Wood v. Florida Rock and Attorney Fees

Saturday, February 25, 2006 | 0

Landmark Alert - Case Alert

Definitive Ruling by the 1st District Court of Appeal

ATTORNEY'S FEES
"Reasonable" means: a statutorily scheduled fee - period!
James Wood v. Florida Rock Industries & Crawford & Co., 31 Fla. L. Weekly D463a Fla 1st DCA 2/13/06)

The Rule of Law: In POST 10/1/03 DA Workers' Compensation cases;
(1) a fee award must be based solely on the value of benefits actually obtained on Claimant's behalf, and;
(2) JCC cannot award a fee greater than statutory sliding fee schedule. In short: "REASONABLE" MEANS A SCHEDULED FEE.


What has happened:

Facts:
Claimant filed a petition for benefits (PFB) requesting, in part, temporary partial disability (TPD) benefits, penalties and interest. Before the dispute was resolved, the E/C submitted an offer of judgment for past TPD, penalties, and interest in the amount of $1,148.50. Claimant accepted this amount; however, issue of attorney's fees remained in controversy. JCC AWARDED A STRICTLY SCHEDULED FEE OF: $229.70, FOR ATTORNEY'S 16.7 HOURS OF WORK. (Note also the E/C had been fined $100 for non compliance with a discovery order in this case.)

On appeal, Claimant ARGUED the JCC erred in interpreting the relevant statutes; by having left the word "reasonable" in the statute, even with the newly added language, a claimant should still be entitled to a "reasonable" fee which in this case, based on the hours invested, should have been $3,340.00 (hourly rate of $200X 16.7), i.e., almost three times the value of benefits secured.

Discussion

Relevant Statutes:
Fla. Stat. Section 440.34 (2005) (with emphasis added)
(1) A fee, gratuity, or other consideration may not be paid for a claimant in connection with any proceedings arising under this chapter, unless approved as reasonable by the judge of compensation claims or court having jurisdiction over such proceedings. Any attorney's fee approved by a judge of compensation claims for benefits secured on behalf of a claimant must equal to 20 percent of the first $5,000 of the amount of the benefits secured, 15 percent of the next $5,000 of the amount of the benefits secured, 10 percent of the remaining amount of the benefits secured to be provided during the first 10 years after the date the claim is filed, and 5 percent of the benefits secured after 10 years. The judge of compensation claims shall not approve a compensation order, a joint stipulation for lump-sum settlement, a stipulation or agreement between a claimant and his or her attorney, or any other agreement related to benefits under this chapter that provides for an attorney's fee in excess of the amount permitted by this section.

Practical Analysis:
In 2003, the legislature amended section 440.34(1), effecting three material changes.

First, the amount of an attorney's fee award may no longer be based on services rendered, but must instead be based on the value of benefits secured on Claimant's behalf.

Second, language permitting the JCC to increase or decrease a statutory fee by considering six enumerated factors if, in the JCC's judgment, the circumstances warrant such action, was deleted.

Third, the legislature added language specifically prohibiting a JCC from awarding a fee in excess of the percentage fee.

The legislature now defines a "reasonable" fee as the scheduled fee, per se, in all cases (the medical exception fee, capped at $1500, is the only allowable add-on, and then only where applicable). Although the statute requires JCC approval of any attorney's fee, a JCC is permitted to approve a fee only if it is "reasonable," which is to say all approved fees must equal the statutorily enumerated percentage based on the value of benefits actually secured.


Conclusion:

Bottom Line:

In post 10/1/03 accidents, a JCC may approve a fee as "reasonable" only when it equals a statutorily established percentage of the value of benefits secured. Apart from the "medical only" fee provision, there are no exceptions (for now at least; see caveat #2, below).

Caveats!

1. This ruling applies only to post 10/1/03 cases; in recent weeks, the First DCA reversed a $150. per hour award in a pre new-law case where it seemed the JCC was influenced by the new law.

2. There is suggestion early in the opinion to the effect the JCC may be empowered to award a lower-than-scheduled fee, but, language following negates such possibility, i.e., the schedule applies, all of the time.

3. More ominously; the concurring opinion implies this appeal may not have advanced the best argument a Claimant's attorney might make in that it did not also attack the VALIDITY of the statute (i.e., Claimant bet everything on a statutory construction argument, without attacking the statute itself). While the odds rarely favor an attack on the validity of a statute, this language in the concurring opinion is a clear indication there is one shoe left to drop before it can be said that the '03 fee reform is "locked in," and, it must also be said the court hinted the statute might be vulnerable to just such an attack!


by H. George Kagan of the MKRS lawfirm. George can be reached by e-mail at GeorgeK@mkrs.com, or phone at 800.761.MKRS.

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