Greene v. Maharaja of India, Inc.

• Decision Date: 07 March 1990
• Docket Number: No. 88-296,88-296
• Parties: 15 Fla. L. Weekly D636 Cherri J. GREENE, Appellant, v. MAHARAJA OF INDIA, INC. and Aetna Life & Casualty, Appellees.
• Court: Florida District Court of Appeals

Page 461

558 So.2d 461

15 Fla. L. Weekly D636

Cherri J. GREENE, Appellant, v. MAHARAJA OF INDIA, INC. and Aetna Life & Casualty, Appellees.

No. 88-296.

District Court of Appeal of Florida,

First District.

March 7, 1990.

Rehearing Denied April 12, 1990.

Robert B. Staats of Staats, Overstreet, White & Clarke, Panama City, for appellant.

James N. McConnaughhay and Gus Vincent Soto of Karl, McConnaughhay, Roland & Maida, P.A., Tallahassee, for appellees.

THOMPSON, Judge.

Claimant appeals a workers' compensation order awarding her an attorney's fee of $75,000.00; 12 percent interest on unpaid medical bills and costs; and allowing the employer/carrier (EC) a credit against future compensation due in the amount of $25,000.00 which was paid in partial settlement of claimant's tort action against various parties. We affirm in part and reverse in part.

The claimant contends: (1) that when the EC denies coverage to a permanent totally disabled claimant on the basis that the claimant's injuries did not occur within the scope and course of her employment, the attorney's fees awarded to claimant in successfully defeating the EC's contentions should be based on the present value of all past and future benefits paid on behalf of or received by the claimant, including the present value of all future remedial care and attendant care; (2) that the claimant is entitled to interest on all sums paid to her, or on her behalf, which interest is to be computed from the date the sums should have been paid, to the date actually paid, where the EC has unsuccessfully denied coverage; and (3) that Aetna Life & Casualty (Aetna) failed to offer any proof that any sums were paid by Travelers Insurance Company (Travelers) on behalf of Maharaja of India, Inc. (Maharaja) and that Aetna was not therefore entitled, as a matter of law, to any setoff. The EC contend on cross-appeal that they are entitled to a $125,000.00 offset, the total amount received by the claimant in settlement of her tort action, rather than the $25,000.00 offset provided by the final order.

The claimant was rendered a quadriplegic in an automobile accident occurring on January 20, 1983. The car in which she was riding had been provided by the claimant's employer and was being driven by a coworker. Following the accident the EC voluntarily provided workers' compensation benefits which the claimant declined, noting that she reserved the right to file a claim later.

Approximately nine months after the accident claimant filed a civil suit in circuit court for her personal injuries against the employer, its automobile insurer, her coworker, her coworkers' insurer and Toyota, as well as against Manu and Kumar Samtani (Samtanis), the individuals who formed the corporate employer, and against another corporation, Vaco, Inc., which was also formed by the Samtanis. Claimant contended the accident did not arise out of and in the course of her employment and that she could therefore sue her employer and coworker. By amended complaint the insurers were subsequently dropped as parties. In December 1984 claimant entered into a settlement agreement with all of the defendants except Toyota. The claimant's products liability suit against Toyota eventually resulted in a defense verdict.

On January 7, 1985, claimant filed a claim for remedial treatment, temporary total disability (TTD) and permanent total disability (PTD) benefits and an application for hearing. The EC denied that the claimant was injured in an accident arising out of and in the course of her employment as claimant had refused benefits and pursued a civil action against her employer, her coworker and others. As a result, the EC argued claimant was now estopped from claiming workers' compensation benefits. The Judge of Compensation Claims (JCC) dismissed the claim with prejudice finding that although claimant was injured in the course and scope of her employment, she had elected her remedy by pursuing a circuit court action and was thereby estopped from asserting entitlement to workers' compensation benefits in light of her circuit court denial that she was injured in the course and scope of her employment. The claimant appealed, and by a decision rendered March 18, 1986, this court reversed the dismissal of the claim. Greene v. Maharaja of India, 485 So.2d 1329 (Fla. 1st DCA), review denied, 494 So.2d 1151 (Fla.1986) (Greene I ). After the Supreme Court of Florida denied review of this court's decision the cause was remanded to the JCC for further proceedings.

The EC then accepted the claimant as TTD, provided nursing services and agreed to pay claimant's medical bills. On September 10, 1987, claimant was accepted as PTD. The remaining claim, for an increase in the amount of attendant care benefits for claimant's mother, was dropped at the hearing. Therefore, the final hearing held December 8, 1987, concerned only the issues of the amount of attorney's fees and costs due claimant.

On the attorney's fee issue, claimant's attorney, Robert B. Staats, testified he has handled claimants' workers' compensation cases for 22 years. He has represented the claimant since 1983, although her civil suit was handled as a separate case. Staats submitted three affidavits. The first showed payments of Aetna to the claimant totaling $319,697.91, as well as $20,744.50 claimed but unpaid. The second affidavit reflected Staats' costs expended totaling $121,270.74 and time expended of 448.58 hours. An additional affidavit added 101.25 hours. Staats testified that the claimant's civil settlement was comprised of $100,000.00 from Travelers; $15,000.00 from Kumar and Manu Samtani, individually; and $10,000.00 from State Farm Fire and Casualty Company (State Farm), the insurer of claimant's coworker who was driving the car at the time of the accident. Staats' office received one-third of the settlement as its contingency fee. His normal hourly rate is $125.00-150.00, but the claimant's case was taken on a total contingency basis. The case was novel in that it represented both unique factual and legal issues. He had never represented a quadriplegic before, and the claimant was insistent that the money be obtained quickly so that she could undergo experimental surgery in New York. The customary hourly rate in the community for comparable attorneys is $150.00. Staats also submitted copies of correspondence detailing the post-appeal settlement negotiations with Aetna for the workers' compensation claim filed January 7, 1985, and settled June 19, 1987. On cross-examination he acknowledged that Aetna had initially tendered benefits without any claim being filed; that the January 7, 1985, claim included remedial care but did not specifically seek attendant care benefits; that the EC had immediately offered 24-hour attendant care; and that only the amount of such care was at issue. He also acknowledged that his time sheets included hours spent on the prior appeal, but he explained he felt like the fees awarded by the First District Court of Appeal and the Supreme Court of Florida did not adequately compensate him for his work. He acknowledged that his estimate of the total value of benefits obtained in the amount of approximately $3 million was based primarily on the estimated value of the attendant care.

Stephen Marc Slepin testified on behalf of the claimant that he is an attorney with 20 years experience in administrative and workers' compensation law. In reaching his opinion as to a reasonable attorney's fee he took into consideration the claimant's life expectancy as a quadriplegic, the value of nursing services and the fact that all benefits were "denied by Aetna," and that "all benefits were won by claimant's counsel." He also applied all the factors to be considered pursuant to Chapter 440: the contingency nature of the claim, length of representation, hours expended, hourly rates, the "landmark decision" in the prior appeal, and the claimant's counsel's reputation and skill. Total benefits to date are $340,000.00, and total lifetime benefits are estimated to be $3,884,689.00. He found that 350 hours, "a conservative figure," would be a reasonable amount of time to have been expended on the case. A reasonable fee would be $646,936.43, with the lowest possible fee being $475,000.00, and the highest being $713,000.00. He included the time Staats spent preparing for the attorney's fees hearing. If attendant care benefits were excluded, a reasonable fee is $375,000.00

Douglas Brown testified on behalf of the EC that he is an attorney with 21 years experience in workers' compensation cases and that he has reviewed the record. Considering Lee Engineering & Construction Company v. Fellows, 209 So.2d 454 (Fla.1968), and the statutory factors in § 440.34, Fla.Stat., he determined that a reasonable fee would be $50,000.00. He based this figure on the fact that this case was somewhat unusual because of the novelty and difficulty of the question presented by the prior appeal, although he discounted the time actually spent on the appeals based on the assumption that the District Court of Appeal and the Supreme Court had awarded a fee. Excluding the appellate proceedings, 100-150 hours would be a reasonable number to expend. He does not believe the employment by the claimant would preclude any other employment or antagonize current clients. Fees sought in such cases are usually based on the statutory fee schedule of $200.00 per hour. Due to the severe nature of claimant's injuries, the demands placed on the attorney would be greater than usual because of the emotional component of such a devastating injury. The amount in controversy calculated by Brown included disability and medical benefits but excluded attendant care because the EC paid it before any claim was ever filed, and the claim proceeded to hearing with the EC not controverting the claimant's entitlement to attendant care. Brown stated it was difficult to estimate the present value of...