Compass Constr. Inc. v. First Baptist Church of Cape Coral, No. 2D09–5444.

CourtCourt of Appeal of Florida (US)
Writing for the CourtWALLACE, Judge.
Citation61 So.3d 1273
PartiesCOMPASS CONSTRUCTION, INC., Appellant,v.FIRST BAPTIST CHURCH OF CAPE CORAL, FLORIDA, INC., Appellee.
Docket NumberNo. 2D09–5444.
Decision Date27 May 2011

61 So.3d 1273

COMPASS CONSTRUCTION, INC., Appellant,
v.
FIRST BAPTIST CHURCH OF CAPE CORAL, FLORIDA, INC., Appellee.

No. 2D09–5444.

District Court of Appeal of Florida, Second District.

May 27, 2011.


[61 So.3d 1274]

Curtright C. Truitt of Curtright C. Truitt, P.A., Fort Myers, for Appellant.W. Gus Belcher, II, of Nuckolls, Johnson, Belcher & Ferrante, P.A., Fort Myers, for Appellee.WALLACE, Judge.

Compass Construction, Inc., challenges the amount of the attorney's fees awarded to First Baptist Church of Cape Coral, Florida, Inc., in an action for indemnification. The fees awarded to First Baptist substantially exceeded the amount actually charged by First Baptist's attorney for his services. Because the trial court was limited by the noncontingent fee agreement between First Baptist and its attorney in making the award of fees against Compass, we reverse the final judgment for attorney's fees.

I. THE FACTS AND PROCEDURAL HISTORY

Compass and First Baptist were both named as defendants in an action arising from a construction accident. First Baptist defended the main action and also pursued a cross-claim for contractual indemnity against Compass. Ultimately, First Baptist prevailed against the plaintiff in the main action and on its cross-claim for indemnity.

Compass conceded that First Baptist was entitled to an award of attorney's fees as part of its indemnity claim. However, the parties disagreed about the appropriate hourly rate at which the fee for First Baptist's attorney should be calculated. Compass argued that the fee for First Baptist's attorney must be limited to the hourly rate actually charged and billed to the client. First Baptist contended that its attorney was entitled to a fee calculated on the basis of a substantially higher hourly rate.

First Baptist had insurance coverage for the claim made against it in the main action. The insurance company assigned an attorney to represent First Baptist and provided a defense to the plaintiff's claims. The attorney assigned to the case had a written fee agreement with the insurance company for the defense of personal injury and wrongful death cases brought against the company's insureds, such as First Baptist. In accordance with the agreement, the attorney billed the insurance company for his services at the rate of $170 per hour. The insurance company's obligation to pay the agreed hourly rate was not contingent in any respect.

The agreement contained an additional provision which—in the attorney's words—

[61 So.3d 1275]

“specifically states that if someone other than the insurance company is to pay the fees, then the amount will be the greater of the amount charged the insurance company and the amount to be determined by the Court.” Such provisions are generally seen in contingency fee agreements. See Kaufman v. MacDonald, 557 So.2d 572 (Fla.1990); Tampa Bay Publ'ns, Inc. v. Watkins, 549 So.2d 745 (Fla. 2d DCA 1989). This court has previously described a similar provision as “an alternative fee recovery clause.” Watkins, 549 So.2d at 747.

After a hearing, the trial court ruled that First Baptist could recover from Compass “a reasonable fee to be later determined by this Court even if that amount is greater than the amount [First Baptist's] counsel charged First Baptist Church.” The trial court determined at a later hearing that First Baptist's attorney reasonably and necessarily expended 115.40 hours in the defense of the plaintiff's claims and that a reasonable hourly rate for the services of First Baptist's counsel was $350 per hour. Based on these findings, the trial court entered a final judgment awarding First Baptist attorney's fees in the amount of $40,390. This appeal followed.

II. THE STANDARD OF REVIEW

The issue of First Baptist's right to a fee award calculated at an hourly rate higher than the rate established in the controlling, noncontingent fee agreement is a question of law. Accordingly, our review of this question is de novo. See Ware v. Land Title Co. of Fla., Inc., 582 So.2d 46 (Fla. 2d DCA 1991).

III. DISCUSSION

In the landmark case of Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145 (Fla.1985), the Supreme Court of Florida established a limit on court-awarded attorney's fees “by holding that ‘in no case should the court-awarded fee exceed the fee agreement reached by the attorney and his client.’ ” Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828, 831 (Fla.1990) (quoting Rowe, 472 So.2d at 1151); see also Perez–Borroto v. Brea, 544 So.2d 1022, 1023 (Fla.1989) (holding that a noncontingent fee agreement between an attorney and the client limits the trial court when it applies the principles of Rowe to determine the amount of a court-awarded attorney's fee). In this case, the trial court calculated the fee awarded to First Baptist at an hourly rate that was more than double the noncontingent, hourly rate fee arrangement negotiated by the attorney and First Baptist's insurance company. In awarding fees to First Baptist at an hourly rate that exceeded the rate agreed to by First Baptist's attorney, the trial court erred.

On appeal, First Baptist does not argue that it was entitled to the application of a contingency risk multiplier in determining the amount of its court-awarded fee. Such an argument would fail because there was no risk of nonpayment in the arrangement between the attorney and First Baptist's insurance company. Under the fee agreement, the attorney was entitled to payment at his hourly rate regardless of the outcome of the case. Absent a risk of nonpayment, the application of a contingency risk multiplier in determining the amount of a court-awarded fee is not warranted. See Quanstrom, 555 So.2d at 835; Wolfe v. Nazaire, 758 So.2d 730, 734 (Fla. 4th DCA 2000) (Farmer, J., concurring specially).

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2 practice notes
  • First Baptist Church of Cape Coral, Fla., Inc. v. Compass Constr., Inc., Nos. SC11–1278
    • United States
    • United States State Supreme Court of Florida
    • May 30, 2013
    ...the Second District Court of Appeal's decisions in Compass Construction, Inc. v. First Baptist Church of Cape Coral, Florida, Inc., 61 So.3d 1273 (Fla. 2d DCA 2011), and Compass Construction, Inc. v. First Baptist Church of Cape Coral, Florida, Inc., 61 So.3d 497 (Fla. 2d DCA 2011). The Sec......
  • Compass Constr. Inc. v. First Baptist Church of Cape Coral, No. 2D09–5455.
    • United States
    • Court of Appeal of Florida (US)
    • May 27, 2011
    ...agreed hourly rate stated in the applicable fee agreement. See Compass Constr., Inc. v. First Baptist Church of Cape Coral, Fla., Inc., 61 So.3d 1273, 2011 WL 2091149 (Fla. 2d DCA 2011). We certify that our decision is in direct conflict with the Fourth District's decision in Wolfe v. Nazai......
2 cases
  • First Baptist Church of Cape Coral, Fla., Inc. v. Compass Constr., Inc., Nos. SC11–1278
    • United States
    • United States State Supreme Court of Florida
    • May 30, 2013
    ...the Second District Court of Appeal's decisions in Compass Construction, Inc. v. First Baptist Church of Cape Coral, Florida, Inc., 61 So.3d 1273 (Fla. 2d DCA 2011), and Compass Construction, Inc. v. First Baptist Church of Cape Coral, Florida, Inc., 61 So.3d 497 (Fla. 2d DCA 2011). The Sec......
  • Compass Constr. Inc. v. First Baptist Church of Cape Coral, No. 2D09–5455.
    • United States
    • Court of Appeal of Florida (US)
    • May 27, 2011
    ...agreed hourly rate stated in the applicable fee agreement. See Compass Constr., Inc. v. First Baptist Church of Cape Coral, Fla., Inc., 61 So.3d 1273, 2011 WL 2091149 (Fla. 2d DCA 2011). We certify that our decision is in direct conflict with the Fourth District's decision in Wolfe v. Nazai......

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