Court Opinion

ID: 3189876
Source: CourtListenerOpinion
Date Created: 2016-03-30 17:02:42.135219+00
Date Added: 2024-06-11T07:39:05.447577
License: Public Domain

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                      MOTION AND, IF FILED, DETERMINED

                                          IN THE DISTRICT COURT OF APPEAL

                                          OF FLORIDA

                                          SECOND DISTRICT

CITIZENS PROPERTY INSURANCE      )
CORP.,                           )
                                 )
      Appellant/Cross-Appellee,  )
                                 )
v.                               )               Case No. 2D13-4331
                                 )
RIVER OAKS CONDOMINIUM II        )
ASSOCIATION, INC., a/k/a RIVER   )
OAKS II CONDO ASSOCIATION,       )
INC.,                            )
                                 )
      Appellee/Cross-Appellant.  )
________________________________ )

Opinion filed March 30, 2016.

Appeal from the Circuit Court for
Hillsborough County; Christopher C.
Sabella, Judge.

Kara Berard Rockenbach of Methe &
Rockenbach, P.A., West Palm Beach,
for Appellant/Cross-Appellee.

George A. Vaka and Nancy A. Lauten
of Vaka Law Group, Tampa, for
Appellee/Cross-Appellant.

NORTHCUTT, Judge.

              Citizens Property Insurance Corp. appeals a final order awarding over

$1.4 million in fees, costs, and prejudgment interest to River Oaks Condominium II

Association, Inc., following the latter's successful lawsuit on a sinkhole claim. River
Oaks is dissatisfied with the amount, and it cross-appeals. We affirm in part and

reverse in part.

               River Oaks is a multi-building condominium property that was insured by

Citizens under a policy that included sinkhole coverage. Damage was initially noted in

one building in February 2005. In April, River Oaks hired an attorney (Richard Wilson),

a public adjuster (Transco American Claims), and a property management company

(University Properties, Inc.) to address this issue. About two weeks later, Transco gave

notice to Citizens of possible sinkhole losses at the property. After some delay, Citizens

sent an independent adjuster to perform an inspection. The adjuster was shown the

building with the most noticeable damage and was informed that other buildings in the

complex were also showing signs of sinkhole activity. Although the adjuster agreed that

a geotechnical engineer was needed for a sinkhole investigation, Citizens did not retain

one. Instead, Citizens took the position that the insurance policy did not cover the cost

of filling sinkholes.

               River Oaks retained Central Florida Testing Laboratories, which confirmed

sinkhole activity as a cause of damage. In September 2005, it filed suit against

Citizens. The complaint alleged breach of contract based in part on Citizens' failure to

conduct the investigation required by section 627.707, Florida Statutes (2004), for

sinkhole claims. It also sought a declaration that the insurance policy provided sinkhole

coverage, including stabilization costs.

               River Oaks made specific allegations of damage to the one building and

general allegations regarding the other buildings. For example, the complaint alleged:

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                     On or about March 2005, River Oaks discovered
              substantial damage occurring to Building 19[1] caused by
              sinkhole activity, as well as damage occurring to other
              buildings insured by Citizens. . . .

                     Despite numerous requests by representatives of
              River Oaks, Citizens has failed to engage an engineer or
              professional geologist as required by law to determine the
              cause of the loss to the subject building and to investigate
              possible damage to River Oaks other buildings. . . .

                     The geotechnical engineering firm retained by River
              Oaks has concluded that Building 19 has been damaged by
              sinkhole activity and has recommended that the other
              buildings be investigated for possible loss caused by
              sinkhole activity. . . .

                     WHEREFORE, River Oaks demands judgment for
              damages, including investigative costs to determine if
              sinkhole activity is occurring, costs to repair, restore or
              replace the subject buildings . . . , together with all
              engineering or architectural fees to repair or replace the
              subject buildings . . . .

              Citizens sought an appraisal without admitting coverage. By the time of a

hearing on Citizens' motion to dismiss or abate, River Oaks had furnished a list

identifying more buildings that showed sinkhole damage. The court ordered appraisal

for all affected buildings and required Citizens to conduct inspections and subsurface

testing. Over the next two years, the testing and appraisal process resulted in awards

totaling $4,777,607 for damage to twelve buildings in the complex.

              Midway through this process, the River Oaks' board of directors was

replaced with a board that was inexplicably hostile to the sinkhole claims, despite the

experts' confirmation of sinkholes. The new board terminated attorney Wilson, Transco,

              1 Known locally as 19, this building was identified in the policy as building
7, a fact that was clarified in an amended complaint.
                                            -3-
and University Properties without compensating them as required under their individual

contracts; this resulted in third-party claims.

              The original board was later restored. The board hired attorney Kennan

Dandar in November 2008. By this point, Citizens had paid the appraisal awards. River

Oaks then settled or concluded the third-party claims. It also sought attorneys' fees,

costs, and prejudgment interest from Citizens, which brings us to this appeal.

              Citizens challenges several items taxed as costs in addition to the use of a

multiplier for calculating attorney Dandar's fee. We agree with the circuit court that the

wrongful act doctrine is inapplicable in this case. Cf. Reiterer v. Monteil, 98 So. 3d 586,

588 (Fla. 2d DCA 2012) (explaining that the doctrine allows for the recovery of certain

costs and expenses as an element of damages when the defendant's wrongful act has

involved the claimant in litigation with others, necessitating the expenses).

              Citizens argues that $759,578.56 in reimbursement for the public adjuster

and property management fees was improperly awarded to River Oaks as a taxable

cost. The Statewide Uniform Guidelines for Taxation of Costs in Civil Actions provides

guidance for trial courts, which have broad discretion in the taxation of costs. In re

Amendments to Uniform Guidelines for Taxation of Costs, 915 So. 2d 612, 614 (Fla.

2005) ("The guidelines . . . are not intended to be mandatory, and the appropriate

assessment of costs in any particular proceeding remains within the discretion of the

trial court."). We conclude that the trial court abused its discretion in taxing the property

management fees and public adjuster fees because they were not litigation costs.

Further, as compared to expert witnesses, a public adjuster is more akin to a consulting

                                             -4-
expert, whose costs should not be taxed according to the guidelines. We agree with

Citizens that these were not proper taxable costs, and we reverse on this issue.

              Citizens argues that $99,741.55 was improperly awarded to River Oaks as

a taxable cost for various expenses and fees in the appraisal process. But under the

insurance policy, River Oaks was required to pay its own appraiser and bear an equal

share of the umpire and other appraisal expenses. We reverse on this issue.

              Finally, Citizens challenges the fee award to attorney Dandar, specifically

the use of a 2.0 multiplier in calculating his fee. A multiplier is appropriate when

              (1) the relevant market requires a contingency multiplier to
              obtain competent counsel; (2) the attorney was unable to
              mitigate the risk of nonpayment in any other way; and (3)
              use of a multiplier is justified based on factors such as the
              amount of risk involved, the results obtained, and the type of
              fee arrangement between attorney and client.

Bell v. U.S.B. Acquisition Co., 734 So. 2d 403, 412 (Fla. 1999) (citing Standard Guar.

Ins. Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990)). The fee agreement in this

case was not a true contingency contract. Instead, it guaranteed payment at a lesser

hourly rate, which mitigated the risk of nonpayment, and the evidence showed that

Dandar had indeed been paid under the contract. See id. at 407 ("[W]e 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." (citing Fla. Patient's Comp. Fund v. Rowe, 472 So. 2d

1145, 1151 (Fla. 1985), holding modified by Quanstrom)). A multiplier was not

appropriate here, and we reverse on this issue.

              On cross-appeal, River Oaks argues that the court erred by limiting its

recovery of attorneys' fees and prejudgment interest to only building 19. We agree that

                                            -5-
the suit encompassed the other buildings in the condominium complex, and we reverse

on this issue. As explained above, River Oaks sued in part to enforce Citizens'

obligation to investigate the sinkhole claim.2 Its complaint clearly alleged that buildings

other than building 19 were damaged, and it sought to recover damages, including

"costs to repair, restore or replace the subject buildings [plural]." We conclude that the

allegations were sufficient to include the other buildings in the condominium complex

because they were sufficient to state a claim "with sufficient particularity for a defense to

be prepared." Arky, Freed, Stearns, Watson, Greer, Weaver & Harris, P.A. v. Bowmar

Instrument Corp., 537 So. 2d 561, 563 (Fla. 1988). Accordingly, we reverse on this

issue and remand for the court to award prejudgment interest and attorney's fees

connected with the other buildings.

              2Section 627.707 provided in part as follows:
              (1) Upon receipt of a claim for a sinkhole loss, an insurer
              must meet the following minimum standards in investigating
              a claim:
                      (a) Upon receipt of a claim for a sinkhole loss, the
              insurer must make an inspection of the insured's premises to
              determine if there has been physical damage to the structure
              which might be the result of sinkhole activity.
                      (b) If, upon the investigation pursuant to paragraph
              (a), the insurer discovers damage to a structure which is
              consistent with sinkhole activity or if the structure is located
              in close proximity to a structure in which sinkhole damage
              has been verified, then prior to denying a claim, the insurer
              must obtain a written certification from an individual qualified
              to determine the existence of sinkhole activity, stating that
              the cause of the claim is not sinkhole activity, and that the
              analysis conducted was of sufficient scope to eliminate
              sinkhole activity as the cause of damage within a reasonable
              professional probability. The written certification must also
              specify the professional discipline and professional licensure
              or registration under which the analysis was conducted.
                                            -6-
              On the issue of an expert witness fee for the fee hearing, we affirm without

further discussion.

              Affirmed in part, reversed in part, and remanded for further proceedings.

KELLY and BLACK, JJ., Concur.

                                           -7-