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Court Holds Insured Fee Multiplier is Unsupported By Relevant Market in Florida

March 27, 2021 | Posted in : Article / Book, Billing Record / Entries, Contingency Fees / POF, Coverage of Fees, Expenses / Costs, Fee / Rate Economics, Fee Award, Fee Award Factors, Fee Denial, Fee Entitlement / Recoverability, Fee Expert / Member, Fee Issues on Appeal, Fee Jurisprudence, Fee Reduction, Fees & Insurance Policy, Fees Paid by Insurers, Hours Billled, Lodestar Multiplier, Practice Area: Insurance Litigation

A recent article by Derek R. Lenzen, “Florida Appellate Court Holds Insured’s Attorneys’ Fee Award Multiplier Is Unsupported By Requirements,” reports that a Florida appellate court held attorneys’ fee award excessive and that the fee multiplier was not necessary in order for an insured to obtain competent counsel in the relevant market.  Deshpande v. Universal Prop. & Cas. Ins. Co., 45 Fla. L. Weekly D2511a (Fla. 3d DCA November 12, 2020).  This article was posted with permission.  The article reads:

The insured filed a claim under a homeowners’ policy.  The insurer denied coverage and the insured filed suit.  After minimal discovery, the insurer served a proposal for settlement exclusive of attorneys’ fees and costs.  The insured accepted the proposal and the parties litigated the amount of reasonable attorneys’ fees.  The insured’s counsel produced invoices for 469 hours among five attorneys and one paralegal, and the insurer provided a line-item response with objections to the invoices.  The insured’s fee expert confirmed the invoices but did not prepare a line-item analysis.  Instead, the insured’s expert applied a blanket 10% reduction of hours from 469 to 422 and stated that a 2.0 multiplier was reasonable. The insurer’s fee expert prepared a full line-item analysis and stated that the market does not require a fee multiplier for insureds to obtain competent counsel.  The trial court adopted the insured’s fee expert’s conclusions without explanation, awarded the fees, and applied the multiplier.

The appellate court reversed, holding that the trial court did not consider the required eight criteria in determining the amount of attorneys’ fees to be awarded, including specific findings as to the number of hours and reduction or enhancement factors.  The appellate court held that the insured’s counsel did not present evidence that it was reasonable to spend 469 hours on a first-party property insurance case that settled after minimal discovery and without significant motions.  Further, the court found that there was no evidence that the insured could not have obtained other competent counsel in the relevant market absent the availability of a contingency fee multiplier.  The appellate court remanded to the trial court with directions to enter an amended final judgment as per the appellate court’s opinion.