State Farm Fla. Ins. Co. v. Alvarez
| Decision Date | 16 September 2015 |
| Docket Number | No. 3D14–1291.,3D14–1291. |
| Citation | 175 So.3d 352 |
| Parties | STATE FARM FLORIDA INSURANCE COMPANY, Appellant, v. Jose ALVAREZ and Martha Alvarez, Appellees. |
| Court | Florida District Court of Appeals |
STATE FARM FLORIDA INSURANCE COMPANY, Appellant
v.
Jose ALVAREZ and Martha Alvarez, Appellees.
No. 3D14–1291.
District Court of Appeal of Florida, Third District.
Sept. 16, 2015.
Ubaldo J. Perez, Jr. ; Russo Appellate Firm, P.A., and Elizabeth K. Russo, Miami, for appellant.
Diaz, Reus, Targ, LLP, and Juan Ramirez, Jr. ; Alvarez, Carbonell, Feltman & Da Silva, P.L., and Paul B. Feltman, for appellees.
Before ROTHENBERG, SALTER, and LOGUE, JJ.
Opinion
LOGUE, J.
State Farm Insurance Company (“Insurer”) appeals a final judgment for attorneys' fees entered in favor of Jose Alvarez and Martha Alvarez (collectively, “Insureds”). We affirm in part, reverse in part, and remand.
FACTS AND PROCEDURAL HISTORY
This case arises from the Insureds' supplemental claim for property damage to their home caused by Hurricane Wilma in 2005. The Insurer initially paid the Insureds $13,700. In 2009, however, the Insureds retained a public adjuster who prepared a report reflecting a claim for an additional $80,000 in damages to the property. Based on the public adjuster's report, the Insureds requested appraisal pursuant to the insurance policy. The Insurer denied the request. The Insureds then retained counsel, who brought suit in 2010 against the Insurer for breach of the policy's appraisal provision.
The Insureds' lawsuit rested largely on the report of the public adjuster. Their sworn proof of loss, prepared after the lawsuit was filed, made a demand reflecting the public adjuster's estimate. In response to the Insurer's requests for production and interrogatories, the Insureds largely referred to the public adjuster's estimate. The Insureds also listed the public adjuster as their expert witness for trial.
The case proceeded in an unremarkable and fairly straightforward manner. Apart from a successful, but non-dispositive motion to dismiss, and a heated hearing over whether appraisal had been waived, most of the court file concerned the Insurer's motions to compel the production of documents and the scheduling of the Insureds' and the public adjuster's depositions, which also involved several motions to compel.
After three years of litigation of this sort, the case was in a posture in which the Insureds claimed $80,000 and the Insurer offered $175. At mediation, the case settled for $10,000.
The Insureds then moved for attorneys' fees and costs under
section 627.428, Florida Statutes (2014), which provides for the award of reasonable attorneys' fees in favor of insureds who prevail in litigation against an insurer.1 Both sides presented expert testimony. The Insureds' attorneys presented time records reflecting approximately 225 hours expended. These hours included ten hours of senior partner time to draft a five-page complaint that appears to be a form complaint; seven hours spent by a senior partner to prepare a three-page motion to compel appraisal that appears to be a form motion and was never set for hearing; an additional eleven hours of senior partner and associate time to prepare a second motion to compel appraisal that is identical to the first one, which was also never set for hearing; and various extensive conferences between many lawyers without any indication of how those conferences advanced the case. In all, the records reflect that eleven different lawyers were consulted or worked on the file.
The Insureds' expert witness testified that 200 of the 225 hours billed were reasonable. He also testified regarding the need for a multiplier. He explained that a 1.5 multiplier was necessary because counsel with “specialized knowledge” of first-party property insurance cases would not represent the Insureds without the possibility of a multiplier.
After the evidentiary hearing, the trial court entered a final judgment for attorneys' fees in favor of the Insureds. The court adopted an hourly rate of $400 and agreed with the Insureds' expert witness that 200 hours billed were compensable. The court also awarded a contingency fee multiplier of 1.5, finding that competent counsel could not be retained without a multiplier; there was a substantial risk of non-payment; the likelihood of success warranted the multiplier, as did “the novelty and difficulty of the question involved in this matter and the results obtained.” It awarded $120,000 in fees. This appeal followed.
ANALYSIS
The Insurer challenges the trial court's findings with respect to the hourly rate of $400, the reasonableness of the 200 hours expended on the litigation, and the 1.5 multiplier. We will address each issue in turn. Before doing so, however, we note that a trial court's determination on these matters is reviewed for an abuse of discretion. Sunshine State Ins. Co. v. Davide, 117 So.3d 1142, 1144 (Fla. 3d DCA 2013). We apply such a highly deferential standard of review because of the trial court's “first-hand knowledge of the case,” “superior understanding of the litigation,” and “extensive contact with the parties and their counsel.” Centex–Rooney Const. Co. v. Martin Cnty., 725 So.2d 1255, 1259 (Fla. 4th DCA 1999). After all, “[t]he question of how much is a reasonable fee in a given case cannot be precisely answered.... [R]easonable judges can differ in opinion.” Universal Underwriters Ins. Co. v. Gorgei Enters., Inc., 345 So.2d 412, 414 (Fla. 2d DCA 1977).
However, “we are not required to abandon what we learned as lawyers or our common sense in evaluating the reasonableness of an award.” Trumbull Ins. Co. v. Wolentarski, 2 So.3d 1050, 1057 (Fla. 3d DCA 2009). There comes a point when hours have been unnecessarily billed to such an extent that the trial court's finding of a reasonable fee cannot be supported by the record. See Dalia v. Alvarez, 605 So.2d 1282, 1283 (Fla. 3d DCA 1992) (“A claim for excessive hours is subject to a reduction by the [appellate] court.”) (citing Fla. Patient's Comp. Fund
v. Rowe, 472 So.2d 1145, 1150 (Fla.1985) ). Moreover, the award of a multiplier must be reversed if no evidence supports a finding that the relevant market required a contingency fee multiplier to obtain competent counsel. USAA Cas. Ins. Co. v. Prime Care Chiropractic Enters, P.A., 93 So.3d 345, 347 (Fla. 2d DCA 2012).
A. The Hourly Rate.
The Insurer challenges the trial court's finding that $400 reflected a reasonable blended hourly rate for the various attorneys who were involved in the case, including several senior partners. Without extensive discussion, we reject the Insurer's argument on this point. Given our review of the entire record, no abuse of discretion occurred. See TRG Columbus Dev. Venture, Ltd. v. Sifontes, 163 So.3d 548, 552 (Fla. 3d DCA 2015) (holding the trial court did not abuse its discretion in awarding an hourly rate of $400); Davide, 117 So.3d at 1145 (affirming a $450 hourly rate in an insured's action against an insurer for breach of contract, bad faith, and to confirm an appraisal award). This conclusion is particularly inescapable because the hourly rate awarded to the Insureds' attorneys was on the lower end of the hourly rate range suggested by the Insurer's own expert witness.
B. The Reasonableness of the Hours.
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