Appellate Court Reverses Fee Multiplier and Slashes Excessive Fee Award
Nov 30, 2020
NOVEMBER 2020
Florida Insurance Matters is a monthly update on Florida insurance-related legal developments by the Colodny Fass Insurance Litigation Practice, recently recognized as the Insurance Litigation Department of the Year in South Florida by the Daily Business Review.
ABOUT THE AUTHOR
Amy L. Koltnow, a Colodny Fass Shareholder, focuses her practice on representing insurance companies in complex insurance litigation and counseling insurers on claims resolution. She has represented insurers in connection with property damage and first-party coverage litigation, claims of “bad faith,” high-risk exposures, class actions and multi-district litigation.
For more information about Ms. Koltnow, click here.
Appellate Court Reverses Fee Multiplier and Slashes Excessive Fee Award
The Third District reversed a trial court order applying a 2.0 fee multiplier and awarding $441,805.14 in fees and costs to the insured’s attorneys in a first-party property insurance case. The case settled for $25,000 after minimal discovery and no significant motions were litigated. The insured’s counsel presented evidence that five attorneys spent 469 hours in the case. The insured’s fee expert testified a 10% “across-the-board” hourly reduction was reasonable. The trial court adopted this opinion without any particularized findings and applied a 2.0 multiplier. The appellate court reversed the fee order finding the fee excessive. The appellate court adopted the findings of defendant’s fee expert and reduced the reasonable hours billed to 101. The court further held the evidence did not support the application of a fee multiplier. Universal Prop. & Cas. Ins. Co v. Deshpande, 3d DCA (Nov. 12, 2020).
TIPS & LESSONS
- The court reiterated that “billable hours” must be reasonably expended.
- Insurers must present clear and compelling evidence to expose the excessive time insureds’ attorneys contend they spent pursuing a successful outcome.
- For consideration: Should the state legislate a deterrent to the submission of excessive fee claims such as proposals for settlement for fee claims enforced against attorneys and law firms?
Appellate Court Reverses Summary Judgment in Favor of Insurer but Acknowledges Insured’s counsel’s “Unprofessional Lawyering”
Days before trial, the insurer sought to strike the insured’s damage witness because the witness never inspected the property. The trial court continued the hearing one week and ordered lead counsel to appear and the witness to be deposed. The witness refused to be deposed and the insured’s lead counsel did not appear for the hearing but sent another attorney instead. The trial judge struck the witness’ affidavit, reconsidered her prior ruling, and granted summary judgment in favor of the insurer finding no genuine issues of material fact as to the amount of damages. The appellate court reversed based on due process deficiencies since the judge gave no advance notice to insured’s counsel that she was reconsidering the insurer’s prior summary judgment motion. The appellate court, however, felt compelled to explain what happened in the case, and acknowledged the frustration of the trial judge in the face of “unprofessional lawyering” by insured’s counsel. Iriarte v. Citizens Property Insurance Corp., 4th DCA (Nov. 18, 2020)
TIPS & LESSONS
- The appellate court highlighted the law firm involved—the Strems Law Firm. Scot Strems is presently suspended from the practice of law pending the Florida Bar’s final report to the Florida Supreme Court.
- The appellate court noted that due process would have been satisfied if the judge had given notice of the hearing only until the following morning.
- For consideration: How can we better educate the judiciary to more swiftly acknowledge and sanction “unprofessional lawyering” and bad faith litigation tactics?
QUICK NOTE: Florida Supreme Court Declines to Accept Jurisdiction Thus Upholding Policy’s Anti-Concurrent Cause Provision as Complete Bar to Coverage
The Florida Supreme Court has declined to accept jurisdiction in Czelusniak v. Security First Prop. Ins. Co., leaving the appellate decision applying the policy’s anti-concurrent cause provision to bar coverage for all property damage caused by multiple concurrent causes as the definitive law in the state. This case serves as an important reminder to insurers and defense counsel to understand the policy’s anti-concurrent cause provisions and how it applies to a particular loss. The Sebo case does not necessarily equate to coverage of all losses.
I am proud to have had the opportunity to present the legal issues in this case to the appellate court and Florida Supreme Court. Click here for the appellate opinion and here for the Florida Supreme Court’s order declining jurisdiction.