Opinion
No. 2D19-2115
06-11-2021
Misael Gomez LIZARDI and Tanya Torres Gomez, Appellants, v. FEDERATED NATIONAL INSURANCE COMPANY, Appellee.
Nicholas A. Shannin of Shannin Law Firm, P.A., Orlando; and Gregory P. Abaray of Law Offices of Allen & Abaray, P.A., Lakeland, for Appellants. Warren B. Kwavnick of Cooney Trybus Kwavnick Peets, PLC, Fort Lauderdale, for Appellee.
Nicholas A. Shannin of Shannin Law Firm, P.A., Orlando; and Gregory P. Abaray of Law Offices of Allen & Abaray, P.A., Lakeland, for Appellants.
Warren B. Kwavnick of Cooney Trybus Kwavnick Peets, PLC, Fort Lauderdale, for Appellee.
MORRIS, Judge.
Misael Gomez Lizardi and Tanya Torres Gomez appeal a final order on attorneys' fees entered in an underlying homeowners' insurance dispute. Following an evidentiary hearing that was apparently conducted without a court reporter, the trial court entered its order awarding attorneys' fees to the appellants but in an amount that reduced not only the appellants' attorney's hourly rate but also the amount of hours for which payment was requested. The appellants contend that they submitted evidence supporting their requested amount of attorneys' fees. The appellants also contend that the trial court's failure to make specific findings as contemplated by Florida Patient's Compensation Fund v. Rowe , 472 So. 2d 1145, 1151 (Fla. 1985), in its order awarding attorneys' fees and its failure to award prejudgment interest on the fee award constitute errors apparent on the face of the record and, therefore, that the transcript of the evidentiary hearing is not required. We agree with this latter argument, and we reverse the order on appeal. I. BACKGROUND
Because this appeal involves an award of attorneys' fees—rather than the settlement which provided the basis for the claim to attorneys' fees—a complete recitation of the facts underlying the homeowners' insurance claim is unnecessary. It is sufficient to note that the appellants settled their insurance claim with Federated National Insurance Company prior to trial. The appellants then filed a motion to determine the amount of attorneys' fees and costs. The trial court conducted an evidentiary hearing at which the appellants introduced a copy of the civil contingency contract they had with their counsel, Gregory P. Abaray. The contract provided that if the appellants were successful in their litigation, Mr. Abaray would seek compensation from the opposing party at a rate of $425 per hour. The appellants also entered into evidence Mr. Abaray's billing ledger reflecting that he spent 331.20 hours working on their case at the $425 hourly rate.
Though we do not have the transcript from the evidentiary hearing, the appellants asserted in their brief that these documents were entered into evidence at the hearing, and Federated does not dispute this fact.
From the appellants' motions for reconsideration/rehearing and Federated's response thereto, both of which are contained in the record on appeal, it is apparent that the parties disagreed about the content of the testimony provided regarding the relevant market rate for attorneys as well as the reasonable number of hours expended.
At the conclusion of the hearing, the trial court awarded the appellants taxable costs and all of the paralegal time at the requested rate. However, the trial court reduced Mr. Abaray's requested rate from $425 to $350 per hour, and it reduced the number of hours for which attorneys' fees were requested from 331.20 to 200 hours. In its subsequent written order, the trial court provided no explanation for the reductions.
The trial court also declined to apply a contingency risk multiplier, but that decision is not at issue in this appeal.
The day after the hearing, the appellants filed a motion for reconsideration as to the hourly rate, prior to the entry of the written order awarding fees and costs. However, the trial court entered the written order awarding fees and costs approximately three weeks later, without ruling on the pending motion for reconsideration. That written order failed to award prejudgment interest on the fee award.
The appellants then filed an amended motion for reconsideration or, alternatively, motion for rehearing directed at the issues of the hourly rate, specificity in the order, and prejudgment interest. They argued that the earlier motion was legally moot since the final judgment on fees and costs had now been entered. The appellants asserted that they wanted to amend the previously filed motion and have it treated as a motion for rehearing. Besides arguing that there were sufficient reasons to justify Mr. Abaray's requested hourly rate and number of hours requested, the appellants also argued that the trial court failed to explain why it reduced the hourly rate and number of hours. Finally, the appellants argued that the trial court erred in failing to award prejudgment interest.
The trial court denied the amended motion for reconsideration/rehearing without a hearing, but in doing so, the trial court obliged the appellants' request to treat the earlier motion as a motion for rehearing. The trial court stated that both motions would be treated as motions for rehearing. The trial court denied the original motion finding that there was no legal basis on which to grant it. The trial court then concluded that the amended motion was untimely but stated it would have denied it on the merits as well.
II. ANALYSIS
A. Failure to make specific findings pursuant to Rowe
We review a trial court's award of attorneys' fees for abuse of discretion. DiStefano Constr., Inc. v. Fid. & Deposit Co. of Md. , 597 So. 2d 248, 250 (Fla. 1992).
In Rowe , the Florida Supreme Court held that in determining an appropriate attorneys' fee award, the trial court must consider certain factors to determine the reasonable number of hours expended on the case and the reasonable hourly rate. 472 So. 2d at 1150. The first step, which requires the trial court to determine the reasonable number of hours expended on the case, requires a review of the attorney's time records. Id. A trial court is permitted to reduce the number of hours if there is inadequate documentation provided or if the court finds that the claim is "excessive or unnecessary." Id. The trial court must then determine the reasonable hourly rate by looking at the prevailing market rate for attorneys of reasonably comparable skill or experience. Id. at 1150-51. The trial court then multiplies the number of hours it determined were reasonably expended by the reasonable hourly rate to arrive at the lodestar figure. Id. at 1151. It may then add or subtract from that lodestar figure by application of a contingency risk factor or the results obtained. Id.
These factors include:
(1) The time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly[;] (2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer[;] (3) The fee customarily charged in the locality for similar legal services[;] (4) The amount involved and the results obtained[;] (5) The time limitations imposed by the client or by the circumstances[;] (6) The nature and length of the professional relationship with the client[;] (7) The experience, reputation, and ability of the lawyer or lawyers performing the services[; and] (8) Whether the fee is fixed or contingent.
Rowe , 472 So. 2d at 1150 (quoting Florida Bar Code of Prof. Resp. D.R. 2-106(b)).
In rendering a fee award, trial courts are required to make specific findings to support their conclusions regarding the number of hours reasonably expended, the reasonable hourly rate, and the appropriateness of the reduction or enhancement factors. Id. ; see also Joyce v. Federated Nat'l Ins. , 228 So. 3d 1122, 1126 (Fla. 2017) (explaining that while a trial court must look at all eight factors addressed in Rowe , it must set forth specific findings as to the "number of hours, the hourly rate, and any reduction or enhancement factors" (citing Rowe , 472 So. 2d at 1151 )). And "[i]f the court decides to adjust the lodestar, it must state the grounds on which it justifies the enhancement or reduction." Rowe , 472 So. 2d at 1151.
Here, the lodestar amount was $70,000. That figure was arrived at by multiplying the number of hours that the trial court deemed were reasonably expended (200) by the hourly rate that the trial court deemed was reasonable ($350). But the appellants are not challenging any reduction in the lodestar. Rather, they are challenging the figures used by the trial court to arrive at the lodestar amount. They contend that the trial court inexplicably reduced their requested number of hours from 331.20 to 200 and the hourly rate from $425 to $350 without providing specific reasons for doing so. Indeed, while the order awarding fees lists the amount of reasonably expended hours and reasonable hourly rate, there is no explanation contained therein as to how the trial court arrived at those figures.
The requirement for specific findings as set forth in Rowe is not limited to situations where trial courts reduce or enhance the lodestar figure. Indeed, as this court has previously explained, Rowe requires a specific explanation if a trial court reduces requested fees without regard to the lodestar amount. See Puleo v. Morris , 98 So. 3d 248, 249-50 (Fla. 2d DCA 2012) (applying Rowe requirement where trial court awarded lump sums that were significantly less than what was requested but failed to make any findings concerning number of hours, hourly rate, or the specific reasons for reducing the requested fees). While trial courts are not bound by expert opinions provided at evidentiary hearings or by attorney affidavits submitted at such hearings, they may only reduce attorneys' fees that they deem to be excessive if they make specific findings to support that determination. Id. at 250 ; see also Parton v. Palomino Lakes Prop. Owners Ass'n , 928 So. 2d 449, 453 (Fla. 2d DCA 2006) (noting that in addition to failing to make findings as to the hourly rate and number of hours reasonably expended, the trial court also made the conclusory assertion that the fees seemed excessive because it appeared "that the [p]laintiff's attorneys spent somewhat more time on this case ... than what would be reasonably necessary to accomplish their goal," and holding that on remand, the trial court "must make the required [factual] findings to support its determination of the amount of reasonable attorneys' fees"); Mitchell v. Mitchell , 94 So. 3d 706, 708 (Fla. 4th DCA 2012) (holding that trial court's order was insufficient under Rowe in part where it failed "to explain the basis for a reduction in fees which the court determined was for ‘multiple lawyers on the same matter’ " because the trial court needed to make a specific finding as to which work was duplicative).
Even in cases that did not address Rowe , courts have consistently required specific explanations for reductions of the hours or hourly rate claimed. See, e.g. , D'Alusio v. Gould & Lamb, LLC , 36 So. 3d 842, 846-47 (Fla. 2d DCA 2010) (holding that trial court abused its discretion in drastically reducing number of hours reasonably expended despite the fact that both parties' experts agreed on a similar amount of fees due where trial court failed to make specific findings to support the fee award); Forman v. Forman , 288 So. 3d 697, 698 (Fla. 4th DCA 2019) (reversing and remanding fee award in part where trial court reduced some of the fees on the basis that some of the billing entries were duplicative but failed to specify which entries met that description, thereby necessitating entry of a new order that contained the necessary findings).
Federated cites to Gonzalez v. Veloso , 731 So. 2d 63, 64 (Fla. 3d DCA 1999), and Hartleb v. State, Department of Transportation , 711 So. 2d 228, 229 (Fla. 4th DCA 1998), for the argument that fee awards are not defective under Rowe where the lodestar amount is not modified. But neither of those cases indicates that it involved a significant reduction in the number of hours claimed or the reasonable hourly rate prior to arriving at the lodestar amount. Consequently, they do not control the disposition of this case.
Had the trial court in this case made specific findings as to why it reduced the requested number of hours or hourly rate, the order would have likely satisfied Rowe's requirements. See Voronin v. Voronina , 995 So. 2d 1049, 1050 (Fla. 2d DCA 2008) (explaining that pursuant to Rowe , "the trial court must determine the proper amount of fees by considering the hourly rate, the number of hours reasonably expended in the case, and setting forth specific findings as to these factors" (emphasis added) (quoting Beck v. Beck , 852 So. 2d 934, 938 (Fla. 2d DCA 2003) )); cf. Frezza v. Frezza , 216 So. 3d 758, 760 (Fla. 2d DCA 2017) (concluding that trial court's attorneys' fee order complied with Rowe because the trial court "made specific findings as to the reasonable number of hours of ‘attorney time’ expended and the reasonable hourly rate for the ‘attorney time’ "). But the order as written, merely stating the hourly rate and reasonable number of compensable hours without any elucidation as to why those figures were used instead of the requested figures, does not comport with the requirements of Rowe .
While Federated contends that the appellants' failure to provide this court with a transcript from the evidentiary hearing requires us to affirm, it overlooks an important distinction about the type of challenge being made in this appeal. Lack of a transcript or stipulated statement of the facts might require an affirmance in cases involving other kinds of challenges to fee awards. But the "rule is not applicable where a trial court order is fundamentally erroneous on its face for failure to make required findings." Citizens Prop. Ins. v. Anderson , 241 So. 3d 221, 224 (Fla. 2d DCA 2018). Indeed, this court has repeatedly explained that "an award of attorney's fees without adequate findings justifying the amount of the award is reversible even where the appellant has provided an inadequate record of the trial court proceedings." Id. (emphasis omitted) (quoting Esaw v. Esaw , 965 So. 2d 1261, 1265 (Fla. 2d DCA 2007) ); see also Jacobs v. Jacques , 310 So. 3d 1018, 1022 (Fla. 2d DCA 2020) ; Frezza , 216 So. 3d at 760 ; Voronin , 995 So. 2d at 1050. Our review of a fee award that lacks the specific findings required by Rowe is not precluded due to lack of a transcript. See R.M.A. v. J.A.S. , 269 So. 3d 649, 651-52 (Fla. 2d DCA 2019). And "[r]eversal is required unless the trial court makes specific written findings as to the[ ] Rowe factors." Id. at 652 ; see also Harris v. McKinney , 20 So. 3d 400, 403 (Fla. 2d DCA 2009) ("[T]he absence of the required [ Rowe ] findings in the written order renders the order fundamentally erroneous on its face and ... the lack of transcript ‘does not preclude appellate review.’ " (quoting Baratta v. Valley Oak Homeowners' Ass'n at the Vineyards , 891 So. 2d 1063, 1065 n.4 (Fla. 2d DCA 2004) )).
We make no conclusions about the sufficiency of the evidence presented at the evidentiary hearing as the lack of a transcript precludes this court from making such a determination.
Accordingly, because the trial court's order is fundamentally erroneous on its face because it fails to contain the specific findings required by Rowe , we must reverse and remand for the trial court to enter an order that contains specific findings to support the award. See Jacobs , 310 So. 3d at 1022 ; Voronin , 995 So. 2d at 1050.
B. Failure to award prejudgment interest
The trial court also erred by failing to award the appellants prejudgment interest on the fee award. While Federated argues that this issue was not preserved because the appellants raised it for the first time in the amended motion for reconsideration/rehearing, we disagree.
There is no dispute that the appellants served their original motion for reconsideration—which the trial court ultimately treated as a motion for rehearing—"not later than 15 days" after the filing of the judgment awarding fees. See Fla. R. Civ. P. 1.530(b). In fact, they filed the motion after the evidentiary hearing but before entry of the written judgment. Once the written judgment was entered, the appellants filed their amended motion for reconsideration/rehearing, although not within fifteen days from entry of the written judgment. However, within that amended motion, they asserted that they wanted to amend their original, timely-filed motion and have it considered as a motion for rehearing. The trial court obliged that request, treating both the original and amended motions as motions for rehearing. Consequently, because the trial court treated both motions as motions for rehearing, it had the discretion to permit amendment of the original motion and it should not have concluded that the amended motion was untimely as it related back to the original motion. See Fla. R. Civ. P. 1.530(b) ("A timely motion [for rehearing] may be amended to state new grounds in the discretion of the court at any time before the motion is determined."). The trial court could have refused to permit amendment of the original motion, yet it did not make such a ruling, and we will not presume that was its intent.
Further, while the appellants have not explicitly challenged the trial court's untimeliness finding with regard to the amended motion, they do challenge the trial court's ultimate refusal to award them prejudgment interest which occurred, in part, due to the trial court's conclusion that the amended motion—which contained their argument about prejudgment interest—was untimely. Consequently, this issue was not waived.
The Florida Supreme Court holds that prejudgment interest begins to accrue when entitlement is determined and it "becomes part of a single total sum adjudged to be due and owing." Quality Engineered Installation, Inc. v. Higley S., Inc. , 670 So. 2d 929, 930-31 (Fla. 1996). It is undisputed that entitlement was determined on November 16, 2018, the date that notice of settlement in the underlying dispute was filed. Thus, there was a date certain as to the issue of entitlement, and the trial court was obligated to perform its ministerial duty of computing the appropriate amount and adding it to the judgment. See Argonaut Ins. v. May Plumbing Co. , 474 So. 2d 212, 215 (Fla. 1985). Consequently, because the trial court erred in its determination that the amended motion was untimely and in refusing to award prejudgment interest, the order must be reversed on this basis as well.
We note that Federated presented no argument on appeal relating to the actual merits of the issue of whether the appellants were entitled to prejudgment interest. Rather, it confined its argument to the issue of preservation.
Reversed and remanded.
BLACK and ATKINSON, JJ., Concur.