Opinion ID: 1837900
Heading Depth: 1
Heading Rank: 2

Heading: analysis of precedent

Text: We begin our analysis by examining our precedent concerning the guidelines for calculating court-awarded attorney fees. In Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145, 1150-51 (Fla.1985), we first enunciated the factors to be utilized by a court in assessing reasonable attorney fees. We noted the distinction between the English Rule, that attorney fees are taxed to the losing party as part of costs, and the `American Rule,' that attorney fees may be awarded by a court only when authorized by statute or agreement of the parties. Id. at 1148. [4] We observed that great concern ha[d] been focused on a perceived lack of objectivity and uniformity in court-determined reasonable attorney fees. Id. at 1149. Noting that it was incumbent upon this Court to articulate specific guidelines to aid trial judges in the setting of attorney fees, we considered the federal lodestar approach to be a suitable foundation for an objective structure upon which to base an award. Id. at 1150. We did not differentiate between court-awarded fees authorized by statute and court-awarded fees authorized by the agreement of the parties. We defined an objective structure in Rowe. In calculating reasonable fees, the trial court must determine the number of hours reasonably expended by the attorney and a reasonable hourly rate for those services, then multiply the two to arrive at the lodestar amount. Id. at 1150-51. The Rowe opinion further explained that the criteria set forth in Disciplinary Rule 2-106(b) of the Florida Bar Code of Professional Responsibility should be utilized to calculate the loadstar. [5] 472 So.2d at 1150. For example, we stated that the novelty and difficulty of the question involved should be considered in determining the number of hours reasonably expended on the litigation. Id. As to the second half of the lodestar equationthe hourly ratewe stated that the court should take into account all of the factors enumerated in the Florida Bar Code of Professional Responsibility except the `time and labor required,' the `novelty and difficulty of the question involved,' the `results obtained,' and `[w]hether the fee is fixed or contingent.' Id. at 1150-51. We instructed that after calculating the lodestar, the court may add or subtract from the fee based upon a `contingency risk' factor and the `results obtained.' Id. at 1151. Thus, although the court is precluded from considering the contingent nature of the fee when determining a reasonable hourly rate, this factor should be taken into account when determining whether a multiplier is appropriate. In Rowe, we recognized the economic reality that attorneys who work on a contingent fee basis only receive compensation when they prevail, and thus must charge a higher fee than if they had been guaranteed an hourly rate. 472 So.2d at 1151. While Rowe emanated from a statutory prevailing party attorney's fee provision, we did not limit our analysis to statutorily based attorney's fees. Our overriding concern was in setting forth a detailed formula to provide the trial judges with objective guidance in the awarding of reasonable attorney fees and allow parties an opportunity for meaningful appellate review. Id. at 1152. In Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828, 830 (Fla.1990), we found it necessary to reexamine the principles adopted in Rowe regarding the federal lodestar approach and the use of the multiplier. We observed that federal courts had developed the lodestar method for determining attorney's fees to apply to a special class of cases, in which Congress had enacted fee-authorizing statutes to pay fees to prevailing plaintiffs for the purpose of obtaining public enforcement of Congressional acts. Id. at 831. We then noted that subsequent to Rowe, in Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 483 U.S. 711, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987), the United States Supreme Court had substantially restricted, if not eliminated the use of a contingency risk multiplier as a method of enhancing a statutorily authorized attorney's fees. Quanstrom, 555 So.2d at 832. We observed that the plurality in Delaware Valley was unconvinced that Congress intended the risk of losing a lawsuit to be an independent basis for increasing the amount of any otherwise reasonable fee. Id. at 831 (quoting Delaware Valley, 483 U.S. at 725, 107 S.Ct. 3078). We further observed that in the context of a public policy enforcement case decided subsequent to Delaware Valley, the Supreme Court in Blanchard v. Bergeron, 489 U.S. 87, 109 S.Ct. 939, 103 L.Ed.2d 67 (1989), authorized courts to consider the contingency fee arrangement as one factor in determining a reasonable fee, but that the contractual fee arrangement between the plaintiff and his attorney would not cap the amount of fees awarded in this type of case. See Quanstrom, 555 So.2d at 832. In contrast, in Rowe we had capped all court-awarded fees at the prevailing party's fee agreement with counsel. 472 So.2d at 1151. Although we reaffirmed the use of the contingency risk multiplier in certain cases in Quanstrom, we recognized the need to modify the application of the contingency risk multiplier based on the type of case under consideration: Different types of cases require different criteria to achieve the legislative or court objective in authorizing the setting of a reasonable attorney's fee. Although we reaffirm our decision in Rowe concerning the lodestar approach as the basic starting point, we find that the use of the contingency fee multiplier should be modified. For a better understanding, we find it appropriate to place attorney's fee cases into the following three categories: (1) public policy enforcement cases; (2) tort and contract claims; and (3) family law, eminent domain, and estate and trust matters. These categories are not intended to be all-inclusive. 555 So.2d at 833 (footnote omitted). In public policy enforcement cases we adopted the federal approach of Blanchard that utilizes multiple factors to arrive at a reasonable attorney's fee. [6] See Quanstrom, 555 So.2d at 833 (citing Blanchard, 489 U.S. at 93, 109 S.Ct. 939). In these cases, the existence of a contingency fee arrangement is but one factor to consider in determining a reasonable attorney's fee, and the trial court is not limited in its award by the fee agreement between the party and his or her attorney. See id. at 834. In the second category, involving tort and contract cases, we reaffirmed the use of a multiplier but found that the trial court should consider the following factors in determining whether a multiplier is necessary: (1) whether the relevant market requires a contingency fee 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 involved, the results obtained, and the type of fee arrangement between the attorney and his client. Evidence of these factors must be presented to justify the utilization of a multiplier. We find that the multiplier is still a useful tool which can assist trial courts in determining a reasonable fee in this category of cases when a risk of nonpayment is established. However, we find that the multiplier in Rowe should be modified as follows: If the trial court determines that success was more likely than not at the outset, it may apply a multiplier of 1 to 1.5; if the trial court determines that the likelihood of success was approximately even at the outset, the trial judge may apply a multiplier of 1.5 to 2.0; and if the trial court determines that success was unlikely at the outset of the case, it may apply a multiplier of 2.0 to 2.5. Id. at 834 (emphasis supplied). [7] Thus, in Quanstrom we did not eliminate the consideration of a contingency risk multiplier in contract cases. Instead, we concluded that in tort and contract cases the multiplier is a useful tool which can assist trial courts in determining a reasonable fee in this category of cases when a risk of nonpayment is established, while emphasizing that the criteria and factors utilized in these cases must be consistent with the purpose of the fee-authorizing statute or rule. Id. at 834. Our concern in Quanstrom that the use of the multiplier be consistent with the purpose of the fee-authorizing statute or rule, see id., does not lead to a conclusion that a multiplier can never be considered unless the fees are based on a fee-authorizing statute or rule. We next discussed contingency multipliers in Lane v. Head, 566 So.2d 508, 511 (Fla.1990), where we found that even when a fee arrangement is partially contingent, the court has discretion to apply a multiplier, reduced by the percentage of the fee that was guaranteed by the fee arrangement. Shortly after Lane was decided, we were confronted with whether our holding in that case mandated the application of a partial multiplier where a commercial bank claimed attorney's fees under a promissory note. See Sun Bank of Ocala v. Ford, 564 So.2d 1078 (Fla.1990). [8] We concluded in Sun Bank that the commercial bank, as the prevailing party, did not automatically qualify to receive a contingency multiplier simply because its attorney provided representation on a partial contingent fee basis. Id. at 1079. Rather, we 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: 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. Therefore, the existence of a contingent-fee agreement between attorney and client does not automatically require application of a multiplier. Id. (citation omitted) (quoting Delaware Valley, 483 U.S. at 731, 107 S.Ct. 3078). In Sun Bank we again reiterated the categories enunciated in Quanstrom, stressing that the factors to consider in tort and contract cases included whether the relevant market required a contingency risk multiplier to obtain competent counsel and whether the attorney was able to mitigate the risk of nonpayment in any way. Id. at 1078. We concluded as follows: The instant case is in the nature of a contract case. We are not aware of any situations where commercial banks have had difficulty finding attorneys to represent them. Indeed, from the myriad of cases involving banks it seems as though attorneys are anxious to represent them. There might be a preference not to accept certain individual cases, but any reluctance generally yields to the reward of gaining other cases and for the business representing a bank engenders. The instant trial judge rejected the contention that a multiplier was appropriate. He found his duty to be to set a reasonable attorney's fee according to the terms of the promissory note. He arrived at the figure by utilizing a rate of one hundred fifty dollars per hour for the time reasonably spent. In this case and under the circumstances presented the award was reasonable and proper. Id. at 1079-80. Thus, Sun Bank specifically applied Rowe and Quanstrom and, in doing so, found the record devoid of evidence that the commercial bank had trouble finding counsel, an important factor to consider under Quanstrom. If our intent had been to preclude a contingency multiplier in contract cases where there was no statutory basis for the fee, our detailed analysis in Sun Bank that focused on whether the party would have difficulty securing counsel would have been unnecessary. This conclusion is reinforced by our recent opinion in Kuhnlein v. Department of Revenue, 662 So.2d 309 (Fla.1995). In that case, this Court noted that:  Rowe and Quanstrom are fee-shifting cases. In a fee-shifting case the adverse party is required by statute or contract to pay attorney fees of the prevailing party. Kuhnlein, 662 So.2d at 311 n. 3 (emphasis supplied). We recognize that the district courts of appeal have not been uniform in deciding whether a multiplier can be considered in a case where the only authority for a fee award is the parties' contract. The First, Second, and Third District Courts of Appeal have upheld the consideration of contingency multipliers in contract cases, relying on our decisions in Rowe or Quanstrom. See, e.g., Stack v. Lewis, 641 So.2d 969, 970 (Fla. 1st DCA 1994); Askowitz v. Susan Feuer Interior Design, Inc., 563 So.2d 752, 754 (Fla. 3d DCA 1990); Freedom Sav. & Loan Ass'n v. Biltmore Constr. Co., 510 So.2d 1141, 1142 (Fla. 2d DCA 1987); see also Hollub v. Clancy, 706 So.2d 16, 19 (Fla. 3d DCA 1997); cf. Florida Pottery Stores of Panama City, Inc. v. American Nat'l Bank, 578 So.2d 801, 804 (Fla. 1st DCA 1991) (treating contractual and statutory basis for attorney fee award as equivalent). Stack arose from a dispute over a broker's fee and Askowitz arose from a sales contract, and in both cases the fee award was based on a contractual agreement rather than a statutory provision. The Fourth District in this case relied on its previous decision in Command Credit. See Stamm, 695 So.2d at 375. However, in a more recent opinion, another panel of the Fourth District, without reaching the Command Credit issue, interpreted Quanstrom to mean that in a contract case there must be evidence that a contingent fee arrangement was necessary in order for the prevailing party to have obtained competent counsel if a multiplier is to be imposed on the nonprevailing party. Simmons v. Royal Floral Distrib., Inc., 724 So.2d 99, 99 (Fla. 4th DCA 1998). Based on a thorough analysis of our opinions, we find no precedent from this Court precluding a trial court from considering a contingency risk multiplier in a contract case. To the contrary, there is much support to be found in Rowe, Quanstrom, and Sun Bank to indicate that we contemplated a trial court's consideration of a multiplier if evidence in the record supports the need for one.