Lessons for fee experts…

FLORIDA LAW WEEKLY

VOLUME 47, NUMBER 10

CASES FROM THE WEEK MARCH 11, 2022

COURT REVERSED ATTORNEYS’ FEES AWARD MADE PURSUANT TO PROPOSAL FOR SETTLEMENT IN A TOBACCO CASE, FINDING THE FEE EXPERT WHO HAPPENED TO BE A CIRCUIT JUDGE’S METHODOLOGY WAS UNRELIABLE, AND THE TRIAL COURT SHOULD HAVE EXCLUDED THE EXPERT

Philip Morris USA v. Naugle, 47 Fla. L. Weekly D530 (Fla. 4^th DCA Mar. 2, 2022):

After the jury reached an $11 million verdict, the plaintiff moved for attorneys’ fees and costs based on his proposal for settlement. The plaintiff’s fee expert was a retired circuit court judge who testified that the $1,000 to $1,500 rates that plaintiff’s counsel requested, were reasonable.

The expert explained that under Rowe, the “extraordinary” time and labor devoted to the case impacted his determination of the “hourly rates” plaintiff’s attorneys charged. When asked how the time and labor impacted his determination, he testified that he didn’t actually analyze the factors, but reviewed and made a determination that the rates were reasonable, even though he initially believed they were high.

The expert also testified that the novelty and difficulty of the case justified the rates that the plaintiff’s attorneys requested and stated that the contingent nature of the fee justified the award of a higher fee. The expert also testified that the winners should make at least what the losers make and should get at least the hourly rate that the highest paid lawyer on the defense team gets.

On cross examination, the expert confirmed that the time and labor involved, novelty, complexity, and the difficulty of the questions and results obtained, and whether the fee was fixed or contingent are Rowe factors that could not be considered in determining the reasonable rate, but testified that he considered those factors as they related to the total fee.

At the end of the hearing, the circuit court noted that it was not basing its decision simply on the expert’s testimony, but that he had seen all of these lawyers’ work, seen them in the courtroom, and acknowledged that all lawyers who have appeared in front of him have been extraordinarily crafty in what they do, with very difficult issues. The court awarded over $5 million in attorneys’ fees plus almost $2 million in pre-judgment interest on the fees.

The Fourth District considered one issue: whether the trial court erred when it denied defendant’s motion to exclude the testimony of the plaintiff’s fee expert. The court ruled that Daubert does apply to expert testimony on attorneys’ fees, and that at no point after the defendant presented its Daubert objections, did the trial judge assess the reliability of the experts’ testimony or consider whether it related to matters requiring his specialized knowledge.

The court explained that the substance of the expert’s testimony was revealing because the expert stated at his deposition that he did not analyze how the Rowe factor for time and labor expended impacted his opinion of the reasonableness of the requested rates, explaining instead that he reviewed everything and found the rates to be reasonable. He also failed to explain how the Rowe factors for the novelty and difficulty of the case and the contingency fee impacted his opinion, stating that those factors “justified” the rates requested.

The expert acknowledged that his position that winners should make at least what the losers make factored into his decision. He acknowledged that that was only his theory, but opined that should be the law, even without case law supporting it.

While the trial judge correctly observed that the expert provided “pure opinion testimony based on a lifetime of experience,” the law requires more than experience alone; it requires the court to assess whether the expert’s reasoning or methodology may properly be applied to the facts at issue.

In this case, the expert provided no insight into what principles or methods were used to reach his opinion, and with no insight into those principles and with clear errors in methodology, the court had little to assess. As a result, the trial court erred in refusing the defendant’s request to exclude the testimony.

With that, the Fourth District reversed the fee award and remanded for further proceedings.

COURT REVERSES TRIAL COURT’S DECISION THAT NOMINAL OFFER OF JUDGMENT WAS MADE IN BAD FAITH – TRIAL JUDGE’S SEARCH FOR CONFLICTING PRECEDENT INAPPROPRIATE WHEN CONTROLLING PRECEDENT FURNISHED THE ANSWER, AND THE OFFER MET THE REQUIREMENTS OF SECTION 768.79, FLORIDA STATUTES

Progressive Select Insurance Co. v. Kagan Jugan & Associates, 47 Fla. L. Weekly D521 (Fla. 2^nd DCA Mar. 2, 2022):

In this PIP case, Progressive served an offer of judgment seeking to resolve the case for $1.00 for the benefits, and $49.00 for the attorneys’ fees. The provider did not respond.

The trial court granted Progressive’s Motion for Summary Judgment because Progressive paid the proper reimbursement under the PIP statute using the participating physician’s fee schedule under Medicare Part B.

The court still rejected Progressive’s attorneys’ fee claim, finding that there were conflicting rulings on the issue, and that the law was unsettled. The Second District rejected that, noting that the law was settled, and that courts may not search for conflicting decisions when controlling precedent furnishes the needed answer.

The Second District also rejected the trial court’s findings that Progressive’s offer was not made in good faith, after examining the reasonableness factors enumerated in Section 768.79(7)(b), Fla. Stat. The court found that a trial court may not rely on these factors to decline an award of fees altogether. The trial judge had mistakenly conflated the two distinct analyses, because whether an offer is made in good faith, is conceptually distinct from what is a reasonable fee.

Instead, the issue of good faith is determined solely by the subjective motivations and beliefs of the offeror. The underlying purpose of the offer of judgment statute includes the early determination of litigation, and encourages a realistic assessment of the claims made.

Because Progressive’s offer reflected its legally correct belief that it was not responsible, it comported with the terms of Section 768.79, Fla. Stat., and was therefore valid.

TRIAL COURT DID NOT ABUSE DISCRETION IN DETERMINING LODESTAR AMOUNT OF FEES AWARDABLE TO THE PREVAILING PARTY – BUT ERRED IN AWARDING A CONTINGENCY FEE MULTIPLIER WITHOUT A FINDING SUPPORTED BY THE RECORD

Impex Caribe Corp. v. Carl Levin, P.A., 47 Fla. L. Weekly D544 (Fla. 3^rd DCA Mar. 2, 2022):

The trial court awarded attorneys’ fees as increased by a 2.0 multiplier. With respect to the relevant market factor, the trial court found that the multiplier was necessary for the plaintiff to obtain competent counsel, because he was one of several attorneys who represented the defendant that was board certified in construction law, thus leading to the conclusion that competent counsel would not include every attorney in Miami-Dade County practicing in the area of construction law. Additionally, the fee expert testified that the relevant market required a contingency fee multiplier to obtain competent counsel, because the plaintiff could not have afforded to pursue the claims if he had to pay hourly rates to do so.

The purpose of the relevant market factor is to assess just whether there are attorneys in any given area, but specifically whether there are attorneys in the relevant market who both have the skills to handle the case effectively, and who would have taken the case absent the availability of a multiplier. To seek prevailing party attorneys’ fees, the prevailing party must establish that the party would have difficulty in securing counsel, without the opportunity for a multiplier.

Here, the fee expert testified that the prevailing party could not afford to pay an attorney on an hourly basis, and that the opposing party’s representation by a board certified construction lawyer necessitated that the prevailing party also have a well-qualified construction lawyer. The fee expert, however, never testified that there was a lack of well-qualified local construction lawyers or that it was unlikely that the plaintiff would have found one to take on the case without a multiplier. On the contrary, the plaintiff’s fee expert conceded he was completely unaware of the number of construction lawyers and board certified construction lawyers practicing in Miami-Dade County.

If there is no evidence that the relevant market required a contingency fee multiplier to obtain competent counsel, a multiplier should not be awarded.

The court affirmed the lodestar amount, but reversed the multiplier.

THE COURT REFUSED TO ALLOW DEFENDANT TO ESCAPE FROM THE PLAINTIFF’S ACCEPTANCE OF HER PROPOSAL FOR SETTLEMENT, BASED ON HER ATTORNEYS’ EXCUSABLE NEGLECT

Williams v. Fernandez, 47 Fla. L. Weekly D569 (Fla. 2^nd DCA Mar. 4, 2022):

The plaintiff accepted a proposal for settlement submitted to her by one of the two defendants. The proposal did not reference nor include the co-defendant, and thereafter, both defendants filed a motion, and an amended motion seeking relief from the proposal, claiming that the omission was done in error.

Defense counsel asserted that the error was caused by the trial counsel’s computer system, which generated a “shell” document, and only included the name of one of the defendants when it was generated. Counsel further asserted that the shell document was then inadvertently filed, but the intended proposal included both defendants. Neither the initial motion nor the amended motion referenced law containing specific ruling entitling the defendants’ relief, and neither motion was sworn to.

At the hearing on the motion, the co-defendant argued that he should not be bound by the terms of the proposal based on a unilateral mistake. However, neither party presented witnesses or sworn affidavits, and at the hearing, the court ruled that even if there were “unilateral mistaken” it was not statutorily identified as an escape hatch for offers extended pursuant to Section 768.79, Fla. Stat. The legislature has only specified one way to avoid the sanction, and that is when the offer is not made in good faith. The statute also provides the offeror with the ability to withdraw an offer before it is accepted.

The court observed that Section 768.79, Fla. Stat., benefits the state more than the parties, by reducing the number of civil cases and the demand for judicial services, with a lessening of the use of tax dollars (not sure the data would bear that out, but…). The court reversed the trial judge’s decision to grant the defendant relief, and ruled that the proposal was properly accepted.