Aries Insurance Co v. Aleman
| Decision Date | 24 April 2002 |
| Docket Number | 00-2316,3 |
| Parties | NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DISPOSED OF. THE ARIES INSURANCE COMPANY, Appellant, vs. ONELIA MARIA ALEMAN, Appellee. CASE NO. 3D00-2316 JANUARY TERM, A.D. 2002 IN THE DISTRICT COURT OF APPEAL OF FLORIDA THIRD DISTRICT Opinion filed |
| Court | Florida District Court of Appeals |
An appeal from the Circuit Court of Miami-Dade County, Murray Goldman, Judge.
Buckner & Shifrin; Lauri Waldman Ross, for appellant.
Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin and Joel S. Perwin, for appellee.
Before SCHWARTZ, C.J., and COPE, and FLETCHER, JJ.
Aries Insurance Company appeals an award of attorney's fees in a class action. After a thorough examination of the record, we find the award to be excessive, and reverse and remand the matter with instructions.
Onelia Maria Aleman initially filed suit against Aries seeking coverage for an automobile accident which occurred after her insurance policy was canceled. This action was later voluntarily dismissed and followed by an action, filed individually and on behalf of a class of similarly situated insureds, seeking a determination that the insurer failed to comply with applicable statutes in the cancellation of her insurance policy. Although the insurer initially objected to the class as defined, the parties subsequently stipulated to the class certification and then filed cross-motions for summary judgment on the legal issue of the validity of the cancellation. The parties also agreed to stay discovery pending resolution of these motions. The trial court entered summary judgment in favor of the insured on the liability issue, which order was affirmed by this court in Aries Ins. Co. v. Aleman, 695 So. 2d 910 (Fla. 3d DCA 1997).1 After extensive settlement negotiations, the parties reached an agreement that damages were to be calculated by an accountant to be paid by the insurer. The insurer additionally agreed to pay reasonable attorney's fees on which a hearing was conducted with both sides presenting expert testimony. After assessing the reasonable hours and hourly rates for the various attorneys who worked on the case on behalf of the plaintiff and reducing the hours requested, the trial court determined the lodestar attorney's fees at $228,450. Further concluding that at the outset the case had less than a fifty percent chance of success and involved complex and novel issues, the trial court enhanced the award by the maximum 2.5 multiplier and added prejudgment interest from the date of entry of the summary judgment, for a total attorney's fee award of $794,015.
Aries appeals from this judgment, raising three points of alleged error. First, Aries argues that the trial court's conclusion with regard to a reasonable attorney's fee in this case was excessive in light of the fact that the litigation was stream-lined and determined on legal issues. For similar reasons, Aries further contends that there is no basis for the 2.5 multiplier awarded. Finally, Aries contests the award of prejudgment interest as inequitable. We will address each issue separately.
We found no abuse of discretion in the trial court's determination of the lodestar attorney's fee amount, but disagree with the contingency fee multiplier awarded under the circumstances of this case. In Standard Guar. Ins. Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990), the Florida Supreme Court set forth certain factors which must be present to justify the application of a multiplier in a contract case. These factors are: "(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel; (2) whether the attorney was able to mitigate the risk of nonpayment in any way; and (3) whether any of the factors set forth in Rowe2 are applicable. . . ." Id. at 834. In the instant case, the trial court based its determination in part on its conclusion that the case involved complex and novel issues. As the court pointed out in Rowe, however, "[t]he 'novelty and difficulty of the question involved' should normally be reflected by the number of hours reasonably expended on the litigation." 472 So. 2d. at 1150; see also Florida Birth-Related Neurological Injury Compensation Ass'n v. Carreras, 633 So. 2d 1103, 1108-09 (Fla. 3d DCA 1994). The number of hours reasonably expended then becomes the lodestar figure after being multiplied by a reasonable hourly rate. The contingency risk multiplier, on the other hand, is intended to enhance the lodestar figure where a risk of nonpayment is established. See Rosenberg v. Ross, 613 So. 2d 505 (Fla. 3d DCA 1993). The other reason given by the trial court for its award of the maximum 2.5 multiplier in this case was the court's opinion that the case had a less than fifty percent chance of success at the outset. This fact also does not automatically mandate award of a multiplier. See Travelers Indem. Co. v. Sotolongo, 513 So. 2d 1384, 1385 (Fla. 3d DCA 1987) (). Subsequent cases on this issue demonstrate that the main focus of the court's inquiry in determining whether to apply a multiplier should be on the first factor listed in Quanstrom, i.e., whether the relevant market requires a contingency fee multiplier to obtain competent counsel. See, e.g., Bell v. U.S.B. Acquisition Co., 734 So. 2d 403 (Fla. 1999); Sun Bank of Ocala v. Ford, 564 So. 2d 1078 (Fla. 1990); Jones v. Minnesota Mut. Life Ins. Co., 759 So. 2d 723 (Fla. 4th DCA 2000); Strahan v. Gauldin, 756 So. 2d 158 (Fla. 5th DCA 2000); Simmons v. Royal Floral Distribs., Inc., 724 So. 2d 99 (Fla. 4th DCA 1998); and Askowitz v. Susan Feuer Interior Design, Inc., 563 So. 2d 752 (Fla. 3d DCA 1990), rev. denied, 576 So. 2d 292 (Fla. 1...
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