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Florida Supreme Court Allows Plaintiffs’ Contingency Fees to Multiply, What Can the Defense Bar Do to Make it Divide?

October 25, 2017

Case Law Update on William Joyce v. Federated National Insurance Company, No. SC16-103 (Fla. Oct. 19, 2017).

On October 19, 2017, the Florida Supreme Court came out with an opinion regarding the award of contingency fee multipliers in first party property disputes, finding that a contingency fee multiplier is not reserved only for “rare” and “exceptional circumstances.” This is a split opinion by the Florida Supreme Court, meaning that this issue is far from resolved.

We anticipate that the Plaintiff’s bar will be using this opinion to justify and substantiate requests for a contingency fee multiplier in cases where the carrier wishes to go to a fee hearing to challenge the reasonableness of the fee requested by a Plaintiff attorney. The opinion sets the stage for a more costly preparation for fee hearings by carriers. As discussed in detail below, the determining factor that led to the Florida Supreme concluding that a contingency fee multiplier of 2 is reasonable in this case, is the finding that there were no other attorneys in the St. Augustine legal market with the requisite skill to represent the insured, Mr. Joyce, other than the attorney he hired. Missing from the opinion is a discussion of how the local legal market is defined. There is no explanation in the opinion as to why Jacksonville, a few mile drive from St. Augustine, is not considered part of the St. Augustine legal market. Furthermore, the majority and the dissent disagree as to whether this case involves complex legal issues.

With the majority of carrier disputes being in the South Florida legal market, with significant numbers of claims also in the Orlando /Central Florida area, the west coast including Naples, Ft. Myers, Tampa/St. Petersburg area and some also in the Panhandle, carriers should be mindful of this opinion and have their fee experts prepared to provide evidence to the trial Judges of the commonality of first party claims and the large volume of attorneys handling these claims who have the skills to properly litigate the case on behalf the insured. Fee experts should be prepared to define the local legal market. Fee experts should be prepared to show the trial Judge that in all these areas of Florida, it is common practice for a first party property Plaintiff attorney to handle hundreds, if not thousands of cases spanning often times, multiple Florida counties. Moreover, fee experts should be able to articulate that the common grounds for a denial of a claim in first party property disputes, to demonstrate that the case does not involve complex legal issues. Insurers should be particularly mindful because with the expected surge of Hurricane Irma litigation in the new year (2018), the plaintiffs bar will be very aggressive to collect fees.

A detailed summary of this opinion follows:

In this case, Mr. Joyce filed a claim for homeowners insurance benefits with his homeowner’s insurer, Federated National Insurance Company (“Federated”). The claim was denied on the basis that Mr. Joyce did not disclose prior claims to Federated made with other homeowners insurance carriers. The omission of previous claims was the basis of the denial. After several months of litigation, the indemnity dispute was settled and Federated stipulated to entitlement to attorney’s fees and costs. Settlement of the indemnity dispute occurred because it was revealed in deposition testimony that the insurance agent had the original paperwork that showed the previous claims were in fact, disclosed. This is somewhat different than the typical denial in first party cases which rely on common policy exclusions, like wear and tear or constant and repeated seepage of water.

The trial Court awarded Mr. Joyce a lodestar figure of $38,150.00 for attorneys fees and costs. The lodestar figure is calculated by multiplying the reasonable hours spent litigating the case by the reasonable hourly rate for attorney’s services. In this case the Court found that 109 hours was the reasonable time spent and multiplied this number by a reasonable hourly rate of $350.00 per hour, for a lodestar figure of $38,150.00. The trial Court also awarded the Plaintiff a multiplier of 2. The lodestar figure was then multiplied by 2, for a total attorney’s fee award following a fee hearing and testimony of fee experts, of $76,300.00. The trial Court concluded that the relevant market required a contingency fee multiplier. Further, the trial Court found that there were few, if any other attorneys in St. Augustine legal market who would take this case, and that this case included difficult policy interpretation and exclusion issues. The findings, based on the text of the opinion, are based largely on testimony from Mr. Joyce’s attorney.

On appeal to the Fifth District Court of Appeal, the Appellate Court reversed the award of the multiplier of 2, finding that the lodestar figure carriers a strong presumption of the reasonable fee, and that a contingency fee multiplier is reserved for “rare” and “exceptional circumstances.” The Appellate Court found the case did not require litigation of complex issues nor was there a shortage of attorneys who could handle the case on behalf of Mr. Joyce. The Third District Court of Appeal previously held in State Farm Florida Insurance Co. v. Alvarez, 175 So. 3d 352 (Fla. 3d DCA 2015), that contingency fee multipliers are reserved for “rare” and “exceptional circumstances.”

The finding of the Appellate Court was appealed to the Florida Supreme Court based on conflict between the Fifth District Court of Appeal’s holding and previous cases on the contingency fee multiplier. The Florida Supreme Court holds that “In short, Quanstrom made clear that trial judges are not required to use a multiplier; but when they do, evidence must be “presented to justify the utilization of a multiplier.” Id. Although the Quanstrom opinion did use the terms “rare” and “extraordinary,” they were not used as a prerequisite to the application of a contingency fee multiplier.” The Florida Supreme Court found that the trial Court’s findings were based on competent testimony and that multipliers are not reserved for “rare” and “exceptional circumstances.” The Supreme Court remanded the case to the Fifth District Court of Appeal to reinstate the trial Court’s attorney’s fee award of $76,300.00.

For more information contact Sarah Goldberg, Esq. at or William Bissett, Esq.,



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