The Week in Torts – Cases from the Week of October 20, 2017

FLORIDA LAW WEEKLY

VOLUME 42, NUMBER 42

CASES FROM THE WEEK OF OCTOBER 20, 2017

ENTITLEMENT TO A MULTIPLIER DOES NOT REQUIRE EITHER “RARE” OR “EXCEPTIONAL” CIRCUMSTANCES.

Joyce v. Federated National Insurance Co., 42 Fla. L. Weekly S852 (Fla. October 19, 2017):

This case arose when an elderly couple filed a claim for insurance benefits with their homeowner’s insurance carrier, Federated National after they sustained water damage to their home. Federated National denied coverage on the basis of alleged material misrepresentations made by the Joyces in the application process. Namely, the insurer asserted that the Joyces failed to disclose certain losses they had with their previous carrier.

The plaintiffs hired an attorney on a contingency fee basis. After months of litigation, Federated National finally agreed to settle the claim.

The court calculated a lodestar amount (the number of hours reasonably incurred multiplied by a reasonable hourly rate) and then determined that a contingency fee multiplier of 2.0 was appropriate.

In awarding the multiplier, the trial court relied on testimony from both the plaintiffs’ attorney and their fee expert, stating that they were both unaware of any other attorneys in St. John’s County who specialized in representing first party plaintiffs against their respective insurance companies.

The court also observed that the Joyces’ fee expert testified that a contingency fee multiplier was necessary to obtain competent counsel based on the expert having interviewed attorneys who accept claims against insurance companies where claims have been denied.

The trial court cited to testimony from plaintiffs’ attorney that she took the plaintiffs’ case with the hope and expectation that if she were successful, the court would award a contingency fee multiplier when calculating the fees. She also testified that she would not have taken the case without that possibility, because it would not have been economically feasible to do so. The attorney testified that because she often fails to recover some or all of the fees owed on cases, the possibility of the multiplier was critical in her decision on whether or not to accept the case.

The trial court concluded that because there were few or no other attorneys in the area who would have taken this case without a multiplier, that plaintiffs likely would not have found another competent attorney, and as such awarded a multiplier. The court arrived at the 2.0 based on an analysis of the Quanstrom factors, namely that the plaintiffs’ attorney could not have mitigated the risk of nonpayment, the results obtained (which while not exceptionally large were materially favorable to the Joyces) and the amount involved. The trial court observed that these kinds of cases were difficult and involved complex issues including interpretation of a policy, exclusionary language, agency law and other issues. The trial court concluded in its order that a multiplier of 2.0 was appropriate because the likelihood of success was even at the outset.

The Fifth District affirmed the lodestar amount but reversed the trial court’s use of a multiplier. Instead, it concluded that the federal lodestar approach includes a “strong presumption” that a lodestar represents the reasonable fee.

The Fifth District also cited to a United States Supreme Court case for the proposition that a contingency fee multiplier should be used only in “rare and exceptional” circumstances. In contravention of the trial court, the Fifth District concluded that the case was not complex and that the plaintiffs should not have had any trouble finding an attorney to represent them.

The Florida Supreme Court noted how the Rowe factors established the eight criteria set forth in disciplinary rule 2-106(b) of the Florida Bar Code of Professional Responsibility as the criteria to be considered in determining a reasonable attorney’s fee. In calculating an hourly rate for the lodestar, the court said, the trial court should look to all eight Rowe factors except the time and labor required, the novelty and difficulty of the question involved, the results obtained and whether the fee is fixed or contingent. Those factors go into whether there was a contingency risk factor.

Notably, the supreme court noted that nowhere in Rowe did it state that the lodestar amount included a strong presumption of reasonableness which may only be overcome in rare and exceptional circumstances as the Fifth District said. Rather, Rowe indicated that the federal lodestar approach provided a suitable foundation, but that trial courts may adjust the fee based on a multiplier provided the court sets forth specific findings.

The court found the Fifth District’s holding directly contradicted the trial court’s conclusion reached based on the evidence. Throughout the litigation, Federated National had maintained that a signed application for coverage completed by the Joyces did not exist, and that it only processed paperless applications, but interrogatories exchanged in that case belied that statement.

While Federated National discovered the application, it did not offer to settle until two months later. While the dissent would have the trial court analyzing the complexity of the case through the benefit of hindsight by looking at the actual outcome, contingency fee multipliers are intended to encourage attorneys to take the cases at the outset that they otherwise might not take.

Moreover, the supreme court said this was not an easy case. The litigation spanned several months and plaintiffs’ attorney spent more than a hundred hours working on the file which was a number everyone conceded was reasonable. Most importantly, the court made clear that multipliers awardable in our state do not require a showing of “rare and exceptional” circumstances.

BECAUSE THE RECORD WAS DEVOID OF EVIDENCE SUPPORTING AWARD OF ATTORNEY’S FEES, THE AWARD WAS PROPERLY REVERSED WITHOUT A REMAND FOR THE TAKING OF ADDITIONAL EVIDENCE.

B & H Miracle, LLC v. Baker, 42 Fla. L. Weekly D2154 (Fla. 1^st DCA October 11, 2017):

The court noted that while the appellee claimed to have filed affidavits supporting its plea for attorney’s fees at the hearing, no such affidavits were in the record. In fact, the record was devoid of any evidence supporting the award of attorney’s fees.

In cases where the record contains no competent substantial evidence of fees whatsoever, the award gets reversed without remand for taking additional evidence. Thus, the fee award was taken away without further discussion. Ouch.

TRIAL COURT ERRED IN DENYING MOTION FOR ATTORNEY’S FEES ON THE GROUND THAT THE PROPOSAL FOR SETTLEMENT FAILED TO APPORTION SETTLEMENT AMOUNT TO EACH DEFENDANT–THERE WAS SUFFICIENT APPORTIONMENT WHERE PLAINTIFF SENT IDENTICAL PROPOSALS TO TWO DEFENDANTS INDICATING THE TOTAL SETTLEMENT AMOUNT, AND THEN CLARIFYING THAT IF EACH OF THE TWO DEFENDANTS ACCEPTED AND RENDERED THE FULL SETTLEMENT AMOUNT TO THE PLAINTIFF THE PLAINTIFF WOULD RETURN HALF OF THE AMOUNT TO EACH OF THE DEFENDANTS.

Golisting.com, Inc. v. Papera, 42 Fla. L. Weekly D2154 (Fla. 4^th DCA October 11, 2017):

The dispute involved a real estate commission. The aggrieved broker had filed a proposal for settlement stating it was to the defendant owner husband, and further stating that an identical proposal had been sent to the co-owner (wife) with a footnote stating that if the defendant accepted the proposal, the broker would dismiss claims against both of the owners, and would even go so far as to return $20,000 to each defendant if both were to pay to get to the $40,000 total amount.

The defendants argued that these were improper joint proposals, because they were identical and failed to apportion the amount so that the co-owners could independently evaluate the offers. The trial court agreed.

The Fourth District, however, reversed. It noted how settlement proposals must be as specific as possible, leaving no ambiguities so that the recipient can fully evaluate the terms and conditions.

Because the court found there was sufficient apportionment under the terms of the proposal making it clear that the offer to settle was for $40,000, and that both defendants were adequately apprised of the amount needed to accept their respective offers (even including a provision for a potential refund) there was a proper apportionment of the joint settlement offer between the parties, and the proposal was valid.

TRIAL COURT DID NOT ERR IN GRANTING A NEW TRIAL BASED ON THE COURT’S FAILURE TO ALLOW DEFENDANTS TO QUESTION SEVERAL MEMBERS OF THE JURY VENIRE BEFORE THEY WERE EXCUSED FOR BIAS.

Irimi v. R.J. Reynolds, 42 Fla. L. Weekly D2156 (Fla. 4^th DCA October 11, 2017):

In this tobacco trial, after some abbreviated questions and where each member of the venire gave answers to plaintiff’s counsel during questioning, the trial judge advised defense counsel that he did not see how some of the jurors could be rehabilitated. The trial court then excused 31 jurors without providing the defense an opportunity to question them.

After a verdict for the plaintiff, the defense asserted that the court should grant it a new trial because it erroneously dismissed jurors for cause on each panel immediately after plaintiff’s counsel’s questioning, which in turn deprived defendants of an opportunity to orally question the entire venire, and possibly tainted the remaining jurors’ answers to the questioning.

In the court’s order granting the new trial, the court lamented potential violations of due process in not allowing the questioning by the defense. The court observed that trial judges have a unique perspective to reflect upon their own decisions and in this case, it was to eliminate 31 people from the venire without allowing the defense to ask a single question. Because the court said it provides great deference to trial courts in making such decisions, it agreed with the trial judge who corrected the initial error and granted a new trial.

INSURER WAIVED DEFENSE THAT INSURED FAILED TO COMPLY WITH CONDITIONS PRECEDENT OF EXHAUSTING REMEDIES AGAINST PRIMARY INSURER BEFORE PROCEEDING AGAINST EXCESS INSURER.

Schoeck v. Allstate, 42 Fla. L. Weekly D2182 (Fla. 2^nd DCA October 13, 2017):

Plaintiff was injured as a passenger in a vehicle driven by her father. She alleged that the driver of another vehicle who caused the collision, lacked sufficient liability coverage.

The plaintiff sued Allstate, the UM carrier. Plaintiff alleged that all conditions precedent to the lawsuit were met.

Allstate disagreed, but waived its defense by failing to plead the issue of the defense in its contract with sufficient specificity. While rule 1.120(c) permits the satisfaction of a condition precedent to be alleged “generally,” the rule requires a pleader to deny the performance or occurrence of the condition precedent “specifically with particularity.” Because that was not done, Allstate waived enforcement of the contractual condition precedent, and the court reversed summary judgment entered in Allstate’s favor.