Third District Court of Appeal
State of Florida
Opinion filed November 12, 2020.
Not final until disposition of timely filed motion for rehearing.
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No. 3D19-1566
Lower Tribunal No. 17-20911
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Universal Property & Casualty Insurance Company,
Appellant,
vs.
Raghunath Deshpande,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Abby Cynamon,
Judge.
Loughren, Doyle and Reising, P.A. (Fort Lauderdale); Russo Appellate Firm,
P.A., and Elizabeth K. Russo, for appellant.
Alvarez, Feltman, Da Silva & Costa, P.L., and Paul B. Feltman, for appellee.
Before EMAS, C.J., and HENDON and GORDO, JJ.
PER CURIAM.
Universal Property & Casualty Insurance Co. appeals the trial court’s order
awarding $441,805.14 in fees and costs payable to Raghunath Deshpande’s
attorneys in this first-party property insurance case. We have jurisdiction. See Fla.
R. App. P. 9.030(b)(1)(A).
Universal argues the award was excessive and unsupported by the evidence.
We agree. Therefore, we reverse and remand to the trial court with directions to
enter an amended final judgment consistent with this opinion.
FACTUAL & PROCEDURAL BACKGROUND
In March 2017, Deshpande suffered water damage to his home. Universal
denied coverage and Deshpande spent $23,000 out of pocket to perform repairs
before hiring counsel to file suit on his behalf. On August 25, 2017, Deshpande sued
Universal for declaratory judgment and breach of contract. The parties engaged in
minimal discovery and took only two depositions in the litigation. No substantive
motions or expert reports were filed and there was no trial in the matter. On October
10, 2018, Universal served a proposal for settlement in the amount of $25,000
excluding attorneys’ fees and costs. Deshpande accepted the proposal for settlement
and the parties proceeded to litigate the amount of reasonable attorneys’ fees.
Deshpande’s counsel produced invoices reflecting that it billed a total of 469
hours for five attorneys and one paralegal in preparation of the case. Universal’s fee
expert provided a line-item response detailing objections for entries he deemed were
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excessive for the nature of the task, had vague or inadequate descriptions, contained
duplicate work from multiple attorneys, or were for secretarial or ministerial tasks.
Plaintiff did not file any written response to these objections.
On July 18, 2019, the trial court held an evidentiary hearing. At the hearing,
the corporate representative for the Plaintiff’s firm testified generally to the accuracy
of the firm’s billing and that each attorney’s hourly rate was reasonable based on the
South Florida market and the attorney’s respective experience. The corporate
representative attested that the firm accepted the case on a pure contingency basis
and that it had no way to mitigate against the risk of nonpayment.
The Plaintiff’s fee expert testified that the attorneys’ hourly rates were
reasonable in the market according to each attorney’s experience, and that the
paralegal’s fee was likewise reasonable. The fee expert confirmed the firm billed
469 hours on the case. The fee expert testified he never prepared a line-item analysis
of the firm’s time entries, but to accomplish a “conservative” estimate, he applied a
10% across-the-board hourly reduction reducing the number of billed hours to 422
hours. He did not explain why that reduction represented a reasonable amount of
hours expended in preparation of the case. The fee expert also opined that a 2.0
multiplier was appropriate based on the favorable outcome achieved and the
likelihood of recovery at the outset of the case.
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The Defendant’s fee expert opined that the number of hours billed should be
reduced from 469 to 101 hours. He testified regarding objections to specific
itemized entries and concluded a reduced number of hours was warranted for trial
preparation, deposition preparation, duplicative billing by multiple attorneys and
ministerial tasks. The Defendant’s fee expert also testified that the relevant market
is saturated with firms practicing first-party property insurance who would likewise
take the case on a contingency basis, and the market does not require a multiplier to
obtain competent counsel.
The trial court adopted Plaintiff’s fee expert’s conclusions in every respect,
applying the 10% across-the-board reduction without further explanation. The court
awarded a lodestar amount of $206,090.00 in attorneys’ fees and $3,315.00 in
paralegal fees. The trial court then applied a 2.0 multiplier increasing the total fee
award to $415,495.00. The court awarded $12,510.14 in costs and $13,800.00 to
Plaintiff’s fee expert. The final judgment for fees and costs payable to Deshpande’s
counsel was $441,805.14 following the $25,000 settlement.
LEGAL ANALYSIS
Lodestar Amount
In determining the amount of attorneys’ fees to be awarded, a trial court is
required to use the lodestar approach and consider the eight criteria set forth in
Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). “Under
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Rowe, a trial court must first determine the lodestar amount, which is the number of
attorney hours reasonably expended multiplied by a reasonable hourly rate.” Joyce
v. Federated Nat’l Ins. Co., 228 So. 3d 1122, 1126 (Fla. 2017) (citing Rowe, 472 So.
2d at 1150–51). “The trial court must set forth ‘specific findings’ as to its
determination of the number of hours, the hourly rate, and any reduction or
enhancement factors.” Id. (citing Rowe, 472 So. 2d at 1151). We review the trial
court’s evidentiary findings regarding the attorneys’ fee award for competent,
substantial evidence. Pazmino v. Gonzalez, 273 So. 3d 1056, 1059 (Fla. 3d DCA
2019).
We begin by approving the court’s findings as to the reasonable hourly rates
for all five of the Plaintiff’s attorneys and the paralegal. We do not, however, affirm
the lodestar amount because the record does not contain competent, substantial
evidence that 469 hours were reasonably expended in this case. Under the lodestar
method, “[t]he fee applicant bears the burden of presenting satisfactory evidence to
establish . . . that the hours are reasonable.” 22nd Century Props., LLC v. FPH
Props., LLC, 160 So. 3d 135, 142 (Fla. 4th DCA 2015) (citation omitted). When
calculating the number of hours reasonably expended on the litigation, “[f]ee
applicants are expected to exercise ‘billing judgment,’ and, if they do not, ‘courts
are obligated to do it for them, to cut the amount of hours for which payment is
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sought, pruning out those that are excessive, redundant, or otherwise unnecessary.’”
Id. (citation omitted).
Deshpande’s counsel failed to present evidence that it was reasonable for five
attorneys to expend 469 hours in this first-party property insurance case that settled
after minimal discovery and in which no significant motions were litigated. The
amount of fees is “assuredly excessive in relation to the results obtained.” Donald
S. Zuckerman, P.A. v. Alex Hofrichter, P.A., 676 So. 2d 41, 43 (Fla. 3d DCA 1996)
(citing In re Estate of Platt, 586 So. 2d 328 (Fla. 1991) (noting it is not ordinarily
reasonable to spend as much legal time on a case as the amount of money in
dispute)). In fact, in a “relatively simple and straightforward” matter like this “such
a claim smacks of being disingenuous.” Brake v. Murphy, 736 So. 2d 745, 750 (Fla.
3d DCA 1999).
Courts must be particularly concerned with “notorious ‘billable hours’
syndrome, with its multiple evils of exaggeration, duplication, and invention.”
Miller v. First Am. Bank & Trust, 607 So. 2d 483, 485–86 (Fla. 4th DCA 1992).
“Duplicative time charged by multiple attorneys working on the case are generally
not compensable.” N. Dade Church of God, Inc. v. JM Statewide, Inc., 851 So. 2d
194, 196 (Fla. 3d DCA 2003). “Likewise noncompensable is excessive time spent
on simple ministerial tasks such as reviewing documents or filing notices of
appearance.” Id. (citations omitted). The court did not make any specific findings
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as to disputed time entries which may have been excessive, vague, duplicative or
ministerial. Nor did the court apply any particularized reductions or make any
findings as to the appropriateness of reductions. Rather, without explanation, the
court adopted the Plaintiff’s fee expert’s 10% blanket reduction to the number of
hours expended. We find this reduction arbitrary and unsupported. Because the
$441,805.14 fee award in this case is not supported by competent, substantial
evidence, we reverse the lodestar amount.
“Generally, when an attorney’s fee or cost order is appealed and the record on
appeal is devoid of competent substantial evidence to support the order, the appellate
court will reverse the award without remand.” Murphy, 736 So. 2d at 748 (citation
omitted). “[W]here a party seeking fees and costs has been afforded an evidentiary
hearing, it is not entitled to a second bite at the apple to prove its claim.” Winter
Park Imports, Inc. v. JM Family Enters., Inc., 77 So. 3d 227, 231 (Fla. 5th DCA
2011). We note, however, that “the opponent of a fee has the burden of pointing out
with specificity which hours should be deducted. . . .” Murphy, 736 So. 2d at 749.
In the record before us, the Defendant’s fee expert identified with specificity which
hours should be deducted based on an itemized analysis of the billing entries. As
there is competent, substantial evidence supporting the Defendant’s fee expert’s
determination that 101 hours were reasonably expended in the litigation, we direct
the trial court to reduce the number of hours billed to 101 hours.
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Multiplier
After determining the lodestar amount, the trial court may then adjust the
lodestar amount based upon “a ‘contingency risk’ factor and the ‘results obtained.’”
Joyce, 228 So. 3d at 1126. While the trial court’s determination to apply a multiplier
to the lodestar amount is reviewed for an abuse of discretion, the trial court’s findings
as to the multiplier must be supported by competent, substantial evidence. See TRG
Columbus Dev. Venture, Ltd. v. Sifontes, 163 So. 3d 548, 552–53 (Fla. 3d DCA
2015).
“The question of whether the trial court may apply a multiplier is governed by
the standards set forth in Standard Guaranty Insurance Company v. Quanstrom, 555
So. 2d 828 (Fla. 1990).” Sifontes, 163 So. 3d at 552. Quanstrom provides:
[T]he trial court should consider the following factors in
determining whether a multiplier is necessary: (1) whether
the relevant market requires a contingency fee multiplier
to obtain competent counsel; (2) whether the attorney was
able to mitigate the risk of nonpayment in any way; and
(3) whether any of the factors set forth in Rowe are
applicable, especially the amount involved, the results
obtained, and the type of fee arrangement between the
attorney and his client.
Id. (quoting Quanstrom, 555 So. 2d at 834). “Quanstrom requires that a trial court
consider evidence in support of each of the three Quanstrom prongs in order to award
a contingency fee multiplier.” Id.
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“Appellate courts have found that Quanstrom’s first prong is not satisfied
where [evidence to demonstrate that the relevant market required a contingency fee
multiplier to obtain competent counsel] is absent.” Id. The Florida Supreme Court
has observed that the rationale of the relevant market factor is “to assess, not just
whether there are attorneys in any given area, but specifically whether there are
attorneys in the relevant market who both have the skills to handle the case
effectively and who would have taken the case absent the availability of a
contingency fee multiplier.” Citizens Prop. Ins. Corp. v. Laguerre, 259 So. 3d 169,
176 (Fla. 3d DCA 2018) (quoting Joyce, 228 So. 3d at 1135).
In support of the multiplier, the court heard testimony regarding Deshpande’s
counsel’s expertise in first-party property insurance litigation, that the case was
accepted on a contingency basis and that counsel would have been unable to mitigate
against the risk of nonpayment. There was also testimony that Deshpande’s counsel
obtained a favorable result. The record, however, contains no evidence that
Deshpande could not have obtained other competent counsel in this market absent
the availability of a contingency fee multiplier. The Plaintiff’s fee expert failed to
testify that Deshpande’s counsel was the only competent counsel in the relevant
market. Nor did the expert alternatively testify that, while there was other competent
counsel available in the relevant market, they would not have taken the case on a
simple contingency fee and would have done so only if the multiplier was available.
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“If there is no evidence that the relevant market required a contingency fee
multiplier to obtain competent counsel, then a multiplier should not be awarded.”
USAA Cas. Ins. Co. v. Prime Care Chiropractic Centers, P.A., 93 So. 3d 345, 347
(Fla. 2d DCA 2012)); see Sun Bank of Ocala v. Ford, 564 So. 2d 1078, 1079 (Fla.
1990) (“[T]here should be evidence in the record, and the trial court should so find,
that without risk-enhancement plaintiff would have faced substantial difficulties in
finding counsel in the local or other relevant market.” (quoting Pennsylvania v.
Delaware Valley Citizens’ Council for Clean Air, 483 U.S. 711, 731 (1987))); Fla.
Peninsula Ins. Co. v. Wagner, 196 So. 3d 419, 422–23 (Fla. 2d DCA 2016)
(reversing award of multiplier where there was no showing or finding that without
the prospect of a multiplier to an otherwise reasonable fee award, the Wagners would
have had difficulty finding competent counsel to represent them in this insurance
coverage dispute). Because the record is devoid of any evidence that the relevant
market required a contingency fee multiplier to obtain competent counsel, we
reverse the trial court’s application of a multiplier.
Expert Fees
Finally, we reverse the costs awarded to Plaintiff’s experts who never testified
at trial and who were never deposed. Generally, “[i]t is not appropriate to tax as
costs the fees of witnesses who are neither qualified as experts by the court nor testify
at trial.” Thellman v. Tropical Acres Steakhouse, Inc., 557 So. 2d 683, 684 (Fla. 4th
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DCA 1990); see § 92.231(2), Fla Stat. (2020); 12 Fla. Jur 2d Costs § 70 Expert Fees
(2020). We recognize that “[u]nder certain circumstances, costs an expert
reasonably incurs in preparing testimony may be taxed, even though the testimony
proves unnecessary.” Wuesthoff Mem’l Hosp. v. Tapia, 687 So. 2d 1370, 1371 (Fla.
1st DCA 1997) (citing Coastal Petroleum Co. v. Mobil Oil Corp., 583 So. 2d 1022
(Fla. 1991)). Under such circumstances, it is incumbent on the trial court “to
determine exactly which expenses would have been reasonably necessary for an
actual trial, including expert-witness-preparation costs.” Coastal, 583 So. 2d at
1025. “In other words, the trial court should reconstruct a trial strategy that a
reasonable party would have developed in an actual trial, and it should award costs
on the basis of that strategy.” Id. Here, the court awarded costs without making any
factual findings regarding which expenses would have been reasonably necessary
for an actual trial. Therefore, we remand with instructions for the trial court to
conduct the appropriate analysis and make findings based on the evidence presented
at the original hearing.
Reversed and remanded for entry of judgment consistent with this opinion.
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