Certain Underwriters at Lloyd's London v. Candelaria

Decision Date18 May 2022
Docket Number3D20-871
Citation339 So.3d 463
Parties CERTAIN UNDERWRITERS AT LLOYD'S LONDON, Appellant, v. Roniel CANDELARIA and Amelia Padura, Appellees.
CourtFlorida District Court of Appeals

Sastre Saavedra & Epstein, PLLC, and Michael Sastre, for appellant.

Alvarez, Feltman, Da Silva & Costa, P.L., and Paul B. Feltman, for appellees.

Before EMAS, GORDO and BOKOR, JJ.

EMAS, J.

I. INTRODUCTION

Certain Underwriters at Lloyd's London (Lloyd's) appeals an order awarding attorney's fees to Roniel Candelaria and Amelia Padura ("the Insureds"). Lloyd's argues that the trial court erred in establishing the lodestar amount and in applying a multiplier because neither the lodestar amount nor application of a multiplier is supported by competent substantial evidence. We agree and, for the reasons that follow, reverse and remand the trial court's order.

II. FACTUAL BACKGROUND

In September 2017, the Insureds’ home suffered damage from Hurricane Irma, and they submitted a claim with Lloyd's. Following an inspection, Lloyd's found that certain damage was not covered under the policy (e.g., wear and tear or pre-existing damage to the roof, the fence, and the shed) but that the covered damage totaled $2,033.48. Because this amount was below the deductible, Lloyd's made no payments to the Insureds, who in turn filed suit against Lloyd's in June 2018.

The case was heavily litigated prior to the November 2019 jury trial. In addition, following a failed mediation attempt, the parties continued (albeit unsuccessfully) to pursue a settlement.

The case proceeded to a five-day trial, after which the jury returned a verdict in favor of the Insureds for $52,000 (which was more than the Insureds’ estimate of $41,744.40 for hurricane-related damages). Lloyd's tendered payment of the verdict amount. The Insureds then filed a motion for attorney's fees and costs pursuant to section 627.428(1), Florida Statutes (2019),1 seeking a lodestar multiplier and prejudgment interest. Lloyd's conceded the issue of the Insureds’ entitlement to reasonable attorney's fees, but contested the lodestar amount and application of any multiplier.

The trial court held an evidentiary hearing. Significantly, the Insureds’ fee expert opined, in part, that "in an abundance of caution being overly conservative, I decided to cut 7.5 percent of all your hours, so that is what I am testifying to the Court." Based on this across-the-board reduction of hours, the Insureds’ expert concluded that the trial court should award a lodestar amount of $372,975 based on 657.1 hours.2 He provided no further explanation for why the billing was excessive nor did he itemize which amounts or services he found to be excessive.3 As for the multiplier, the Insureds’ expert opined that a 2.45 multiplier was appropriate because "this is the first case that I've been on that's gone to trial, and there are some issues that I have not seen before in other cases. I'm usually uber-conservative on the multiplier, and as you know, I have rejected cases where I don't think that there's multipliers that should apply. I think that a multiplier applies here, and I think it should be an aggressive multiplier." And while he acknowledged that there are other attorneys in South Florida "that do this"—i.e., represent insureds in first-party property insurance caseshe maintained that the Insureds’ counsel's firm is "one of the best shops" that works in this field and that they are trial lawyers as opposed to "settlement lawyers." Plaintiffs would have a "hard time," he continued, "getting some good lawyer" to take their case absent a multiplier.

In response, Lloyd's expert opined as to the lodestar amount, testifying, inter alia, that a reasonable amount of attorney's fees would have been $169,797.50 based on a total of 480.5 hours billed. Lloyd's expert undertook a side-by-side comparison of the work product and the amount of time billed and reviewed each individual time entry. He reviewed the work product, discovery conducted, and made notations on each invoice to denote entries that were problematic, such as for excessive time. He testified to the amount and reasons for each of the reductions he made for each individual attorney's billings.

Lloyd's expert also testified that a multiplier was not appropriate because there was no evidence the insureds were rejected by any other law firms, nor was there evidence presented that no other competent counsel in the South Florida community would have taken the case. As for the latter point, he listed several South Florida law firms capable of handling similar cases.

At the conclusion of the hearing, the trial court announced its ruling awarding attorney's fees based on a lodestar amount of $312,607 and applying a 1.8 multiplier for a total of $562,692 plus costs in the amount of $44,001 for a total award of $606,693. To arrive at this amount, the trial court stated it "cut back the hours across the board by 15%." Specifically, the trial court stated at the hearing:

I have looked through several of the time sheets . I've spent some time looking at this. It was a very contested trial, but I do agree that there is some double billing, and some extra billing.
As a result of that , I cut back the hours across the board by 15 percent , which is actually twice what the expert—or double the amount the [plaintiffs’] expert had advised.

(Emphasis added). The trial court found that a 1.8 multiplier was warranted, citing the difficulty of the case.

On April 28, 2020, the Insureds submitted a proposed final order with a cover letter, which noted that Lloyd's had objections to certain aspects of the proposed order. The same day, Lloyd's submitted a letter detailing its objections to the ruling and to the Insureds’ proposed order. Later that same night, the trial court signed the Insureds’ proposed order verbatim; even the caption of the court's order—"ORDER AWARDING ATTORNEY FEES (PLAINTIFF'S PROPOSED)"—remained unaltered.4 In the final order, the trial court awarded a total of $652,239 in attorneys’ fees and costs. The trial court later denied Lloyd's motion for rehearing, and this timely appeal followed.

III. DISCUSSION AND ANALYSIS

Both the fee award and application of a multiplier are reviewed for an abuse of discretion. Attorney's Title Ins. Fund, Inc. v. Landa-Posada, 984 So. 2d 641, 643 (Fla. 3d DCA 2008). See also St. Paul Mercury Ins. Co. v. Coconut Grove Bank, 106 So. 3d 452, 454 (Fla. 3d DCA 2009). As explained further below, the trial court abused its discretion in establishing the lodestar amount and in applying a contingency fee multiplier.

A. The Lodestar Amount

Lloyd's contends that the lodestar figure is not supported by competent substantial evidence where the Insureds’ fee expert admitted during his testimony that he did not conduct a line-item analysis of the time records as required, but instead simply reduced the hours billed by 7.5 percent with no proffered rationale for this reduction. Further, the trial court announced at the conclusion of the hearing that it was reducing the hours billed by an across-the-board cut of fifteen percent. As Lloyd's points out, we recently rejected this methodology in Universal Property & Casualty Insurance Co. v. Deshpande, 314 So. 3d 416 (Fla. 3d DCA 2020). See also Citizens Prop. Ins. Corp. v. Casanas, 336 So. 3d 746 (Fla. 3d DCA Oct. 27, 2021).

In Deshpande, this court reaffirmed the proper procedure for establishing a lodestar amount:

In determining the amount of attorneys’ fees to be awarded, a trial court is required to use the lodestar approach and consider the eight criteria set forth in Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). "Under Rowe, a trial court must first determine the lodestar amount, which is the number of attorney hours reasonably expended multiplied by a reasonable hourly rate." Joyce v. Federated Nat'l Ins. Co., 228 So. 3d 1122, 1126 (Fla. 2017) (citing Rowe, 472 So. 2d at 1150-51 ). "The trial court must set forth ‘specific findings’ as to its determination of the number of hours , the hourly rate, and any reduction or enhancement factors." Id. (citing Rowe, 472 So. 2d at 1151 ).

Id. at 419 (emphasis added). In the instant case—as in Deshpande —the lodestar amount is not supported by competent substantial evidence because the trial court did not make "specific findings" as to its determination of the number of hours and, instead, applied an arbitrary, across-the-board cut of fifteen percent.

In Deshpande, two months after the plaintiff filed suit against Lloyd's, he accepted a $25,000 proposal for settlement with an agreement to a hearing on fees. Following the hearing, the trial court adopted the plaintiff's fee expert's conclusions in every respect without explanation, e.g., applying a ten percent, across-the-board reduction and a 2.0 multiplier. As a result, the trial court awarded counsel $441,805.14 in fees on a $25,000 case that settled before trial.

The Insureds contend—and we acknowledge—that the instant case is distinguishable in that it was heavily litigated and tried over five days, whereas in Deshpande there was minimal discovery, two depositions taken, and no substantive motions or expert reports filed. Id. at 418. However, such a distinction is of no moment for purposes of this analysis, as the relevant facts are the same. Here—as in Deshpande —the Insureds’ expert did not conduct a line-by-line analysis of the billing but, instead, applied an arbitrary, 7.5 percent "blanket reduction to the number of hours expended." Id. at 420. And—as in Deshpande —the trial court adopted plaintiff's expert's arbitrary methodology. Id. Indeed, in the instant case the trial court did not merely adopt the expert's methodology, but added its own across-the-board reduction of fifteen percent.

The trial court's oral pronouncement and its findings in the order on appeal fail to satisfy the requirement that the trial court make "specific findings as to disputed...

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