11 Fla. L. Weekly Supp. 510a
Attorney’s fees — Insurance — Personal injury protection — Hours expended — Where insurer had already agreed to plaintiff’s entitlement to fees through settlement prior to fee hearing, litigation regarding whether to apply multiplier is litigation pertaining to amount of fees, not time spent litigating entitlement to fees, and trial court erred in including time in fee award
ALLSTATE INSURANCE COMPANY, an Illinois corporation, Appellant, v. LEROY HERSHELL LUCKEY, JR., Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. CVA 1-99-71. L.C. Case No. CC 98-11201. October 29, 2001. Appeal from the County Court for Orange County, Jerry L. Brewer, Judge. Counsel: Julie Walbroel-Pardy, for Appellant. David A. May, for Appellee.
(Before GRIDLEY, RUSSELL, and KIRKWOOD, JJ.)
FINAL ORDER AND OPINION REVERSING TRIAL COURT
(PER CURIAM.) Allstate Insurance Company (“Appellant”), filed this appeal of Final Judgment Awarding Attorney’s Fees and Costs. We have jurisdiction pursuant to Florida Rule of Appellate Procedure 9.030(c)(1)(A). We dispense with oral argument. Fla. R. App. P. 9.320.
Factual and Procedural Background
On October 29, 1998, LeRoy Hershell Luckey, Jr. (“Appellee”) filed a breach of contract action against Appellant for failure to pay Personal Injury Protection (“PIP”) benefits. On February 26, 1999, Appellant settled the case, tendering the full amount of the outstanding bills. After settlement, the only issue remaining between the parties was Appellee’s right to a multiplier of his award of attorney fees from Appellant.
After the hearing on Appellee’s motion for attorney fees, the trial court issued a Final Judgment awarding Appellee’s counsel his total requested time of 42 hours, including post-settlement time of 9.7 hours. Appellant appeals the Final Judgment, arguing that Appellee’s post-settlement time should not have been included in the award of attorney fees, as the time spent related only to the amount of attorney fees awarded, and not Appellee’s entitlement thereto.
Standard of Review
In general, the “standard of review in reviewing an award of attorney’s fees is whether the trial court abused its discretion.” Jones & Granger v. Johnson, 788 So. 2d 381, 382 (Fla. 1st DCA 2001). See also First Fed. Sav. & Loan Ass’n of Palm Beaches v. Bezotte, 740 So. 2d 589, 590 (Fla. 4th DCA 1999). “If reasonable men could differ as to the propriety of the action taken by the trial court, then the action is not unreasonable and there can be no finding of an abuse of discretion.” First Fed. Sav. & Loan Ass’n of Palm Beaches, 740 So. 2d at 590.
A different standard of review applies to the case at bar, however, because the issue here involves a strictly legal determination. “The standard of review of a trial court ruling on a pure issue of law is de novo, i.e., an appellate court need not defer to the trial court on matters of law.” Rittman v. Allstate Ins. Co., 727 So. 2d 391, 393 (Fla. 1st DCA 1999) (discussing standard of review in reviewing ruling on motion to dismiss). In Gibbs Constr. Co. v. S.L. Page Corp., 755 So. 2d 787, 790 (Fla. 2d DCA 2000), the court noted that “[t]o the extent that a trial court has discretion, appellate courts apply an abuse of discretion standard in reviewing a trial court’s award of attorney’s fees, most often in regard to the amount of an award rather than the actual entitlement to an award.” In Gibbs, theentitlement to attorney fees was based upon contract provisions. Id. at 790. Because the award of attorney fees involved the “construction of two unambiguous contractual provisions as a pure matter of law[,]” the court undertook a de novo review of the contractual provisions. Id. In the final analysis, the court used an abuse of discretion standard when evaluating the amount of the attorney fees award and a de novo standard when evaluating the contractual provisions entitling the party to attorney fees. Id. at 791.
The issue in the case at bar requires an evaluation of entitlement to certain attorney fees. This appeal involves a pure legal determination (whether litigation regarding a multiplier should be considered litigation pertaining to amount or litigation pertaining to entitlement), and therefore, pursuant to Gibbs Constr., a de novo standard of review is applied.
Discussion
In State Farm Fire & Cas. Co. v. Palma, 629 So. 2d 830 (Fla. 1993), the Florida Supreme Court held that insureds may recover attorney fees from non-prevailing insurance companies under Section 627.428, Florida Statutes, for time spent litigating entitlement to fees, but may not recover for time spent litigating the amount of the fees. This has led to the issue of whether litigating the application of a multiplier to the attorney fees calculation is litigation regarding entitlement (compensable) or amount (not compensable).
In Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985), the Florida Supreme Court laid out how to compute a reasonable attorney fee award. Throughout the opinion, the multiplier is discussed in terms of calculating the amount of the attorney fee award, for example: “[I]n contingent fee cases, the lodestar figure calculated by the court is entitled to enhancement by an appropriate contingency risk multiplier . . . . [I]n computing an attorney fee, the trial judge should . . . adjust the fee on the basis of the contingent nature of the litigation or the failure to prevail on a claim or claims. Id. at 1151-52 (emphasis added).
In Standard Guaranty Ins. Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990), the Florida Supreme Court clarified Rowe andheld that when an insured sues his insurer, and the insured’s attorney is retained on a contingency fee basis, the trial court must consider whether to apply a multiplier when determining the amount of attorney fees. The trial court, however, is not required to award a multiplier. Id. at 830.
The Quanstrom opinion is replete with references that in determining whether to apply a multiplier, the court is determining the amount of fees. The court frames the issue in Quanstrom as “whethera contingency fee multiplier must be utilized when determining the appropriate attorney’s fee to be paid to a prevailing insured pursuant to section 627.428, Florida Statutes (1987).” Id. at 829 (emphasis added). The court noted that the United States Supreme Court decisions regarding multipliers “effectively eliminated the use of contingency fee multipliers in computing fees under the lodestar approach.” Id. Finally, in setting forth its holding, the court stated, “We find that the multiplier is still a useful tool which can assist trial courts in determining a reasonable fee in this category of cases. . . .” Id. at 834 (emphasis added).
Quanstrom and Rowe indicate that the Florida Supreme Court considers multipliers an amount issue. The court discusses multipliers in the context of the amount of the fee award, not entitlement to the fee. The multiplier, like the lodestar method, is a means to arrive at a reasonable fee. The Florida Supreme Court authorizes use or non-use of a multiplier to arrive at the correct amount of attorney fees, but never speaks of a multiplier in terms of entitlement to a fee.
In addition, two circuit courts sitting in their appellate capacity have held that an insured may not recover fees from the insurer for litigating whether a multiplier should be applied. The Fifteenth Judicial Circuit ruled that “no attorney’s fees may be awarded for time spent researching and litigating the issue regarding the contingency risk multiplier since [the insurance company] was only disputing the amount of attorney’s fees to be awarded, rather than entitlement thereto.” Dixie Ins. Co. v. Puzo, 5 Fla. L. Weekly Supp. 211a, 211 (Fla. 15th Cir. Ct. May 8, 1996).
In Colonial Ins. Co. of California v. Sensory Neurodiagnostic, Inc., 5 Fla. L. Weekly Supp. 522 (Fla. 13th Cir. Ct. April 17,1998),the circuit court sitting in its appellate capacity was faced with the identical issue that is presented in this case. The insurer settled with the insured and admitted that the insured was entitled to attorney fees pursuant to Section 627.428, Florida Statutes. Id. at 523. The lower court awarded “fees for time spent litigating the applicability of a risk multiplier.” Id. The court stated the following:
Although the parties may have been contesting Sensory’s “entitlement” to a multiplier, semantics aside, the fact remains that entitlement to fees had already been conceded as of the settlement . . . . Entitlement to a reasonable fee had already been determined when the county court conducted its fee hearing to decide whether to apply a multiplier, and if so, to determine what that multiplier should be. Litigation as to the application of a multiplier once entitlement to a reasonable attorney’s fee has already been determined would appear to be an “amount” issue, not an “entitlement” issue. Consequently, fees incurred litigating the applicability of a risk multiplier are not properly included in an award of attorneys’ fees.
Id.
The case at bar is very similar to Colonial Insurance. Both are PIP cases, attorney fees were awarded pursuant to Section 627.428, Florida Statutes, and both cases settled, whereupon the insurers did not challenge the insureds’ entitlement to attorney fees. Thus, the reasoning in Colonial Insurance applieswith equal force to this case. Appellee and Appellant already agreed to Appellee’s entitlement to an award of fees before the attorney fee hearing. The only issue remaining after settlement was how much money Appellee would receive as a fee award. A multiplier may be used to determine the amount of that award, and therefore litigation regarding whether to apply a multiplier is litigation regarding the amount of attorney fees.
We hold that litigation regarding whether to apply a multiplier is an amount issue, and therefore is not included in an award of attorney fees pursuant to Section 627.428, Florida Statutes. Applying our holding to the case at bar, the record reflects that Appellee expended 9.7 hours out of a total of 42 hours litigating the application of a multiplier. Therefore, Appellee is entitled to an award of attorney fees for 32.3 hours at $200 per hour, with a multiplier of 2.5, as Appellant did not challenge on appeal the amount of hours, rate, and multiplier the trial court awarded. Appellant also did not challenge the portions of the Final Judgment awarding costs and expert witness fees to Appellee, and therefore this Order does not alter that award of $1,9750.00.
Appellate Costs and Attorney’s Fees
Appellant moved for appellate costs pursuant to Florida Rule of Appellate Procedure 9.400. Since Appellant is the prevailing party, and finding no reason that costs should not be taxed, the Court concludes that Appellant is entitled to have costs taxed in its favor, if it timely files a motion with the lower tribunal within thirty days of the issuance of the mandate in this matter. Fla. R. App. P. 9.400(a).
Appellee requests an award of attorney fees pursuant to Rule 9.400, Florida Rules of Appellate Procedure, and Section 627.428, Florida Statutes. Appellee is not the prevailing party, and therefore his motion for attorney fees is denied.
THEREFORE, based upon the foregoing, it is hereby ORDERED and ADJUDGED as follows:
The Final Judgment Awarding Attorney’s Fees and Costs is REVERSED and REMANDED, with directions to the trial court to award Appellee, LeRoy Hershell Luckey, Jr., $16,150.00, as reasonable attorney fees, and $1,975.00, as costs. The trial court is further directed to order that the Law Firm of David A. May, P.A., shall recover from Appellant the sum of $18,125.00, that shall bear interest at the rate of 10% per annum from the date of the trial court’s order.
It is also FURTHER ORDERED AND ADJUDGED that Appellant shall have costs taxed in its favor, if it files a proper motion pursuant to Florida Rule of Appellate Procedure 9.400(a) with the lower tribunal within thirty days of the issuance of the mandate in this matter.
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