Forthuber v. First Liberty - corrected 11/17/17, 229 So. 3d 896

Background

Insured David Forthuber prevailed in a first-party insurance dispute and sought a reasonable attorney’s fee under Fla. Stat. § 627.428.
The same lawyer (Hewett G. Woodward) represented Forthuber through three successive firms; while at the first firm (Latham), Woodward logged 247.2 hours before leaving the firm.
Latham withdrew as counsel, filed a charging lien, then obtained court permission to withdraw and (by court concession) forfeited any entitlement to fees because it withdrew before the contingency occurred.
At the fee hearing the insurer (First Liberty) argued the court should exclude the 247.2 hours Woodward worked while at Latham; the trial court excluded them and limited prejudgment interest to the date of the fee hearing.
The Fifth District reversed: the court held the trial court erred by refusing to consider all reasonable hours expended by the insured’s attorneys (including hours logged while the lawyer worked at a prior firm) when awarding a statutory fee to the insured; it also held the trial court erred in computing prejudgment interest only through the fee hearing date.
On cross-appeal, the insurer challenged portions of awarded hours as attributable to work at the prior firm; the appellate court affirmed that part of the lower court’s award without further discussion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the trial court must consider hours billed by insured’s lawyer while employed at a prior firm that forfeited its fee	Forthuber: §627.428 entitles the insured to a reasonable fee; the court must consider all reasonable hours expended on the case regardless of which firm employed the lawyer when the time was incurred	First Liberty: Hours incurred while the prior firm held the claim should be excluded because that firm forfeited any fee by withdrawing	Reversed — court must consider all reasonably expended hours in calculating the insured’s statutory fee; entitlement is the insured’s, not the attorney’s
Whether the trial court properly limited prejudgment interest to interest accruing through the date of the fee hearing	Forthuber: Prejudgment interest should run through the date judgment is entered, not stop at the evidentiary hearing	First Liberty: (Implicit) interest need not run beyond the hearing date used for the award	Reversed — prejudgment interest calculation should include interest accruing through the date judgment is entered
Whether certain awarded hours were improperly attributed to time at the prior firm (cross-appeal)	(Cross-appellant) Forthuber: awarded hours were properly included	First Liberty: some awarded hours actually were work at the prior firm and should be excluded	Affirmed — appellate court affirmed the trial court’s award on cross-appeal without further discussion

Key Cases Cited

Danis Indus. Corp. v. Ground Improvement Techniques, Inc., 645 So. 2d 420 (Fla. 1994) (fee-shifting under statute benefits only the prevailing insured)
Fortune Ins. Co. v. Gollie, 576 So. 2d 796 (Fla. 5th DCA 1991) (fees under §627.428 belong to the insured, not the attorney)
Fla. Patient’s Comp. Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985) (reasonable fee typically calculated by hours multiplied by a reasonable hourly rate)
Kaufman & Broad Home Sys., Inc. v. Sebring Airport Auth., 366 So. 2d 1230 (Fla. 2d DCA 1979) (contingency contract producing an excessive effective hourly rate cannot bind a fee-shifting award)
First Baptist Church of Cape Coral, Florida, Inc. v. Compass Construction, Inc., 115 So. 3d 978 (Fla. 2013) (alternative fee recovery clause can permit awarding a rate higher than the base contractual rate when fees are payable by a third party)
Kirschner v. Biritz, 843 So. 2d 349 (Fla. 5th DCA 2003) (contingent-fee lawyer forfeits fee by withdrawing before contingency unless limited exceptions apply)
DePena v. Cruz, 884 So. 2d 1062 (Fla. 2d DCA 2004) (exceptions where withdrawal is legally impossible or client conduct would force ethical violation)
Liberty Mutual Ins. Co. v. Holbrook, 861 So. 2d 1216 (Fla. 2d DCA 2003) (distinguishable: attorney who forfeited fee attempted to assert fee in own right and was rejected)
Buckley Towers Condo., Inc. v. Katzman Garfinkel Rosenbaum, LLP, [citation="519 F. App'x 657"] (11th Cir. 2013) (client may be entitled to any excess amount where recovered fee exceeds fee actually owed)