State Farm Fire & Casualty Co. v. Johnson

Oct 4, 1988
No. 88-51
Versions:547 So. 2d 940
13 Fla. L. Weekly 2259
1988 WL 100554
1988 Fla. App. LEXIS 4340

Lead Opinion

THOMPSON, Judge.

State Farm Fire and Casualty Company (State Farm) appeals a final judgment awarding attorneys’ fees and costs to ap-pellee. We reverse.

Appellee entered into a one-third contingency fee contract with his attorneys, providing that if he was successful in his suit against State Farm they would receive as their fee one-third of any amount recovered by appellee. The maximum possible recovery, due to policy limits, was $40,000. Because appellee was found by the jury to have been comparatively negligent, his actual recovery was $18,000.

There is absolutely no dispute or question as to the terms of the attorney fee contract between appellee and his attorneys. It was a contingency fee contract providing the attorneys would receive as their fee 33⅛ percent of the total amount recovered by appellee. This was clearly set forth in the record, in the briefs and at oral argument. At the hearing to determine the attorney’s fee that is the subject of this appeal, Robert A. Cole, an attorney witness as to a reasonable fee, testified as follows:

Q Did you take a look at the fee agreement between Mr. Burnett and Mr. Johnson?
A Yes.
Q Was that a contract?
A Yes, I believe it was. It was signed by Mr. Johnson.
Q It called for a one-third contingency?
A Thirty-three and a third, I believe it was.

In his brief and in his oral argument the attorney for the appellant stated that the attorney fee contract with appellee was a one-third contingency fee contract. The attorney for the appellee never contradicted that statement. In fact he admitted that he had a one-third contingent fee contract. At the oral argument the following colloquy between Judge Zehmer and David R. Lewis, attorney for the appellee, took place:

*941JUDGE ZEHMER: What is the contract? The first question I asked Mr. Shaw is, what is the proof of the contract?
MR. LEWIS: Unfortunately, there is none in the record.
JUDGE ZEHMER: Other than the testimony, this was a one-third contingent fee contract?
MR. LEWIS: Yes sir.
JUDGE ZEHMER: Well, if there has to be a reversal and remand, is that a question that should be decided or is that a question that’s already been decided?
MR. LEWIS: There’s no secret about what it is, your Honor. It’s not in the record. If the court wants me to tell it, I can, but there’s no problem.
JUDGE ZEHMER: Well, I just want to go on what the record shows.

In view of the admission of appellee’s attorney that there is no dispute regarding his fee arrangement, there is no need to take further evidence on the meaning and effect of the contract. It is immaterial what fee contract appellee’s attorney could have entered into or should have entered into. The provisions of the fee contract which the appellee entered into are established by the record and they are not in disputo.

In calculating the amount of the fee award to which appellee was entitled the trial court relied on Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla.1985) and considered the number of hours reasonably expended and the reasonable hourly rate to arrive at the lodestar figure. The court then enhanced this amount by multiplying it by a contingency risk factor of 1.5. The resulting fee which the court awarded was $41,715. This amount is in error because Rowe specifically cautions that “in no case should the court-awarded fee exceed the fee agreement reached by the attorney and his client.” Id. at 1151.

Although the contingency fee agreement in the instant case was entered into prior to the effective date of the Rowe decision, the supreme court has recently held that Rowe does not constitute a judicial change in the law which is retroactively inapplicable because it impairs vested rights. Instead, the court explained that Rowe merely implements the statutory provision which authorizes an attorney’s fee award to the prevailing party. No contractual rights exist between the prevailing party and the opposing party, therefore no vested right is impaired. Miami Children’s Hospital v. Tamayo, 529 So.2d 667 (Fla.1988). In Bodiford v. World Service Life Insurance Co., 524 So.2d 701 (Fla. 1st DCA 1988) this court held that' Rowe does not apply retroactively so as to restrict the fee award to the amount of a contingency fee agreement if the agreement was entered into prior to the effective date of Rowe. Two days after this court denied rehearing in Bodiford, the supreme court filed its decision in Tamayo. Therefore, the decision in the instant case is in accord with the supreme court decisions in Rowe and Tamayo, but is in conflict with this court’s prior opinion in Bodiford, which is currently pending review in the supreme court.

We reverse the fee award and remand for reconsideration in light of Rowe as clarified by Tamayo.

REVERSED and REMANDED.

SHIVERS, J., concurs. ZEHMER, J., dissents and concurs with opinion.



Concurrence Opinion

ZEHMER, Judge

(specially concurring and dissenting).

While I concur in the reversal and remand ordered by the court’s opinion, my concurrence is qualified to some extent. I do not agree that the intent of the parties to the attorney fee agreement and the legal effect thereof is as clearly established as the court’s opinion makes it out to be. Unquestionably, the plaintiff and his attorney made a conventional one-third contingent fee contract, as outlined in the court’s opinion. However, the testimony in the record does not necessarily explain the intent of their agreement in the event the trial court should award a reasonable attorney’s fee to the plaintiff. Contracts must be construed as having been made in contemplation of the applicable law, and such *942law is usually implicitly or expressly incorporated in the contract terms. The law when this contract was made, as now, permitted the payment only of a reasonable fee, whether calculated by a contingency percentage or set by the court. The law also permitted these parties to agree that plaintiffs attorneys would be paid a reasonable fee consisting either of one third of the plaintiffs recovery, or a reasonable fee to be set by the court and paid by the defendant, whichever might be greater. The law and customary practice at the time this agreement was made generally contemplated that plaintiffs attorney would receive the reasonable fee awarded by the court if that amount should be the greater of the two amounts. Despite the testimony of record that this agreement was basically a one-third contingency contract, whether the plaintiff and his attorneys intended that the reasonable fee awarded by the court was or was not to be reduced by the one-third contingency was not the subject of detailed inquiry upon the record, no doubt because the parties and the court were primarily concerned at the hearing with whether Rowe should be retroactively applied rather than with whether, under the fee agreement, the reasonable fee awarded by the court was intended by the plaintiff and his attorney to be limited to the one-third contingency. While I concur in reversing and remanding for further proceedings, I do so with the belief that the parties should be allowed, if they so desire, to present further evidence and legal argument on the precise meaning and legal effect of the contract of employment between plaintiff and his attorney. Because the trial court has never directly passed on this precise issue, that court should be the first to determine the extent to which the agreement so made operates to limit or reduce the amount of fee that the trial court has deemed to be reasonable under all the circumstances. I strongly disagree with this court’s interpreting the testimony and determining the intent of the parties in the absence of a prior finding on these matters by the trial court. To the extent that the majority opinion is intended to preclude such further consideration, I must respectfully dissent.

ON MOTION FOR CLARIFICATION

PER CURIAM.

Appellee’s motion for clarification is denied.

SHIVERS, C.J., and THOMPSON, J., concur.

ZEHMER, J., dissenting with written opinion.





Dissenting Opinion

ZEHMER, Judge

(dissenting).

Appellee’s motion for clarification vividly points up the need to clarify the court’s opinion by remanding with leave for the parties to adduce further evidence on the precise agreement between appellee Johnson and his trial and appellate attorneys, as noted in my dissent to the court’s opinion.

Appellee’s motion alleges, and the record reflects, that he was represented at trial, on the prior appeal in Johnson v. State Farm Fire and Casualty Co., 451 So.2d 898 (Fla. 1st DCA 1984), review denied, 496 So.2d 137 (Fla.1986), and on this appeal, by attorney David R. Lewis and his law firm, Lewis, Paul, Isaac & Castillo, P.A. Johnson had originally employed Mr. Burnett as his attorney, and it was the original agreement between Johnson and Burnett that is referred to as the one-third contingent fee contract in the record and in the court’s opinion; the record does not contain any testimony of the terms of Johnson’s employment of the Lewis firm some year and a half after Mr. Burnett was employed, as the quoted statements set forth in the court’s opinion readily show. The absence of testimony on the agreement with Lewis is attributable, no doubt, to the fact that the attorney fee issue was submitted and resolved in appellee’s favor by the trial court’s ruling that Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla.1985), would not be retroactively applied in this case. This ruling made the terms of Johnson’s contract with Lewis of no compelling significance in the view of the trial court, appellee and appel-lee’s counsel because a reasonable fee *943would be due under the law and customary practice followed before Rowe without regard to the precise terms of the agreement between Johnson and Burnett or Lewis.

As I have pointed out in my dissent, it had been customary for attorney fee contracts to impliedly or expressly include an agreement that the ultimate fee due by the client to the lawyer, when a contractual or statutory right to reimbursement by the opposing party for attorneys fee exists, would be not less than the amount of the agreed contingency nor an amount greater than the reasonable fee set by the court. Such fee arrangements simply effectuated the ethical restriction that lawyers should not charge more than a reasonable fee. Such understandings have been impliedly, as well as expressly, a part of fixed fee, hourly rate, and contingent fee contracts. Therefore, at the very least, the parties and the trial court should be afforded an opportunity to review evidence of the terms of appellee’s contract with his present attorneys so that the trial court can properly and correctly apply the Rowe principles to an accurately determined state of facts.

State Farm opposes the motion for clarification and permitting any evidence of Johnson’s contract with Lewis, contending that Johnson and Lewis had ample opportunity to present evidence of their contract, and that if Lewis’s contract were any different from that between Johnson and Burnett, such fact has not been argued before now, either to the trial court or to this court: Thus, State Farm argues, “Having failed to assert this issue either before the trial court or in briefs or in oral argument before this court, Appellee may not now raise it for the first time”. (Appellant’s Reply, p. 2.) I grant this argument has not been previously made, but for a good reason. It was not until receipt of this court’s opinion that appellee was informed that (1) Rowe would be applied retroactively, (2) under Rowe the fee to be awarded could not exceed the contingent fee agreement between the parties, and (3) that this court would not remand for the parties to present "evidence of the fee agreement which had now become, by reason of the court’s opinion, most relevant and material to the disposition of the claim for attorney’s fees. We should not penalize appel-lee for not presenting evidence of an agreement which was not essential to the trial court’s disposition of the issue. The correct procedure, since we are reversing on a legal principle not applied correctly in the lower court, is to remand the case for further proceedings in accordance with the correct principle of law, including additional findings of fact relevant to that principle. This court should not speculate or undertake to make any findings of fact determining what the actual agreement was, but leave that function to the trial judge in this instance.'

For all of these reasons, I respectfully dissent.