TALLAHASSEE – In a noteworthy decision filed Oct. 19, the Florida Supreme Court determined a trial court can apply a contingency fee multiplier even when no “rare” and “exceptional” circumstances exist.
The decision came as a result of a case between a retired couple and Federated National Insurance Company. William and Judith Joyce had been denied coverage by the insurance carrier, and the couple filed a suit alleging their claim had been wrongfully denied. Because the couple could not afford an attorney at an hourly rate, their attorney agreed to work on a contingency fee basis.
After litigating the case for several months, the insurance company agreed to a settlement, which included reasonable attorney’s fees for the Joyces’ attorney. The trial court set the fee at $38,150 plus a contingency fee multiplier of 2.0, bringing the total attorney’s fee award to $76,300.
Federated National appealed the award to the Fifth District Court of Appeals, arguing against the court’s calculation of the fees as well as its use of the fee multiplier. The appellate court affirmed the calculation of the fees but reversed the multiplier, finding that it should only be used in rare and exceptional circumstances, which the Joyce case did not present.
Justice Barbara J. Pariente http://www.floridasupremecourt.org/justices/pariente.shtml
The Florida Supreme Court accepted review of the case because the Fifth District’s decision conflicted with its precedent. In its filed opinion, written by Justice Barbara J. Pariente, the court pointed out “It is clear this court has never limited the use of contingency fee multipliers to only ‘rare’ and ‘exceptional’ circumstances,’” and in reality past cases have shown that, “this court emphasized the importance of contingency fee multipliers to those in need of legal counsel and made clear that trial courts could consider contingency fee multipliers any time the requirements for a multiplier were met.”
The court also rejected the precedent set by the U.S. Supreme Court in rejecting contingency fee multipliers, which that court felt promote nonmeritorious claims. Rather, the Florida Supreme Court “would, instead, posit that solely because a case is ‘difficult’ or ‘complicated’ does not mean that the case is nonmeritorious,” Pariente wrote. “Indeed, without the option of a contingency fee multiplier, those with difficult and complicated cases will likely be unable or find it difficult to obtain counsel willing to represent them.”
The court remanded the case to the Fifth District to reinstate the attorney’s fees award and judgment. Chief Justice Jorge Labarga and Justices R. Fred Lewis and Peggy A. Quince concurred with Pariente’s opinion, Justice Ricky Polston concurred in result, and Justice Charles T. Canady dissented with an opinion, to which C. Alan Lawson concurred.
In his dissenting opinion, Canady argued the Fifth District misstated the Supreme Court’s law concerning the use of contingency fee multipliers, “but because the multiplier was used without sufficient justification under the requirements of our case law, the district court nonetheless reached the correct result in reversing the fee award.”