Allstate Indem. Co. v. Hicks
880 So. 2d 772, 2004 WL 1413923 (2004)
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Rule of Law:
Under section 627.428, Florida Statutes, an insured may not recover attorney's fees for the time spent litigating the applicability of a fee multiplier, as this issue relates to the amount of fees, not the entitlement to them.
Facts:
- Jeffrey Hicks, an insured of Allstate Indemnity Co., was injured in an automobile accident.
- Hicks received chiropractic treatment and sought Personal Injury Protection (PIP) benefits, including lost wages and mileage, from Allstate.
- Allstate initially paid the benefits but later required Hicks to undergo a medical examination.
- Following the examination, Allstate stopped paying PIP benefits.
- Allstate concluded that any further treatment was not reasonable, necessary, or related to the accident.
Procedural Posture:
- Jeffrey Hicks filed a PIP action against Allstate in county court seeking benefits and attorney's fees.
- The parties settled the underlying benefits dispute, leaving only the issue of attorney's fees.
- The county court, after a hearing, established a lodestar fee and awarded a 2.0 multiplier, including in its calculation the time spent litigating the multiplier.
- Allstate, as appellant, appealed the fee award to the Circuit Court of Seminole County.
- The circuit court, acting in its appellate capacity, affirmed the county court's judgment.
- Allstate, as petitioner, sought certiorari review from the District Court of Appeal of Florida, Fifth District.
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Issue:
Does an insured's recovery of attorney's fees under section 627.428, Florida Statutes, include fees for the time spent litigating the appropriateness of applying an attorney's fee multiplier?
Opinions:
Majority - Orfinger, J.
No. Litigating the appropriateness of a fee multiplier is considered part of litigating the amount of fees, not the entitlement to them, and therefore time spent on that issue is not recoverable under section 627.428. The court relies on the precedent in State Farm Fire & Casualty Co. v. Palma, which established that fees are recoverable for litigating entitlement but not for litigating the amount. A multiplier can only be considered after entitlement to a fee is already established, making it a question of amount. Public policy supports this, as the purpose of the statute is to award a reasonable fee to make the insured whole, not to provide a windfall through multipliers except in rare instances.
Dissenting - Pleus, J.
Yes. Litigating the appropriateness of a fee multiplier goes to both the entitlement to and the amount of attorney's fees. The purpose of a multiplier is to help insureds obtain competent counsel in contingency fee cases, which benefits the client. Because the availability of a multiplier enhances access to legal services for all potential claimants, any dispute over its use is an issue of entitlement, not merely amount. Therefore, fees incurred in successfully defending the multiplier on appeal should be recoverable under the statute, as this promotes the policy of encouraging insurers to promptly pay valid claims.
Analysis:
This decision clarifies and narrows the scope of recoverable attorney's fees in Florida insurance litigation under the framework established in Palma. By categorizing the fight over a fee multiplier as an issue of 'amount,' the court limits an insurer's liability for costs associated with fee litigation. This holding may disincentivize extensive litigation over multipliers, as the plaintiff's attorney cannot be compensated for that specific time, potentially impacting the overall size of fee awards in complex contingency cases against insurers.
