorney’s fees is a matter committed to sound judicial discretion which will not be disturbed on appeal, absent a showing of clear abuse of discretion”) (citations omitted); United Automobile Insurance Co. v. Padron, 775 So. 2d. 372, 373 (Fla. 3d DCA 2000) (affirming an award of attorney’s fees where “the appellant failed to demonstrate that the trial court abused its discretion by determining the lodestar amount of attorneys’ fees or by applying a 1.5 contingency risk multiplier”); Centex-Rooney Construction Co., Inc. v. Martin County, 725 So. 2d 1255, 1258 (Fla. 4th DCA 1999) (finding that “[i]t is well settled that the determination of an award of attorneys’ fees is within the sound discretion of the trial court and will not be disturbed on appeal, absent a showing of a clear abuse of that discretion”) (citations omitted); In re the Estate of McArthur v. Gentry, 443 So. 2d 1052, 1052 (Fla. 4th DCA 1984) (finding that the general rule is that “the amount of an attorney fee award is a matter of discretion and will not be disturbed absent a clear showing of abuse”).Discussion
While State Farm does not dispute Brock’s entitlement to an award of attorney’s fees, it argues that the trial court abused its discretion by awarding Brock’s attorneys a contingency risk multiplier of 2.25 and bases that argument on the following assertions.
I. The contingency risk multiplier was based on facts unknown to Brock’s attorney at the outset of the case and, therefore, its application does not comply with the requirements of Supreme Court of Florida as stated in Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990).
II. Brock’s case is without any unique facts and circumstances in contravention of the Supreme Court of Florida’s decision in State Farm Fire & Casualty Co. v. Palma, 629 So. 2d. 830 (Fla. 1993).
III. The trial court made no specific finding that Brock would have had substantial difficulty retaining competent counsel without the application of a contingency risk multiplier.
IV. Brock’s attorney was able to mitigate the risk of non-payment by the sheer volume of PIP cases filed where Brock’s attorney obtained a statutory fee in the “vast majority of cases.”
V. The application of a multiplier is not automatic but must be clearly established in the record in accord with the Fifth District Court of Appeal’s decision in Strahan v. Gauldin, 756 So. 2d 158 (Fla. 5th DCA 2000).
VI. The application of a contingency risk multiplier is not necessary in PIP litigation in light of the United States Supreme Court decision in City of Burlington v. Dague, 505 U.S. 557 (1992).
VII. Florida Standard Jury Instruction 6.2(b) militated against the award of a multiplier.
Lodestar Approach to Awarding Attorney’s Fees and theContingency Risk Multiplier
The Supreme Court of Florida in Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985) adopted the federal lodestar approach for computing reasonable attorney fees. The lodestar is calculated by first determining the number of hours reasonably expended on the litigation. The fee applicant should present records detailing the amount of work performed. Novelty and difficulty should generally be reflected by the number of hours.
Second, the court must determine a reasonable hourly rate for the services of the prevailing party’s attorney. Considerations include time and labor required, novelty and difficulty, results obtained, whether the fee is fixed or contingent. The burden is on the party seeking the fee. Id.
Multiplying the hours by the rate produces the lodestar figure. Once the court arrives at the lodestar figure, it may add or subtract from the fee based upon a contingency risk factor and the results obtained. Id.
The court went on to set the contingency risk multiplier in a range from 1.5-3.0. Id. However, this was later modified by the court in Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990) (setting the contingency risk multiplier range at 1.0-2.5).
Therefore, the current range and guidelines for determining the application of a contingency risk multiplier are as follows. If the trial court finds that
(1) success was more likely than not at the outset — court may apply a multiplier of 1.0 to 1.5;
(2) likelihood of success was approximately even at the outset — court may apply a multiplier of 1.5 to 2.0; or
(3) success was unlikely at the outset of the case — court may apply a multiplier of 2.0-2.5.
Quanstrom, 555 So. 2d at 834.Appellant’s Arguments
In light of Rowe and Quanstrom, each of State Farm’s arguments are considered in turn:
I. The contingency risk multiplier was based on facts unknown to Brock’s attorney at the outset of the case and, therefore, its application does not comply with the requirements of Supreme Court of Florida as stated in Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990).
State Farm argues that where, as here, complicating factors arise as a case progresses, those factors are not a basis for awarding a contingency risk multiplier, because the purpose for allowing the possible award of a multiplier is to induce attorneys to accept difficult cases on behalf of plaintiffs who otherwise might go without representation. State Farm maintains that the decision to accept such cases is made at the outset, as determined in Quanstrom, and that the acceptance of a run-of-the-mill PIP case, while giving rise to the necessity of considering a multiplier, does not in itself support the award of one, much less one at the 2.25 level.
Brock counters that this was a difficult case from the outset because she had soft-tissue injuries to the back and neck; because the accident which allegedly caused her injuries was so minor that it did not damage the vehicle; because she did not initially seek treatment for her injuries; because she was later treated by a chiropractor, but only after visiting a lawyer, Mark Shapiro, who referred her to the chiropractor; and that the chiropractor then sent her to the dentist for TMJ treatment.
Brock further points out that State Farm had her examined by it own doctor, Dr. Chas Gill, who wrote a lengthy report and testified at trial that in his expert opinion the treatment received by Brock was not necessary or reasonable and that her injuries were not related to the October 5, 1996, accident. Finally, Brock states that State Farm also had the benefit of a physicist’s trial testimony that the impact to the vehicle was so slight as to be inconsequential.
The reason for allowing the application of a multiplier to attorney’s fees awarded pursuant to statutory entitlement is to induce attorneys to represent plaintiffs who otherwise might not be able to avail themselves of competent counsel. Quanstrom, 555 So. 2d 828; Rowe, 472 So. 2d 1145. Logic dictates that once an attorney has agreed to represent a client, which in most cases is marked by a contract between the attorney and the client, the attorney has assessed the likelihood of success. In any event, the “outset” of a case must be said to be no later than the time of filing the complaint. As Judge Sharp wrote recently: “The critical ascertainment time for Quanstrom is when the attorney initially accepts and evaluates the case for the purposes of making a fee arrangement with the client. Not sometime down the road, after discovery or other misadventure has altered the judicial landscape.” Internal Medicine Specialists, P.A. v. Figueroa, 781 So. 2d 1117 (Fla. 5th DCA 2001) (Sharp, J. in dissent) (emphasis in original). Hence, State Farm is correct in asserting that those difficulties or complications, which arose after Attorney Albert had agreed to represent Brock, have no bearing on the assessment of a contingency risk multiplier.
Nonetheless, there remain the factors listed above that were present at the outset (soft-tissue injury; no damage to the accident vehicle; no immediate medical treatment, etc.). Hence the question becomes one of whether these considerations are sufficient to support a finding that “success was unlikely at the outset.”
The standard of review in this case is an abuse of discretion, the test for which is one of reasonableness. “If reasonable men could differ as to the propriety of the action taken by the trial court, then the action is not unreasonable and there can be no finding of an abuse of discretion.” Canakaris v. Canakaris, 382 So. 2d 1197, 1203 (Fla. 1980). This Court finds that the trial court did not abuse its discretion in finding that success was unlikely at the outset in Brock’s case.
II. Brock’s case is without any unique facts and circumstances in contravention of the Supreme Court of Florida’s decision in State Farm Fire & Casualty Co. v. Palma, 629 So. 2d 830 (Fla. 1993).
State Farm argues that this is a run-of-the-mill causation case involving TMJ treatment and that there is nothing novel or extraordinary, which would support the award of such a high multiplier. State Farm relies on Palma for the proposition that only unique or rare cases or those with an impact on the law in general should be awarded such a high multiplier.
Brock counters that just because the facts of her case are not the same as those in Palma does not mean that a multiplier is unwarranted. She states that likelihood of success in a case should be the main focus of the trial court’s decision to apply a multiplier. She further maintains that while the circumstances in her case were not the same as those in Palma, her success at the outset was unlikely.
The actual holding in Palma was twofold: (1) that an insurer who loses suit to an insured but contests the insured’s entitlement to attorney fees may be held liable for attorney fees incurred in litigating the issue of entitlement to fees, but not for the time spent litigating the amount of those fees; and (2) that a contingency fee multiplier in excess of 2.5 should not have been applied. Palma, 629 So. 2d at 833.
The Florida Supreme Court’s reasons for disapproving the multiplier in Palma were first, that the 2.6 multiplier exceeded the upper limit guideline set forth in Quanstrom; and second, it was uncertain whether the trial court understand that while the application of a multiplier must be considered in contingency cases, ultimately the decision of whether to award a multiplier is within the trial court’s discretion. 629 So. 2d at 833. Therefore, the case was remanded for the trial court to redetermine the amount of attorney’s fees, but in doing so the Florida Supreme Court also stated: “[W]e find that the trial court’s application of a multiplier was proper because of the extraordinary circumstances present.” Id.
The extraordinary circumstances that made Palma unique were that it had been before the Fourth District Court of Appeal three times and before the Florida Supreme Court twice and it established that (1) attorney’s fees could be awarded for litigating entitlement to those fees, but not for litigating the amount of the fees, and (2) the insurer, State Farm, had to pay for a thermographic examination, which the insurer had initially refused to do, claiming that the treatment did not constitute a necessary medical service. Id. at 830-31.
Hence, while it is true that the facts in Brock’s case may not be so unique as those in Palma, the trial court’s finding that Brock’s case presented a situation where success was unlikely at the outset does not constitute an abuse of that Court’s discretion.
III. The trial court made no specific finding that Brock would have had substantial difficulty retaining competent counsel without the application of a contingency risk multiplier.
State Farm argues that there is no evidence here that the market required a contingency risk multiplier in order for Brock to obtain competent counsel. State Farm cites to Quanstrom and to Bell v. U.S.B. Acquisition Co., Inc., 734 So. 2d 403 (Fla. 1999). The court in Bell, citing to Sun Bank of Ocala v. Ford, 564 So. 2d 1078 (Fla. 1990), found that “the critical factor for the court to consider in deciding whether to apply a multiplier was the party’s difficulty in finding counsel without risk-enhancement.” 734 So. 2d at 409. The Bell court also reiterated a quote from the United States Supreme Court in Pennsylvania v. Delaware Valley Citizens’ Council of Clean Air, 483 U.S. 771, 731 (1987): “Before adjusting for risk assumption, there should be evidence in the record, and the trial court should so find, that without risk-enhancement plaintiff would have faced substantial difficulties in finding counsel in the local or other relevant market.”
However, State Farm admits that Brock was referred to Attorney Albert by another attorney, Mark Shapiro. State Farm alleges that no reason was given for the referral, stating that many attorneys do not litigate, but can still gain a referral fee by sending a client to an attorney who does litigation. State Farm maintains that Brock could have and did obtain an attorney without the substantial difficulty that would necessitate a risk multiplier, and hence, the trial court abused its discretion in awarding one.
Brock counters that the trial court did hear evidence that “the relevant market is such that competent counsel could not be obtained in the relevant market absent the use of a multiplier.” Brock’s brief references page 331 of the attorney’s fees hearing transcript, which contains a portion of the testimony offered by Brock’s expert on attorney’s fees, Attorney Stephen Carter.
The Quanstrom court found that the trial court in determining whether a multiplier is necessary should “especially consider the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client.” 555 So. 2d at 834. The results obtained in the instant case were 100% in that the jury did find for Brock. Additionally, the parties agree that there was a contingency agreement. In Internal Medicine Specialists, a case where the primary issue on appeal was the use of a multiplier, the court found that a “multiplier provides an incentive to a lawyer to represent a client in a case in which few lawyers would venture.” 781 So. 2d at 1119. The trial court found Brock’s case to be such a case and this Court will not disturb that finding.
IV. Brock’s attorney was able to mitigate the risk of non-payment by the sheer volume of PIP cases filed where Brock’s attorney obtained a statutory fee in the “vast majority of cases.”
State Farm argues that Brock’s attorney’s firm handles so many cases that end in court awarded fees, that the firm’s risk factor is mitigated. Brock counters that if risk is mitigated by other cases, then no plaintiff’s firm could claim a multiplier.
Quanstrom does list among factors to be considered by the trial court “whether the attorney was able to mitigate the risk of nonpayment in any way.” 555 So. 2d at 834. However, this is not elaborated upon, and this particular argument appears to lack substance from both sides. All the factors to be considered as discussed in Rowe and Quanstrom are applied to individual cases.
V. The application of a multiplier is not automatic but must be clearly established in the record in accord with the Fifth District Court of Appeal’s decision in Strahan v. Gauldin, 756 So. 2d 158 (Fla. 5th DCA 2000).
State Farm argues, as it did in III above, that the record does not establish that there was a need for a multiplier in order for Brock to obtain competent counsel, and as in Strahan, where the court reversed the application of a 2.0 multiplier, this Court should do likewise. Brock counters that Strahan can be distinguish in that it was a typical negligence case as opposed to a PIP case.
This argument is redundant on the part of State Farm and Brock’s distinction is one without a difference. The standard for application of a multiplier is still the assessment at the outset that absent the possibility of a multiplier, the client could not have obtained competent counsel.
VI. The application of a contingency risk multiplier is not necessary in PIP litigation in light of the United States Supreme Court decision in City of Burlington v. Dague, 505 U.S. 557 (1992).
This argument is totally without basis. Dague was a case brought pursuant to the Federal Resource Conservation and Recovery Act, and as such, it is a public policy enforcement action. Such cases were classified by the court in Quanstrom to be among those which would generate a customary fee pursuant to an entitlement statute, whether the fee was fixed or contingent; however, no multiplier attached.
VII. Florida Standard Jury Instruction 6.2(b) militated against the award of a multiplier.
State Farm did not appeal the jury instructions given in this case. Therefore, this issue is not properly before the Court.Appellee’s Motion for Appellate Attorney’s Fees
On July 19, 2000, Brock filed her “Appellee’s Motion for Appellate Attorney Fees” naming Stephan Carter and the firm of McKeever, Albert and Barth, P.A. as attorneys for purposes of this appeal. On July 28, 2000, State Farm filed its “Motion to Strike Appellee’s Claim for Attorney’s Fees,” relying on the holding in Palma.
As stated above, the holding in Palma is that an insurer who loses suit to an insured but contests the insured’s entitlement to attorney fees may be held liable for attorney fees incurred in litigating the issue of entitlement to fees, but not for the time spent litigating the amount of those fees. 629 So. 2d at 833 (emphasis added). The court went on to explain that such work “inures solely to the attorney’s benefit and cannot be considered services rendered in procuring full payment of the judgment.” Id.
In Brock’s case, State Farm is not appealing the award of fees and even stipulated to the amount per hour for one of her attorneys, Albert, at $200 per hour. Although there was no stipulation to McKeever’s fee, State Farm did not appeal the court’s award of $250 per hour for his fee, nor the $300 per hour for Carter’s fee as an expert witness on attorney’s fees. The only issued appealed in this case was the application of a 2.25 multiplier, which addresses the amount of fees. Therefore, no award of appellate attorney’s fees will be granted.Conclusion
Even though this Court does not find that the lower court abused its discretion in this case, we write here to express concern in two areas. First, there have recently been several cases valued at less than $5,000 to the plaintiffs involved, but which end with over $100,000 in trial court attorneys’ fees solely as a result of awards of high-end multipliers. It may be true that the possibility of being awarded a multiplier may be necessary to induce attorneys to represent clients whose cases present initial difficulties. However, it should be the rare case that is awarded a high-end multiplier. Otherwise, plaintiffs with truly difficult cases will still have a problem finding an attorney, because there will be little incentive to take such cases when high-end multipliers are being awarded for those cases that are not so challenging. The purpose, after all, of allowing the application of a multiplier is not to enrich attorneys, but to induce them to represent plaintiffs who otherwise might not be able to avail themselves of the services of competent counsel. See Standard Guaranty Insurance Co. v. Quanstrom, 555 So. 2d 828; Rowe, 472 So 2d 1145.
Second, the labor of this Court would be much reduced if final orders in cases such as the instant case stated with more specificity the factual findings upon which the trial court based its conclusions. Such findings are extremely helpful to appellate court review. This is especially true, where, as is the case here, the record contains facts to support a finding that success was unlikely at the outset of the case, but also contains additional facts, which were revealed at trial and must not be considered in determining whether a multiplier is appropriate. While the lower court’s findings arrive at this Court clothed with the presumption of correctness, without specific findings “the appellant court must determine whether, based upon the record, the proper analysis would have produced the result reached by the trial court.” Jupiter v. Alexander, 747 So. 2d 395, 400 (Fla. 4th DCA 1998); see also New Nautical Coatings, Inc. v. Scoggin, 731 So. 2d 145 (Fla. 4th DCA) (finding that “because the trial court made no specific findings of fact in the final judgment, this court must `accept the facts to be those shown by that evidence most favorable’ . . . to the prevailing party”).
Based on the foregoing, it is hereby ORDERED AND ADJUDGED that the lower court order appealed from is AFFIRMED.
It is further ORDERED AND ADJUDGED that Appellee Karen Brock’s Motion for Appellate Attorney’s Fees and Costs is DENIED.
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