On May 20, 2020, the First District Court of Appeal issued an opinion1 reaffirming the proper considerations when deciding entitlement to a contingency fee multiplier on an award of attorney’s fees.
After a fire loss, Mr. and Mrs. Wesson filed a lawsuit against their homeowner’s insurance company for breach of contract. The Wessons filed a motion for attorney’s fees under Florida Statute §627.428 following an entry of final judgment. The parties stipulated to an amount for a fee award and taxable costs; but the trial court held the Wessons were not entitled to a contingency fee multiplier at the evidentiary hearing. On appeal, the First DCA reversed and remanded, holding the trial court relied on improper considerations when applying the facts of the case to the applicable test outlined in Joyce v. Federated National Insurance Company.2
In analyzing whether a contingency fee multiplier may be applied to an award of attorney’s fees, the First DCA stated:
Under Joyce, we consider three factors in determining whether a contingency fee multiplier is required: 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 Rowe3 are applicable.
Under the first prong, the controlling factor is whether the attorney’s client would have been able to secure competent counsel absent the availability of a contingency fee multiplier. In Joyce, the Florida Supreme court considered the fact that the Joyces’ counsel spent over 100 hours on the case and no other attorneys in the area specialized in this type of litigation. The Joyce court reversed the Fifth DCA, in part, because it improperly relied on the fact that the Joyces retained counsel after making only one phone call. The supreme court determined the Fifth District improperly considered the Joyces’ actual experience in the market rather than the relevant market itself. Similarly, the trial court here improperly considered the Wesson’s actual difficulty in obtaining counsel rather than the relevant market itself.
Under the second prong, the controlling factor is whether the plaintiff can afford to pay the attorney either a retainer or on an hourly basis. In Joyce, the lower court properly relied on testimony from the plaintiffs’ attorney and plaintiffs’ fee expert. The attorney testified that the clients stated they could not afford to pay a retainer. The fee expert testified there was no meaningful way to mitigate the risk of nonpayment. In Wesson, the trial court analyzed the likelihood of success rather than the plaintiffs’ ability to pay a retainer or an hourly fee. The likelihood of success is not a proper consideration when determining whether an attorney can mitigate the risk of nonpayment. Rather, the likelihood of success is a factor considered when determining the range of the multiplier after the issue of entitlement to a contingency fee multiplier is determined.
Entitlement to contingency fee multipliers is a controversial issue in Florida legislation; but article I, section 21 of the Florida Constitution guarantees Floridians equal right to court access for redress of any injury. Florida jurisprudence has helped level the playing field in property insurance disputes by allowing for a contingency fee multiplier under certain circumstances. Policyholder advocates contend multipliers promote access to courts and ensure policyholders can retain competent counsel for representation on matters attorneys may not otherwise be able to pursue.
“The courts shall be open to every person for redress of any injury, and justice shall be administered without sale, denial, or delay.” ~ Fla. Const., art. I §21
1 Wesson v. Florida Peninsula Ins. Co., No. (Fla. 1st DCA May 20, 2020).
2 Joyce v. Federated National Ins. Co., 228 So.3d 1122 (Fla. 2017).
3 Florida Patient’s Comp. Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985).