Court Opinion

ID: 2950938
Source: CourtListenerOpinion
Date Created: 2015-09-16 15:04:03.648018+00
Date Added: 2024-06-11T15:00:43.778433
License: Public Domain

Third District Court of Appeal
                               State of Florida

                        Opinion filed September 16, 2015.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                               No. 3D14-1291
                          Lower Tribunal No. 10-6692
                             ________________

               State Farm Florida Insurance Company,
                                    Appellant,

                                        vs.

                   Jose Alvarez and Martha Alvarez,
                                    Appellees.

      An Appeal from the Circuit Court for Miami-Dade County, Jorge E. Cueto,
Judge.

      Ubaldo J. Perez, Jr.; Russo Appellate Firm, P.A., and Elizabeth K. Russo,
for appellant.

     Diaz, Reus, Targ, LLP, and Juan Ramirez, Jr.; Alvarez, Carbonell, Feltman
& Da Silva, P.L., and Paul B. Feltman, for appellees.

Before ROTHENBERG, SALTER, and LOGUE, JJ.

      LOGUE, J.
         State Farm Insurance Company (“Insurer”) appeals a final judgment for

attorneys’ fees entered in favor of Jose Alvarez and Martha Alvarez (collectively,

“Insureds”). We affirm in part, reverse in part, and remand.

                     FACTS AND PROCEDURAL HISTORY

         This case arises from the Insureds’ supplemental claim for property damage

to their home caused by Hurricane Wilma in 2005. The Insurer initially paid the

Insureds $13,700. In 2009, however, the Insureds retained a public adjuster who

prepared a report reflecting a claim for an additional $80,000 in damages to the

property. Based on the public adjuster’s report, the Insureds requested appraisal

pursuant to the insurance policy. The Insurer denied the request. The Insureds then

retained counsel, who brought suit in 2010 against the Insurer for breach of the

policy’s appraisal provision.

         The Insureds’ lawsuit rested largely on the report of the public adjuster.

Their sworn proof of loss, prepared after the lawsuit was filed, made a demand

reflecting the public adjuster’s estimate. In response to the Insurer’s requests for

production and interrogatories, the Insureds largely referred to the public adjuster’s

estimate. The Insureds also listed the public adjuster as their expert witness for

trial.

         The case proceeded in an unremarkable and fairly straightforward manner.

Apart from a successful, but non-dispositive motion to dismiss, and a heated

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hearing over whether appraisal had been waived, most of the court file concerned

the Insurer’s motions to compel the production of documents and the scheduling of

the Insureds’ and the public adjuster’s depositions, which also involved several

motions to compel.

         After three years of litigation of this sort, the case was in a posture in which

the Insureds claimed $80,000 and the Insurer offered $175. At mediation, the case

settled for $10,000.

         The Insureds then moved for attorneys’ fees and costs under section

627.428, Florida Statutes (2014), which provides for the award of reasonable

attorneys’ fees in favor of insureds who prevail in litigation against an insurer.1

Both sides presented expert testimony. The Insureds’ attorneys presented time

records reflecting approximately 225 hours expended. These hours included ten

hours of senior partner time to draft a five-page complaint that appears to be a

form complaint; seven hours spent by a senior partner to prepare a three-page

motion to compel appraisal that appears to be a form motion and was never set for

hearing; an additional eleven hours of senior partner and associate time to prepare

a second motion to compel appraisal that is identical to the first one, which was

also never set for hearing; and various extensive conferences between many

lawyers without any indication of how those conferences advanced the case. In all,

1   The issue of entitlement to fees was not raised by the parties and is not before us.

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the records reflect that eleven different lawyers were consulted or worked on the

file.

        The Insureds’ expert witness testified that 200 of the 225 hours billed were

reasonable. He also testified regarding the need for a multiplier. He explained that

a 1.5 multiplier was necessary because counsel with “specialized knowledge” of

first-party property insurance cases would not represent the Insureds without the

possibility of a multiplier.

        After the evidentiary hearing, the trial court entered a final judgment for

attorneys’ fees in favor of the Insureds. The court adopted an hourly rate of $400

and agreed with the Insureds’ expert witness that 200 hours billed were

compensable. The court also awarded a contingency fee multiplier of 1.5, finding

that competent counsel could not be retained without a multiplier; there was a

substantial risk of non-payment; the likelihood of success warranted the multiplier,

as did “the novelty and difficulty of the question involved in this matter and the

results obtained.” It awarded $120,000 in fees. This appeal followed.

                                    ANALYSIS

        The Insurer challenges the trial court’s findings with respect to the hourly

rate of $400, the reasonableness of the 200 hours expended on the litigation, and

the 1.5 multiplier. We will address each issue in turn. Before doing so, however,

we note that a trial court’s determination on these matters is reviewed for an abuse

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of discretion. Sunshine State Ins. Co. v. Davide, 117 So. 3d 1142, 1144 (Fla. 3d

DCA 2013). We apply such a highly deferential standard of review because of the

trial court’s “first-hand knowledge of the case,” “superior understanding of the

litigation,” and “extensive contact with the parties and their counsel.” Centex-

Rooney Const. Co. v. Martin Cnty., 725 So. 2d 1255, 1259 (Fla. 4th DCA 1999).

After all, “[t]he question of how much is a reasonable fee in a given case cannot be

precisely answered. . . . [R]easonable judges can differ in opinion.” Universal

Underwriters Ins. Co. v. Gorgei Enters., Inc., 345 So. 2d 412, 414 (Fla. 2d DCA

1977).

      However, “we are not required to abandon what we learned as lawyers or

our common sense in evaluating the reasonableness of an award.” Trumbull Ins.

Co. v. Wolentarski, 2 So. 3d 1050, 1057 (Fla. 3d DCA 2009). There comes a point

when hours have been unnecessarily billed to such an extent that the trial court’s

finding of a reasonable fee cannot be supported by the record. See Dalia v.

Alvarez, 605 So. 2d 1282, 1283 (Fla. 3d DCA 1992) (“A claim for excessive hours

is subject to a reduction by the [appellate] court.”) (citing Fla. Patient’s Comp.

Fund v. Rowe, 472 So. 2d 1145, 1150 (Fla. 1985)). Moreover, the award of a

multiplier must be reversed if no evidence supports a finding that the relevant

market required a contingency fee multiplier to obtain competent counsel. USAA

                                         5
Cas. Ins. Co. v. Prime Care Chiropractic Enters, P.A., 93 So. 3d 345, 347 (Fla. 2d

DCA 2012).

   A. The Hourly Rate.

      The Insurer challenges the trial court’s finding that $400 reflected a

reasonable blended hourly rate for the various attorneys who were involved in the

case, including several senior partners. Without extensive discussion, we reject the

Insurer’s argument on this point. Given our review of the entire record, no abuse of

discretion occurred. See TRG Columbus Dev. Venture, Ltd. v. Sifontes, 163 So. 3d
548, 552 (Fla. 3d DCA 2015) (holding the trial court did not abuse its discretion in

awarding an hourly rate of $400); Davide, 117 So. 3d at 1145 (affirming a $450

hourly rate in an insured’s action against an insurer for breach of contract, bad

faith, and to confirm an appraisal award). This conclusion is particularly

inescapable because the hourly rate awarded to the Insureds’ attorneys was on the

lower end of the hourly rate range suggested by the Insurer’s own expert witness.

   B. The Reasonableness of the Hours.

      We agree, however, with the Insurer that 200 hours billed for this case is

excessive. In the first place, the records reflect that eleven different lawyers billed

on this file. This alone should have alerted the trial court to a problem. A court

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should be extremely wary of paying fees to so many lawyers for such a relatively

small case with relatively straightforward legal issues and no precedential value.

Rathmann v. Rathmann, 721 So. 2d 1218, 1220 (Fla. 5th DCA 1998) (“While the

parties have the right to employ as many lawyers as they choose, the Court will not

assess lawyer fees for or against any party for more than one lawyer for a matter in

which more than one lawyer is not required.”). In a similar situation, this court has

ordered a reduction in fees, noting, “[t]he time sheets also reflect a significant

amount of time spent in conferences between the partner and the associate who

were working on the case as well as multiple attorneys performing or reviewing

the same items. Duplicative time charged by multiple attorneys working on the

case are generally not compensable.” N. Dade Church of God, Inc. v. JM

Statewide, Inc., 851 So. 2d 194, 196 (Fla. 3d DCA 2003).

      In the second place, an examination of the specific hours claimed raises

concerns. The billing reports include items such as ten hours of senior partner time

to draft a five-page complaint that appears to be a form complaint; seven hours

spent by a senior partner to prepare a three-page form motion to compel appraisal

that was never set for hearing; an additional eleven hours of senior partner and

associate time to prepare a second motion to compel appraisal that is identical to

the first one, which was also never set for hearing; and various extensive

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conferences between many lawyers without any indication of how those

conferences advanced the case.

      Although the Insureds’ expert witness generally opined that 200 hours were

appropriate, he provided no specific justification that explained how those hours

were needed in the manner this case was litigated. Even under our highly

deferential standard of review, the expert’s testimony could not support the amount

of hours awarded. See Canakaris v. Canakaris, 382 So. 2d 1197, 1203 (Fla. 1980)

(“The trial court’s discretionary power is subject only to the test of reasonableness,

but that test requires a determination of whether there is logic and justification for

the result.”); Whitney v. Whitney, 638 So. 2d 517, 518 n.1 (“Although the hours

which the trial court found reasonable were within the range of the experts’

testimony presented at the hearing . . . ‘[t]he existence of such evidence does not

require that we abandon our own expertise, much less our common sense.’”

(quoting Miller v. First Am. Bank & Trust, 607 So. 2d 483, 485 (Fla. 4th DCA

1992))).

      There may be cases where a trial court has overlooked some unnecessarily

billed hours without abusing its discretion. But where, as here, a large percentage

of the hours awarded are excessive, reversal is warranted. See Whitney, 638 So. 2d
517 (reversing an award of attorneys’ fees where approximately half of the hours

spent on the case were excessive); Dalia, 605 So. 2d at 1284 (same).

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      In the final analysis, the prosecution of the Insureds’ claim in this case was

important and vital work. We also recognize that the Insurer may have caused

unnecessary hours to be incurred by the Insureds by, for example, unduly

aggressive tactics such as asserting twelve affirmative defenses in a straight-

forward case. Nevertheless, this matter was an unremarkable property damage case

in which the Insureds’ case rested almost entirely on the public adjuster’s report

that was completed before the lawyers became involved. The case settled at the

first mediation conference with only basic discovery and without going to trial. In

similar circumstances, Florida courts have reduced the claimed hours. See

Whitney, 638 So. 2d 517 (reducing an excessive award of attorneys’ fees in a

single-issue family law case, where the “wife was represented by an experienced

competent attorney in routine modification proceedings which involved no novel

or complex questions of law or fact” and the “husband’s petition generated one

two-hour deposition, routine document discovery, and one final hearing”).2

      We remand to the seasoned trial judge to determine the reasonable number

of hours related to achieving the settlement in this case. In doing so, the trial court

2 Nothing in this opinion should be construed as suggesting that the measure of
reasonable hours is the least time in which the work might theoretically have been
done. See Norman v. Hous. Auth. of City of Montgomery, 836 F.2d 1292, 1305-06
(11th Cir. 1988) (“The court on reconsideration should bear in mind that the
measure of reasonable hours is determined by the profession’s judgment of the
time that may be conscionably billed and not the least time in which it might
theoretically have been done.”).

                                          9
should keep in mind that “a court must consider the time that would ordinarily

have been spent by lawyers in the community to resolve this particular type of

dispute, which is not necessarily the number of hours actually expended by counsel

in the case at issue.” Wolentarski, 2 So. 3d at 1057. “[E]xcessive time spent on

simple ministerial tasks such as reviewing documents or filing notices of

appearance” is normally not compensable. N. Dade Church of God, 851 So. 2d at

196. Nor are duplicative reviews and consultations by numerous attorneys. Id. In

reliance on the seasoned trial judge’s good judgment, we refrain from providing

more specific guidance. See Whitney, 638 So. 2d 517 (reversing an award of

attorneys’ fees and remanding with directions to award fees in an amount not to

exceed approximately half of the amount originally awarded).

   C. The Multiplier.

      Finally, we reverse the award of the multiplier. The application of a

multiplier is the exception, not the rule. As the United States Supreme Court has

explained, “there is a ‘strong presumption’ that the lodestar figure is reasonable”

and this presumption is overcome only in “rare” and “exceptional” circumstances.

Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554 (2010). This presumption

generally remains, even in a complex case, because the novelty and complexity of

the case is typically reflected in the number of hours reasonably spent on the

litigation. See Rowe, 472 So. 2d at 1150 (“The ‘novelty and difficulty of the

                                        10
question involved’ should normally be reflected by the number of hours reasonably

expended on the litigation.”); Perdue, 559 U.S. at 553 (“[T]he novelty and

complexity of a case generally may not be used as a ground for an enhancement

because these factors presumably are fully reflected in the number of billable hours

recorded by counsel.”) (citation and quotation omitted).

      In this regard, the Florida Supreme Court has required courts to consider

three factors before awarding a multiplier in contract cases:

      (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.

Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990). “Evidence

of these factors must be presented to justify the utilization of a multiplier.” Id.

      With respect to Quanstrom’s first prong, “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.” Sun Bank of Ocala v. Ford, 564 So. 2d 1078, 1079 (Fla. 1990).

“If there is no evidence that the relevant market required a contingency fee

                                           11
multiplier to obtain competent counsel, then a multiplier should not be awarded.”

USAA Cas. Ins. Co., 93 So. 3d at 347.

      The Insureds did not present evidence of substantial difficulty in obtaining

competent counsel in this market. Their expert’s testimony focused on why the

possibility of a multiplier was necessary to obtain the “specialized” counsel they

did. But Quanstrom’s first prong does not concern whether the client could obtain

the “best” representation available. Instead, the inquiry concerns “substantial”

difficulty in obtaining “competent” counsel. Thus, the Insureds did not establish

the first prong of this test. See USAA Cas. Ins. Co., 93 So. 3d at 347 (holding no

competent, substantial evidence supported a finding in favor of a plaintiff under

Quanstrom’s first prong, where the plaintiff’s expert witness “summarily

concluded that the market required a multiplier for [the plaintiff] to obtain

competent counsel” and “did not provide the court with any evidence to support

his broad assertion”).

      The trial court also based the multiplier upon the result obtained, but the

Insureds’ demand, both before and during the litigation, was for $80,000. They

settled for $10,000. This result is respectable in light of the Insurer’s offer of $175,

but it is far from the type of remarkable result that justifies a multiplier.

      Finally, the trial court based the multiplier in part upon “the novelty and

difficulty of the question involved in this matter.” The court in its order and the

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Insureds in their briefs, however, have not identified any such issues. We have

carefully examined the record and we are unable to find any novel or difficult

factual or legal issues in this case. Again, we recognize that the prosecution of the

Insureds’ claim is vital and important work. Still, this matter was a fairly

straightforward property damage case with little precedential value that was settled

at the first mediation conference with only basic discovery and without trial. We

hold that this case does not warrant a multiplier.

                                  CONCLUSION

      We affirm the trial court’s award of a $400 hourly rate. We reverse,

however, the finding that 200 hours were reasonably spent on the litigation

because that number of hours is excessive. Finally, we hold that this case does not

warrant a contingency fee multiplier. Accordingly, we remand for further

proceedings to determine the reasonable number of hours expended on the case.

      Affirmed in part; reversed in part; and remanded for further proceedings

consistent with this opinion.

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