Calculating Reasonable Attorney’s Fees for Prevailing Parties

The amount of fees to which a prevailing party is entitled in any lawsuit where they are at issue are calculated following a method laid out by the Florida Supreme Court in Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla.1985). This method is often referred to as the “lodestar” method because the Court modeled it after a similar federal formula of that name. This formula is applicable where a statute authorizes an award of fees to a prevailing party.  Rowe applies whether the awarded attorney’s fees are based on entitlement by statute or by contract.

In Rowe, the Florida Supreme Court lays out a formula to provide a suitable foundation for an objective structure in fee calculations. In determining reasonable attorney fees, the Court in Rowe explains that courts should utilize the criteria set forth in Disciplinary Rule 2-106(b) of The Florida Bar Code of Professional Responsibility:

• The time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly;
• The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
• The fee customarily charged in the locality for similar legal services;
• The amount involved and the results obtained;
• The time limitations imposed by the client or by the circumstances;
• The nature and length of the professional relationship with the client;
• The experience, reputation, and ability of the lawyer or lawyers performing the services; and
• Whether the fee is fixed or contingent.

The first step in the lodestar process requires the court to determine the number of hours reasonably expended on the litigation. To accurately assess the labor involved, the attorney fee applicant should present records detailing the amount of work performed. Counsel is expected to claim only those hours that he could properly bill to his client. Inadequate documentation may result in a reduction in the number of hours claimed, as will a claim for hours that the court finds to be excessive or unnecessary. The “novelty and difficulty of the question involved” should normally be reflected by the number of hours reasonably expended on the litigation.

The second half of the equation, which encompasses many aspects of the representation, requires the court to determine a reasonable hourly rate for the services of the prevailing party’s attorney. In establishing this hourly rate, the court should assume the fee will be paid irrespective of the result, and take into account all of the Disciplinary Rule 2-106 factors except the “time and labor required,” the “novelty and difficulty of the question involved,” the “results obtained,” and “[w]hether the fee is fixed or contingent.” The party who seeks the fees carries the burden of establishing the prevailing “market rate,” i.e., the rate charged in that community by lawyers of reasonably comparable skill, experience, and reputation, for similar services. The number of hours reasonably expended, determined in the first step, multiplied by a reasonable hourly rate, determined in the second step, produces the lodestar, which is an objective basis for the award of attorney fees.

It is important to note that Florida Courts generally do not award fees for time spent litigating the amount of the fees to be awarded. This is a critical factor in determining whether fees should be expended in pursuing a fees claim. Please note, however, recent case law suggests there may be certain circumstances under which fees may be awarded for time spent litigating the amount of fees.

In The Waverly at Las Olas Condominium Association, Inc. v. Waverly Las Olas, LLC, 4th District Case No. 4D11-2180, May 16, 2012, the Court found that the trial court did not abuse its discretion by awarding developer all fees incurred in the litigation, including fees for time spent litigating amount of fees. Broad language in the owners’ purchase agreements provided for award of fees for “any” litigation between the parties under the agreement. This holding may be used to support a similar award of fees for litigating the amount of fees in covenant enforcement disputes where the declaration of covenants includes broad prevailing party fees language.

Once the court arrives at the lodestar figure, it may add or subtract from the fee based upon a “contingency risk” factor and the “results obtained.”

The Court in Rowe explained that when the prevailing party’s counsel is employed on a contingent fee basis, the trial court must consider a contingency risk factor when awarding a statutorily-directed reasonable attorney fee.11 In contingent fee cases, the lodestar figure calculated by the court is subject to enhancement by an appropriate contingency risk multiplier in the range of 1.5 to 3. When the trial court determines that success was more likely than not at the outset, the multiplier should be 1.5; when the likelihood of success was approximately even at the outset, the multiplier should be 2; and, when success was unlikely at the time the case was initiated, the multiplier should be in the range of 2.5 to 3.12

In describing the Supreme Court’s computation method in Rowe, the court in Lake Tippecanoe Owners Ass’n, Inc. v. Hanauer, 494 So. 2d 226 (Fla. 2d DCA 1986) explained that in computing attorney’s fees, the trial judge should: (1) determine the number of hours reasonably expended on the litigation; (2) determine the reasonable hourly rate for this type of litigation; (3) multiply the result of (1) and (2); and, when appropriate, (4) adjust the fee on the basis of the contingent nature of the litigation or the failure to prevail on a claim or claims.

The trial judge correctly followed steps (1), (2), and (3), and arrived at a figure of $11,875, the lodestar factor under Rowe. The trial judge then proceeded to multiply this amount by what it termed a “success factor” of 1.5 and arrived at $17,812.50. The trial judge erred in multiplying the lodestar factor by 1.5, however, because the case did not qualify for an enhanced fee. Enhancement under Rowe is only applied where the prevailing party’s counsel is employed on a contingent fee basis.

The “results obtained” may provide an independent basis for reducing the fee when the party prevails on a claim or claims for relief, but is unsuccessful on other unrelated claims. When a party prevails on only a portion of the claims made in the litigation, the trial judge must evaluate the relationship between the successful and unsuccessful claims and determine whether the investigation and prosecution of the successful claims can be separated from the unsuccessful claims. In adjusting the fee based upon the success of the litigation, the court should indicate that it has considered the relationship between the amount of the fee awarded and the extent of success.

Evidence sufficient to support a finding of the number of hours reasonably expended by an attorney need not necessarily include specific, written time records, although such records are highly preferable and the lack thereof may in certain cases justify a reduction in the number of hours claimed.

Expert witnesses may be used to determine reasonable fee awards, and may be required in some cases. Florida Statutes § 92.231 permits any expert or skilled witness who testifies in any cause to be allowed a witness fee. As such, the costs associated with pursuing fees should be factored into the decision to pursue fees at all.

Blog based on article published at: http://www.csklegal.com/pages/calculating-reasonable-attorneys-fees-for-…