A recent Law 360 story by Nathan Hale, “Fla. Insurer Loses Appeal of Multiplier of Atty Fees Award,” reports that a Florida appeals court rejected Citizens Property Insurance’s appeal of an order applying a multiplier to an attorneys' fees award for a homeowner who obtained a favorable settlement in a coverage dispute, finding the insurer's argument relied on a decision recently rejected by the Florida Supreme Court.  The Third District Court of Appeal concluded that the trial judge had not abused his discretion in applying a 2.0 contingency fee multiplier, which resulted in a fee award of $120,250 for homeowner Agosta Laguerre.

Citizens Property Insurance Co., which is Florida's insurer of last resort, did not dispute that state law entitled Laguerre to collect attorneys' fees after they settled the underlying suit, in which she contested an $8,400.77 coverage payment she argued significantly undervalued her December 2005 claim for wind damage caused by Hurricane Wilma.  Citizens argued against the multiplier based on the Third District's 2015 decision in State Farm Ins. Co. v. Alvarez, which held that courts can apply contingency fee multipliers “only in 'rare' and 'exceptional' circumstances,” according to the opinion.

The appeals panel pointed out, however, that it had held the Laguerre case in abeyance after hearing oral arguments to await the Florida Supreme Court's ruling in Joyce v. Federated National Insurance Co., an appeal of a decision by the Fifth District that had relied on the Alvarez decision.  In its ruling last year, the Florida Supreme Court rejected the idea that contingency fee multipliers are appropriate only in rare and exceptional circumstances, disapproving of that element of the Alvarez decision, the opinion said.

The Third District quoted the high court's statement that “the contingency fee multiplier provides trial courts with the flexibility to ensure that lawyers, who take a difficult case on a contingency fee basis, are adequately compensated.  Citizens had argued that Laguerre's request did not meet the “rare” and “exceptional” requirement because there was no evidence presented at the fee hearing that Laguerre had difficulty finding an attorney who would take her case, that the results she obtained were not enough to warrant a multiplier, and that a multiplier cannot be based on the complexity of the case, the Third District recounted.

The appeals panel found that while the testimony provided by Laguerre's expert fee witness was thin, Citizens' decision not to cross-examine him about the application of a multiplier and its failure to present evidence that there were competent attorneys who would have taken the case without a multiplier meant the trial judge had not abused his discretion in reaching the conclusion that the relevant market required a fee multiplier.  “Although we find that the testimony supporting the trial court’s conclusion was minimal, a trial court generally may rely on 'expert testimony that a party would have difficulty securing counsel without the opportunity for a multiplier' in support of the imposition of the multiplier,” the panel said.

The panel also rejected Citizens' argument that the “relatively small recovery” did not justify a multiplier, pointing to the difference between a $2,000 offer the insurer made and the appraisal umpire's ultimate award of $27,367.63 minus the money already paid to Laguerre.  Finally, the Third District said the Florida Supreme Court made clear in the Joyce decision that it was not wrong for the trial court to consider the complexity and difficulty of a case in weighing application of a multiplier.

“Turning to whether the complexity of the instant case warrants a contingency fee multiplier, we again note that a contingency fee multiplier analysis 'is properly analyzed through the same lens as the attorney when making the decision to take the case,'” the panel said.  “For this reason, the fact, in hindsight, that this case ultimately consisted of two summary judgment proceedings and minimal discovery and did not proceed to trial is not determinative on this issue.”

The case is Citizens Property Insurance Co. v. Laguerre, case number 3D15-2411, in the Third District Court of Appeal of Florida.