Florida Court of Appeals cuts attorney’s fees by $600,000 for $52,000 claim
Florida may have one of the most generous attorney fee schemes in the country, sometimes resulting in plaintiff fees several times the amount of damages.
That’s enough to drive property insurers crazy – or on the brink of insolvency. Insurance industry groups are now hoping that Florida’s much-criticized attorney fee multiplier rule will be high on the agenda of next week’s special legislative session.
Meanwhile, a South Florida appeals court this week struck a blow to what some have called an inflated fee, finding that experts and trial judges must follow the rule with precision and must weigh specific and complete evidence before authorizing “lodestar” factors and fee multipliers. .
In Certain Underwriters at Lloyd’s London against Roniel Candelaria and Amelia Padura, Florida’s 3rd The District Appeals Court ruled on Wednesday that a circuit court judge erred in awarding more than $652,200 in attorneys’ fees and costs to plaintiffs on a $52,000 verdict in a claim property insurance resulting from Hurricane Irma. The appeals court reduced the costs to around $169,800, relying largely on the testimony of an expert witness hired by Lloyd’s of London in the case.
The court sent the case back to the trial court with an instruction to reduce the fees and the number of billable hours to 480. The decision essentially saved the insurer from having to pay up to $482,200 in fees and costs to opposing counsel.
The decision comes seven months after the same court issued a similar ruling in Citizens Property Insurance against Casanas, reversing a fee that was four times the amount of the claim settlement.
But the opinions may not indicate that the courts are completely rethinking the fee system. In Lloyd’s, the panel of appellate judges focused on the fact that the insureds’ expert witness and Miami-Dade trial judge Martin Zilber failed to fully consider the hours and lawyers’ work product, and had based their figures on apparently arbitrary data. factors.
“I don’t know if it shows that the courts look at fees differently. They’re just applying the law as it’s written,” said Michael Sastre, the Miami attorney who represented Lloyd’s in the appeal.
The original fee request was much higher. But the plaintiffs’ own expert witness testified at an evidentiary hearing that out of an “excess of caution” he decided to cut the hours by 7.5%. The trial judge went even further and hacked the plaintiffs’ attorneys’ hours by 15%.
Despite this, and using the lodestar factor and a multiplier of 1.8, the trial judge was awarded fees almost 13 times what a jury had awarded on the claim. (Lloyd’s had agreed to pay just $2,033 on the original claim, noting that some alleged damage was not covered by the policy, including pre-existing roof damage.)
The appeals judges sided with Lloyd’s adjuster Ron Kammer, a Miami insurance lawyer who testifies on the reasonableness of attorneys’ fees in about five cases a year. Unlike the plaintiffs’ expert and the trial judge, Kammer conducted an exhaustive review of the lawyers’ billed hours, work products and other records, he and the court explained.
“I did a line-by-line, side-by-side comparison of work done versus billing entries and time billed,” Kammer said Thursday.
He also reviewed the plaintiff’s firm’s deposition start and end times and studied published surveys showing prevailing rates for South Florida attorneys with similar years of experience and similar expertise in this area of the straight.
Kammer’s conclusion: the lodestar factor and the multiplier were not necessary and the lawyers had charged too many hours to begin with. The Court of Appeal agreed.
“The trial court erred in its determination of the amount of the lodestar, because such an award was not supported by competent substantial evidence and involved an arbitrary and widespread reduction, indistinguishable in all relevant respects from recent decisions of this court…” reads 3rd DCA Opinion, written by Judge Kevin Emas.
The Lodestar and the multiplier mechanism have long been a thorn in the side of Florida insurers. Federal courts adopted the lodestar factor decades ago, and Florida courts adopted their own formula in 1985. It is essentially intended to provide compensation to attorneys based on reasonable hourly rates and reasonable time invested in the case. .
But Florida also allows a multiplier of 1.1 to 2.5, to encourage law firms to take on tough cases or ones where other firms are hard to find, or the plaintiff won’t be able to pay. fees. A 2017 Florida Supreme Court decision upheld the multiplier method, as long as certain criteria are met.
It effectively “opened the floodgates” and dramatically inflated most plaintiffs’ fees, said Mark Friedlander, director of corporate communications for the Insurance Information Institute. He spoke Thursday during a webinar hosted by financial ratings firm AM Best. LINK
“That’s why we’re seeing such pressures on insurers’ spending and why some insurance companies are going bankrupt,” he said.
While other states have adopted various methods of awarding plaintiffs’ legal costs, Florida appears to have one of the most generous methodologies in the country, Tampa insurance attorney Matthew Lavisky wrote on his blog. “The allure of a large attorney’s fee award has spawned the very litigation the Fee Transfer Act was meant to avoid,” he wrote.
Friedlander and others in the insurance industry are now hoping Florida lawmakers will rewrite attorney fee rules next week and remove the multiplier. But he said in the webinar that word from some Tallahassee lawmakers is not to expect a full reform package from the five-day session.
“They said they didn’t expect major changes,” Friedlander said. “I guess we have to see the special session as a first step towards stability.”
While Florida courts have often awarded plaintiffs huge costs — and sometimes overturned them — judges are content to follow the laws and court precedents, said Lloyd’s defense attorney Sastre.
“The legislature is the one that has to formulate reasonable fee methodologies,” he said.