Case Name: Sally SARKIS, Petitioner, v. ALLSTATE INSURANCE COMPANY, Respondent
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 2003-10-02
Citations: 863 So. 2d 210
Docket Number: No. SC02-428
Parties: Sally SARKIS, Petitioner, v. ALLSTATE INSURANCE COMPANY, Respondent.
Judges: ANSTEAD, C.J., and LEWIS, QUINCE, and BELL, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 863
Pages: 210–230

Head Matter:
Sally SARKIS, Petitioner, v. ALLSTATE INSURANCE COMPANY, Respondent.
No. SC02-428.
Supreme Court of Florida.
Oct. 2, 2003.
Julie H. Littky-Rubin of Lytal, Reiter, Clark, Fountain & Williams, LLP, West Palm Beach, FL; and Robert M. Molet-teire of Graham, Moletteire & Torpy, P.A., Melbourne, FL, for Petitioner.
Charles W. Hall of Fowler White Boggs Banker P.A., St. Petersburg, FL; and Richard A. Sherman, Fort Lauderdale, FL, for Respondent.
Philip M. Burlington of Caruso, Burlington, Bohn & Compiani, P.A., West Palm Beach, FL, for The Academy of Florida Trial Lawyers, Amicus Curiae.
Roy C. Young of Young, Van Assenderp, Varnadoe & Anderson, P.A., Tallahassee, FL, for Florida Chamber of Commerce, Amicus Curiae.
Wendy F. Lumish of Carlton Fields, P.A., Miami, FL, for Florida Defense Lawyers Association, Amicus Curiae.

Opinion:
PER CURIAM.
We have for review Allstate Insurance Co. v. Sarkis, 809 So.2d 6 (Fla. 5th DCA 2001), which expressly and directly conflicts with Pirelli Armstrong Tire Corp. v. Jensen, 752 So.2d 1275 (Fla. 2d DCA 2000), review dismissed, 777 So.2d 973 (Fla.2001), and Collins v. Wilkins, 664 So.2d 14 (Fla. 4th DCA 1995). We have jurisdiction. See art. V, § 3(b)(3), Fla. Const.
The petitioner, Sally Sarkis (Sarkis), was involved in an automobile accident, as a result of which she suffered damages. Sarkis brought an action against her insurer, respondent Allstate Insurance Company (Allstate), requesting compensation based on her uninsured motorist coverage.
Prior to trial, Sarkis filed an offer of judgment for $10,000, pursuant to section 768.79, Florida Statutes (1997), and Florida Rule of Civil Procedure 1.442. This offer was rejected by Allstate. The case proceeded to trial, and Sarkis was ultimately awarded a net judgment of $87,700, which was twenty-five percent greater than her offer of judgment. Sarkis therefore moved for an award of attorney fees and costs.
The trial court found that the jury verdict returned on behalf of Sarkis was twenty-five percent greater than the offer of judgment, thereby entitling Sarkis to an award of attorney fees pursuant to section 768.79 and rule 1.442. In considering whether to apply a contingency risk multiplier to Sarkis's award of attorney fees, the trial court stated:
4. The Court has also reviewed a number of attorney's fee orders awarding Robert M. Moletteire, Esquire a reasonable hourly rate of $350.00. More particularly, two of the orders that are a part of this file contain stipulations by ALLLSTATE INSURANCE COMPANY that a reasonable hourly rate for Robert M. Moletteire in the handling of a personal injury protection lawsuit was $350.00 per hour.
5. The Court further finds, based upon the testimony of Robert M. Molet- telre, Esquire, counsel for Plaintiff, and O. John Alpizar, Esquire, that the relevant market in Brevard County required a multiplier in order for Plaintiff, SALLY SARKIS, to obtain competent counsel to try this underinsured motorist claim. Plaintiff has presented substantial evidence in the record that she would otherwise [have] been unable to afford competent counsel. The Court finds that counsel for the Plaintiff was unable to mitigate the risk of nonpayment in any way.
6. The Court finds that Plaintiff has presented ample testimony from the record that Defendant, ALLSTATE INSURANCE COMPANY, as a practice on a national level as well as more particularly in Brevard County, vigorously defends claims of the nature brought by the Plaintiff in this case. Plaintiff presented ample testimony in the record that there is a strong likelihood that any claim made against Defendant, ALLSTATE INSURANCE COMPANY, will require a trial. Counsel for Plaintiff was aware of that at the outset of accepting to represent the Plaintiff in this claim.
7. The Court further finds that the record speaks for itself that Plaintiff obtained a successful result in the trial of this case.
8. The Court further finds the following facts presented at trial to be important additional factors in determining a contingency risk multiplier:
a.Plaintiff, SALLY SARKIS, had a pre-existing complaint of low back pain prior to the accident that gave rise to this lawsuit.
b. That the jury heard testimony that Ms. Sarkis had been involved in 2 to 3 prior accidents involving personal injury to her neck and back.
c. That Defendant vigorously argued Plaintiffs low back injury was not due to the automobile accident that was the subject matter of this lawsuit, but instead was due to degeneration and prior traumatic events.
IT IS HEREBY ORDERED AND ADJUDGED that the following attorney's fees award be made.
1. Hours reasonably incurred: 167 hours
Reasonable hourly rate: 350.00 per hour
Lodestar': $58,450.00
Contingency Risk Multiplier: 1.5
Total Attorney's Fees: $87,675.00
Sarkis v. State, No. 97-10784-CA-H (Fla. 18th Cir. Ct. order filed July 11, 2000).
Allstate appealed the trial court's award of attorney fees to the Fifth District Court of Appeal. The district court, sitting en banc, reversed the trial court's order, holding as a matter of law that contingency risk multipliers are not to be used to compute attorney fees under section 768.79, Florida Statutes. Sarkis, 809 So.2d at 8. The court adopted the dissenting view of Judge Casanueva in Pirelli Armstrong Tire, 752 So.2d at 1277 (Casanueva, J., concurring in part and dissenting in part), that neither Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828 (Fla.1990), nor section 768.79 authorizes the use of contingency risk multipliers in calculating attorney fees awarded under the offer of judgment statute. In so holding, the court receded from its prior decisions in Garrett v. Mohammed, 686 So.2d 629 (Fla. 5th DCA 1996); Strahan v. Gauldin, 756 So.2d 158 (Fla. 5th DCA 2000); and Internal Medicine Specialists, P.A. v. Figueroa, 781 So.2d 1117 (Fla. 5th DCA 2001). The district court further acknowledged conflict with Pirelli and Collins.
The issue of the use of a multiplier to calculate the amount of an award of reasonable attorney fees on the basis of the authority of section 768.79 and rule 1.442 has been the subject of a multiplicity of opinions in the district courts. In 1995, the Fourth District Court of Appeal issued its opinion in Collins v. Wilkins, 664 So.2d 14 (Fla. 4th DCA 1995). In a brief opinion, the district court stated:
The statute provides:
When determining the reasonableness of an award of attorney's fees pursuant to this section, the court shall consider, along with all other relevant criteria, the following additional factors:
§ 768.79(7)(b), Fla. Stat. (1993) (emphasis supplied). The statute follows with enumerated additional factors for the court to consider. However, these are not exclusive but, as the statute says, must be considered with the other relevant criteria. Since the statute also refers the court to the guidelines promulgated by the supreme court in determining a reasonable fee, see section 768.79(6)(a), (b), Florida Statutes (1993), we look to the Rules of Professional Conduct, Rule 4-1.5, Fees for Legal Services, for the factors to be considered in determining a reasonable fee. These include whether or not the fee is fixed or contingent. Rule 4-1.5(b)(8). The rule also specifies that all factors should be considered in setting a reasonable fee, "and may be applied, in justification of a fee higher or lower than that which would result from application of only the time and rate factors." Rule 4-1.5(c). Therefore, we conclude that the legislature authorized a trial court to consider the application of a contingency risk factor as one criterion which may be applied in determining a reasonable fee under section 768.79. See also Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828, 831 (Fla.1990).
Collins, 664 So.2d at 15.
Recently, in Island Hoppers, Ltd. v. Keith, 820 So.2d 967 (Fla. 4th DCA 2002), the Fourth District again considered the application of a multiplier in this context and provided a' more extensive analysis. The district court wrote:
This court addressed the applicability of a contingency risk multiplier in the offer of judgment context in Collins v. Wilkins, 664 So.2d 14 (Fla. 4th DCA 1995).... [W]e concluded that the legislature had authorized a trial court to consider the application of a contingency risk factor as one criterion which may be applied in determining a reasonable fee under section 768.79. Collins, 664 So.2d at 15.
. We see no reason to recede from our prior holding, especially where Judge Casanueva expressly admits in his dissenting opinion, "[B]y referring to the fees for legal services rule, the Fourth . assert[s] that the legislature statutorily authorized trial courts to apply a contingency .risk multiplier in determining a reasonable fee under section 768.79 . arguably, a reading of the fee factors promulgated by our supreme court could support this holding...." Pirelli Armstrong, 752 So.2d at 1277. Thus, we maintain trial courts are legally authorized (by the legislature) to consider application of a contingency risk multiplier under the offer of judgment statute.
Furthermore, we find no logical inconsistency in the application of the Quan-strom factual requirements in the offer of judgment context. We recognize whenever a potential client walks through an attorney's door for the first time, a wide array of factors enter the calculus as to whether or not counsel will in fact decide to undertake that representation. Rowe and Quanstrom recognized potential clients whose cases seem to have a relatively low likelihood of success at the outset, may face considerable difficulties in securing counsel, and may often be unable to afford competent counsel. As such, the multiplier was established, to serve as an incentive of sorts, for attorneys to undertake representation where a risk of nonpayment was established. Although an attorney contemplating representation of a particular client can never "know" for certain whether or not entitlement to a fee award under 768.79 will ultimately be established, surely skilled counsel can, contrary to the words of Chief Judge Schwartz in Gonzalez, "anticipate" such. Offers of judgment, as well as requests to apply multipliers, have clearly become part and parcel of litigation in the state of Florida; this court need only look to any monthly docket to recognize such. We find no inconsistency in holding competent counsel can "anticipate" the eventual filing of a 768.79 offer of judgment, "anticipate" the possible entitlement to fees if the statutory prerequisites are met, and "anticipate" the possibility said fee award will be multiplied. Accordingly, we find no logical inconsistency in application of the Quanstrom requirements to the offer of judgment context, and move to consider the application of said requirements to the instant case.
Island Hoppers, 820 So.2d at 973-75 (footnote omitted).
The use of a multiplier in section 768.79 circumstances has also been both denied and questioned in the district courts. In Pirelli Armstrong Tire, the Second District Court of Appeal aligned with the Fourth District Court of Appeal's decision in Collins and the Fifth District Court of Appeal's then existing decision in Garrett, and approved the use of a multiplier of 2.5 to increase the lodestar figure of $414,000 to over $1 million. In a dissent, Judge Casanueva found that the use of a contingency risk multiplier in the context of section 768.79 violated the constitutional principle of equal protection because only one side in a civil action — the plaintiff — is eligible under a rule 4-1.5 analysis to receive a contingency risk multiplier since it is the plaintiff that is taking the risk of commencing the action. Judge Casanueva concluded that this Court's decisions in Quanstrom and Rowe did not justify the multiplier's use in this manner. As a second basis for his dissent, Judge Casanueva concluded that the statutory language of section 768.79 does not expressly provide judicial authority to use a multiplier. Judge Casanueva wrote:
Without this express directive, the court lacks the authority to use a multiplier. In subsection (1), where it created the statutory entitlement to an attorneys' fee, the legislature defined and limited the award of fees to those incurred within a specified period. Fees are only awardable for services rendered be tween the date of filing an offer or demand that was subsequently rejected and the conclusion of the litigation. The rejected demand or offer, the legislature decreed, was admissible only to pursue the statute's penalty provisions. The fees for legal services performed during this period were to be calculated in accordance with supreme court guidelines. Rules 4-1.5(b) and (c) of the Rules Regulating the Florida Bar identify factors to be considered in determining a reasonable fee. Nowhere in rule 4-1.5 is there a specific mention of a multiplier. Attorneys' fees are authorized only by statute or contract. Because a supreme court rule is neither, it cannot authorize a fee. It is the legislature's task to enact substantive law, see TGI Friday's Inc. v. Dvorak, 663 So.2d 606, 611 (Fla.1995), and even though it created a substantive right to an attorney's fee calculated between two points in time, it did not create a substantive right to have that fee multiplied.
In addition to providing for a penalty or sanction in subsection (7), the legislature specifically granted a trial court the authority to disallow the entitlement to attorneys' fees where it concluded the offer was not made in good faith. The interplay between the subsections evinces a clear legislative intent to penalize where appropriate and to provide a mechanism to deny a fee where the offer was not made in good faith. That same clarity of expression could have been used to authorize a multiplier but was not.
Pirelli Armstrong Tire, 752 So.2d at 1278-79 (Casanueva, J., concurring in part and dissenting in part).
Then, in Doyle-Vallery v. Aranibar, 838 So.2d 1198 (Fla. 2d DCA 2003), a case in which the majority noted that Judge Ca-sanueva's dissent in Pirelli Armstrong Tire "presents a strong argument" and that this Court had accepted review of this issue in the present case, Judge Alten-bernd wrote a concurring opinion. Judge Altenbernd stated that "if this panel were writing on a clean slate and if the issue were not already before the supreme court, I would vote to prohibit the use of a multiplier in determining a reasonable fee under section 768.79, Florida Statutes (2001)." Doyle-Vallery, 838 So.2d at 1198 (Altenbernd, J., concurring), Judge Al-tenbernd stated that he would hold that the multiplier was not applicable on the basis that the use of a multiplier to enhance fees awarded pursuant to section 768.79 would be contrary to legislative intent. Judge Altenbernd wrote:
Although I agree with most of Judge Casanueva's dissent in Pirelli, I am not convinced this issue necessitates a constitutional ruling. The matter should be resolved as a matter of statutory interpretation. The courts should interpret the reach of this statute to assure that the statute achieves its intended purpose and only that purpose.
The legislature created this statute to reduce the costs and the length, of litigation while maintaining a neutral playing field. When the legislature inserted the phrase, "along with all relevant criteria," into section 768.79(7)(b), it intended to incorporate those criteria relevant to these goals. The legislature did not intend for courts to use criteria that favor one side in the litigation over the other. As explained below, the multiplier has that effect. The legislature also did not intend for the courts to use criteria designed to promote more litigation rather than to limit existing litigation. It is beyond dispute that the multiplier was created to promote litigation, not to limit it. Thus, as a matter of simple statutory construction, the multiplier is not a "relevant criterion."
Judge Casanueva is correct in his two most important observations. First, the multiplier was created primarily to promote the goal of access to courts. See Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828, 838 (Fla.1990); Fla. Patient's Comp. Fund v. Rowe, 472 So.2d 1145, 1151 (Fla.1985). Using a multiplier encourages lawyers to accept representation at the inception of certain cases when lawyers might not otherwise accept such cases. The legislature and the courts apply a multiplier to assure that lawyers receive a sufficient economic incentive to represent clients who need access to the courts and cannot achieve that access without such incentives. Thus, the multiplier is designed to achieve a public policy that is separate and distinct from the policy of encouraging early settlement of lawsuits. If anything, by encouraging the filing of more lawsuits, the multiplier creates congestion in the judicial system that makes it more difficult for section 768.79 to achieve the goal of quicker, less expensive litigation.
Second, defense attorneys have no feasible means of entering into employment contracts based upon a contingency fee. As a result, the existing rules would rarely, if ever, permit the defendant to recover a fee that included a multiplier. This may not violate equal protection, but it does affect the workings of this statute. Because the multiplier benefits only the plaintiff, if it applies to the fees imposed under section 768.79, that statute will necessarily shift the value of lawsuits in favor of the plaintiff.
Doyle-Vallery, 838 So.2d at 1198-99 (Altenbernd, J., concurring) (footnote omitted).
In 1999, the Third District Court of Appeal, in Gonzalez v. Veloso, 731 So.2d 63 (Fla. 3d DCA 1999), affirmed a trial court's denial of a multiplier in a case in which the plaintiffs offer of judgment exceeded the section 768.79 twenty-five-percent requirement. In writing for the court, Judge Schwartz stated: "[Tjhere [is no] evidence in the record that the prevailing party would have been unable to obtain competent counsel." Id. at 64 (quoting Askowitz v. Susan Feuer Interior Design, Inc., 563 So.2d 752, 754 (Fla. 3d DCA 1990)). Judge Schwartz further questioned
[w]hether any such showing can ever be made, and thus whether a multiplier is ever appropriate when fees are awarda-ble only when a reasonable offer is not accepted under § 768.79, an eventuality which obviously cannot be anticipated when counsel is obtained.
Gonzalez, 731 So.2d at 64 n. 2.
In Amisub (American Hospital), Inc. v. Hernandez, 817 So.2d 870 (Fla. 3d DCA 2002), the Third District Court of Appeal again reviewed the application of a multiplier in a section 768.79 situation. The court wrote:
Our inquiry in this case, based on the Quanstrom criteria, is "whether the relevant market requires a contingency fee multiplier to obtain competent counsel" when fees are awarded for failure to accept an offer under Section 768.79. Although three law firms refused Hernandez's case, Charlip accepted the case based on a forty-five percent contingency fee arrangement.
Hernandez contends that although Charlip originally agreed to a contingency fee, the litigation became overbearing. Therefore, the availability of a con tingency fee multiplier became essential to Charlip's continued representation.
We reject this argument for two reasons. First, in Quanstrom, the Court specifically refers to obtaining counsel in the first instance, not whether counsel continues the case after prolonged litigation.
Second, the record does not support Hernandez's argument. After the first trial ended in an adverse directed verdict, Charlip and Hernandez renegotiated their fee and cost arrangement. If Charlip had made the determination to proceed with the case in the hope of obtaining a contingency fee multiplier, he would not have renegotiated the fee agreement with Hernandez. Clearly, Charlip was willing to continue representing Hernandez once he revisited the fee arrangement and mitigated his risk.
Charlip's failure to satisfy two of the Quanstrom requisites, the ability to obtain competent counsel in the relevant market and the ability to mitigate the risk of nonpayment in any way, negate the application of a multiplier. Therefore, we reverse that portion of the trial court's order applying a 2.5 multiplier to the attorney's fees award. See Gonzalez v. Veloso, 731 So.2d at 64.
Id. at 873.
The First District Court of Appeal has held that a trial court should have considered the applicability of a contingency risk multiplier in connection with a section 768.79 attorney fee award in Lewis v. Bondy, 752 So.2d 1225 (Fla. 1st DCA 2000), and subsequent cases. In Lewis, the court aligned with the majority in Pirelli Armstrong Tire, but did not set forth independent analysis. However, in Brown & Williamson Tobacco Corp. v. Carter, 848 So.2d 365 (Fla. 1st DCA 2003), the court reversed the trial court's application of the multiplier in a section 768.79 attorney fee award.
Finally, prior to its decision in the present case, the Fifth District Court of Appeal had also held that a multiplier was applicable under section 768.79. See Tetrault v. Fairchild, 799 So.2d 226 (Fla. 5th DCA 2001). We find, however, that Judge Harris's concurring opinion in this case is noteworthy. In his opinion, Judge Harris wrote an extensive analysis concerning the application of a multiplier in a section 768.79 attorney fee award. In part, Judge Harris wrote:
[Another] reason for denying application of the multiplier in offer of judgment cases was well developed by Judge Casanueva in his dissent in Pirelli Armstrong Tire Corp. v. Jensen, 752 So.2d 1275 (Fla. 2d DCA 2000). Judge Casanueva based his opinion on equal protection guarantees. It can just as well be argued that to apply the multiplier in offer of judgment cases is contrary to clear legislative intent. The legislature in section 768.79 carefully crafted a party neutral fee provision to encourage settlement by assessing identical risks against each party if an offer is improperly rejected. By applying the multiplier (applicable only to plaintiffs), the courts will have destroyed the neutrality intended by the legislature and will have given great advantage to plaintiff: "If I lose, I must pay your reasonable fee; if you lose, you must pay up to two-and-a-half times my reasonable fee." The supreme court emphasized that the "criteria and factors" utilized in setting a reasonable attorney's fee "must be consistent with the purpose of the fee-authorizing statute or rule." Quanstrom, 555 So.2d at 834. Granting a multiplier for only one of the parties would not be consistent with the purpose of the offer of judgment statute which is to put both parties on the same footing when reasonably evaluating the case.
Tetrault, 799 So.2d at 235 (Harris, J., concurring and concurring specially).
ANALYSIS
We approve the Fifth District Court of Appeal's decision. We hold that the use of a multiplier in awarding attorney fees authorized by section 768.79, Florida Statutes, is error. This conclusion follows this Court's precedent in which we have construed the offer of judgment statutes since their adoption in 1986, ruled upon their constitutionality, and adopted rules of civil procedure implementing them.
In sum, we have recognized that attorney fees awarded pursuant to the offer of judgment statutes are sanctions. These fees are awarded as sanctions for unreasonable rejections of offers of judgment. We have set forth in rule 1.442 the factors to be considered in determining a reasonable amount of attorney fees awarded as sanctions. We have not included the use of a multiplier in the rule as a factor to be considered in the award of attorney fees. Because attorney fees awarded under the offer of judgment statute are sanctions against the party against whom the sanction is levied, we have held that the statute and rule must be strictly construed. We here examine our precedent.
We first adopted an offer of judgment rule of procedure in 1972. In re the Florida Bar, 265 So.2d 21 (Fla.1972). That rule was the same as Federal Rule of Civil Procedure 68 and provided that if the judgment finally obtained by the adverse party was not more favorable than the offer of judgment, the adverse party had to pay the costs incurred after making the offer.
Thereafter, the Legislature enacted two offer of judgment statutes. In 1986, the Legislature enacted section 768.79, and in 1987, the Legislature enacted section 45.061, Florida Statutes (1987). In 1988, we requested the Civil Procedure Rules Committee to examine any conflict between sections 45.061 and 768.79 and rule 1.442. In response, the Committee petitioned for adoption of a new rule of civil procedure.
In its petition, the majority of the Committee proposed a sanction for the failure to accept a bona fide offer of settlement of fifteen percent of an unaccepted offer to pay. The Committee contended that the then existing sanction, consisting only of costs, was inadequate to deter unnecessary litigation. The Committee also urged this Court to declare unconstitutional sections 768.79 and 45.061, Florida Statutes. A minority of the Committee and the Board of Governors of The Florida Bar urged this Court to return to the then current rale's sanctions of costs only and to declare the statutes unconstitutional.
In ruling upon the petition and adopting a new rule, we stated:
The proposal submitted by the Committee raises a serious question of whether this Court impinges upon the legislative prerogative to enact substantive law if we adopt a "procedural" sanction of this type.... [I]t is not so clear that a sanction is "procedural" when it imposes a "fine" based on a percentage of an unaccepted offer, especially when a party may have done nothing more serious than guessing wrong about a jury verdict.
We do not find it necessary, however, to reach this question.... We believe it is wiser policy to have a sanction based on costs and attorneys fees. This is what the legislature did in both of the statutes under review in this opinion, and this legislative determination is persuasive. Accordingly, we have modified the proposed rule as set forth in the appendix to this opinion to reflect the major components of the statutes in question.
. Our final rule imposes a sanction based entirely on costs and attorneys fees, but strengthens the existing rule to permit sanctions whenever an offer of judgment is unreasonably refused and the subsequent judgment is disproportionate to that offer by more than 25%. For instance, we have added extensive new language defining what can constitute an unreasonable refusal and clarifying the extent of the trial court's discretion on this question.
Florida Bar re Amendment to Rules of Civil Procedure, Rule 144.2 (Offer of Judgment), 550 So.2d 442, 442-43 (Fla.1989) (emphasis added). We then declined to address the statutes' constitutionality in the nonadversarial rules proceeding. We did, however, recognize the confusion by reason of the difference between the statutes and the then existing rule 1.442. We thus withdrew the then existing rule 1.442, effective January 1, 1990, and replaced it with a new rule 1.442. We held that, to the extent the new rule's procedural aspects were inconsistent with the statutes, the rules superseded the statutes.
Shortly after our adoption of the new rule 1.442, we considered a decision of the Fifth District Court of Appeal in Milton v. Leapai, 562 So.2d 804 (Fla. 5th DCA 1990), in which the district court held section 45.061, Florida Statutes (1987), unconstitutional concerning offers of settlement because the statute infringed upon the exclusive rule-making authority of the Supreme Court. The district court had reached its conclusion in answering two certified questions from a county court. The first certified question was whether the statute was constitutional. The second certified question was whether attorney fees could be imposed as sanctions under the statute where the offer of settlement was made subsequent to the enactment of the statute but where the cause of action accrued prior to the enactment of the statute. Id.
We reversed the district court as to its holding of the offer of settlement statute unconstitutional and remanded with directions that the county court's award of attorney fees be reinstated. We then addressed the second certified question from the county court. That answer is important in respect to the issue which we now decide. We stated:
Having found the statute constitutional as modified by our rule, we next must address the question of whether section 45.061, Florida Statutes (1987), is constitutional as applied. In this instance, we agree with Leapai that the statute was not applied retroactively since the right to recover attorney fees attaches not to the cause of action, but to the unreasonable rejection of an offer of settlement. As noted in our statement of facts, the offer and rejection of the offer occurred after the act had been adopted by the legislature.
Leapai v. Milton, 595 So.2d 12, 15 (Fla.1992) (emphasis added).
Later, in 1992, we considered the interplay between sections 45.061 and 768.79 in Timmons v. Combs, 608 So.2d 1 (Fla.1992). We noted that the Legislature had repealed section 45.061 with respect to causes of action accruing after October 1, 1990. and had amended section 768.79 in 1990. We then found that section 768.79 contained procedural aspects which were subject to this Court's rule-making authority. We therefore repealed the then existing rule 1.442 and adopted the procedural portions of section 768.79 as a rule of this Court, effective as of the date of the Tim-mons opinion. Timmons, 608 So.2d at 3. In a supplemental order, we requested the Civil Procedure Rules Committee to address the adoption of a new rule and authorized the submission of a proposed rule outside of the four-year cycle. Timmons, 608 So.2d at 3.
In 1995, we again considered the statutes and rule in TGI Friday's, Inc. v. Dvorak, 663 So.2d 606 (Fla.1995). In that case, the Fourth District Court of Appeal had made four holdings, which we expressly approved. Id. at 611. We stated:
In Leapai, this Court upheld the constitutionality of section 45.061 and found that the statute did not infringe on the rule-making authority of the Court. Finding no relevant distinction between section 4-5.061 and section 768.79, the district court ruled that section 768.79 was likewise constitutional.
Second, the district court held that rule 1.442 could be applied to this case despite the fact that Dvorak's cause of action preceded the effective date of the rule. The district court once again relied on this Court's decision in Leapai and our holding that section 45.061 could be retroactively applied to a cause of action so long as the statute was enacted before the offeree's rejection of the offer of judgment. The district court held that the same reasoning should apply to rule 1.442, and found that the rule would apply in this instance because TGI Friday's rejected Dvorak's offer after rule 1.442 became effective.
TGI Friday's, 663 So.2d at 610 (emphasis added). In its third and fourth holdings, the district court held that under the statutes and rule, the issue of whether TGI Friday's had unreasonably rejected the offer of judgment had no bearing on whether Dvorak was entitled to an award of attorney fees.
We noted that while the reasonableness of the rejection of an offer had no bearing on the issue of entitlement to fees, the factors set forth in section 768.79(2)(b), which had been incorporated into rule 1.442, would have a bearing on the amount of attorney fees awarded by the court. We stated:
[I]t is equally clear that these enumerated factors are intended to be considered in the determination of the amount of the fee to be awarded. Thus, in a given case, the court could justifiably reduce the amount of the attorney's fee to be assessed against a severely injured plaintiff who suffered an adverse verdict after rejecting a small settlement offer. By the same token, the court could reasonably conclude that a defendant with a small liability potential who rejected a large settlement offer should pay only a reduced fee even though the verdict ultimately exceeded the offer by more than twenty-five percent.
TGI Friday's, 663 So.2d at 613.
In 1996, in In re Amendments to Florida Rules of Civil Procedure, 682 So.2d 105 (Fla.1996), we adopted rule 1.442 in a form recommended by the Civil Procedure Rules Committee, except for two recommendations which we determined were in conflict with TGI Friday's. By its ex press statement in subdivision (a), the rule applies to all proposals for settlement authorized by Florida law regardless of the terms used to refer to the proposals. Subdivision (a) also expressly provides that the rule superseded all other provisions of rules and statutes inconsistent with the new rule that we adopted by the opinion. The new rule was therefore made applicable to an award of attorney fees pursuant to section 768.79. Subdivision (h)(2) of the rule provides the factors that a court is to use in determining the amount of attorney fees awarded for refusal to accept a proposal for settlement.
As noted at the beginning of this analysis, the detailed history of our cases construing the offer of judgment statutes and .the adoption of rule 1.442 reflect that an award of attorney fees authorized by section 768.79 is a sanction against the rejecting party for the refusal to accept what is presumed to be a reasonable offer. This is a sanction levied against the rejecting party for unnecessarily continuing the litigation. The statute specifically limits the attorney fees to fees incurred after the date the offer was served upon the rejecting party. § 768.79(6)(a)-(b), Fla. Stat. (1997). The right to the award of attorney fees attaches to the rejection of the offer of judgment, not to the cause of action. Leapai 595 So.2d at 15. The factors specified in rule 1.442 each have to do with the evaluation and nature of the offers and the case in litigation.
We have recognized that the use of a multiplier must be consistent with the purpose of the fee-authorizing statute or rule. Quanstrom, 555 So.2d at 834; see also Bell v. U.S.B. Acquisition, Inc., 734 So.2d 403, 408-09 (FIa.1999). The reason for an award of attorney fees authorized as a sanction for the rejection of an offer to settle is very different from the reason that we authorized the use of a multiplier in Quanstrom, 555 So.2d at 833, and Rowe, 472 So.2d at 1151. In those cases, we authorized the use of a multiplier to promote access to courts by encouraging lawyers to undertake representation at the inception of certain cases. See Doyle-Vallery, 838 So.2d at 1198-99 (Altenbernd, J., concurring). We agree with the Third District Court of Appeal's analysis in Ami-sub that Quanstrom specifically refers to obtaining counsel in the first instance. Amisub, 817 So.2d at 872-73. It is self-evident that attorney fees awarded as a sanction under section 768.79 and rule 1.442 are awarded after an attorney has already been obtained and agreed to un dertake the case, and thus the use of a multiplier is not consistent with the purpose of the fee-authorizing statute. Quan-strom and Rowe do not justify the use of a multiplier in awards of attorney fees authorized by section 768.79 and made in compliance with rule 1.442.
Furthermore, we have recognized that statutory authorization for attorney fees is to be strictly construed. Gershuny v. Martin McFall Messenger Anesthesia Prof. Ass'n, 539 So.2d 1131, 1132 (Fla.1989). We have also recognized that a statute imposing a penalty must be strictly construed in favor of the one against whom the penalty is imposed and is never extended by construction. Hotel & Restaurant Comm'n v. Sunny Seas No. One, Inc., 104 So.2d 570, 571 (Fla.1958). We have recently applied this rule of strict construction to section 768.79. See Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So.2d 276 (Fla.2003).
Throughout the statutory and rule history of offers of judgment, the use of a multiplier has never been expressly authorized. Neither section 768.79 nor rule 1.442 authorizes the use of a multiplier in determining the amount of attorney fees as a sanction for the rejection of an offer. Applying a strict construction of the statute and rule, a multiplier therefore cannot be applied under section 768.79 or rule 1.442, and the trial court's application of a multiplier in this case was error. From our reading of the trial court's "Judgment Award of Attorney's Fees and Costs" in the present case, we do not see that the trial court used the factors of rule 1.442(h)(2) to determine the amount of the attorney fees award. Upon remand, the trial judge should use these factors in calculating the award, as well as the reasonable hourly rate and time, which the judge had already determined. A multiplier is not authorized.
We therefore approve the decision of the Fifth District Court of Appeal in this case and remand for further proceedings in accord with this opinion. We disapprove Pirelli Armstrong Tire from the Second District, Island Hoppers from the Fourth District, and Lewis from the First District. The decisions in those cases failed to consider the 1996 version of rule 1.442 and approved the use of a multiplier though rule 1.442 did not.
It is so ordered.
ANSTEAD, C.J., and LEWIS, QUINCE, and BELL, JJ., concur.
CANTERO, J., recused.
. In Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145 (Fla.1985), modified by Quanstrom, this Court established the criteria that must be proven for a, contingency risk multiplier to be applied. For a trial court to apply a contingency risk multiplier in tort and contract cases, the party seeking use of a multiplier must present evidence of the following factors: (1) whether the relevant market requires a contingency risk multiplier to obtain competent counsel; (2) whether the attorney was able to mitigate the risk of nonpayment in any way; and (3) whether any of the factors set forth in Rowe are applicable, especially the amount obtained, and the type of fee arrangement between the attorney and his client. Quanstrom, 555 So.2d at 834; see also Rowe, 472 So.2d at 1150-52.
. This figure was ultimately reduced by twenty-five percent to take into account the other criteria in section 768.79(7)(b), resulting in a total fee award of $777,695.95.
. We interpret the reference to a "clean slate" to mean that if the panel was not bound by the majority's decision in Pirelli Armstrong Tire.
. The First District's decision followed the decision by this Court to strike the multiplier in the award of appellate attorney fees. Carter v. Brown & Williamson Tobacco Corp., No. SC94797 (Fla. order filed Dec. 13, 2002).
. In this original rule, costs were the only sanction. There was no authorization in this rule for attorney fees as a sanction. This rule was changed immaterially for present purposes in 1980. The Florida Bar, 391 So.2d 165 (Fla.1980).
. Section 45.061 was a similar offer-of-judgment statute, which was repealed with respect to actions accruing after October 1, 1990. Ch. 90-119, § 22, Laws of Fla. Section 768.79 was therefore left as the only statute applicable to actions accruing after that date.
. In pertinent part, the new rule stated:
(h) Sanctions.
(1) Upon motion made within 30 days after the return of the verdict in a jury action or the date of filing of the judgment in a non-jury action, the court may impose sanctions equal to reasonable attorneys fees and all reasonable costs of the litigation accruing from the date the relevant offer of judgment was made whenever the court finds both of the following:
(A) that the party against whom sanctions are sought has unreasonably rejected or refused the offer, resulting in unreasonable delay and needless increase in the cost of litigation; and
(B) that either
(I) an offer to pay was refused and the damages awarded in favor of the offeree and against the offeror are less than 75 percent of the offer; or
(ii) an offer to accept payment was refused and the damages awarded in favor of the offeror and against the offeree are more than 125 percent of the offer.
(2) In determining entitlement to and the amount of a sanction, the court may consider any relevant factor, including:
(A) the merit of the claim that was the subject of the offer;
(B) the number, nature and quality of offers and counteroffers made by the parties;
(C) the closeness of questions of fact and law at issue;
(D) whether a party unreasonably refused to furnish information necessary to evaluate the reasonableness of an offer;
(E) whether the suit was in the nature of a test case presenting questions of far-reaching importance affecting nonparties;
(F) the fact that, at the time the offer was made and rejected, it was unlikely that the rejection would result in unreasonable cost or delay;
(G) the fact that a party seeking sanctions has himself unreasonably rejected an offer or counteroffer on the same issues or engaged in other unreasonable conduct;
(H) the fact that the proceeding in question essentially was equitable in nature;
(I) the lack of good faith underlying the offer; or
(J) the fact that the judgment was grossly disproportionate to the offer.
(3) No sanction under this rule shall be imposed in any class action or shareholder derivative suit, nor in any proceeding involving dissolution of marriage, alimony, nonsupport, child custody or eminent domain.
(Footnotes omitted.)
. See supra note 6.
. Ch. 90-119, § 48, Laws of Fla.
. This case was decided under section 768.79 as it existed prior to its 1990 amendments, and under rule 1.442 as it existed in 1990, prior to this Court's repeal of the rule in Timmons.
. TGI Friday's was decided under the 1987 version of section 768.79. The statute was amended in 1990, wherein the factors of subsection (2)(b) in the 1987 version (incorporated into rule 1.442) were moved to subsection (7)(b) of the amended statute. See ch. 90-119, § 48, Laws of Fla. The substance of the subsection remained the same.
. The Committee recommended that rule 1.442(h)(2) provide guidelines for determining the "entitlement to and the reasonableness of" the amount of an award of attorney fees. This Court rejected including the words "the entitlement to" because use of those words would infringe upon the Legislature's exclusive authority to enact substantive law. The Committee also recommended adding whether the proposal was reasonably rejected to the factors to be considered in respect to the award of attorney fees. This Court rejected that recommendation, reasoning that such a consideration was inconsistent with this Court's opinion in TGI Friday's, in which this Court noted that the Legislature, by enacting section 768.79, did not give judges the discretion to determine whether it is reasonable to reject an offer of judgment. This consider ation would therefore also impinge upon the Legislature's prerogative to enact substantive law. In re Amendments to Fla. Rules of Civ. Proc., 682 So.2d at 105-06.
. The factors are as follows:
(h) Costs and Fees.
(1) If a party is entitled to costs and fees pursuant to applicable Florida law, the court may, in its discretion, determine that a proposal was not made in good faith. In such case, the court may disallow an award of costs and attorneys' fees.
(2) When determining the reasonableness of the amount of an award of attorneys' fees pursuant to this section, the court shall consider, along with all other relevant criteria, the following factors:
(A) The then-apparent merit or lack of merit in the claim.
(B) The number and nature of proposals made by the parties.
(C) The closeness of questions of fact and law at issue.
(D) Whether the party making the proposal had unreasonably refused to furnish information necessary to evaluate the reasonableness of the proposal.
(E) Whether the suit was in the nature of a test case presenting questions of far-reaching importance affecting nonparties.
(F) The amount of the additional delay cost and expense that the party making the proposal reasonably would be expected to incur if the litigation were to be prolonged.
. In determining attorney fee awards pursuant to rule 1.442, trial courts should make specific findings with respect to the factors provided in rule 1.442(h)(2).