Sarkis v. Allstate Ins. Co.

• Decision Date: 02 October 2003
• Docket Number: No. SC02-428.,SC02-428.
• Citation: 863 So.2d 210
• Parties: Sally SARKIS, Petitioner, v. ALLSTATE INSURANCE COMPANY, Respondent.
• Court: Florida Supreme Court

863 So.2d 210

Sally SARKIS, Petitioner, v. ALLSTATE INSURANCE COMPANY, Respondent.

No. SC02-428.

Supreme Court of Florida.

October 2, 2003.

Julie H. Littky-Rubin of Lytal, Reiter, Clark, Fountain & Williams, LLP, West Palm Beach, FL; and Robert M. Moletteire of Graham, Moletteire & Torpy, P.A., Melbourne, FL, for Petitioner.

Charles W. Hall of Fowler White Boggs Banker P.A., St. Petersburg, FL; and Richard A. Sherman, Fort Lauderdale, FL, for Respondent.

Philip M. Burlington of Caruso, Burlington, Bohn & Compiani, P.A., West Palm Beach, FL, for The Academy of Florida Trial Lawyers, Amicus Curiae.

Roy C. Young of Young, Van Assenderp, Varnadoe & Anderson, P.A., Tallahassee, FL, for Florida Chamber of Commerce, Amicus Curiae.

Wendy F. Lumish of Carlton Fields, P.A., Miami, FL, for Florida Defense Lawyers Association, Amicus Curiae.

PER CURIAM.

We have for review Allstate Insurance Co. v. Sarkis, 809 So.2d 6 (Fla. 5th DCA 2001), which expressly and directly conflicts with Pirelli Armstrong Tire Corp. v. Jensen, 752 So.2d 1275 (Fla. 2d DCA 2000), review dismissed, 777 So.2d 973 (Fla.2001), and Collins v. Wilkins, 664 So.2d 14 (Fla. 4th DCA 1995). We have jurisdiction. See art. V, § 3(b)(3), Fla. Const.

The petitioner, Sally Sarkis (Sarkis), was involved in an automobile accident, as a result of which she suffered damages. Sarkis brought an action against her insurer, respondent Allstate Insurance Company (Allstate), requesting compensation based on her uninsured motorist coverage.

Prior to trial, Sarkis filed an offer of judgment for $10,000, pursuant to section 768.79, Florida Statutes (1997), and Florida Rule of Civil Procedure 1.442. This offer was rejected by Allstate. The case proceeded to trial, and Sarkis was ultimately awarded a net judgment of $87,700, which was twenty-five percent greater than her offer of judgment. Sarkis therefore moved for an award of attorney fees and costs.

The trial court found that the jury verdict returned on behalf of Sarkis was twenty-five percent greater than the offer of judgment, thereby entitling Sarkis to an award of attorney fees pursuant to section 768.79 and rule 1.442. In considering whether to apply a contingency risk multiplier to Sarkis's award of attorney fees, the trial court stated:

4. The Court has also reviewed a number of attorney's fee orders awarding Robert M. Moletteire, Esquire a reasonable hourly rate of $350.00. More particularly, two of the orders that are a part of this file contain stipulations by ALLLSTATE INSURANCE COMPANY that a reasonable hourly rate for Robert M. Moletteire in the handling of a personal injury protection lawsuit was $350.00 per hour.

5. The Court further finds, based upon the testimony of Robert M. Moletteire, Esquire, counsel for Plaintiff, and O. John Alpizar, Esquire, that the relevant market in Brevard County required a multiplier in order for Plaintiff, SALLY SARKIS, to obtain competent counsel to try this underinsured motorist claim. Plaintiff has presented substantial evidence in the record that she would otherwise [have] been unable to afford competent counsel. The Court finds that counsel for the Plaintiff was unable to mitigate the risk of nonpayment in any way.

6. The Court finds that Plaintiff has presented ample testimony from the record that Defendant, ALLSTATE INSURANCE COMPANY, as a practice on a national level as well as more particularly in Brevard County, vigorously defends claims of the nature brought by the Plaintiff in this case. Plaintiff presented ample testimony in the record that there is a strong likelihood that any claim made against Defendant, ALLSTATE INSURANCE COMPANY, will require a trial. Counsel for Plaintiff was aware of that at the outset of accepting to represent the Plaintiff in this claim.

7. The Court further finds that the record speaks for itself that Plaintiff obtained a successful result in the trial of this case.

8. The Court further finds the following facts presented at trial to be important additional factors in determining a contingency risk multiplier:

a. Plaintiff, SALLY SARKIS, had a pre-existing complaint of low back pain prior to the accident that gave rise to this lawsuit.

b. That the jury heard testimony that Ms. Sarkis had been involved in 2 to 3 prior accidents involving personal injury to her neck and back.

c. That Defendant vigorously argued Plaintiff's low back injury was not due to the automobile accident that was the subject matter of this lawsuit, but instead was due to degeneration and prior traumatic events.

IT IS HEREBY ORDERED AND ADJUDGED that the following attorney's fees award be made.

1. Hours reasonably incurred: 167 hours Reasonable hourly rate: 350.00 per hour Lodestar: $58,450.00 Contingency Risk Multiplier: 1.5 Total Attorney's Fees: $87,675.00

Sarkis v. State, No. 97-10784-CA-H (Fla. 18th Cir. Ct. order filed July 11, 2000).

Allstate appealed the trial court's award of attorney fees to the Fifth District Court of Appeal. The district court, sitting en banc, reversed the trial court's order, holding as a matter of law that contingency risk multipliers are not to be used to compute attorney fees under section 768.79, Florida Statutes. Sarkis, 809 So.2d at 8. The court adopted the dissenting view of Judge Casanueva in Pirelli Armstrong Tire, 752 So.2d at 1277 (Casanueva, J., concurring in part and dissenting in part), that neither Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990), nor section 768.79 authorizes the use of contingency risk multipliers in calculating attorney fees awarded under the offer of judgment statute.¹ In so holding, the court receded from its prior decisions in Garrett v. Mohammed, 686 So.2d 629 (Fla. 5th DCA 1996); Strahan v. Gauldin, 756 So.2d 158 (Fla. 5th DCA 2000); and Internal Medicine Specialists, P.A. v. Figueroa, 781 So.2d 1117 (Fla. 5th DCA 2001). The district court further acknowledged conflict with Pirelli and Collins.

The issue of the use of a multiplier to calculate the amount of an award of reasonable attorney fees on the basis of the authority of section 768.79 and rule 1.442 has been the subject of a multiplicity of opinions in the district courts. In 1995, the Fourth District Court of Appeal issued its opinion in Collins v. Wilkins, 664 So.2d 14 (Fla. 4th DCA 1995). In a brief opinion, the district court stated:

The statute provides:

When determining the reasonableness of an award of attorney's fees pursuant to this section, the court shall consider, along with all other relevant criteria, the following additional factors:

§ 768.79(7)(b), Fla. Stat. (1993) (emphasis supplied). The statute follows with enumerated additional factors for the court to consider. However, these are not exclusive but, as the statute says, must be considered with the other relevant criteria. Since the statute also refers the court to the guidelines promulgated by the supreme court in determining a reasonable fee, see section 768.79(6)(a), (b), Florida Statutes (1993), we look to the Rules of Professional Conduct, Rule 4-1.5, Fees for Legal Services, for the factors to be considered in determining a reasonable fee. These include whether or not the fee is fixed or contingent. Rule 4-1.5(b)(8). The rule also specifies that all factors should be considered in setting a reasonable fee, "and may be applied, in justification of a fee higher or lower than that which would result from application of only the time and rate factors." Rule 4-1.5(c). Therefore, we conclude that the legislature authorized a trial court to consider the application of a contingency risk factor as one criterion which may be applied in determining a reasonable fee under section 768.79. See also Standard Guaranty Ins. Co. v. Quanstrom, 555 So.2d 828, 831 (Fla.1990).

Collins, 664 So.2d at 15.

Recently, in Island Hoppers, Ltd. v. Keith, 820 So.2d 967 (Fla. 4th DCA 2002), the Fourth District again considered the application of a multiplier in this context and provided a more extensive analysis. The district court wrote:

This court addressed the applicability of a contingency risk multiplier in the offer of judgment context in Collins v. Wilkins, 664 So.2d 14 (Fla. 4th DCA 1995).... [W]e concluded that the legislature had authorized a trial court to consider the application of a contingency risk factor as one criterion which may be applied in determining a reasonable fee under section 768.79. Collins, 664 So.2d at 15.

....

... We see no reason to recede from our prior holding, especially where Judge Casanueva expressly admits in his dissenting opinion, "[B]y referring to the fees for legal services rule, the Fourth ... assert[s] that the legislature statutorily authorized trial courts to apply a contingency risk multiplier in determining a reasonable fee under section 768.79 ... arguably, a reading of the fee factors promulgated by our supreme court could support this holding...." Pirelli Armstrong, 752 So.2d at 1277. Thus, we maintain trial courts are legally authorized (by the legislature) to consider application of a contingency risk multiplier under the offer of judgment statute.

Furthermore, we find no logical inconsistency in the application of the Quanstrom factual requirements in the offer of judgment context. We recognize whenever a potential client walks through an attorney's door for the first time, a wide array of factors enter the calculus as to whether or not counsel will in fact decide to undertake that representation. Rowe and Quanstrom recognized potential clients whose cases seem to have a relatively low likelihood of success at the outset, may face considerable difficulties in securing counsel, and may often be unable to afford competent counsel. As such, the multiplier was established, to serve as an incentive of sorts, for attorneys to undertake representation where a risk of nonpayment was established. Although an attorney contemplating representation of a particular client can never "know" for certain

...