PIP Portal

9 Fla. L. Weekly Supp. 539a

Insurance — Personal injury protection — Med Pay — Attorney’s fees — Contingency risk multiplier — In case involving novel issue of reimbursement from Med Pay when a workers’ compensation lien is paid, where risk was substantial and chance of success even at outset of case, and market requires a multiplier in order for someone like insured to obtain competent counsel, multiplier of 2.0 is awarded — Attorneys for insured reasonably anticipated a proper defense and possible proposal for settlement from insurer, and fact that insurer failed to live up to that expectation is not basis for lower multiplier — Reasonable hourly rate — Court is satisfied that attorney is quite knowledgeable and skillful in handling first party insurance cases despite attorney’s lack of board certification — Reasonable number of hours — Hours attorney devoted to clerical functions are not taxable as attorney functions — Costs — Expert witness fees and other costs awarded — Prejudgment interest on attorney’s fees and costs awarded

RICHARD J. CASCIO, Plaintiff, vs. ALLSTATE INSURANCE COMPANY, Defendant.Circuit Court, 15th Judicial Circuit in and for Palm Beach County. Case No. CL 01-01031 AD. May 29, 2002. Timothy P. McCarthy, Judge. Counsel: Diego C. Asencio, Diego C. Asencio, P.A., North Palm Beach. Patrick C. Massa, Law Offices Patrick C. Massa, P.A., North Palm Beach. V. Rand Saltsgaver, Orlando. Joseph Murasko, West Palm Beach.

ORDER ON PLAINTIFF’S MOTION TO TAXATTORNEYS FEES AND COSTS WITH INTEREST

THIS CAUSE came to be heard May 20, 2002 on the Plaintiff’s Motion to Tax Attorneys Fees and Costs with interest. The parties were able to agree on most of the facts. The sole issues left for the court’s determination were: 1) the number of hours reasonably and necessarily expended by attorney Diego C. Asencio, 2) the multiplier, and 3) the market rate for attorney V. Rand Saltsgaver.

The Court read the deposition transcripts of Robert Critton (the expert witness for the Plaintiff), Patrick Massa (co-counsel for the Plaintiff), and V. Rand Saltsgaver (co-counsel for the Plaintiff) by deposition. The court heard live testimony from Diego C. Asencio (co-counsel for the Plaintiff) and from Robert Johnson (the expert witness for defense). The court received into evidence billing records and contracts for each attorney for the Plaintiff. Having duly considered all of the evidence adduced at the attorney fee hearing together with the arguments of counsel, the court makes the following findings of fact and conclusions of law:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. THE UNDERLYING COVERAGE DISPUTE

ROBERT CASCIO (hereinafter MR. CASCIO) was a Lake Park motorcycle police officer who was injured in a motor vehicle work related accident on April 17, 1999. MR. CASCIO’s no-fault claim arose when he paid his workers compensation carrier, Florida League of Cities, on a lien it placed on his bodily injury liability settlement for that work related accident. ALLSTATE INSURANCE COMPANY (hereinafter ALLSTATE) insured MR. CASCIO’s household motor vehicles. ALLSTATE insured MR. CASCIO for $10,000.00 in PIP (with no deductible) and $25,000.00 in Med Pay.

The time period of representation on the no-fault dispute ran from April 27, 2000 to June 20, 2001. Originally, MR. CASCIO was represented solely by Mr. Massa with regard to the personal injury claim when the no-fault issue surfaced. Mr. Massa began to work on the no-fault issue starting on April 27, 2000.

Mr. Massa attempted to persuade ALLSTATE to pay the PIP and Med Pay from September 18, 2000 to December 19, 2000. Mr. Massa first notified ALLSTATE’s adjuster James Navetta of the workers compensation lien in the amount of $29,073.12 September 18, 2000¹. He then followed up with another letter on September 29, 2000 demanding $26,030.19 against ALLSTATE’s PIP and Med Pay based on an anticipated payment of $19,234.23. October 10, 2000 another letter was sent to ALLSTATE containing a copy of the $19,234.23 payment made by MR. CASCIO to the Florida League of Cities. When Mr. Massa could not obtain any payment of PIP or Med Pay from ALLSTATE, he associated Mr. Asencio on December 19, 2000.

2. FILING OF SUIT AND CONFESSION OF JUDGMENT

Mr. Asencio filed suit against ALLSTATE on February 1, 2001. The complaint was served on ALLSTATE on March 2, 2001. ALLSTATE first indicated that it might wish to settle on March 12, 2001 when adjuster Eric Streu first called Mr. Asencio. At first Mr. Streu questioned whether Mr. Massa had properly submitted the PIP and Med Pay claims. Mr. Asencio immediately faxed Mr. Streu documentation showing that Mr. Massa had submitted the claims properly. Then Mr. Streu offered $19,234.23 with interest on March 13, 2001. Mr. Streu was unable to comprehend how ALLSTATE could be liable for more than MR. CASCIO had paid the workers compensation carrier. From March 12 to March 26, 2001 Mr. Asencio wrote ALLSTATE four (4) times supplying the facts and the law supporting the claim but he was unable to coax full payment of the PIP and Med Pay from Mr. Streu.

Mr. Asencio continued to pursue settlement of the PIP and Med Pay claim with defense counsel. From March 26, 2001 to June 4, 2002 Mr. Asencio wrote ten (10) times to defense counsel. However, no payment was forthcoming from March 12, 2001 until June 11, 2001 when ALLSTATE tendered as “full and final” payment a check for $24,116.44. That payment followed ALLSTATE’s June 4, 2001 filing of a “confession of judgment” for $24,116.44.

After consulting with MR. CASCIO, Mr. Asencio rejected the “full and final” payment of $24,116.44 and persisted in demanding full payment writing six (6) more letters between June 11, 2001 and June 20, 2001. On June 20, 2001 ALLSTATE paid an additional $1,592.77. Ultimately, ALLSTATE agreed to pay MR. CASCIO $25,709.21 not including attorney’s fees and costs. As part of the settlement it was agreed that the attorneys fees, costs and interest would be determined by the court.

3. LAW GOVERNING THE UNDERLYING DISPUTE

The case law is quite clear on the issue of reimbursement from PIP for payment from a bodily injury settlement on a worker compensation lien. See South Carolina Ins. Co. v. Arnold, 467 So.2d 324 (Fla. 2d DCA 1985). An insured is entitled to make a PIP claim to the extent that the workers compensation carrier is reimbursed. Fortune Ins. Co. v. McGhee, 571 So.2d 546 (Fla. 2d DCA 1990). However, this case was different from the usual reimbursement from PIP in a couple of important respects. Here, MR. CASCIO was seeking reimbursement from Med Pay in addition to the PIP. Additionally, MR. CASCIO was seeking to increase his Med Pay claim by the pro rata share of fees and costs. Such a claim for pro rata fees and costs is owed on the PIP up to the $10,000 limit. Delehanty v. Coronet Ins. Co., 619 So.2d 990 (Fla. 2d DCA 1993). However, no case law currently supports such reimbursement from Med Pay when a worker compensation lien is paid. This was a novel issue of law.

4. NEED FOR A MULTIPLIER AND RISK AT THE OUTSET

The testimony was unrebutted that at the time of the representation MR. CASCIO could not afford to pay an attorney on an hourly basis. The only way MR. CASCIO could get representation was on a contingency basis. MR. CASCIO signed contingency fee contracts with each of his attorneys. In fact, ALLSTATE does not dispute that a multiplier should be applied to the fees. It only disputes the amount of that multiplier.

Mr. Massa testified (page 15-16) that he considered the case risky and that “it was probably a case that could go either way on those issues.” Mr. Asencio said he evaluated the case at the outset as “having an even chance of success” and that he strives to accurately evaluate the risk in each of his cases. Mr. Asencio’s billing statement reflects that he evaluated the risk of non-recovery as “even” at the outset. Both Mr. Massa and Mr. Asencio were concerned that ALLSTATE might use a proposal for settlement.

Mr. Critton (page 12-13) testified that there was a “substantial risk associated with taking this case at the outset.” He stated with regard to reimbursement from Med Pay (at page 18-19) “I would put this in the highest category of risk.” When considering both the PIP and the Med Pay issues together, he considered the risk on the whole case to be “even” (pages 13, 18-19). Mr. Critton also assessed the risk at the outset based upon the likely use of a proposal for settlement against MR. CASCIO by ALLSTATE pursuant to U.S. Security Ins. Co. v. Cahuasqui, 760 So.2d 1101 (Fla. 3d DCA 2000).

Mr. Johnson testified on behalf of ALLSTATE that this case was a “ground ball” and it had “a good chance of success.” Mr. Johnson recommended a multiplier between 1.0 and 1.5. However, most of the facts relied upon by ALLSTATE concerned its tactical failures after the filing of suit. Specifically, ALLSTATE failed to file an answer and it failed to serve the proposal for settlement feared by Mr. Asencio and Mr. Massa. Mr. Johnson agreed that a $15,000 proposal for settlement by ALLSTATE would have put pressure on MR. CASCIO.

This court must consider the multiplier based on the risk involved at the outset. J.E. Stack v. Lewis, 641 So.2d 969 (Fla. 1st DCA 1994) (appellate attorneys fees should include multiplier based on risk when case was first accepted); Dreese v. Craftman Auto Electric, 620 So.2d 1097 (Fla. 4th DCA 1993) (multiplier should still be awarded based on risk when case first accepted even if recovery was achieved thru default). Mr. Asencio and Mr. Massa reasonably anticipated a proper defense and a possible proposal for settlement from ALLSTATE. The fact that ALLSTATE failed to live up to their expectations cannot form the basis of a lower multiplier.

Pursuant to Quanstrom v. Standard Insurance, 555 So.2d 828 (Fla. 1990) this court is required to consider a multiplier based on the likelihood of success. If the court determines that success was more likely than not at the outset, it may apply a multiplier of 1 to 1.5. If the court determines that the likelihood of success was approximately even at the outset, the court may apply a multiplier of 1.5 to 2.0. If the court determines that success was unlikely at the outset of the case, it may apply a multiplier of 2.0 to 2.5. A multiplier in the appropriate amount should be awarded when supported by the facts. Speer v. Mason, 769 So.2d 1102 (Fla. 4th DCA 2000).

The Court finds that, here, the risk was substantial at the outset. There was no case law supporting MR. CASCIO’s theory that Med Pay reimbursement should be handled on the same basis as the PIP reimbursement. Med Pay is not always treated the same as PIP. See Bolden v. State Farm Mut. Auto. Ins. Co., 689 So.2d 339 (Fla. 4th DCA 1997) (Med Pay coverage does not extend to pedestrians who are entitled to PIP) and Allstate v. Jones, 700 So.2d 110 (Fla. 1st DCA 1997) (Med Pay coverage does not extend to bicyclists who are entitled to PIP). Not many claimant attorneys may have recognized that Med Pay reimbursement as a viable issue or made a claim for the pro rata share of fees and costs based on the Delehanty case. The court finds that success was even at the outset. The court further finds that the market requires a multiplier for this type of case in order for someone like MR. CASCIO to obtain competent counsel. Based on its novelty, the court awards a multiplier of 2.0 on this case.

5. MARKET RATE FOR MR. SALTSGAVER

ALLSTATE stipulated to an hourly rate of $300.00 for Mr. Asencio and Mr. Massa. However, it would not agree to such a rate for Mr. Saltsgaver arguing for a market rate of $250.00 per hour. ALLSTATE’s main argument was that Mr. Saltsgaver lacked board certification. Mr. Saltsgaver was admitted to the Florida bar in 1979 and started his own practice in 1981 doing mostly criminal defense and Plaintiff’s personal injury work (page 7). In the last ten (10) to twelve (12) years he has concentrated his practice on personal injury and so-called first-party insurance cases (page 7). In the last three years he has filed from 350 to 400 PIP suits (page 8). Over the course of his practice he has handled over 1,000 first-party insurance cases (page 8). Mr. Saltsgaver has handled first party cases from the trial court level all the way up to the Florida Supreme Court level. The courts in Central Florida are presently awarding Mr. Saltsgaver $300.00 per hour (page 12). While a certificate of board certification may be evidence of a lawyer’s qualification, it is not the only evidence of a lawyer’s expertise. The Court is satisfied that Mr. Saltsgaver is quite knowledgeable and skillful in the handling of first party cases. The court hereby finds that $300.00 per hour is the appropriate market rate for Mr. Saltsgaver.

6. NUMBER OF HOURS FOR MR. ASENCIO

The parties stipulated to 9.8 hours for Mr. Massa and 4.8 hours for Mr. Saltsgaver. Mr. Asencio requested 34.10 hours for his time. ALLSTATE argued that a more reasonable number of hours for Mr. Asencio would be 30 because some of his work appears to be clerical. Mr. Asencio maintains that his hours are very reasonable as a whole and that he works much more efficiently by handling each and every aspect of the case. However, the Court finds that 2.3 hours of Mr. Asencio’s time were devoted to clerical functions and, therefore, not taxable as attorney functions.

Mr. Asencio filed a detailed seven (7) page complaint, he served extensive discovery in the form of a request to produce, interrogatories and request for admissions tailored to the issues in the case. Mr. Asencio also prepared a motion for summary judgment with affidavits and maintained an excellent level of contact with his client, the ALLSTATE adjuster, defense counsel, both co-counsel and his expert witness both in writing and by phone. The nature of the services and the time spent on each matter is well documented in his billing statements. The court finds that 32.7 hours were reasonably and necessarily spent by Mr. Asencio as an attorney.

7. EXPERT WITNESS FEES AND TAXABLE COSTS

The parties have also stipulated that MR. CASCIO is entitled to an expert witness fee for Mr. Critton pursuant to F.S. §92.231 and that Mr. Critton reasonably expended four (4) hours at $325.00 per hour. Accordingly, the court awards the four (4) hours at $325.00 per hour. The court awards these fees to MR. CASCIO as costs. Stokus v. Phillips, 651 So.2d 1244 (Fla. 2d DCA 1995) (expert witness taxed as costs under F.S. §92.231); Mangel v. Bob Dance Dodge, Inc., 739 So.2d 720 (Fla. 5th DCA 1999).

The court also awards the costs for the underlying coverage matter in the amount of $1050.00 as stipulated which includes the cost of the court reporter’s per diem for the fee hearing.

8. PREJUDGMENT INTEREST ON THE FEES AND COST

MR. CASCIO is entitled to prejudgment interest on attorney fees and costs from the date ALLSTATE agreed to entitlement to attorneys fees and costs. Prejudgment interest on attorneys fees includes prejudgment amounts in a merged total, with post-judgment interest then accruing on the merged total. Quality Engineering Installation v. Higley South, Inc., 670 So. 2d 929 (Fla. 1996). The parties agree that ALLSTATE conceded entitlement to fees and costs on June 20, 2001. The parties agree that the interest rate to be applied is 10%. Thus, prejudgment interest on attorneys fees and costs shall accrue interest at the rate of 10% from that date.

9. SET OFF FOR PREVIOUSLY PAID ATTORNEYS FEES

ALLSTATE paid $10,000 towards the attorneys fees and costs on October 3, 2001. The parties stipulated that ALLSTATE is entitled to a $10,000 set off against any fee award by this court.

Based on the above, the court finds and it is ORDERED AND ADJUDGED that the reasonable attorneys fees, costs and interest in this case are:

A. Attorney time of 32.7 hours (34.10 less 2.3) for Diego C. Asencio (number of hours reasonably and necessarily expended) X $300.00 per hour (reasonable hourly rate) = $9,810.00 (Loadstar) X 2.0 (Contingency Risk Multiplier) = $19,620.00 total attorneys fees.

B. Attorney time of 9.8 hours for Patrick Massa (number of hours reasonably and necessarily expended) X $300.00 per hour (reasonable hourly rate) = $2,940.00 (Loadstar) X 2.0 (Contingency Risk Multiplier) = $5,880.00 total attorneys fees.

C. Attorney time of 4.8 hours for V. Rand Saltsgaver (number of hours reasonably and necessarily expended) X $300.00 per hour (reasonable hourly rate) = $1,440.00 (Loadstar) X 2.0 (Contingency Risk Multiplier) = $2,880.00 total attorneys fees.

D. Total costs of $985.00 for the underlying dispute.

E. Expert witness fees for attorney Robert Critton of $1,300.00.

F. Court reporter’s per diem for hearing of $65.00

G. Total fees and costs of $29,365.00 (A, B, C & D) shall accrue interest from June 20, 2001 to October 3, 2001 at the rate of 10% (per diem of $8.04 x 96 days = $771.84). Total fees and interest of $30,136.84 less the $10,000 payment ($20,136.84) shall accrue interest from October 3, 2001 to May 20, 2002 at the rate of 10% (per diem of $5.51 x 240 days = $1,322.40).

H. Adding together the sum of $21,459.40 in attorneys fees, costs and interest together with the $1,300.00 in expert witness fees (E) and the $65.00 for the court reporter per diem (F) results in a total combined figure of $22,824.40 upon which judgment shall be entered and which shall bear interest at the 2002 statutory rate of 9% from the date of the hearing on May 20, 2002 (per diem of $5.62).

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¹Although the original figure was reported as $29,073.12, it was later learned on March 13, 2001 that the workers compensation carrier actually paid a total of $35,542.90 ($18,478.80 in lost wages and $17,064.10 in medical).

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