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Court Calls $193,750 Lawyer Bill 'Injustice' By Michael Sasso TAMPA - Judges have become accustomed to awarding five- and six-figure attorney fees in long court battles. But when a judge in Seminole County awarded an Altamonte Springs lawyer $193,750 in fees - in an auto insurance lawsuit over $1,315 - it was too much for judges on the 5th District Court of Appeal to stomach. On Oct. 20, the Daytona Beach-based appellate court overturned the hefty fee and took issue with a little-known but lucrative part of insurance litigation called the contingency fee multiplier. With fee multipliers, attorneys can receive up to 2 1/2 times their normal fees, often to the point that attorneys receive far more than their clients. Insurance industry lawyers are thrilled with the court's decision, because insurance companies often must pay attorneys fees. Insurers often say that when they have to pay a whopping attorneys fees in a lawsuit, it boosts everyone's insurance rates. With their decision, the appellate judges sent the message that, "Hey, we're looking at these things, and there's a limit to what we will swallow," said Anthony Russo, a Tampa lawyer who often represents insurers. Personal injury lawyers, though, say accident victims may be hurt by the ruling more than lawyers. If attorneys don't see potential for a big fee, they won't take on risky auto accident cases. Some victims will be without a lawyer when an insurance company won't pay their claims, said Paul Jess, general counsel for the Academy of Florida Trial Lawyers. The 5th District Court of Appeal's ruling involved a routine insurance lawsuit pitting a Seminole County man, Donald Schultz, against Progressive Express Insurance Co. After an auto accident in May 2001, Schultz went to an Orlando area chiropractor for treatment and submitted the bill to Progressive. After a few months, Progressive argued that Schultz didn't need any more treatment and stopped paying his chiropractor bills. That left Schultz with a balance owed of $1,315, and he filed a lawsuit in Seminole County. Hundreds of such lawsuits are in Florida courts at any time. The two sides settled the lawsuit, with Progressive agreeing to pay Schultz the $1,315 in benefits he was seeking, plus about $2,000 in additional medical bills, said his attorney, Glenn Klausman of Altamonte Springs. Progressive also was on the hook for Klausman's fee, which came to $77,500. Judge Increased FeeA Seminole County judge multiplied that fee by a factor of 2.5 for a total fee of $193,750. A circuit court judge upheld the ruling. However, when Progressive appealed to the 5th District Court of Appeal, the appellate judges called the fee and the fee multiplier a "manifest injustice" and overturned it. Klausman said he is hoping the appellate court will reconsider its decision. If not, he hopes the Florida Supreme Court will hear the case. At the heart of the appellate case was when - if ever - judges should multiply a trial lawyer's fee. In Florida, judges may give an attorney a fee multiplier if the attorney took an exceptional risk in taking on a case. In auto accident lawsuits, personal injury attorneys often take cases on "contingency," meaning they are only paid if their clients win or settle their cases. They receive nothing if their clients lose. Fee multipliers reward attorneys who take on hard-to-win cases. Klausman said his big fee was warranted. Through an exhaustive investigation, Klausman was able to discredit Progressive's expert witness, who claimed that Schultz didn't need further medical treatment. The investigation and subsequent litigation took up nearly 200 hours of Klausman's time, the attorney said. Plus, few other lawyers would have taken the case, Klausman said, so the judge was right to multiply his fee. The judges of the 5th District Court of Appeal didn't agree. They also found it hard to believe that other attorneys wouldn't have represented Schultz. "It seems that few insured, if any, have difficulty obtaining competent counsel to represent them," the judges wrote in their decision. "To the contrary, every television station and telephone book, and many billboards and buses, call out with ads from lawyers seeking to represent the injured." Insurance Lawyers PleasedInsurance industry lawyers hope the case has a big impact and causes judges to think twice about awarding fat attorneys fees. Judges are only supposed to award a fee multiplier in extremely difficult cases, but attorneys in Central Florida and the Bay area are getting them even for routine auto insurance lawsuits, said Julie Walbroel-Pardy, an insurance industry lawyer from Orlando. Walbroel-Pardy was an expert witness for Progressive in the appellate court case. Scott Dutton, a Tampa lawyer who represents insurance companies, said personal injury attorneys today routinely receive a fee of $2,000 to $3,000 for filing the most basic of PIP lawsuits. Those are the cases in which the lawyer does little more than file a form lawsuit and quickly settle the case, Dutton said. If the case requires hearings or depositions, fees can run $7,500 to $30,000, he said. In some cases, the client receives $500 or $1,000 in insurance benefits while his lawyer gets thousands, Dutton said. Plaintiffs' attorneys don't see it the same way. Jess, of the Academy of Florida Trial Lawyers, acknowledged that contingency fee multipliers are controversial. Last year, the Florida Legislature debated whether to ban them, but the idea failed to become law. Jess said the fee multiplier helps to keep insurance companies honest. If insurers didn't have to worry about paying attorney fees in lawsuits, nothing would stop them from denying even legitimate claims at will. "If we didn't have these protections built into the law, insurance companies could deny paying claims just because they could," Jess said.
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