18 Fla. L. Weekly Supp. 201a
Online Reference: FLWSUPP 1802WOOD
Insurance — Personal injury protection — Attorney’s fees — Amount — Contingency risk multiplier — Where use of multiplier was necessary to obtain competent counsel in case, medical provider’s counsel could not mitigate risk of nonpayment, amount in controversy was small and results obtained were excellent, contingency fee agreement between provider and its counsel allows for multiplier, and provider’s chances of success at outset were 50%, multiplier of 1.5 is appropriate — Costs, expert witness fees, and prejudgment interest are awarded
TALLAHASSEE ORTHOPEDIC CLINIC III, P.L., as assignee of Thomas Woodward, Plaintiffs, v. UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendant. County Court, 2nd Judicial Circuit in and for Leon County. Case No. 2009 CC 001690. October 1, 2010. Honorable Judith W. Hawkins, Judge. Counsel: Kimberly A. Driggers, Brooks, LeBoeuf, Bennett, Foster, Gwartney, P.A., Tallahassee, for Plaintiff.
FINAL JUDGMENT ON PLAINTIFF’S ATTORNEY’S FEES AND COSTS
THIS CAUSE, came before the Court for an evidentiary hearing on September 1, 2010, after Defendant, United Services Automobile Association (“USAA”) confessed judgment and agreed to entitlement of Plaintiff’s attorney’s fees and costs. The Court reviewed the Court file, heard testimony, examined documents admitted into evidence, and considered argument by counsels, finds as follows:
UNDERLYING LAWSUIT
1. The Plaintiff, Tallahassee Orthopedic Center (“TOC”), as assignee of Thomas Woodward, brought a lawsuit in breach of contract as a result of USAA’s denial of approximately $7,500.00 in personal injury protection (“PIP”) benefits. USAA denied PIP benefits based upon its position that because Line 1 of the Standard Disclosure & Acknowledgment (“SD&A”) Form (Plaintiff’s Exhibit # 1) was not properly completed, USAA was not put on notice of a covered loss, allowing it to deny the entirety of PIP benefits for treatment performed by TOC.
2. This Court heard testimony from a representative of TOC. She testified that prior to retaining Ms. Driggers, TOC was represented by a lawyer in Jacksonville, but because of the negative decisions at that time on the SD&A issue in Duval County, Florida, he withdrew Mr. Woodward’s claim. Eventually, the Jacksonville attorney informed TOC that he no longer handled PIP litigation.
The TOC representative, unable to identify new counsel contacted the Florida Bar Referral Service, which referred TOC to Ms. Driggers. On May 19, 2009, Ms. Driggers filed suit in Leon County, Florida.
3. At the time Plaintiff filed suit, USAA had numerous lawsuits filed around the State of Florida on this legal issue, with some rulings for the insured and some for the insurer, USAA. After years of litigation and appeals, both the Third and Fifth District Court of Appeals decided the legal issue contrary to USAA’s position. Both appellate decisions were rendered after suit in this case was filed. See United Auto. Ins. Co. v. Professional Medical Group, Inc., a/a/o Gaston M. Botta, 26 So.3d 21 (Fla. 3d DCA Dec. 2, 2009) [34 Fla. L. Weekly D2500a]; Florida Medical & Injury Center, Inc. v. Progressive Express Ins. Co., 29 So. 3d 329 (Fla. 5th DCA January 22, 2010) [35 Fla. L. Weekly D215b].
4. In addition to this issue being litigated in the appellate courts, USAA also defended and eventually ended up settling a class action lawsuit involving USAA’s denial of PIP benefits based upon an incomplete SD&A form. Again, however, USAA settled the class action lawsuit well after this lawsuit was filed.
5. USAA filed several affirmative defenses in this case, including: (a) failure to perform a condition precedent based upon a defective pre-suit notice; (b) the treatment was not reasonable, necessary, or related to the automobile accident based upon a paper review performed by Dr. Kriz who opined the treatment was not related; and (c) that USAA was requesting money back from TOC.
6. After approximately one year of litigation, USAA confessed judgment on April 8, 2010, when it issued TOC the entirety of the remaining benefits, plus approximately $1,000.00 in interest. Therefore, TOC obtained as much as it could have obtained, plus interest, without paying any attorney’s fees and costs to Ms. Driggers.
7. The parties failed in their attempts at settling attorney’s fees and costs, and after Plaintiff’s counsel expended approximately 67 hours in discovery and litigation on the issue of reasonable attorney’s fees (approximately triple the amount being sought to prevail in the underlying case), this matter came before this Court for determination.
NUMBER OF HOURS
8. The Plaintiff’s attorney, Kimberly A. Driggers, is claiming 21.9 hours for attorney’s time. Plaintiff has supplied the Court with detailed timesheets documenting Plaintiff’s counsel’s time expenditure.
9. Plaintiff’s attorney fee expert witness, Robert Heath, Esquire, is an experienced trial attorney with a specialty in PIP litigation. Mr. Heath has practiced law in the North Florida area for nearly thirty years.
10. Mr. Heath testified that he reviewed Plaintiff’s file, Plaintiff’s timesheets, and that he has spoken with Plaintiff’s counsel regarding the issues in this case. Mr. Heath determined that these hours were reasonable given the facts and circumstances in this case.
11. Aside from the above, this Court entered sanctions against USAA for its failure to serve meaningful discovery responses in violation of this Court’s Order dated August 20, 2010. In addition, USAA failed to produce its expert, Scott Dutton, Esquire, for deposition. Such discovery violations are in contravention of Fla. R. Civ. P. 1.380.
12. As a consequence of the Defendant’s refusal to provide timely discovery and based upon its failure to comply with this Court’s August 20, 2010 Order, the Defendant was precluded from introducing any evidence or witnesses to controvert the attorney time claimed by Ms. Driggers in the prosecution of this underlying claim.
13. Based upon the above, the Court finds that 21.9 hours were reasonably expended by Kimberly A. Driggers in the prosecution of this case.
HOURLY RATE
14. Plaintiff’s attorney, Ms. Driggers, has testified that a reasonable hourly rate for her services is $375.00 per hour.
15. Plaintiff’s expert, Robert Heath, Esquire, testified that he is very familiar with Ms. Driggers’ reputation, skills and experience. Mr. Heath is also familiar with the hourly rates awarded to other attorneys for similar work and hourly rate work in Leon County, Florida. He also testified that no other attorneys routinely practice in Plaintiff’s PIP litigation in the Leon County, Florida area besides Ms. Driggers. Mr. Heath testified that $375.00 per hour is a reasonable hourly rate for Ms. Driggers.
16. Ms. Driggers testified that she has appeared in Leon County Court and over the last 15 years has built her practice in this area of the law. Her expertise is highly respected and she is a frequent writer, speaker, and consultant on issues involving PIP. Ms. Driggers has testified before the Legislature on issues regarding PIP; is Assistant General Counsel for the Florida Chiropractic Association where her expertise is regularly requested; she has authored articles and spoken on PIP issues; and she has worked with the Florida Justice Association on issues regarding PIP/No-Fault insurance.
17. In determining a reasonable hourly fee for Ms. Driggers, the Court finds that Rowe factors 1, 3, 4, 7, and 8 apply. See Florida Patient’s compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985).
18. Specifically, as to Rowe factor No. 1, (the time and labor required, the novelty, complexity, and difficulty of the questions involved, and the skill requisite to perform the legal service properly), this Court finds the issue involved in this case was an issue of first impression in the State of Florida. PIP cases are fiercely fought against by insurers and during litigation, insurers often raise affirmative defenses that were not anticipated at the outset of the case. A simple review of Florida Law Weekly Supplement at the time this case was filed, would show a significant number of cases both in favor and against the Plaintiff. Additionally, the primary cases on this issue closest to Leon County, were those out of Duval County, Florida, all finding contrary to the Plaintiff. A lawyer prosecuting these cases must have knowledge of the PIP statute and the over thirty year history of No Fault law and litigation. Ms. Driggers was able to prevail against USAA in this case, in part, based upon her skill to prosecute this case.
19. As to Rowe Factor number 3 (the fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature), Mr. Heath provided sufficient testimony regarding other fees in the locality, including fees ranging between $350.00 per hour to $425.00 per hour (Escambia County for PIP litigation) to $500.00 per hour (personal injury litigation).
20. As to Rowe Factor number 4 (the significance of, or amount involved in, the subject matter of the representation, the responsibility involved in the representation, and the results obtained), this Court finds there was a large sum involved, all of which Ms. Driggers was able to obtain for her client, along with interest.
21. As to Rowe Factor number 7 (the experience, reputation, diligence and ability of the lawyer or lawyers performing the service and skill, expertise, or efficiency of effort reflected in the actual providing of such services), this Court has already found Ms. Driggers to have an excellent reputation and ability, but likewise Ms. Driggers efficiently litigate this case, pushing for a quick resolution.
22. As to Rowe Factor number 8 (whether the fee is fixed or contingent, and if fixed as to amount or rate, then whether the client’s ability to pay rested to any significant degree on the outcome or the representation), the fee was contingent. It would not have been practicable for the client to have taken the risk associated with winning this suit and have paid Ms. Driggers on an hourly basis considering the flux of the case law at the time the suit was filed.
23. Notwithstanding all of the above Rowe factors, the Agreement entered into between Ms. Driggers and Tallahassee Orthopedic Center states $350.00 per hour as the hourly billable rate. The Court specifically finds that this represents a fair and reasonable hour rate.
CONTINGENT FEE MULTIPLIER
24. Plaintiff’s attorney and Mr. Heath both testified that a multiplier was necessary to obtain competent counsel in this case, and that Plaintiff’s chances of success were equal to 50% at the outset, warranting a multiplier of 1.5-2.0.
25. The Court finds the case to be appropriate for the use of a multiplier under the Rowe and Quanstrom guidelines. Standard Guaranty Ins. Co. v. Quanstrom, 555So.2d 828 (Fla. 1990). The relevant market requires the use of a multiplier in this case. Ms. Driggers and Mr. Heath both testified that a multiplier was necessary to obtain competent counsel in this case. The facts strongly support this testimony.
26. The testimony revealed a contingency fee multiplier is particularly important to obtain competent counsel in PIP cases because of the complexity of the law, disputes between insurers and insureds, and time required to achieve final resolution of the case. After resolution of the underlying case, attorneys’ fees are often zealously litigated.
27. While the time associated with the recovery of attorney’s fees and costs is unrecoverable in Florida, the time expended on collecting fees is certainly a factor to consider when determining how desirable or undesirable these PIP cases are. Plaintiff attorneys are mindful of the fact that fees awarded pursuant to Section 627.428, Florida Statutes (first party prevailing party fees), if not agreed upon, must be determined by the Court. This is but one factor that makes Plaintiff PIP cases less desirable than others, and likewise provides ample reason why a lawyer would not take a Plaintiff’s PIP case without the knowledge they would recover a multiplier for litigating the risky case.
28. The Court finds that this litigation presented a difficult claim, and with the issues related to a relatively small amount at issue, it would have been impossible to obtain competent counsel on a standard contingency fee unless a multiplier was used. There was competent, substantial evidence that Plaintiff’s counsel could not mitigate the risk of nonpayment. The other factors set forth in Rowe have also been met. Specifically, the amount in controversy was small and the results obtained were excellent. Finally, the contingency fee contract utilized by Plaintiff and Ms. Driggers allows for a contingency risk multiplier.
29. As a result of this litigation, USAA paid TOC all of the remaining PIP benefits, plus interest, which is the best Plaintiff could have done in this case.
30. The Court finds that, at the outset of the handling of the case, the Plaintiff’s chances of success were equal to 50%, and that a multiplier of 1.5 is appropriate.
31. The First District Court of Appeal has recently upheld the application of the multiplier in two separate PIP cases: Massie v. Progressive Express Ins. Co., 25 So.3d 584 (Fla. 1st DCA 2009) [34 Fla. L. Weekly D2364b]; and State Farm Mutual Auto. Ins. Co. v. Edge Family Chiro., P.A. a/a/o Wise, __ So.3d __, 2010 WL 2541260 (Fla. 1st DCA 2010) [35 Fla. L. Weekly D1438a].
32. A reasonable attorney’s fee for the Plaintiff’s attorneys for the underlying claim is therefore calculated as follows:21.9 hours x $350.00 per hour = $7,665.00=Lodestar$7,665.00 x 1.5 (multiplier) = $11,497.50
COSTS
33. The parties stipulated to costs in the amount of 553.00.
34. This Court finds that $553.00 in costs was reasonable in the prosecution of this case.
PRE-JUDGMENT INTEREST
35. Plaintiff’s counsel is entitled to interest on the attorney’s fees and costs at 6% from the date the claims were paid through the date of the fee hearing (161 days through 9/1/2010). Quality Engineering Installation v. Higley South, Inc., 670 So.2d 929 (Fla. 1996) [21 Fla. L. Weekly S141a]; Orlando Regional Med. Ctr., Inc. v. Chmielewski, 573 So.2d 876 (Fla. 5th DCA 1990).
36. Plaintiff’s attorney shall have and recover from the Defendant, UNITED SERVICES AUTOMOBILE ASSOCIATION, interest on the attorney’s fees and costs at 6% from the date of the payment of the claims through the date of the fee hearing (161 days) in the amount of $318.93 (.06 / 365 x 161=.026 x 12,050.50 = pre-judgment interest).
EXPERT WITNESS FEES
37. Plaintiff’s expert witness on attorney’s fees, Robert Heath, Esquire, is entitled to be compensated for the time he expended in preparing to testify and testifying in this case. Mr. Heath expended 11.6 hours in this case, and a reasonable hourly rate for Mr. Heath is $425.00 per hour. See Stokus v. Phillips, 651 So.2d 1244 (Fla. 2d DCA 1995) [20 Fla. L. Weekly D627c]. [The Court specifically found that the Defense expert attorney’s testimony was helpful, but that his charge of 1.5 hours at his $250 hourly rate was incongruent. Either the hourly rate or the hours should have reflected the expert’s true value. To use Defense’s expert rate as the basis upon which to determine Plaintiff’s expert rate would inherently be unfair and subject to abuse.]
38. The Court also awards Mr. Heath travel time at the rate of $150.00 per hour for six hours. Expert travel time is discretionary and based upon Plaintiff’s subsequent briefing on the issue, along with the face there are no local PIP lawyers to testify, this Court awards expert travel time at a significantly reduced hourly rate.
SANCTIONS AGAINST USAA
39. This Court retains jurisdiction to determine the amount of attorney’s fees and costs associated with this Court’s August 20, 2010, Order granting Plaintiff’s Motion to Compel, and this Court’s most recent Order granting the Plaintiff’s Motion for Sanctions.
IT IS THEREFORE ORDERED and ADJUDGED as follows:
A. Plaintiff’s attorneys shall have and recover from the Defendant, UNITED SERVICES AUTOMOBILE ASSOCIATION, the sum of $11,497.50 as attorney’s fees, $553.00 as costs, and $318.93 as pre-judgment interest, for a total amount of $12,369.43.
B. Plaintiff’s expert witness on attorney’s fees, Robert Heath, Esquire shall have and recover from the Defendant, UNITED SERVICES AUTOMOBILE ASSOCIATION, fees in the amount $4,930.00, plus 6 hours at $150.00 per hour for a total of $5,830.00 for the time expended in this case.
C. The above shall bear interest at the rate of 6% a year, for which let execution issue.
