Paton v. GEICO Gen. Ins. Co.

• Citation: 190 So.3d 1047
• Decision Date: 24 March 2016
• Docket Number: No. SC14–282.,SC14–282.
• Parties: Kelly PATON, Petitioner, v. GEICO GENERAL INSURANCE CO., Respondent.
• Court: United States State Supreme Court of Florida

190 So.3d 1047

Kelly PATON, Petitioner,

v.GEICO GENERAL INSURANCE CO., Respondent.

No. SC14–282.

Supreme Court of Florida.

March 24, 2016.

Bard Daniel Rockenbach of Burlington & Rockenbach, P.A., West Palm Beach, FL, and Richard Mark Benrubi of Liggio Benrubi, West Palm Beach, FL, for Petitioner.

James Kendall Clark of Clark, Robb, Mason, Coulombe, Buschman & Charbonnet, Miami, FL, for Respondent.

LEWIS, J.

Kelly Paton seeks review of the decision of the Fourth District Court of Appeal in GEICO General Insurance Co. v. Paton (Paton II ), 133 So.3d 1071 (Fla. 4th DCA 2014), on the ground that it expressly and directly conflicts with the decision of this Court in State Farm Fire & Casualty Co. v. Palma, 555 So.2d 836 (Fla.1990), on a question of law. We have jurisdiction. See art. V, § 3(b)(3), Fla. Const.

FACTS

Paton was injured in a car accident due to the negligence of an underinsured driver. GEICO Gen. Ins. Co. v. Paton (Paton III ), 150 So.3d 804, 805 (Fla. 4th DCA 2014). After Respondent GEICO General Insurance Company (GEICO) failed to pay the total amount claimed by Paton under the underinsured motorist (UM) policy maintained by her mother, she filed an action against GEICO. See id.; see also Paton v. GEICO Gen. Ins. Co. (Paton I ), No. 09CACE013697, 2010 WL 10129165, at *1 (Fla. 17th Cir.Ct. June 24, 2010) (trial court order). The jury returned a verdict in favor of Paton for $469,247, which the trial court reduced to $100,000, the limit of the UM policy. Paton III, 150 So.3d at 805.

Paton subsequently amended her complaint to add a claim of bad faith against GEICO under section 624.155, Florida Statutes (2010). Id. She obtained a jury verdict in her favor for $369,247, the amount of the excess verdict in the UM trial. Id. at 806. Thereafter, she moved for attorney's fees and costs, and as the fees were being highly contested, she sought discovery related to her opposition's attorneys' time records. Paton II, 133 So.3d at 1071. Specifically, Paton served on opposing counsel a request to produce the following records:

1. Any and all time keeping slips and records regarding time spent defending GEICO in the bad faith action in Paton v. GEICO General, Case No.: 09–013697(12).

2. Any and all bills, invoices, and/or other correspondence for payment of attorney's fees for defending GEICO in the bad faith action in Paton v. GEICO General, Case No.: 09–013697(12).

3. Any and all retainer agreements between you and/or your respective law firm for defending GEICO in the bad faith action in Paton v. GEICO General, Case No.: 09–013697(12).

GEICO objected to the request to produce on the basis that the information was privileged and irrelevant, and relied on Estilien v. Dyda, 93 So.3d 1186 (Fla. 4th DCA 2012), and HCA Health Services of Florida v. Hillman, 870 So.2d 104 (Fla. 2d DCA 2003). In Estilien, the Fourth District held that where a party seeks to discover the billing records of opposing counsel solely to support a claim for attorney's fees, the party seeking the discovery must establish that the material requested (1) is actually relevant to a disputed issue, (2) is necessary, and (3) that its substantial equivalent cannot be obtained from another source. 93 So.3d at 1188–89 (citing Hillman, 870 So.2d at 107 ). The circuit court overruled GEICO's objections, but provided that GEICO “may redact privileged information.”

Paton also propounded Lodestar/Multiplier Fee Determination Interrogatories to GEICO. GEICO objected, again on the basis ofEstilien and Hillman, to the following interrogatory:¹

8. Did you or your attorneys spend any attorney's time in prosecuting or defending this lawsuit? If so, list a description of each such item of attorney's fees, the date incurred, hourly rate and the hours incurred on each such date. (Note: you may answer this question by stapling your time records to the answers to interrogatories as long as those records are legible and complete or indicating that you are relying on attached time records for your answer).

Again, the circuit court overruled GEICO's objection. This order did not reference redaction of any privileged information.

GEICO filed a petition for writ of certiorari in the Fourth District, requesting that the district court quash the orders relating to the request to produce and the interrogatory. GEICO alleged that Estilien and Hillman establish that a party must make a special showing prior to the discovery of the billing records of opposing counsel, and Paton failed to make such a showing. GEICO also alleged that the materials were privileged and irrelevant.

The Fourth District granted the petition and quashed the orders of the circuit court. Paton II, 133 So.3d at 1071. The district court held that Estilien controlled, and noted that the court in Estilien stated that the records of opposing counsel are, at best, only marginally relevant to the determination of reasonable attorney's fees. Id. (citing Hillman, 870 So.2d at 107 ). The court recognized that Estilien required a party to establish that the billing records of opposing counsel are actually relevant and necessary, and their substantial equivalent could not be obtained elsewhere. Id. The district court concluded Paton failed to make the necessary showing. Id.

Paton sought review of Paton II in this Court, alleging it conflicted with Palma, 555 So.2d 836, which concerned the appropriate range for a contingency fee multiplier in the computation of a reasonable attorney's fee. In Palma, this Court considered the billing records of opposing counsel to be relevant to our analysis, and explicitly noted the number of hours expended by opposing counsel in our decision. Id. at 837. In Palma, we explained that “the trial court found that 650 was a reasonable amount of hours and that a reasonable hourly rate was $150. Further, the trial court applied a multiplier of 2.6. We note that State Farm's counsel [ (opposing counsel) ] expended 731 hours on this case. ” Id. (emphasis added). The number of hours expended by counsel for both the plaintiff and defendant in Palma demonstrated the complexity and significance of the issue, which involved only a $600 medical bill. Id. at 836. Our recognition that State Farm expended more hours than those the trial court found to be reasonable for the plaintiff demonstrates that the number of attorney hours expended by counsel for State Farm was highly relevant to the determination of a reasonable attorney's fee for the plaintiff. Thus, the statement in Paton II that the billing records of counsel for GEICO were “at best, only marginally relevant,” conflicts with our analysis in Palma. We accept jurisdiction to clarify the relevance of the time expended by opposing counsel to the issue of reasonable hours for a party who is entitled to payment of his or her attorney's fees when the fees are contested.

ANALYSIS

The scope of discovery is provided in Florida Rule of Civil Procedure 1.280(b)(1), which states:

Parties may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter of the pending action, whether it relates to the claim or defense of the party seeking discovery or the claim or defense of any other party.... It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

Relevant evidence is defined by statute as evidence that tends to prove or disprove a material fact. See § 90.401, Fla. Stat. (2015). Additionally, we have previously explained that the definition of relevancy is broader in the context of discovery than it is during trial. Bd. of Trs. of Internal Improvement Tr. Fund v. Am. Educ. Enter., LLC, 99 So.3d 450, 458 (Fla.2012) (citing Amente v. Newman, 653 So.2d 1030, 1032 (Fla.1995) ).

The decision below relied on Estilien, which, in turn, was founded on the decision of the Second District Court of Appeal in Hillman. In Hillman, the trial court granted the plaintiffs' motion to compel a response to a subpoena duces tecum that sought production of the following: “timesheets, invoices, bills, reimbursements, payments, correspondence, contract for services, fee agreement, hourly fee schedules, all computer generated records pertaining to attorneys' fees, costs, expenses ..., or other related documents.” 870 So.2d at 106 (alterations in original). However, the order of the trial court also provided that any material that was protected by the attorney-client or work-product privileges should be redacted, with an unredacted copy to be provided to the trial court. Id. The defendant medical center petitioned the Second District for a writ of certiorari, which was granted. Id. at 108. The district court concluded that the billing records of opposing counsel are only sometimes relevant to an attorney's fees claim and, even when relevant, are protected by the attorney-client and work-product privileges. Id. at 107. Florida Rule of Civil Procedure 1.280(b)(4)² provides that privileged information may be obtained:

upon a showing that the party seeking discovery has need of the materials in the preparation of the case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of the materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.

The Second District granted certiorari review and held that the billing records of opposing counsel are privileged materials that can be obtained only if the party that seeks such discovery demonstrates the material is actually relevant to a disputed issue, is needed to prepare for the attorney's fees hearing, and that substantially equivalent material cannot be obtained elsewhere. Hillman, 870 So.2d at 107 (citing Fla. R. Civ. P. 1.280(b...