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In a victory for business groups, the Florida Supreme Court has ruled that plaintiff attorneys cannot receive an enhanced contingency fee for winning a long-shot case if the losing side must pay the fee because it refused to settle the case. Thursday’s 5-1 ruling could have a chilling effect on some lawsuits filed on a contingency-fee basis, said Phil Burlington, who wrote an amicus brief on behalf of the plaintiff for the Academy of Florida Trial Lawyers. Roy Young, who wrote an amicus brief for the Florida Chamber of Commerce, said he hopes the ruling will chill new lawsuits in Florida. “For the business community I represent, if it had gone the other way, we were worried it might be the beginning of an avalanche of these types of things,” he said. The high court’s ruling in Sally Sarkis v. Allstate Insurance Co. arises from a lawsuit filed by Sarkis against her auto insurer in Brevard County Circuit Court. Sarkis, of Melbourne, Fla., was seeking uninsured motorist benefits related to a 1996 car accident. The case was complicated by the fact that Sarkis had been in several previous auto accidents. And her alleged lower back injuries from the accident at issue in the lawsuit were difficult to distinguish from her pre-existing health problems. Given her low odds of winning, Sarkis’ attorney, Robert M. Moletteire, a partner at Graham Moletteire & Torpy in Melbourne, figured that he was entitled to a fee multiplier if he won the case at trial. Florida Bar rules and state law allow trial judges to apply a multiplier when awarding fees to lawyers who take unusually difficult cases on a contingency fee basis. The purpose is to encourage lawyers to represent clients with challenging cases who can’t afford to pay the lawyers themselves. Moletteire won the case in a 2000 trial, securing an award of $122,700. Because Sarkis had been willing to settle with Allstate for $10,000 and was turned down, Allstate was required to pay Moletteire’s fees under the state’s “offer of judgment” law. That law states that if the judgment turns out to be 25 percent higher than the settlement offer the losing side declined, the losing party is liable for the winning party’s attorney fees and costs. It is intended to encourage litigants to accept reasonable settlement offers. At the same time, the trial judge recognized that taking Sarkis’ case was financially risky for Moletteire, and used a multiplier of 1.5 to increase the amount Allstate had to pay him to $87,675. PENALTY FOR NOT SETTLING But awarding the extra fees in Sarkis’ case had the questionable effect of imposing a penalty on Allstate for refusing to settle a case it had a reasonable chance of winning at trial. Allstate appealed the enhanced attorney fee as excessive. In December 2001, the state’s 5th District Court of Appeal agreed, ruling unanimously that contingency fee multipliers should not be applied in cases falling under the offer of judgment statute. The appellate court reasoned that it was impossible for lawyers to prove that they wouldn’t have taken a case without the expectation of a fee multiplier. That ruling was at odds with previous holdings by three other DCAs as well as with prior opinions out of the 5th. Sarkis then appealed to the Florida Supreme Court. In an amicus brief, the Academy of Florida Trial Lawyers argued that the Legislature clearly intended for courts to include multipliers in calculating what a “reasonable” fee is in offer of judgment cases. That’s because the offer of judgment statute instructs judges to calculate attorney fees in accordance with Supreme Court guidelines, and those guidelines include consideration of risk multipliers. In oral arguments in February, Julie Littky-Rubin of Lytal Reiter Clark Fountain & Williams in West Palm Beach, who represented Sarkis in the Supreme Court case, urged the justices to leave established practice alone. Arguing for Allstate, Charles Hall, a partner at Fowler White Boggs Banker in Tampa, told the justices that the offer of judgment statute was intended to penalize the refusal of reasonable settlement offers. Adding a multiplier on top of that adds an extra punishment not found in the statute, he said. ‘NOT AUTHORIZED’ In making its ruling, the justices called court rulings allowing for the multipliers “error.” “Throughout the statutory and rule history of offers of judgment, the use of a multiplier has never been expressly authorized,” the high court stated in a per curiam opinion. Remanding the case back to the trial court, the justices urged the trial judge to recalculate the attorney fees without the multiplier. “A multiplier is not authorized,” they stated. In its ruling, the Supreme Court also overturned rulings by the 1st, 2nd and 4th DCAs that allowed multipliers in offer of judgment cases. One of those cases, involving a multiplier of 2.5, was tried by Burlington. Justice Barbara Pariente was the sole dissenter. She argued that no attorney would have taken Sarkis’ case without the multiplier. “The prospect of a fee award under the offer of judgment statute can be a significant consideration in an attorney’s decision to undertake representation of certain individuals with prospective claims, especially when the total amount of the potential claim is small as compared to the number of hours that will be expended if the case goes to trial,” Pariente wrote. Justice Raoul W. Cantero III, who represented Allstate before being appointed to the Supreme Court, was recused from the case. Richard Sherman of the Law Offices of Richard A. Sherman in Fort Lauderdale, who represented Allstate, said the ruling will reduce future frivolous lawsuits. “This is a very favorable result,” he said. But Phil Burlington, a partner at Caruso Burlington Bohn & Compiani of West Palm Beach, tried to downplay the significance of the ruling. “It’s not disastrous,” he said. “We can still get attorney fees, just not multipliers.”

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