18 Fla. L. Weekly Supp. 49b
Online Reference: FLWSUPP 1801HART
Insurance — Personal injury protection — Attorney’s fees — Amount — Contingency risk multiplier — No abuse of discretion in awarding contingency risk multiplier where potential for multiplier was necessary for insured to secure counsel — However, where application of 2.0 multiplier results in fee award 300 times amount in controversy, award is reversed and remanded for determination of multiplier less than 2.0 that would have enabled insured to hire counsel yet have resulted in more reasonable fees award
PROGRESSIVE EXPRESS INSURANCE COMPANY, Appellant, v. JAMES HARTHON, Appellee. Circuit Court, 18th Judicial Circuit (Appellate) in and for Brevard County. Case No. 05-2009-AP-005927-XXXX. On appeal from Brevard County Court, Judge David Silverman. Counsel: Michael Clarke, for Appellant. Christian Lindback, for Appellee.
(PER CURIAM.)
Upon consideration of the timely Motion for Rehearing or Clarification filed by Appellee/Cross-Appellant and the Response filed by Appellant/Cross-Appellee, the Court withdraws the opinion filed on July 13, 2010 and renders the following decision
After Appellant Progressive Express Insurance Company denied payment of his $360 PIP claim for medical bills, Appellee James Harthon filed suit against the insurer. The case was litigated for over five years before Appellant agreed to pay the claim and to pay reasonable attorney’s fees pursuant to § 627.428, Florida Statutes. Following an evidentiary hearing, the trial court awarded Appellee $110,776.62 in fees, which included a 2 0 fees multiplier on an award of 179 hours, 40 minutes of time. Appellant challenges both the use of the 2 0 multiplier and the hourly rates awarded to Appellee’s attorneys.
The Court generally reviews an award of attorney’s fees under an abuse of discretion standard. Baker v. Falcon Power, Inc, 788 So.2d 1104 (Fla. 5th DCA 2001) [26 Fla. L. Weekly D1578a]. However, it must look particularly closely at the use of attorney’s fees multipliers in light of Progressive Exp. Ins. Co. v. Schultz, 948 So.2d 1027 (Fla. 5th DCA 2007) [32 Fla. L. Weekly D548b], rev. den. 966 So.2d 968 (Fla. 2007). The Fifth District Court of Appeal has emphasized that a lodestar, hourly-based fee is presumed to be the reasonable fee in PIP cases unless there is competent evidence on the record that a fees multiplier is necessary.
The principle factor to consider in determining whether a multiplier is appropriate is whether the insured could have obtained competent counsel in the absence of the potential for a multiplier. See Tetrault v. Fairchild, 799 So. 2d 226, 234 (Fla. 5th DCA 2001) [26 Fla. L. Weekly D1854d]. “[I]t must be proved that but for the multiplier, plaintiff could not have obtained competent counsel in the area.” The following facts, as established by the record in this case, demonstrate that Appellee would have been unable to secure counsel without the possibility of a multiplier.
There are no attorneys in the limited market of Brevard County who practice PIP law exclusively, and thus there was no attorney Appellee could readily have hired to take on his small claim. In addition, the record supports Appellee’s argument that Appellee’s mental illness, criminal background, prior injuries and prior worker’s compensation claim would have further hampered his ability to find an attorney to represent him in this matter. He was able to secure counsel for his claim primarily because he had already hired his attorneys to represent him on a personal injury suit, the attorneys took the PIP suit only as part of their overall representation of Appellee.
Appellant raised nine affirmative defenses, at least two of which were not simple or routine. The coding defense was complex and sophisticated, requiring extensive work on the part of Appellee’s counsel. As the jurisprudence on the issue was not settled in Florida, this defense created additional risk for Appellee’s attorneys. The CMS forms defense also added to the difficulty and risk of taking this case. Consequently, this was not a run-of-the-mill PIP case.
Appellant fought this case very aggressively from the beginning, refusing to settle for more than five years and waiting until the eleventh hour before agreeing to pay Appellee’s claim. There does not appear to be any means by which Appellee’s attorneys, who spent years fighting to secure Appellee’s insurance benefits, could have mitigated their risk of nonpayment.
For all of the above reasons, the Court finds that the award of a multiplier was not an abuse of discretion as there was evidence to support the conclusion that a multiplier was necessary for Appellee to secure counsel.
However, the Court must look at the fees awarded here in conjunction with the Fifth District Court’s admonition that “all fees awarded by the court be reasonable.” Schultz at 1030. (Emphasis in original.) Schultz requires that fees be looked at through the lens of common sense and with an eye toward the amount in controversy. It cites favorable to Ziontz v. Ocean Trail Unit Owners Association, Inc., 663 So.2d 1334, 1335-36 (Fla. 4th DCA 1993).
[J]udges and lawyers [have lost] sight of a truth they formerly accepted almost universally viz, that there is an economic relationship to almost every legal service in the marketplace. The value of any professional service is almost always a function of its relationship to something else — i.e., some property or other right. Trial judges and lawyers used to accept a priori the idea that, no matter how much time was spent or how good the advocate, the fair price of some legal victories simply could not exceed — or, conversely, should not be less than — some relevant sum not determined alone by hours or rates. Since Rowe, that all seems lamentably forgotten.
In this case, the fees award is more than 300 times the amount in controversy. The award, in light of the amount in controversy, raises the question of the necessity of a multiplier of 2 0. There must be a balance between a party’s need for a multiplier to secure counsel and the Court’s concern that an award of this magnitude undermines the confidence of the public in the bench and bar. Baruch v. Giblin, 122 Fla. 59, 164 So. 831, 833 (1935), cited by Schultz at 1031.
The Court therefore reverses the award of a 2 0 multiplier. It remands the matter to the trial court for a determination of what multiplier of less than 2 0 would have enabled Appellee to hire counsel in this case and yet have resulted in a more reasonable fees award. The Court finds no abuse of discretion in the hourly rates awarded to Appellee’s attorneys.
Appellee is entitled to an award of pre-judgment interest as of the date Appellant acknowledged it would be required to pay attorneys’ fees. Quality Engineered Installation, Inc. v. Higley South, Inc., 670 So.2d 929, 930-931 (Fla. 1996) [21 Fla. L. Weekly S141a]. Appellee also should be awarded reasonable appellate attorney’ fees for the time spent litigating the right to pre-judgment interest, as it was the prevailing party on this issue.
REVERSED IN PART AND REMANDED for further proceedings (DAVIDSON and REINMAN, JJ, concur.)
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(DUGAN, Judge, dissenting.) The majority accurately states the standard of review by this Court of an award of attorney’s fees. The standard of review is one of abuse of discretion. See Baker v. Falcon Power, Inc., 788 So.2d 1104, (Fla. 5th DCA 2001). There is ample evidence in the record to support the detailed and well thought-out findings of the trial judge, and no abuse of discretion has been shown.
The majority also correctly states the higher standard applicable to determining whether a fees multiplier is appropriate. As stated in Progressive Exp. Ins. Co. v. Schultz, 948 So. 2d 1027 (Fla. 5th DCA 2007), rev. den. 966 So. 2d 969 (Fla. 2007), a lode-star, hourly based fee may be presumed to be reasonable in a PIP case unless there is competent evidence on the record that a fees multiplier is necessary.
The award of an attorney’s fees multiplier requires the Court to answer two questions. The more difficult first question involves the evaluation of the requisite factors to determine whether a multiplier is justified. The majority agrees that the facts and applicable law justify the award of a multiplier but questions the amount of the multiplier.
The easier second question to be answered is the amount of the multiplier to be set. In Standard Guaranty Ins. Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990) the Florida Supreme Court held that once a multiplier is found to be appropriate, “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.” In the instant case the trial judge, after considering the evidence presented at the hearing, found that the likelihood of success was, in fact, approximately even. Based thereon he set the multiplier at 2 0. There is competent evidence in the record to support that finding as well.
While the amount in controversy may not be great, the amount may be significant to the Plaintiff who spent 5 years fighting to recover what was ultimately agreed to be his in the first place. The trial judge heard the evidence, and carefully and thoroughly evaluated it. The judge concluded, among other things, that Progressive, in defending the claim, was “going to the mat.” Put another way, Progressive made its bed, and now has to lie in it. See State Farm Fire & Cas. Ins. v. Palma, 555 So. 2d 836, (Fla. 1990).
