Sarkis v. Allstate Ins. Co.Sarkis v. Allstate Ins. Co.
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.
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
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
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 ALLSTATE 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,
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
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
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, seesection 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).
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....”
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 whether or not entitlement to a fee award under 768.79 will ultimately be established, surely skilled counsel can, contrary to the words of Chief Judge Schwartz in Gonzalez, “anticipate” such. Offers of judgment, as well as requests to apply multipliers, have clearly become part and parcel of litigation in the state of Florida; this court need only look to any monthly docket to recognize such. We find no inconsistency in holding competent counsel can “anticipate” the eventual filing of a 768.79 offer of judgment, “anticipate” the possible entitlement to fees if the statutory prerequisites are met, and “anticipate” the possibility said fee award will be multiplied. Accordingly, we find no logical inconsistency in application of the Quanstrom requirements to the offer of judgment context, and move to consider the application of said requirements to the instant case.
Island Hoppers, 820 So.2d at 973-75 (footnote omitted).
The use of a multiplier in
Without this express directive, the court lacks the authority to use a multiplier. In subsection (1), where it created the statutory entitlement to an attorneys’ fee, the legislature defined and limited the award of fees to those incurred within a specified period. Fees are only awardable for services rendered between
the date of filing an offer or demand that was subsequently rejected and the conclusion of the litigation. The rejected demand or offer, the legislature decreed, was admissible only to pursue the statute‘s penalty provisions. The fees for legal services performed during this period were to be calculated in accordance with supreme court guidelines. Rules 4-1.5(b) and (c) of the Rules Regulating the Florida Bar identify factors to be considered in determining a reasonable fee. Nowhere in rule 4-1.5 is there a specific mention of a multiplier. Attorneys’ fees are authorized only by statute or contract. Because a supreme court rule is neither, it cannot authorize a fee. It is the legislature‘s task to enact substantive law, see TGI Friday‘s Inc. v. Dvorak, 663 So.2d 606, 611 (Fla. 1995), and even though it created a substantive right to an attorney‘s fee calculated between two points in time, it did not create a substantive right to have that fee multiplied. In addition to providing for a penalty or sanction in subsection (7), the legislature specifically granted a trial court the authority to disallow the entitlement to attorneys’ fees where it concluded the offer was not made in good faith. The interplay between the subsections evinces a clear legislative intent to penalize where appropriate and to provide a mechanism to deny a fee where the offer was not made in good faith. That same clarity of expression could have been used to authorize a multiplier but was not.
Pirelli Armstrong Tire, 752 So.2d at 1278-79 (Casanueva, J., concurring in part and dissenting in part).
Then, in Doyle-Vallery v. Aranibar, 838 So.2d 1198 (Fla. 2d DCA 2003), a case in which the majority noted that Judge Casanueva‘s dissent in Pirelli Armstrong Tire “presents a strong argument” and that this Court had accepted review of this issue in the present case, Judge Altenbernd wrote a concurring opinion. Judge Altenbernd stated that “if this panel were writing on a clean slate and if the issue were not already before the supreme court, I would vote to prohibit the use of a multiplier in determining a reasonable fee under
Although I agree with most of Judge Casanueva‘s dissent in Pirelli, I am not convinced this issue necessitates a constitutional ruling. The matter should be resolved as a matter of statutory interpretation. The courts should interpret the reach of this statute to assure that the statute achieves its intended purpose and only that purpose.
The legislature created this statute to reduce the costs and the length of litigation while maintaining a neutral playing field. When the legislature inserted the phrase, “along with all relevant criteria,” into section 768.79(7)(b), it intended to incorporate those criteria relevant to these goals. The legislature did not intend for courts to use criteria that favor one side in the litigation over the other. As explained below, the multiplier has that effect. The legislature also did not intend for the courts to use criteria designed to promote more litigation rather than to limit existing litigation. It is
beyond dispute that the multiplier was created to promote litigation, not to limit it. Thus, as a matter of simple statutory construction, the multiplier is not a “relevant criterion.” Judge Casanueva is correct in his two most important observations. First, the multiplier was created primarily to promote the goal of access to courts. See Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828, 833 (Fla.1990); Fla. Patient‘s Comp. Fund v. Rowe, 472 So.2d 1145, 1151 (Fla.1985). Using a multiplier encourages lawyers to accept representation at the inception of certain cases when lawyers might not otherwise accept such cases. The legislature and the courts apply a multiplier to assure that lawyers receive a sufficient economic incentive to represent clients who need access to the courts and cannot achieve that access without such incentives. Thus, the multiplier is designed to achieve a public policy that is separate and distinct from the policy of encouraging early settlement of lawsuits. If anything, by encouraging the filing of more lawsuits, the multiplier creates congestion in the judicial system that makes it more difficult for section 768.79 to achieve the goal of quicker, less expensive litigation.
Second, defense attorneys have no feasible means of entering into employment contracts based upon a contingency fee. As a result, the existing rules would rarely, if ever, permit the defendant to recover a fee that included a multiplier. This may not violate equal protection, but it does affect the workings of this statute. Because the multiplier benefits only the plaintiff, if it applies to the fees imposed under section 768.79, that statute will necessarily shift the value of lawsuits in favor of the plaintiff.
Doyle-Vallery, 838 So.2d at 1198-99 (Altenbernd, J., concurring) (footnote omitted).
In 1999, the Third District Court of Appeal, in Gonzalez v. Veloso, 731 So.2d 63 (Fla. 3d DCA 1999), affirmed a trial court‘s denial of a multiplier in a case in which the plaintiff‘s offer of judgment exceeded the
[w]hether any such showing can ever be made, and thus whether a multiplier is ever appropriate when fees are awardable only when a reasonable offer is not accepted under § 768.79, an eventuality which obviously cannot be anticipated when counsel is obtained.
Gonzalez, 731 So.2d at 64 n. 2.
In Amisub (American Hospital), Inc. v. Hernandez, 817 So.2d 870 (Fla. 3d DCA 2002), the Third District Court of Appeal again reviewed the application of a multiplier in a
Our inquiry in this case, based on the Quanstrom criteria, is “whether the relevant market requires a contingency fee multiplier to obtain competent counsel” when fees are awarded for failure to accept an offer under Section 768.79. Although three law firms refused Hernandez‘s case, Charlip accepted the case based on a forty-five percent contingency fee arrangement.
Hernandez contends that although Charlip originally agreed to a contingency fee, the litigation became overbearing. Therefore, the availability of a contingency
We reject this argument for two reasons. First, in Quanstrom, the Court specifically refers to obtaining counsel in the first instance, not whether counsel continues the case after prolonged litigation.
Second, the record does not support Hernandez‘s argument. After the first trial ended in an adverse directed verdict, Charlip and Hernandez renegotiated their fee and cost arrangement. If Charlip had made the determination to proceed with the case in the hope of obtaining a contingency fee multiplier, he would not have renegotiated the fee agreement with Hernandez. Clearly, Charlip was willing to continue representing Hernandez once he revisited the fee arrangement and mitigated his risk.
Charlip‘s failure to satisfy two of the Quanstrom requisites, the ability to obtain competent counsel in the relevant market and the ability to mitigate the risk of nonpayment in any way, negate the application of a multiplier. Therefore, we reverse that portion of the trial court‘s order applying a 2.5 multiplier to the attorney‘s fees award. See Gonzalez v. Veloso, 731 So.2d at 64.
The First District Court of Appeal has held that a trial court should have considered the applicability of a contingency risk multiplier in connection with a
Finally, prior to its decision in the present case, the Fifth District Court of Appeal had also held that a multiplier was applicable under
[Another] reason for denying application of the multiplier in offer of judgment cases was well developed by Judge Casanueva in his dissent in Pirelli Armstrong Tire Corp. v. Jensen, 752 So.2d 1275 (Fla. 2d DCA 2000). Judge Casanueva based his opinion on equal protection guarantees. It can just as well be argued that to apply the multiplier in offer of judgment cases is contrary to clear legislative intent. The legislature in section 768.79 carefully crafted a party neutral fee provision to encourage settlement by assessing identical risks against each party if an offer is improperly rejected. By applying the multiplier (applicable only to plaintiffs), the courts will have destroyed the neutrality intended by the legislature and will have given great advantage to plaintiff: “If I lose, I must pay your reasonable fee; if you lose, you must pay up to two-and-a-half times my reasonable fee.” The supreme court emphasized that the “criteria and factors” utilized in setting a reasonable attorney‘s fee
“must be consistent with the purpose of the fee-authorizing statute or rule.” Quanstrom, 555 So.2d at 834. Granting a multiplier for only one of the parties would not be consistent with the purpose of the offer of judgment statute which is to put both parties on the same footing when reasonably evaluating the case.
Tetrault, 799 So.2d at 235 (Harris, J., concurring and concurring specially).
ANALYSIS
We approve the Fifth District Court of Appeal‘s decision. We hold that the use of a multiplier in awarding attorney fees authorized by
In sum, we have recognized that attorney fees awarded pursuant to the offer of judgment statutes are sanctions. These fees are awarded as sanctions for unreasonable rejections of offers of judgment. We have set forth in
We first adopted an offer of judgment rule of procedure in 1972. In re the Florida Bar, 265 So.2d 21 (Fla.1972). That rule was the same as
Thereafter, the Legislature enacted two offer of judgment statutes. In 1986, the Legislature enacted
In its petition, the majority of the Committee proposed a sanction for the failure to accept a bona fide offer of settlement of fifteen percent of an unaccepted offer to pay. The Committee contended that the then existing sanction, consisting only of costs, was inadequate to deter unnecessary litigation. The Committee also urged this Court to declare unconstitutional
In ruling upon the petition and adopting a new rule, we stated:
The proposal submitted by the Committee raises a serious question of whether this Court impinges upon the legislative prerogative to enact substantive law if we adopt a “procedural” sanction of this type.... [I]t is not so clear that a sanction is “procedural” when it imposes a “fine” based on a percentage of an unaccepted offer, especially when a party may have done nothing more serious than guessing wrong about a jury verdict. We do not find it necessary, however, to reach this question.... We believe it is wiser policy to have a sanction based on costs and attorneys fees. This is what the legislature did in both of the statutes under review in this opinion, and this legislative determination is persuasive. Accordingly, we have modified the proposed rule as set forth in the appendix to this opinion to reflect the major components of the statutes in question.
... Our final rule imposes a sanction based entirely on costs and attorneys fees, but strengthens the existing rule to permit sanctions whenever an offer of judgment is unreasonably refused and the subsequent judgment is disproportionate to that offer by more than 25%. For instance, we have added extensive new language defining what can constitute an unreasonable refusal and clarifying the extent of the trial court‘s discretion on this question.
Florida Bar re Amendment to Rules of Civil Procedure, Rule 1.442 (Offer of Judgment), 550 So.2d 442, 442-43 (Fla.1989) (emphasis added). We then declined to address the statutes’ constitutionality in the nonadversarial rules proceeding. We did, however, recognize the confusion by reason of the difference between the statutes and the then existing
Shortly after our adoption of the new
We reversed the district court as to its holding of the offer of settlement statute unconstitutional and remanded with directions that the county court‘s award of attorney fees be reinstated. We then addressed the second certified question from the county court. That answer is important in respect to the issue which we now decide. We stated:
Having found the statute constitutional as modified by our rule, we next must address the question of whether section 45.061, Florida Statutes (1987), is constitutional as applied. In this instance, we agree with Leapai that the statute was not applied retroactively since the right to recover attorney fees attaches not to the cause of action, but to the unreasonable rejection of an offer of settlement. As noted in our statement of facts, the offer and rejection of the offer occurred after the act had been adopted by the legislature.
Leapai v. Milton, 595 So.2d 12, 15 (Fla. 1992) (emphasis added).
Later, in 1992, we considered the interplay between
In 1995, we again considered the statutes and rule in TGI Friday‘s, Inc. v. Dvorak, 663 So.2d 606 (Fla.1995).10 In
In Leapai, this Court upheld the constitutionality of section 45.061 and found that the statute did not infringe on the rule-making authority of the Court. Finding no relevant distinction between section 45.061 and section 768.79, the district court ruled that section 768.79 was likewise constitutional.
Second, the district court held that rule 1.442 could be applied to this case despite the fact that Dvorak‘s cause of action preceded the effective date of the rule. The district court once again relied on this Court‘s decision in Leapai and our holding that section 45.061 could be retroactively applied to a cause of action so long as the statute was enacted before the offeree‘s rejection of the offer of judgment. The district court held that the same reasoning should apply to rule 1.442, and found that the rule would apply in this instance because TGI Friday‘s rejected Dvorak‘s offer after rule 1.442 became effective.
TGI Friday‘s, 663 So.2d at 610 (emphasis added). In its third and fourth holdings, the district court held that under the statutes and rule, the issue of whether TGI Friday‘s had unreasonably rejected the offer of judgment had no bearing on whether Dvorak was entitled to an award of attorney fees.
We noted that while the reasonableness of the rejection of an offer had no bearing on the issue of entitlement to fees, the factors set forth in
[I]t is equally clear that these enumerated factors are intended to be considered in the determination of the amount of the fee to be awarded. Thus, in a given case, the court could justifiably reduce the amount of the attorney‘s fee to be assessed against a severely injured plaintiff who suffered an adverse verdict after rejecting a small settlement offer. By the same token, the court could reasonably conclude that a defendant with a small liability potential who rejected a large settlement offer should pay only a reduced fee even though the verdict ultimately exceeded the offer by more than twenty-five percent.
TGI Friday‘s, 663 So.2d at 613.
In 1996, in In re Amendments to Florida Rules of Civil Procedure, 682 So.2d 105 (Fla.1996), we adopted
As noted at the beginning of this analysis, the detailed history of our cases construing the offer of judgment statutes and the adoption of
We have recognized that the use of a multiplier must be consistent with the purpose of the fee-authorizing statute or rule. Quanstrom, 555 So.2d at 834; see also Bell v. U.S.B. Acquisition, Inc., 734 So.2d 403, 408-09 (Fla.1999). The reason for an award of attorney fees authorized as a sanction for the rejection of an offer to settle is very different from the reason that we authorized the use of a multiplier in Quanstrom, 555 So.2d at 833, and Rowe, 472 So.2d at 1151. In those cases, we authorized the use of a multiplier to promote access to courts by encouraging lawyers to undertake representation at the inception of certain cases. See Doyle-Vallery, 838 So.2d at 1198-99 (Altenbernd, J., concurring). We agree with the Third District Court of Appeal‘s analysis in Amisub that Quanstrom specifically refers to obtaining counsel in the first instance. Amisub, 817 So.2d at 872-73. It is self-evident that attorney fees awarded as a sanction under
Furthermore, we have recognized that statutory authorization for attorney fees is to be strictly construed. Gershuny v. Martin McFall Messenger Anesthesia Prof. Ass‘n, 539 So.2d 1131, 1132 (Fla.1989). We have also recognized that a statute imposing a penalty must be strictly construed in favor of the one against whom the penalty is imposed and is never extended by construction. Hotel & Restaurant Comm‘n v. Sunny Seas No. One, Inc., 104 So.2d 570, 571 (Fla.1958). We have recently applied this rule of strict construction to
Throughout the statutory and rule history of offers of judgment, the use of a multiplier has never been expressly authorized. Neither
We therefore approve the decision of the Fifth District Court of Appeal in this case and remand for further proceedings in accord with this opinion. We disapprove Pirelli Armstrong Tire from the Second District, Island Hoppers from the Fourth District, and Lewis from the First District. The decisions in those cases failed to consider the 1996 version of
It is so ordered.
ANSTEAD, C.J., and LEWIS, QUINCE, and BELL, JJ., concur.
CANTERO, J., recused.
WELLS, J., concurring.
I write to state the reasons that I do not agree with Justice Pariente‘s analysis in her dissenting opinion.
(1) In this case, as with all cases in which a trial court is to consider attorney fees under
In her dissent, Justice Pariente relies on this Court‘s decision in Bell v. U.S.B. Acquisition Co., 734 So.2d 403 (Fla.1999). However, Bell was a case in which this Court emphasized that the use of the multiplier in contract cases was limited to those cases in which it was demonstrated that counsel could not have been obtained without the inducement of the fee multiplier. This was the basis upon which this Court distinguished the denial of the use of a fee multiplier in Sun Bank of Ocala v. Ford, 564 So.2d 1078 (Fla.1990). In offer of judgment cases, since counsel is already obtained, Bell does not apply.
(2) The fees authorized by
(3) The reason that the statute and rule are to be strictly construed is not because either is ambiguous but because the statute authorizes and the rule implements an award of attorney fees and because the assessment of attorney fees pursuant to the statute and rule is a sanction. It is the long-standing precedent of this Court that statutes and rules authorizing attorney fees or imposing penalties are to be strictly construed as written and not extended by implication. Since neither the statute nor the rule authorizes a fee multiplier, an authorization for the use of a multiplier would have to be by implication in violation of both long-standing and very recent precedent of this Court. See majority op. at 223.
(4) In delineating the criteria for a trial judge to use in determining the amount of attorney fees, the statute and rule set forth criteria that focus exclusively upon issues concerning the evaluation and rejection of the offer of judgment. Thus, the reasonable construction of the phrase “along with all other relevant criteria” in the introductory part of
(5) As stated above in paragraph (1), in cases in which the offer-of-judgment statute and rule apply, counsel has already agreed by contract to represent the client before the offer of judgment is made. In this case, counsel agreed to this representation before any offer of judgment was made on the basis of a thirty-three and
BELL, J., concurs.
PARIENTE, J., dissenting.
I respectfully dissent. In my view, the contingent nature of the representation is an appropriate consideration in an award of attorney‘s fees under the offer of judgment statute,
I disagree. Whenever a trial court bases a fee award in part on the multiplier, its determination must take into account the necessary factual predicates set forth in Standard Guaranty Insurance Co. v. Quanstrom, 555 So.2d 828 (Fla.1990), and Florida Patient‘s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla.1985), i.e., that the attorney representing the party who made the offer of judgment would not have taken the case, nor would any other competent attorney in that legal community, without the availability of the multiplier. Thus circumscribed, the use of the contingency risk factor, in tandem with the six statutory criteria and other relevant considerations, serves the goals of both ensuring access to the courts by potential litigants and encouraging settlement of claims.
The prospect of a fee award under the offer of judgment statute can be a significant
In addition, the adverse party‘s knowledge that the representation is contingent and the prospect of an enhanced fee award would be additional factors in promoting settlement. The defendant in a contingent fee case knows that no matter how many hours the plaintiff‘s attorney works, the recovery of a fee is contingent on whether the plaintiff prevails. Thus, in many circumstances, there is little incentive for a defendant to settle early on. Once the plaintiff makes an offer of judgment, the defendant must assess the likelihood that the verdict will be twenty-five percent less than the offer of judgment and what the liability for attorney‘s fees will be. The knowledge that the attorney‘s fees awarded will include the possibility of an enhanced fee due to the contingent nature of the representation is a factor for the adverse party to consider in assessing whether to settle the case in a timely fashion.
The Fourth District has recognized that in the context of the offer of judgment statute, the prospect that an award of fees will include a contingency risk multiplier may be a significant consideration in an attorney‘s initial decision to represent a client on a contingency fee basis:
[W]e find no logical inconsistency in 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 whether or not entitlement to a fee award under 768.79 will ultimately be established, surely skilled counsel can ... anticipate such. Offers of judgment, as well as requests to apply multipliers, have clearly become part and parcel of litigation in the state of Florida; this court need only look at any monthly docket to recognize such. We find no inconsistency in holding competent counsel can “anticipate” the eventual filing of a 768.79 offer of judgment, “anticipate” the possible entitlement to fees if the statutory prerequisites are met, and “anticipate” the possibility said fee award will be multiplied. Accordingly, we find no logical inconsistency in application of the Quanstrom requirements to the offer of judgment context.
Island Hoppers, Ltd. v. Keith, 820 So.2d 967, 975 (Fla. 4th DCA 2002) (footnote and quotation marks omitted) (emphasis supplied).
I agree with this assessment of the practical realities of the role that the multiplier plays in the initial decision to undertake
In July 1998, plaintiff Sarkis made a reasonable offer of $10,000, which was not accepted. The ultimate net judgment for Sarkis was $87,700, following a verdict in her favor in February 2000.16 The trial court found a reasonable hourly rate to be $350 per hour. The trial court further found 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 against Defendant, Allstate Insurance Company will require a trial.
In applying a multiplier of 1.5, the trial court awarded fees corresponding to an hourly rate of $525. Additionally, as the Fifth District itself noted:
Sarkis made a strong showing to support the award of a multiplier. One of her attorney expert witnesses testified that the possibility of obtaining a multiplier fee award in this case was “absolutely something that any competent attorney would be taking into consideration and expect.” In accepting this case, he said, an attorney would have to consider the need to recover more than $35,000 because of the PIP, medical payments and tortfeasor setoffs, and the attorney would have to prove permanent injury for a plaintiff with a history of prior accidents and pre-existing conditions—not a promising case from the outset. Further, because the case involved Allstate as the insurer/defendant and it has a firm policy to not settle cases, this case would likely go to trial, with the attorney having to finance costs. There was no way to mitigate the risk of nonpayment in any way.
Sarkis’ attorney testified:
[I]t is very tough to find competent counsel unless that counsel has an understanding that if we succeed at tilting the windmill [Allstate] and doing that successfully that there will be a reward at taking the risk on a contingency fee.
Allstate Ins. Co. v. Sarkis, 809 So.2d 6, 7-8 (Fla. 5th DCA 2001). In my view, the fee awarded was consistent with the offer of judgment statute.17
Paragraphs (6)(a) and (b) of
Even if we were to dispense with utilizing a multiplier in a contract case, one of the factors set forth in rule 4-1.5(b) ... is whether the fee is fixed or contingent. Thus, even without a multiplier, the court would be authorized to award a greater fee based on the contingent nature of the fee agreement, or reduce a fee award where there was no risk of nonpayment. In fact, an upward adjustment of a fee under these circumstances would be analogous to a court‘s application of a multiplier.
Further, the Court has adopted a forced, rather than a strict, construction of an unambiguous statute in rejecting the contingent nature of the representation as one of the “relevant criteria” in determining the reasonableness of a fee award under
This commonsense observation is reflected in one of the cases cited by the majority to show that statutes imposing fees as a sanction must be strictly construed. In Willis Shaw Express, Inc. v. Hilyer Sod, Inc., 849 So.2d 276, 279 (Fla.2003), this Court held that “under the plain language” of
The majority also cites to Gershuny v. Martin McFall Messenger Anesthesia Professional Ass‘n, 539 So.2d 1131, 1132 (Fla.1989), for the proposition that statutory authorization for attorney‘s fees is to be strictly construed. In Gershuny, this Court relied in part on its decision in Finkelstein v. North Broward Hospital District, 484 So.2d 1241 (Fla.1986), which applied the principles of strict construction and the implied exclusion of one thing by the mention of another to hold that a nurse could not recover under a fee-shifting statute that authorized an award to the prevailing party in a malpractice action against any physician, podiatrist, hospital, or health maintenance organization. Unlike the list of specific entities in the statute discussed in Finkelstein, the inclusion of “all other relevant criteria” in
Although the term “all other relevant criteria” is intentionally open-ended and nonspecific, it is not ambiguous in the sense of being susceptible to two opposing constructions. Cf. State v. Jefferson, 758 So.2d 661, 663 (Fla.2000) (finding ambiguity in a provision that appeared to create
Section 768.79(7)(b) directs the trial court to consider, in determining the reasonableness of the fee, certain enumerated factors “along with all other relevant criteria” (emphasis ours). The statute also refers the trial court to the guidelines promulgated by the supreme court. See§ 768.79(6)(a) ,(b) . These guidelines include the Rules Regulating the Florida Bar, one of which, rule 4-1.5, fees for legal services, refers to whether or not the fee is fixed or contingent. See R. Regulating Fla. Bar 4-1.5(b)(8). Additionally, in setting a reasonable fee, rule 4-1.5(c) provides that all factors in this rule should be considered, “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.” Thus, it is clear that the legislature authorized trial courts to consider and apply a contingency risk multiplier when awarding an attorneys’ fee under section 768.79. See also Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828, 831 (Fla.1990). Inasmuch as the procedure is clearly outlined in the statute, we decline to construe it in a manner inconsistent with its directive, despite the fact that it enhances the award in such a generous manner. The trial court properly applied the statute as written.
Id. at 1276 (second emphasis supplied).
In contrast, we have restricted the use of the contingent risk multiplier only when the fee statute has specifically stated that only the enumerated factors shall be considered. See, e.g., Schick v. Dep‘t of Agric. & Consumer Servs., 599 So.2d 641, 644 (Fla.1992) (construing
Nor can I find a foundation for the Court‘s exclusion of a contingency risk multiplier in the history of the offer of judgment statute. Although the Court has detailed the lengthy history of the offer of judgment statute, it is noteworthy that the term “all other relevant criteria” has been part of
Further, the Legislature has not abrogated Collins, the first appellate decision applying the multiplier to
As we stated in Bell in discussing the many public policy considerations behind statutorily authorized attorney‘s fees:
It is true that one of the purposes of certain statutory attorney‘s fees provisions is to obtain public enforcement of legislative acts through private lawsuits. See Quanstrom, 555 So.2d at 833. However, as we made clear in Quanstrom, public policy enforcement cases are treated differently from other court-awarded fee cases. In public policy enforcement cases, the contingency fee agreement is only one of many factors to consider in awarding a reasonable attorney‘s fee, and the fee is not capped by the fee agreement between attorney and client. See id. at 833-34.
There are many other types of statutes that authorize attorney‘s fees but are not considered public policy enforcement cases as contemplated by Quanstrom. While some attorney‘s fees statutes may have a broader policy purpose, see, e.g.,
§ 627.428, Fla. Stat. (1997) (attorney‘s fees against insurer), many involve only private disputes between parties. See, e.g.,§ 506.16, Fla. Stat. (1997) (awarding reasonable attorney‘s fees in actions to recover milk bottles);713.29, Fla. Stat. (1997) (attorney‘s fees for enforcement of a lien). Nevertheless, consideration of a multiplier is authorized by Rowe and Quanstrom in these cases.
....
We perceive no policy concern that would prevent a court‘s consideration of a contingency multiplier when the parties to a contract agree to have the court award reasonable attorney‘s fees. Instead, we find that the primary policy that favors the consideration of the multiplier is that it assists parties with legitimate causes of action or defenses in obtaining competent legal representation even if they are unable to pay an attorney on an hourly basis. In this way, the availability of the multiplier levels the playing field between parties with unequal abilities to secure legal representation. While a prevailing party‘s attorney‘s fee provision in a contract may be a powerful sword in the hands of those who can afford an attorney, a party who would be faced with substantial difficulties in obtaining an attorney without a contingency arrangement ought to be able to claim a multiplier in the appropriate case, if the evidence justifies it.
Bell, 734 So.2d at 410-11 (footnotes omitted).
In sum, I conclude that allowing the trial court to consider the contingent nature of the representation in calculating an award of a reasonable attorney‘s fees award is consistent with the language of the offer of judgment statute and not inconsistent with its underlying policy of promoting settlements. Accordingly, I dissent.
Notes
(h) Sanctions.
(1) Upon motion made within 30 days after the return of the verdict in a jury action or the date of filing of the judgment in a non-jury action, the court may impose sanctions equal to reasonable attorneys fees and all reasonable costs of the litigation accruing from the date the relevant offer of judgment was made whenever the court finds both of the following:
(A) that the party against whom sanctions are sought has unreasonably rejected or refused the offer, resulting in unreasonable delay and needless increase in the cost of litigation; and
(B) that either
(I) an offer to pay was refused and the damages awarded in favor of the offeree and against the offeror are less than 75 percent of the offer; or
(ii) an offer to accept payment was refused and the damages awarded in favor of the offeror and against the offeree are more than 125 percent of the offer.
(2) In determining entitlement to and the amount of a sanction, the court may consider any relevant factor, including:
(A) the merit of the claim that was the subject of the offer;
(B) the number, nature and quality of offers and counteroffers made by the parties;
(C) the closeness of questions of fact and law at issue;
(D) whether a party unreasonably refused to furnish information necessary to evaluate the reasonableness of an offer;
(E) whether the suit was in the nature of a test case presenting questions of far-reaching importance affecting nonparties;
(F) the fact that, at the time the offer was made and rejected, it was unlikely that the rejection would result in unreasonable cost or delay;
(G) the fact that a party seeking sanctions has himself unreasonably rejected an offer or counteroffer on the same issues or engaged in other unreasonable conduct;
(H) the fact that the proceeding in question essentially was equitable in nature;
(I) the lack of good faith underlying the offer; or
(J) the fact that the judgment was grossly disproportionate to the offer.
(3) No sanction under this rule shall be imposed in any class action or shareholder derivative suit, nor in any proceeding involving dissolution of marriage, alimony, nonsupport, child custody or eminent domain.
(Footnotes omitted.)
(h) Costs and Fees.
(1) If a party is entitled to costs and fees pursuant to applicable Florida law, the court may, in its discretion, determine that a proposal was not made in good faith. In such case, the court may disallow an award of costs and attorneys’ fees.
(2) When determining the reasonableness of the amount of an award of attorneys’ fees pursuant to this section, the court shall consider, along with all other relevant criteria, the following factors:
(A) The then-apparent merit or lack of merit in the claim.
(B) The number and nature of proposals made by the parties.
(C) The closeness of questions of fact and law at issue.
(D) Whether the party making the proposal had unreasonably refused to furnish information necessary to evaluate the reasonableness of the proposal.
(E) Whether the suit was in the nature of a test case presenting questions of far-reaching importance affecting nonparties.
(F) The amount of the additional delay cost and expense that the party making the proposal reasonably would be expected to incur if the litigation were to be prolonged.