Rynd v. Nationwide Mut. Fire Ins. Co., CASE No. 8:09-CV-1556-T-27TGW

• Decision Date: 25 January 2012
• Docket Number: CASE No. 8:09-CV-1556-T-27TGW
• Parties: WILLIAM P. RYND, Plaintiff, v. NATIONWIDE MUTUAL FIRE INS. CO., Defendant.
• Court: U.S. District Court — Middle District of Florida

WILLIAM P. RYND, Plaintiff,
v.
NATIONWIDE MUTUAL FIRE INS. CO., Defendant.

CASE No. 8:09-CV-1556-T-27TGW

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

January 25, 2012

REPORT AND RECOMMENDATION

The plaintiff, who was insured by the defendant under an automobile insurance policy, alleged in this lawsuit that the defendant acted in bad faith by failing to settle a personal injury claim against the plaintiff resulting from an automobile accident. A jury found in favor of the plaintiff on this claim.

The plaintiff has filed a Verified Motion for Attorney's Fees and Costs (Doc. 202). The defendant argues that the amount of the attorneys' fee is unreasonable and some of the costs are not recoverable (Doc. 219). The motion was referred to me for a report and recommendation (Doc. 215).

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Having considered the materials submitted and the governing legal standards, I recommend that the plaintiff be awarded an attorneys' fee of $218,616, and $12,464.32 in costs.

I.

On December 19, 2006, a pick-up truck driven by the plaintiff collided with a motorcycle operated by Melvin D. Crawford, resulting in serious injuries to Crawford (Doc. 2, ¶6). At the time of the collision, the plaintiff was insured by defendant Nationwide Mutual Fire Insurance Company under an automobile insurance policy which provided a maximum benefit of $100,000 per person for bodily injury (id., ¶¶7, 9). The plaintiff timely reported the accident to the defendant, which did not deny coverage (id., ¶¶8, 14). Crawford's injury claim, however, was not resolved. Consequently, Crawford filed a lawsuit against the plaintiff, which resulted in a jury award in favor of Crawford for over two million dollars, well in excess of the automobile insurance policy liability limit (id., ¶¶17, 18).

In July 2009, the plaintiff filed this lawsuit against Nationwide and attorney Sonya Wesner, who represented the plaintiff in the lawsuit by Crawford. Count I of the complaint alleged that Nationwide breached its duty of good faith under the automobile insurance policy by failing to, among other

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things, "settle [] Crawford's claims against the plaintiff within the available policy limits when it could have and should have done so" (id., ¶22e). Count II of the complaint alleged that attorney Wesner had a "conflict of interest" because she was employed by the defendant when she was assigned to represent the plaintiff in the lawsuit brought by Crawford, and that Wesner failed to use independent judgment to advise the plaintiff of opportunities which would have protected him from a judgment in excess of his policy limits (id., ¶¶34, 35). The plaintiff sought monetary damages equal to the amount of the excess judgment from Crawford's lawsuit (id., p. 9). The case was subsequently removed to federal court (Doc. 1).

The plaintiff voluntarily dismissed count II of the complaint against Wesner after Wesner filed a Motion to Dismiss or, for More Definite Statement (Docs. 14, 17, 18). A particularly contentious and protracted discovery period followed, during which counsel for both parties were admonished for being uncooperative (Doc. 53, p. 18; Doc. 75, pp. 20-21).¹ Furthermore, I expressed, on more than one occasion, that the plaintiff's

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discovery requests were overbroad, and sought irrelevant information (see, e.g., Doc. 53, pp. 9, 12; Doc. 75, pp. 8-11, 19-20).

In January 2011, attorneys Stephen Marino and Danya Pincavage from the Miami law firm of Ver Ploeg and Lumpkin, P.A. (VPL) joined solo practitioner Jason Mulholland as counsel for the plaintiff in this case. In June 2011, the plaintiff's claim was tried before a jury. After a three-day trial, the jury returned a verdict for the plaintiff, finding that the defendant (Doc. 195):

act[ed] in bad faith by failing to settle the claim brought by Melvin Crawford within the policy limits when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for his interests.

A judgment was entered in favor of the plaintiff in the amount of $2,215,914.77 (Doc. 217).

The plaintiff subsequently filed a Verified Motion for Attorney's Fees and Costs (Doc. 202). He requests an attorneys' fee of $778,308, which includes a contingency risk multiplier of 2.0, and costs of $13,502.12 (id., pp. 10, 12). The defendant opposes the motion, arguing that a reasonable attorneys' fee in this case is $139,222.50, and that the reimbursable costs total $10,293.09 (Doc. 219, p. 20).

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In support of their contentions, both parties submitted expert opinions, and plaintiff's counsel submitted their time records (Docs. 202-1, 202-2, 216-2, 220-1).² The plaintiff requested, and was granted, an opportunity to file a reply to the defendant's opposition memorandum (Doc. 225). Oral argument was subsequently conducted on the motion.

II.

Plaintiff's counsel seeks an award of an attorneys' fee under §627.428(1), Fla. Stat., which provides in pertinent part:

Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named ... insured ... under a policy or contract executed by the insurer, the trial court ... shall adjudge or decree against the insurer and in favor of the insured ... a reasonable sum as fees or compensation for the insured's ... attorney prosecuting the suit in which the recovery is had.

Based on the jury verdict, the plaintiff is entitled to receive from the defendant an attorneys' fee under this statute. Further, the defendant does not dispute the plaintiff's entitlement to an attorneys' fee; rather, its challenge is solely to the amount (Doc. 219, p. 1).

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Section 627.428, Fla. Stat., directs that the prevailing insured be awarded a "reasonable" attorneys' fee. Florida has adopted the federal lodestar approach as the foundation for setting reasonable fee awards. Florida Patient's Compensation Fund v. Rowe, 472 So.2d 1145, 1150 (Fla. 1985); Bell v. U.S.B. Acquisition Co., Inc., 734 So.2d 403, 406 (Fla. 1999).³ This method requires the court to determine a "lodestar figure" by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate for the services of the prevailing party's attorney. Id. The fee applicant bears the burden of presenting satisfactory evidence to establish that the requested rate is in accord with the prevailing market rate and that the hours are reasonable. Norman v. Housing Authority of the City of Montgomery, 836 F.2d 1292, 1303 (11^th Cir. 1998); Florida Patient's Compensation Fund v. Rowe, supra, 472 So.2d at 1150-51.

In computing the lodestar amount, the following factors, enumerated in Rule 4-1.5 of the Rules Regulating the Florida Bar, are to be considered (Standard Guaranty Ins. Co. v. Quanstrom, 555 So. 2d 828, 830-31 n.3 (Fla. 1990)):

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(1) The time and labor required, the novelty, complexity, and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) The likelihood that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) The fee, or rate of fee, customarily charged in the locality for legal services of a comparable or similar nature;

(4) The significance of, or amount involved in, the subject matter of the representation, the responsibility involved in the representation, and the results obtained;

(5) The time limitations imposed by the client or by the circumstances and, as between attorney and client, any additional or special time demands or requests of the attorney by the client;

(6) The nature and length of the professional relationship with the client;

(7) The experience, reputation, diligence, and ability of the lawyer or lawyers performing the service and the skill, expertise, or efficiency of effort reflected in the actual providing of such services; and

(8) Whether the fee is fixed or contingent....

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Once the lodestar is determined, the court must consider in contingency fee cases whether an enhancement of the lodestar is appropriate. Standard Guaranty Ins. Co. v. Quanstrom, supra, 555 So.2d at 831.

The plaintiff argues that he is entitled to a court awarded attorneys' fee of $778,308, which comprises a lodestar of $389,154 multiplied by two (Doc. 202, p. 10). The defendant argues that a reasonable attorneys' fee in this case is a lodestar of $139,222.50, and that no multiplier of this sum is warranted (see Doc. 219, p. 20).

A. REASONABLENESS OF THE NUMBER OF HOURS EXPENDED

Florida courts first calculate the number of hours reasonably expended on the litigation. In this regard, "the attorney fee applicant should present records detailing the amount of work performed. Counsel is expected, of course, to claim only those hours that he could properly bill to his client. Inadequate documentation may result in a reduction in the number of hours claimed, as will a claim for hours that the court finds to be excessive or unnecessary." Florida Patient's Compensation Fund v. Rowe, supra, 472 So.2d at 1150 (citations omitted). The fee opponent then "has the burden of pointing out with specificity which hours should be deducted." Centex-Rooney

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Const. Co., Inc. v. Martin County, 725 So.2d 1255, 1259 (Fla. App. 1999); see also Norman v. Housing Authority of the City of Montgomery, supra, 836 F.2d at 1301.

The plaintiff in this case seeks compensation for 1098.5 hours of legal work on this matter, comprising 922.6 hours billed by three attorneys and 175.8 hours by two paralegals (Doc. 202, p. 8). This time was spent on all facets of the litigation, including pre-suit activities, lengthy discovery practice, and a three-day jury trial. Specifically, the attorneys seek compensation for the following number of hours: Jason Mulholland-535.1 hours, Stephen A. Marino, Jr. -127.5 hours, and Danya J. Pincavage-260.1 hours (id.). Additionally, the plaintiff seeks reimbursement for 152.3 hours of services by paralegal Linda...