Wagner v. Group

• Decision Date: 07 April 2011
• Docket Number: No. SC08–1525.,SC08–1525.
• Citation: 64 So.3d 1187
• Court: Florida Supreme Court
• Parties: WAGNER, VAUGHAN, McLAUGHLIN & BRENNAN, P.A., Petitioner,v.KENNEDY LAW GROUP, Respondent.

64 So.3d 1187

WAGNER, VAUGHAN, McLAUGHLIN & BRENNAN, P.A., Petitioner,

v.KENNEDY LAW GROUP, Respondent.

No. SC08–1525.

Supreme Court of Florida.

April 7, 2011.

Joel D. Eaton and Stephen F. Rosenthal of Podhurst Orseck, P.A., Miami, FL, for Petitioner.Steven L. Hearn and Jeanne A. McLean of Steven L. Hearn, P.A., Tampa, FL, for Respondent.QUINCE, J.

The law firm of Wagner, Vaughan, McLaughlin, and Brennan seeks review of the decision of the Second District Court of Appeal in Wagner, Vaughn, McLaughlin & Brennan, P.A. v. Kennedy Law Group, 987 So.2d 741, 744 (Fla. 2d DCA 2008), on the ground that the decision expressly and directly conflicts with the decision of the Third District Court of Appeal in Perez v. George, Hartz, Lundeen, Flagg & Fulmer, 662 So.2d 361 (Fla. 3d DCA 1995), on a question of law. We have jurisdiction. See art. V, § 3(b)(3), Fla. Const. For the reasons stated below, we approve in part and quash in part the decision of the Second District.

FACTUAL AND PROCEDURAL HISTORY

The underlying case involves the application of section 768.26, Florida Statutes (2005), the attorney fees provision of the Florida Wrongful Death Act (the Act), in a wrongful death action that settled before suit was filed and in which the survivors were represented by separate counsel. The case stems from the deaths of Robert and Thelma Elmore as the result of an automobile accident that occurred in June 2005. The Elmores were survived by three adult sons, Gary, Larry, and Robert. In August 2005, Gary was appointed the sole personal representative of the Elmores' estates, pursuant to a provision in the Elmores' wills. Larry and Robert both signed forms approving Gary's appointment as the personal representative.

Gary retained the Kennedy Law Group (KLG) to represent him in his capacity as personal representative. KLG negotiated a settlement for the full proceeds of the accident tortfeasor's bodily injury insurance policy and distributed the net proceeds to Gary, who in turn divided the proceeds equally among the three brothers on August 19, 2005.

On August 17, 2005, an attorney from the law firm of Wagner, Vaughan, McLaughlin & Brennan, P.A. (the Wagner firm) wrote KLG to inform them that the Wagner firm represented Larry Elmore. The Wagner firm also proposed a fee-sharing arrangement between the law firms for a wrongful death action. The Wagner firm suggested that the two firms participate equally in handling the action and split the attorney's fee for whatever recovery was obtained for Gary and Larry Elmore. KLG did not respond to the letter.

On the day that Larry received his share of the proceeds from the bodily injury settlement, the Wagner firm wrote to the attorney who represented the Elmores' estates in the probate action. The letter stated that Larry did “not approve of the distribution apportionment,” that Larry should have been given an opportunity to object to the apportionment of the funds in the probate court, and that the probate court was required to approve the disbursement of the funds from the settlement. The Wagner firm also copied the letter to KLG and informed KLG that it did not have the authority to settle on behalf of Larry. The Wagner firm requested that KLG immediately stop payment on the settlement checks and take no further action regarding the claim.

The Wagner firm then filed a petition in the probate court seeking the removal of Gary as the personal representative and the return of the settlement proceeds to the trust account until Larry's objections could be heard. The probate court denied the petition as procedurally deficient, and the Wagner firm made no further objections to the distribution of the settlement proceeds. Larry cashed his settlement check without taking any further action in the courts.

Shortly thereafter, KLG made a demand upon the Elmores' automobile insurer for $2 million in uninsured motorist insurance proceeds. The insurer requested pre-suit mediation. On the morning of mediation, Robert Elmore retained the same Wagner firm attorney representing Larry to also represent him in the proceedings. The Wagner firm and KLG accompanied the three Elmore brothers to the mediation, which produced a settlement of $1.23 million.

The Wagner firm memorialized Larry and Robert's position in a letter to KLG at the end of the day of the mediation. The letter asserted that the case “could have and should have settled” higher than it did. The letter also stated that Larry and Robert's claims were worth more than Gary's, but the two brothers were willing to approve the settlement in exchange for a one-third distribution of the proceeds to each brother. The probate court approved the settlement, and the parties proceeded to an evidentiary hearing on attorney's fees. It was at this hearing that the probate court determined that the Wagner firm was not entitled to a portion of the attorney's fee award because Larry and Robert did not have any competing claims with Gary. The probate court issued an order awarding KLG the entire contingency attorney fee amount from the $1.23 million in settlement proceeds.

The Wagner firm appealed the probate court order to the Second District Court, arguing that the lower court erred in awarding KLG the entire fee for three reasons. First, the Wagner firm asserted that the Act does not provide for fees incurred if the case settles before suit is filed. Second, the Wagner firm argued that there was a conflict of interest between Gary and his brothers that precluded KLG from collecting attorney's fees for work done for Larry and Robert. Third, the Wagner firm contended that it did not have to show that Larry and Robert had a competing claim in order to be entitled to fees under the Act. The Second District concluded that none of these arguments merited reversal. See Wagner, Vaughn, McLaughlin & Brennan, P.A. v. Kennedy Law Group, 987 So.2d 741, 744 (Fla. 2d DCA 2008).

The Second District held that even though the wrongful death action settled prior to the filing of a suit, section 768.26, Florida Statutes (2005), did not preclude the award of attorney fees to the personal representative's counsel. Id. at 745–46. The Second District explained that pre-suit negotiations are an important part of wrongful death litigation and that section 768.26 does not limit recoverable fees to those incurred subsequent to filing suit. The Second District also cited this Court's decision in Wiggins v. Estate of Wright, 850 So.2d 444 (Fla.2003), in which this Court approved the Fourth District's decision in In re Estate of Catapane, 759 So.2d 9 (Fla. 4th DCA 2000), and its method for allocating attorney's fees in a wrongful death action. Because this Court approved the decision in Catapane, in which the insurers had offered the limits of coverage before counsel filed a wrongful death action, the Second District reasoned that “there is no question that section 768.26 applies to provide for fees incurred even in cases that settle before suit is filed.” Wagner, 987 So.2d at 746.

The Second District also concluded that the other survivors did not have competing interests with Gary that would preclude the attorney fee award to the personal representative's counsel. The court explained that the Wagner firm's objection to the apportionment of the bodily injury settlement would have established a conflict of interest, had it been pursued. However, the court noted, Larry had abandoned his objection to the apportionment after his petition to remove Gary as personal representative was dismissed. Further, neither Larry nor Robert objected to the amount or the apportionment of the settlement and had waived any objection by accepting their equal shares. Id.

Finally, the Second District concluded that the probate court did not abuse its discretion in declining to award the Wagner firm a share of the attorney's fees because the Wagner firm did not perform any work on any aspect of the case in which KLG had a conflict of interest. The court explained that the survivors' counsel was required to show a competing interest in order to be entitled to share of attorney fees, which it had not shown. Id. at 746–47.

The Wagner firm sought review by this Court based on direct conflict with the decision of the Third District in Perez v. George, Hartz, Lundeen, Flagg & Fulmer, 662 So.2d 361 (Fla. 3d DCA 1995), which also involved the allocation of attorney's fees in the settlement of a wrongful death action. In a footnote in Perez, the Third District concluded that section 768.26 was not applicable because “[t]here was no action for wrongful death filed or litigated in this case.” Id. at 364 n. 4. We granted review on the basis of this conflict as to the applicability of section 768.26. For the reasons explained below, we approve in part and quash in part the decision in Wagner.

ANALYSIS

The Florida Wrongful Death Act (the Act), which encompasses sections 768.16 to 768.26 of the Florida Statutes, provides that it is the public policy of the State of Florida to shift the losses resulting when wrongful death occurs from the survivors of the decedent to the wrongdoer. § 768.17, Fla. Stat. (2005). The Act is designed to substitute the financial resources of the wrongdoer for the resources of the decedent, in an attempt to meet the financial obligations of the decedent, Ellis v. Humana of Fla., Inc., 569 So.2d 827 (Fla. 5th DCA 1990), and to prevent a tortfeasor from evading liability for his or her misconduct when such misconduct results in death, Variety Children's Hosp. v. Perkins, 445 So.2d 1010 (Fla.1983). The Act also eliminates the multiplicity of suits that resulted from each survivor bringing an independent action and avoids survivors racing to get the first judgment. See In re Estate of Catapane, 759 So.2d 9, 11 (Fla. 4th DCA 2000). By statute, the personal representative is the only party with standing to bring a wrongful death action to recover damages for the benefit of the...