The Honorable Reese O. Nable on Exercising Discretion Over Attorneys Fees in Florida PIP Cases

Do insurance companies have any real negotiating power when it comes to plaintiffs’ demands for attorney’s fees? Often, settlement negotiations in personal injury protection (PIP) cases come down to a dispute over the reasonableness of the plaintiff’s fee demand. The parties may agree that the defendant, the insurance company, will issue an additional $31.45 in PIP benefits, but the plaintiff’s counsel refuses to accept anything less than $7,500 on a three-month-old case with nothing more than the complaint and one set of boilerplate discovery filed. This is the point where a cost-benefit analysis plays a major role. What would happen if the parties bifurcated and took the fee dispute to hearing?

A recent publication in The Florida Law Weekly Supplement highlighted a heralding order on attorney’s fees issued by Judge Luis Perez-Medina, a former Assistant State Attorney of the Miami-Dade State Attorney’s Office, wherein the judge slashed the plaintiff’s counsel’s hours by almost half to reach a “reasonable” amount. The order arose from the plaintiff’s motion for attorney’s fees, interest on attorney’s fees and costs, and included consideration of documentary evidence and expert testimony presented by both parties. However, one additional factor played a critical role in Judge Perez-Medina’s analysis—common sense.

In L.E.R.G. Medical Inc., a/a/o Omar Peiro v. Infinity Auto Insurance Company, 30 Fla. L. Weekly Supp. 111a (Miami-Dade County Court 2021), the plaintiff’s attorney claimed he expended 32.6 hours litigating a PIP case, to be multiplied by an hourly rate of $500. The court disagreed and reduced the number of hours to 17.40 (at $500/hour), pursuant to Hensley v. Echerhart, 461 U.S. 424, 434 (1983) and North Dade Church of God, Inc. v. JM Statewide, Inc., 851 So.2d 194, 196 (Fla. 3d DCA 2003). One particular criticism was that the plaintiff unilaterally set depositions without first seeking to coordinate with the defendant or obtain assistance from the court, leading to the filing of excessive motions for sanctions against the defendant, which the plaintiff never took to hearing. Additionally, the plaintiff appeared to circumvent payment of the appropriate filing fee by amending its complaint before the return of service was filed with the court, raising the jurisdictional amount from $99 to over $5,000.

One major benefit of the court’s order in this case is the extensive case law that insurance companies and their counsel may use to conduct a cost-benefit analysis of a plaintiff’s attorney’s claim for fees in settlement negotiations. The court made clear that the movant at a fee hearing must produce competent, substantial evidence that the hours claimed are “reasonable.” The following are factors a court must consider when determining reasonableness:

1. The time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly.
2. The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.
3. The fee customarily charged in the locality for similar legal services.
4. The amount involved and the results obtained.
5. The time limitations imposed by the client or by the circumstances.
6. The nature and length of the professional relationship with the client.
7. The experience, reputation, and ability of the lawyer or lawyers performing the services.
8. Whether the fee is fixed or contingent.

Florida Patient’s Comp. Fund v. Rowe, 472 So.2d 1145 (Fla. 1985), holding modified by Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990); Rule 4-1.5, Rules Regulating the Florida Bar. Nonetheless, a court is not required to award an amount that “is so obviously contrary to the manifest justice of the case [and] so obviously offends even the most burdened conscience.” L.E.R.G. Medical Inc., a/a/o Omar Peiro, supra (citing Nunez v. Allen, 292 So.3d 814, 821 (Fla. 5th DCA 2019). See also, Kuhnlein v. Dep’t of Rev., 662 So.2d 309, 312 (Fla. 1995) (holding a judge must not abandon his or her own experience or common sense “irrespective of [expert opinions at a fee hearing]” to determine “reasonableness”). This begs the question: is the extent to which a judge applies common sense to an analysis of a reasonable attorney’s fee objectively ascertainable?

The short answer, yes. Case law directs courts to use common sense to identify a claim for hours that is: (a) excessive or “too thorough”; (b) duplicative of time spent by other lawyers for the same party; or (c) were simple ministerial tasks that were more appropriately handled by support staff. L.E.R.G. Medical Inc., a/a/o Omar Peiro, supra. Hours for pre-suit time are not compensable either. PIP litigation may sometimes involve convoluted arguments but a court need not be a master of the Florida No-Fault Statute to determine how much time is reasonable for an attorney to prepare a breach of contract complaint and boilerplate discovery requests—that is where common sense comes in based on experience in the field and/or on the bench.

With Florida courts granting plaintiffs’ firms fee awards with hourly rates between $500 and $650 per hour, and recent pressure from the civil case management orders to move cases swiftly, understanding the progress of case law on the issue of attorney’s fees and “reasonableness” can enable insurance companies to prepare concise and realistic strategies for defending and settling PIP claims. Plaintiffs’ firms may increase hourly rates, but they cannot change the longstanding precedent of the Florida courts and the Rules of the Florida Bar.

*Kimberly is an associate in our Tampa, Florida, office. She can be reached at 813.898.1817 or kjlopater@mdwcg.com.

_{Defense Digest, Vol. 28, No. 3, October 2022 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2022 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}