Florida courts may not use a multiplier when awarding attorney fees authorized by offer of judgment statute

Law Reporter, Mar 2004

ATTORNEYS

Sarkis v. Allstate Ins. Co., _ So. 2d _, No. SC02-428, 2003 WL 22250352 (Fla. Oct. 3, 2003).

The Florida Supreme Court held that a court may not use a multiplier-such as a contingency risk multiplier-when awarding attorney fees under the offer of judgment statute, Fla. Stat. Ann. § 768.79, and the Florida civil procedure rule governing settlement proposals, Fla. R. Civ. P. 1.442.

Here, Sarkis sued her insurer, Allstate Insurance Company, seeking compensation under the uninsured motorist provision of her auto insurance policy. Before trial, Sarkis filed an offer of judgment, which Allstate rejected. The case went to trial, and the jury awarded Sarkis an amount that was 25 percent greater than her offer of judgment. Sarkis then moved for attorney fees and costs.

The trial court acknowledged various factors-including the fact that Sarkis could not obtain competent counsel without a multiplier, that a trial would be required because defendant would vigorously defend the claim, and that Sarkis presented a history of previous injuries that would make recovery particularly difficult in this case-and ordered the attorney fees be increased by a contingency multiplier of 1.5. Defendant appealed the attorney fee award. The appellate court held that contingency risk multipliers are not to be used to compute attorney fees under § 768.79. Plaintiff appealed.

Affirming, Florida's high court held that the use of a multiplier in awarding attorney fees authorized by § 768.79 is error. Attorney fees awarded under this statute are sanctions against a party for its refusal to accept a reasonable settlement offer, thereby unnecessarily continuing litigation, the court said.

Florida Civil Procedure Rule 1.442 sets out the factors to be considered in determining a reasonable amount of fees to be awarded as sanctions. The factors specified in the rule have to do with the evaluation and nature of the offers and the pending case.

Use of a multiplier must be consistent with the purpose of the fee-authorizing statute or rule, the court stated. Fees awarded as a sanction are awarded after an attorney has already agreed to take a case, and are thus not consistent with the purpose of the fee-authorizing statute. A statute imposing a penalty must be strictly construed.

The use of a multiplier has never been expressly authorized, the court determined. Neither § 768.79 nor Rule 1.442 authorizes the use of a multiplier in determining the amount of attorney fees as a sanction for rejection of an offer. Thus, under a strict construction of the statute and rule, a multiplier cannot be applied.

Accordingly, the court affirmed and remanded the case with instructions to the trial court to consider the factors in Rule 1.442 in determining the amount of plaintiff's attorney fees.