Last week the Florida 1st DCA issued a long-awaited ruling regarding claimant’s attorney fees in Rudolph v. Darrien Smith/Home Depot, 1D2022-1627. https://1dca.flcourts.gov/content/download/1679907/opinion/Opinion_2022-1627.pdf
The crux of the case was when can a JCC award hourly fees instead of the guideline fee, if the JCC finds the guideline fee to be too high.
In Smith, the claimant suffered a catastrophic accident in 1993 and was a ventilator-dependent quadriplegic. Eventually in 2018, the case settled for $13,500,000 after a 10- day mediation. At the time of the mediation, Rudolph was his attorney, but the claimant had gone through 5 prior claimant attorneys as well over the 25 years. As part of the settlement, the claimant’s current attorney filed for a reduced guideline fee of $1,330,000 to be split amongst the 6 claimant attorneys. (The 1993 guideline fee would have been $2,025,750, so the attorneys were asking for $695,000 below the guideline.) In the filing for fees, the claimant’s guardian waived their right to a hearing on reasonableness of a fee (this is standard on every represented settlement).
The JCC approved the $525,000 in fees to be split between the 5 prior attorneys, however he denied the current attorney’s share of the fee of $805,000. The JCC asked for Rudolph’s hours and found that the requested $805,000 share of the reduced guideline fee divided by his 205 hours spent worked out to about $4,000 an hour. The JCC then turned to the way the 5 priors attorneys split the $525,000, and took the highest hourly rate from their filings of $600 an hour. The JCC multiplied Rudolph’s 205 hours by the $600 hourly rate, and awarded Rudolph a fee of $123,000, with the balance going to the claimant. Rudolph then appealed.
The 1st DCA stated the guideline fee was created by the legislature, and it is presumptively reasonable. There has to be exceptional circumstances to justify a reduction in the guideline because it is presumed reasonable. In looking back at prior cases, the DCA stated a JCC may proper consider the fee customarily charged in the area for similar legal work, but this could not be the sole basis for a departure particularly if the customary fee used for the argument is an hourly fee. (In English, if the guideline fee creates a higher hourly rate than is usual in that area, that is not a reason alone to reduce the guideline fee, there has to be a better reason).
The 1st DCA also pointed out in this case the only evidence before the JCC was the statutory guideline fee. No one was arguing against it. The court stated a JCC must rely on evidence instead of his own subjective belief and personal experience in evaluating the reasonableness of an attorney’s fee claim. Further the DCA stated the stipulated fee was already substantially less than the guideline fee ($695,000 less than guideline fee). The DCA found the less than guideline fee of $805,000 was reasonable and awarded it to the claimant’s attorney.
So what does this mean to you and me?
- If the claimant prevails on a major benefit despite minimal litigation time spent, a very high guideline fee could be awarded. For example, a $400,000 hospital bill is paid late after a PFB, the guideline fee would be $40,750. We cannot only argue the claimant attorney only spent 10 hours to get it paid, and that is equal to $4,000 an hour. We need more.
- To challenge what you and I would consider an unreasonable guideline fee, we need to show it is “manifestly unfair” and that there were “exceptional circumstances”.
- Our evidence to challenge it has to be more than just saying it creates an hourly fee that is too high.
- We can perhaps push for a reduced guideline fee as in Smith in some cases.
As always let me know if you have any questions.
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Morgan Indek | Managing Partner