Court Opinion

ID: 9926242
Source: CourtListenerOpinion
Date Created: 2024-01-24 15:02:46.340141+00
Date Added: 2024-06-11T09:22:13.274179
License: Public Domain

FIRST DISTRICT COURT OF APPEAL
                 STATE OF FLORIDA
                 _____________________________

                        No. 1D2022-1627
                 _____________________________

MICHAEL D. RUDOLPH,

    Appellant,

    v.

DARIEN SMITH, THE HOME
DEPOT U.S.A., INC., and LIBERTY
MUTUAL INSURANCE COMPANY,

    Appellees.
                 _____________________________

On appeal from the Office of the Judges of Compensation Claims.
Edward R. Almeyda, Judge.

Date of Accident: October 29, 1993.

                        January 24, 2024

RAY, J.

     This is an appeal from a final order on attorney’s fees in a
workers’ compensation case in which the judge of compensation
claims (“JCC”) awarded fees to the claimant’s attorney based on a
customary hourly rate instead of the contingency fee amount
agreed to by the claimant and his attorneys. Because there were
no exceptional circumstances that would justify a reduction in the
presumptively reasonable fee set by statute, we reverse.
                                  I

     By way of background, this case stems from a tragic accident
in 1993 that rendered the claimant a ventilator-dependent
quadriplegic with complex housing, medical, transportation, and
attendant care needs. The claimant settled the indemnity portion
of his case in 1995. But his rights to certain medical benefits
continued to be litigated for decades, during which time he rotated
through at least six attorneys. As noted by Judge Almeyda, who
presided over the case for eight years, “this [was] the most complex
and delicate case” ever before him.

     Eventually, in 2018, the parties settled the medical portion of
the case for $13,500,000 after a ten-day mediation. At the time of
settlement, the claimant was represented by Michael D. Rudolph.

     The claimant 1 and Rudolph jointly petitioned the JCC to
approve an award of attorney’s fees from the settlement in the
amount of $1,330,000. As part of this joint filing, Rudolph agreed
that he would resolve all fee and costs liens of the claimant’s prior
attorneys out of this fee. And the claimant expressly waived his
right to a hearing to contest the reasonableness of the fee.

     In a separate filing, the attorneys with a stake in the fee
award stipulated to a division of the fees. At the outset, the
stipulation noted that the presumptively reasonable fee under
section 440.34, Florida Statutes (1993), is $2,025,750. But it
explained that the attorneys collectively agreed to accept
$1,330,000, which is a $695,750 reduction from the statutory
guideline amount. The attorneys allocated $275,000 to Ramon
Malca; $150,000 to be shared between Jason Goldstone and Jerry
Goodmark; $100,000 to be shared between Richard Dolan and
William Hutchinson; and $805,000 to Rudolph.

     The claimant, through Rudolph, then filed a verified petition
for payment of attorney’s fees and costs. The petition reiterated
that the claimant had agreed to settle his case for $13,500,000,
inclusive of a 9.85% attorney’s fee of $1,330,000, and set forth the

    1 At all times relevant to this appeal, the claimant acted
through his power of attorney, Linda McCoy.

                                 2
allocation of fees referred to above. For his part, Rudolph sought
approval of his portion of the fee, which is 5.9% of the overall
settlement.

     After a short hearing, the JCC entered two orders. The first
awarded fees in the predetermined amounts to the claimant’s prior
attorneys. The second order, which is challenged here, reduced
Rudolph’s fee from $805,000 to $123,000. After considering the
statutory factors set forth in section 440.34(1)(a)–(h), Florida
Statutes, the JCC found that the stipulated amount “shocks [his]
conscience,” noting that it was “about $4,000 hourly” and “it is
coming from a quadriplegic on a ventilator, and the settlement
must last his lifetime.”

     In determining what would be a reasonable fee for Rudolph,
the JCC ostensibly relied on a $600 hourly rate (as testified to by
Malca for his fee lien based on quantum meruit) multiplied by the
205 hours Rudolph had expended on the case. From there, he
concluded that a reasonable fee is $123,000. The decretal portion
of the order provided that “the balance [is to be] returned to the
Claimant.” 2

     Rudolph moved for rehearing and to vacate and reopen the
case. The motions were denied, and this appeal followed. 3

                                II

     Under the law as it existed at the time of the claimant’s
accident in 1993, the Legislature set forth a sliding scale for an
award of fees based on the value of the benefits obtained. The
starting point for the determination of a reasonable fee would be

    2 Recognizing that the JCC’s order may have created a conflict

of interest between Rudolph and his client, Rudolph moved to
withdraw from the case, leaving the claimant unrepresented.
    3 After acting on Rudolph’s motion for rehearing and to vacate

and reopen the case, Judge Almeyda recused himself. The case was
eventually reassigned to Judge Medina-Shore. Rudolph again
moved to vacate and reopen the case, which was also denied by
Judge Medina-Shore.

                                3
an amount “equal to 25 percent of the first $5,000 of the amount of
the benefits secured, 20 percent of the next $5,000 of the amount
of the benefits secured, and 15 percent of the remaining amount of
the benefits secured.” § 440.34(1), Fla. Stat.

    The JCC would then consider whether a deviation from the
guideline amount is warranted based on the following factors:

          (a) The time and labor required, the novelty and
    difficulty of the questions involved, and the skill requisite
    to perform the legal service properly.

        (b) The likelihood, if apparent to the claimant, that
    the acceptance of the particular employment will
    preclude employment of the lawyer by others or cause
    antagonisms with other clients.

        (c) The fee customarily charged in the locality for
    similar legal services.

        (d) The amount involved in the controversy and the
    benefits resulting to the claimant.

         (e) The time limitation imposed by the claimant or
    the circumstances.

         (f) The nature and length of the professional
    relationship with the claimant.

        (g) The experience, reputation, and ability of the
    lawyer or lawyers performing services.

         (h) The contingency or certainty of a fee.

440.34(1)(a)–(h), Fla. Stat. (1993). Although the JCC had the
discretion to deviate from the presumptive fee by applying the
statutory factors, this Court has cautioned that he should do so
only in “exceptional circumstances” where the presumptive
amount under the formula is “manifestly unfair.” Alderman v.
Florida Plastering, 805 So. 2d 1097, 1100 (Fla. 1st DCA 2002),
superseded by statute on other grounds, Ch. 2003-412, Laws of Fla.,
§ 12 at p. 3944, as recognized in Davis v. Bon Secours-Maria
Manor, 892 So. 2d 516, 517 n.2 (Fla. 1st DCA 2004). That is

                                 4
because the statute “reflects a legislative intent to standardize
attorney’s fee awards in workers’ compensation cases.” Id.

    After considering the statutory factors in the instant case, the
JCC rejected Rudolph’s requested fee of $805,000, concluding that
“there is little there to justify a fee of about $4,000 an hour.” He
explained,

         First, the time spent was low, only 205 hours over a
    seven-month period. The litigation was minimal and the
    expertise to settle a case is not as great as the predecessor
    attorneys in this case that had to contend with novel and
    severe issues involving the health of a quadriplegic.

         Second, the benefits obtained, in reducing to a lump
    sum that which had been furnished in an ongoing basis,
    is minimal compared to obtaining a denied benefit after
    litigation.

        Third, there was no evidence in this claimed fee to
    the fee customarily charged in the community. If the
    other attorneys involved in this litigation are considered
    experts in this matter, then the largest hourly fee is
    $600.00 per hour.

        Neutral factor is the likelihood that this
    representation would preclude other representation.

         Positive is the contingency of the fee, which is the
    case in all worker’s compensation cases, and not unique
    to this case, and the expertise of the attorneys, including
    Mr. Rudolph.

         In view of the above consideration, I cannot approve
    the fee claimed by Mr. Rudolph of $805,000.00, or about
    $4,000.00 hourly, as it shocks the undersigned’s
    conscience, particularly as it is coming from a
    quadriplegic on a ventilator, and the settlement must last
    his lifetime.

                                 5
                               III

     Rudolph argues, in part, that the order must be reversed
because the JCC placed undue reliance on a customary hourly rate
in departing from the agreed-upon fee amount and failed to
consider that the “customary fee” is in fact a percentage of the
settlement and not based on an hourly rate. He also submits that
there is a lack of record evidence to support the JCC’s findings on
the other factors. In all, he contends there are no exceptional
circumstances that would warrant a downward departure from the
guideline fee amount, much less a departure from a less-than-
guideline amount. We agree.

     This case is like Alderman. There, this Court determined that
the JCC erred in departing downward from the presumptive fee
set by statute given that the departure was based primarily on her
view that the presumptive fee was excessive given the customary
hourly rate. Alderman, 805 So. 2d at 1101. In concluding that the
JCC placed undue reliance on the customary hourly rate, we
explained that a JCC “may properly consider the fee customarily
charged in the locality for similar legal work,” but this factor could
not “provide the sole basis for a departure, particularly if the
customary fee is based on an hourly rate.” Id. at 1100. We reasoned
that “[a] decision to displace the statutory calculation with a fee
based on hourly rate would effectively defeat the contingent fee
arrangement implemented by the statute.” Id.; see also Smith v.
Gulf Coast Hosp., 31 So. 3d 297, 297 (Fla. 1st DCA 2010)
(concluding that the JCC abused her discretion by awarding
attorney’s fees based on the customary hourly rate rather than on
the fee schedule set by statute); Okaloosa Cnty. Gas Dist. v.
Mandel, 394 So. 2d 453, 454 (Fla. 1st DCA 1981) (explaining that
“to judge the excessiveness of the award solely on the basis of its
per hour rate would be to improperly ignore the new sliding scale
provisions in the statute”).

    The JCC made the same error here. For starters, the only
evidence of the “fee customarily charged in the community” for this
type of case was the statutory guideline fee and not an hourly rate.
What is more, the JCC’s hyperfocus on a reasonable hourly rate
reduced the fee analysis to nothing more than a simple
mathematical formula (hourly rate x number of hours) and strayed

                                     6
from the contingent fee arrangement inherent in the statute. Lost
in the JCC’s well-intentioned calculation was any recognition that
the stipulated fee amount was already substantially less than
what the statute deemed as presumptively fair.

     Nor was there competent substantial evidence to support the
JCC’s findings that “the time spent was low,” the “expertise to
settle a case is not as great as the predecessor attorneys in this
case that had to contend with novel and severe issues involving the
health of a quadriplegic,” and that reducing future benefits to a
lump sum is a “minimal” benefit “compared to obtaining a denied
benefit after litigation.” A judge of compensation claims must rely
on evidence instead of his own “subjective belief and personal
experience” in evaluating the reasonableness of an attorney’s fee
claim. Sanchez v. Woerner Mgmt., Inc., 867 So. 2d 1173, 1174–75
(Fla. 1st DCA 2004) (reversing fee award where reduction of time
was not supported by competent substantial evidence but, instead,
based on the JCC’s subjective belief and personal experience as to
what was reasonable). Here, all the evidence on this matter was
that both the fee amount claimed by Rudolph and the less-than-
guideline global fee amount were reasonable.

     For these reasons, we reverse the award of attorney’s fees and
remand with directions that the JCC award Rudolph the
stipulated amount of $805,000, which is less than the guideline fee
and the amount that the evidence established is reasonable.

    REVERSED and REMANDED.

ROWE and WINOKUR, JJ., concur.

                 _____________________________

    Not final until disposition of any timely and
    authorized motion under Fla. R. App. P. 9.330 or
    9.331.
               _____________________________

Michael J. Winer of Winer Law Group, P.A., Tampa, for Appellant.

Linda McCoy, Fayetteville, GA, for Appellee Darien Smith.

                                7
Kimberly J. Fernandes of Kelley Kronenberg, Tallahassee, for
Appellees The Home Depot U.S.A. and Liberty Mutual Insurance
Company.

                             8