Kearney v. Auto-Owners Insurance

713 F. Supp. 2d 1369, 2010 U.S. Dist. LEXIS 56169, 2010 WL 1949633
CourtDistrict Court, M.D. Florida
DecidedMay 14, 2010
Docket3:06-cv-00595
StatusPublished
Cited by27 cases

This text of 713 F. Supp. 2d 1369 (Kearney v. Auto-Owners Insurance) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kearney v. Auto-Owners Insurance, 713 F. Supp. 2d 1369, 2010 U.S. Dist. LEXIS 56169, 2010 WL 1949633 (M.D. Fla. 2010).

Opinion

ORDER AWARDING ATTORNEY’S FEES

SUSAN C. BUCKLEW, District Judge.

The Court now considers the motion, as corrected, from Defendant Auto-Owners Insurance Company for attorney’s fees in the amount of $258,883.50 and costs in the amount of $221,049.27. (Does. 596, 601.) Plaintiff Clayton Kearney urges the Court to cut the attorneys’s fees by 60 percent and award Auto-Owners $103,553.40. Kearney also asks the Court to award Auto-Owners no costs beyond those permitted in 28 U.S.C. § 1920. (Doc. 606.)

Upon review, the Court awards Auto-Owners attorney’s fees in the amount of $209,685.50. It denies without prejudice *1372 Auto-Owners’ request for costs allowed under Florida law.

BACKGROUND

The insured, Plaintiff Clayton Kearney, sued his insurer, Auto-Owners Insurance Company, for breach of contract and bad faith under Florida law for failing to pay the limits of a primary and excess insurance policy after Kearney was severely injured in an automobile accident. 1 The Court divided the case into two parts, resulting in two trials: the first to determine Kearney’s damages, the second to determine whether Auto-Owners acted in bad faith by failing to timely pay Kearney the $5.03-million limit of the two insurance policies. After the first jury trial, the Court determined that as a result of the automobile accident, Kearney had suffered damages of $30-million.

On September 18, 2009, more than 45 days before the November 9, 2009 start of the trial on the question of bad faith, Auto-Owners offered to settle the case for $l-million. Auto-Owners made the offer and settlement proposal as authorized by Rule 69 of the Federal Rules of Civil Procedure, Florida Statute § 768.79, and Rule 1.442 of the Florida Rules of Civil Procedure. Kearney did not respond to the offer, and, therefore, the offer lapsed.

On November 20, the jury in the bad faith trial returned a verdict for Auto-Owners, finding that it had not committed bad faith in failing to promptly pay Kearney’s insurance claim. After the Court entered a judgment for Auto-Owners, Auto-Owners timely moved for attorney fees.

Auto-Owners seeks $258,883.50 in attorney’s fees and $221,049.27 in costs for the 64-day period beginning on September 18, 2009, the day Auto-Owners made its settlement offer to Kearney, and ending on November 20, 2009, the last day of the jury trial. The fees account for the work of five lawyers and three paralegals with the law firm of Burr & Forman, LLP, based out of offices in Mobile and Birmingham, Alabama, and the work of four lawyers and one paralegal with the law firm of Valenti, Campbell, Trohn, Tamayo & Aranda, P.A. (‘Valenti, Campbell”), based in Lakeland, Florida.

Burr & Forman billed $219,499.50 for 1,183.10 hours of work, and Valenti, Campbell billed $39,384 for 384 hours of work.

ANALYSIS

I. AUTO-OWNERS IS ENTITLED TO ATTORNEY’S FEES UNDER FLORIDA STATUTE § 768.79 FOR A 64-DAY PERIOD STARTING SEPTEMBER 18, 2009

In the American legal system, each party generally must pay its own attorney’s fees and expenses. 2 However, in order to advance a variety of public policy goals, Congress and the states have enacted hundreds of laws that shift attorney’s fees to an opposing party. 3 One of these laws, Florida Statute § 768.79, shifts fees to encourage parties to settle cases without a trial and to sanction parties who unreasonably reject settlement offers. 4 To obtain attorney’s fees under the statute, a *1373 defendant must first file an offer of judgment on the plaintiff no later than 45 days before the earliest trial date. 5 The statute imposes detailed procedural requirements — that must be strictly observed — on the content of the offer. 6 The plaintiff must then reject the offer or let it lapse. If at trial, the plaintiff wins a judgment worth less than 25 percent of the settlement offer, or the judgment states that the defendant had no liability, then the plaintiff must pay defendant’s attorney’s fees beginning from the date of the offer.

Because Florida Statute § 768.79 exists to implement the state’s public policy, the Eleventh Circuit found in Menchise v. Akerman Senterfitt 7 that the statute serves as substantive, rather than procedural, law. Therefore, federal courts in Florida, when adjudicating Florida law claims, must apply Florida Statute § 768.79, rather than federal law, to determine whether to award attorney’s fees.

Applying Florida law, the Court agrees that Auto-Owners is entitled to attorney’s fees and expenses under Florida Statute § 768.79 because Auto-Owners properly filed an offer of judgment that complied with the statute’s strict requirements and that Kearney did not accept before trial. Auto-Owners is entitled to attorney’s fees for a 64-day period beginning on September 18, 2009 and ending on November 20, 2009.

Kearney does not seriously contest this point. 8 Instead, Kearney argues that Auto-Owners’ fees are unreasonable and excessive.

II. AUTO-OWNERS’ ATTORNEY’S FEES WILL BE REDUCED

A. Choice of Law

Just as a federal court must apply state law to determine whether a party is entitled to fees, it must also apply state law to resolve disputes about the reasonableness of fees. 9 The Florida Supreme Court, however, has turned the law full circle by adopting the federal lodestar method, rather than a state rule, to determine what constitutes “reasonable” attorney’s fees. In Florida Patient’s Compensation Fund v. Rowe, 10 the Florida Supreme Court found that the federal lodestar approach “provides a *1374 suitable foundation for an objective structure” to determine what constitutes “reasonable” fees. Thus, to a large extent, Florida law and federal law on determining attorney’s fees mirror each other. 11 However, the Florida Supreme Court has carved out some differences to the federal approach. Federal courts, when applying the lodestar method to a federal statute, determine what constitutes a lawyer’s reasonable hourly rate by looking at “ ‘the prevailing market rates in the relevant community.’ ” 12

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Bluebook (online)
713 F. Supp. 2d 1369, 2010 U.S. Dist. LEXIS 56169, 2010 WL 1949633, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kearney-v-auto-owners-insurance-flmd-2010.