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Few things enrage insurers more than what appear to be exorbitant attorney fees, and Florida may be ground-zero on that issue, thanks in part to the state’s fee-multiplier statute. So, industry advocates were heartened to see a recent ruling by Florida’s 3^rd District Court of Appeal, which held that fees that were four times the amount of the settlement were too much.

In Citizens Property ÈȵãºÚÁÏ Corp. vs. Casanas and Cervantes, the appeals court found that the Miami trial court had erred in allowing a $150,600 fee on a $35,000 settlement for a roof that was damaged in Hurricane Irma in 2017. The fee included $9,360 in litigation costs and $13,800 for the plaintiffs’ fee experts.

“We approve the trial court’s findings, based on the evidence in the record, that the hourly rates billed for each attorney were reasonable,” Appeals Court Judge Monica Gordo in the Oct. 27 opinion. “We cannot, however, affirm the Lodestar amount because the record does not contain competent, substantial evidence that the number of hours billed were reasonable.”

Lodestar. That was the name of a federal court case that set out a formula for determining reasonable attorney fees for the prevailing litigant, in some types of cases. The Florida Supreme Court modeled its own formula on Lodestar in a 1985 decision. The method considers a number of factors, including the likelihood that the attorney would have to give up other work to focus on the case at hand, and the number of hours “reasonably expended” on the litigation.

Florida law also allows a multiplier for fees. Its original intent, decades ago, was to assist small businesses and rural litigants in finding a lawyer, who may have had to travel for hours to handle the case, attorneys have explained. ÈȵãºÚÁÏ industry advocates have said the multiplier has added unnecessary loss cost expenses, driving up rates for homeowners. They are urging lawmakers to again consider limits when the Legislature convenes in January.

In the Citizens vs. Casanas case, the trial court allowed a Lodestar fee amount of $70,800, then added a multiplier of 1.8, to reach a total attorney award of $127,440 in a case that was minimally litigated.

Citizens argued that the Lodestar amount and the multiplier were unwarranted because the relevant market did not require it. The 3^rd District Court of Appeals agreed, noting that a similar, 2020 case, Universal Property & Casualty vs. Deshpande, reached the same conclusions.

“Accordingly, we reverse the Lodestar amount with instruction for the court to reduce the number of hours billed to 81.1 hours—the only number for which there is competent, substantial evidence adduced by the defendant’s fee expert following a line-by-line accounting of the compensable hours,” Judge Gordo wrote.

The plaintiffs’ counsel did not establish that there was a risk of nonpayment, or that there was difficulty finding an attorney in the Miami market, the court said. On the litigation costs, the plaintiffs submitted two invoices for experts, but no evidence on the reasonableness of the costs or if they planned to call the experts as witnesses at trial.

“We agree with the ruling,” said Michael Peltier, a spokesman for Citizens. “The multiplier was created to address especially difficult or complex cases. As the ruling notes, this case did not meet any of those criteria.”

The plaintiffs’ counsel, Paul Feltman of Alvarez, Feltman, Da Silva and Costa, in Miami, said he will ask the 3^rd DCA to reconsider, partly because the trial court may have made an error. The Miami-Dade Circuit Judge, Martin Zilber, adopted a blanket 10% reduction in the expert’s hours. But Feltman said the judge, after an unusual closed-door conference with another judge, actually reduced the expert hours by 17%. Yet, the DCA went further.

And while a number of recent court decisions may appear to some to be swinging in the insurers’ favor, Feltman pointed out that in Universal Property & Casualty vs. Celestrin, handed down in March, the same appeals court awarded his firm almost the full Lodestar amount on attorney fees, as well as the maximum multiplier amount – 2.5.

“Is it a trend toward insurance defense victories? I don’t know,” Feltman said.

Topics Florida Carriers