Attorney Fee Appellate Activities and Decisions:
Rayford H. Taylor, Esquire

            One of the most controversial and bitterly-fought reforms to the Florida workers’ compensation law in 2003 was the elimination of hourly rate attorney fees in most cases. That change to Section 440.34 has generated considerable litigation over how the courts will interpret this major component of the 2003 reforms.  As a result, considerable litigation has been initiated to challenge the statute’s validity and operation.  Thus far, it is most litigated and disputed provision in the 2003 legislation.

STATUTORY INTERPRETATION

I.          Paul Panescu v. Lykes Meat Group, Inc., Case # 1D04-375

            This was one of the first cases to address the various legislative changes to Section 440.34 dealing with attorneys fees.  The appeal to the First District Court of Appeal was from an attorney’s fee award by Judge Murphy for an accident prior to October 1, 2003.  While Judge Murphy concluded the attorney’s fee should be based upon hours rather than a percentage of the benefits achieved, he interpreted the 2003 statutory changes as containing a legislative pronouncement that hourly rates should be limited to a maximum of $150.00 per hour. 

Judge Murphy set forth several reasons for why he felt the fee being sought by claimant’s counsel was too high.  He would have awarded a higher hourly rate to claimant’s counsel but for the fact he interpreted the Legislature’s use of $150.00 per hour to be a statement of both public policy and a desire to have uniformity of maximum hourly rates for cases.  He concluded Section 440.34 could not be retroactively applied, but the Legislature’s declaration that hourly rates should be uniform and limited to the maximum rate was not a retroactive application of the statutory changes.

The claimant’s attorney argued on appeal Judge Murphy’s award of the attorney fee using a maximum of $150.00/hour was an unconstitutional retroactive application of the statute.  Judge Murphy’s decision was upheld by the First District pursuant to a per curiam affirmed opinion dated April 18, 2005. 

II.          James Wood v. Florida Rock Industries, 929 So. 2d 542 (Fla. 1st DCA 2006) Opinion modified, 929 So. 2d 545 (Fla. 1st DCA 2006) rev den.  935 So. 2d 1221 (Fla. 2006)

This was the first case challenging Section 440.34 for a post – 10/1/03 accident.  The Claimant filed a Petition for Benefits seeking in part, temporary partial disability benefits, penalties and interest. The Employer/Carrier responded to the Petition, denying the benefits.  The Employer/Carrier subsequently offered to pay past temporary partial disability benefits, penalties, and interest in the amount of $1,148.50.  The Claimant accepted the offer, but the issue of attorney’s fees remained pending.

            The Claimant’s attorney requested two separate attorney’s fees.  First, he contended he was entitled to an attorney’s fee under section 440.34 (3)(b) for the successful prosecution of the claims.  Second, the attorney argued that he was entitled to a fee as a sanction for the Employer/Carrier’s failure to timely comply with a discovery request.  The JCC awarded the Claimant’s attorney an attorney’s fee pursuant to Section 440.34(3)(b) of $229.70, which represented 20% of the benefits secured for the claimant. The JCC also awarded the attorney $100.00 as a fee in the form of a sanction for the Employer/Carrier’s failure to timely comply with the motion to compel.

            On appeal, the Claimant argued that he was entitled to a fee of $3,340.00, which was a fee nearly three times greater than the value of the benefits secured.  The Claimant also argued that the attorney’s fee ordered by the JCC as a sanction for the Carrier’s failure to comply to with the motion to compel was inadequate.  The Claimant argued the statute should be interpreted such that a JCC is permitted to award a fee in excess of the statutory percentage by considering the factors formerly contained in the statute to decide what is “reasonable”.

The First District Court of Appeals rejected the Claimant’s arguments observing: “First, the amount of an attorney's fee award is no longer based on services rendered, but instead is based on the value of the benefits secured on behalf of the claimant.”  The Court also noted that the statute expressly prohibited a judge of compensation claims (JCC) from awarding an attorney’s fee greater than the specific statutory percentages except under certain circumstances in medical only cases.  The Court recognized the Florida Legislature intended to repeal the use of alternate criteria to award an attorney fee greater than the percentages set forth in the statute.  

Subsequently, the Claimant filed a motion to certify a question of great public importance to the Florida Supreme Court which was granted on May 25, 2006. The First District added to following to its previous opinion in:

Do the amended provisions of section 440.34 (1) Florida Statutes (2003), clearly and unambiguously establish the percentage fee formula provided therein as the sole standard for determining the reasonableness of an attorney’s fee to be awarded a claimant.

            The Supreme Court On July 12, 2006 rejected the First District’s request to consider the certified question.

CONSITUTIONAL CHALLENGES (FACIAL)

I. Jean Lundy and Charles Williams v. Four Seasons Ocean Grand, 932 So. 2d 506
(Fla. 1st DCA 2006) rev den., 939 So. 2d 39 (Fla. 2006)

            The Claimant sustained a compensable injury on October 7, 2003 and a petition was filed seeking an average weekly wage adjustment, change of physician and past due indemnity benefits.  At a mediation conference, the parties resolved all the issues and the Claimant was to receive $1,700.00 in past due benefits, and Claimant’s counsel was entitled to an attorney’s fee from the Employer/Carrier.

Approximately ten days later, Claimant’s counsel sent a letter to the Employer/Carrier confirming a complete settlement of the case for $23,700.00 to be distributed as follows:

1. $1,700 to claimant for past indemnity benefits
2. $1,900 attorney fee to claimant’s counsel for obtaining the past benefits
3. $20,100 for a comprehensive settlement, which would be distributed as follows:

1. $17,000.00 to claimant
2. $ 2,760 to claimant’s counsel as a statutory fee
3. $   340.00 to claimant’s counsel for costs.

When the documents were presented to Judge Shelley Punancy, she approved the total settlement of the case as outlined above but held a hearing on the proposed attorney fee based upon the $1,700.00 in past due indemnity benefits.  Judge Punancy concluded she did not have the authority to approve a $1,900.00 attorney fee for $1,700.00 benefits because that exceeded the statutory fee schedule.  In so holding, she concluded the $1,900.00 fee was reasonable and a fee of $340.00 for the 26 hours asserted by claimant’s counsel would not have been considered “reasonable” if the accident had occurred prior to October 1, 2003.

The Claimant  appealed to attorney fee awarded and raised various constitutional challenges to the statute.  The statute’s challengers contended the limitation of attorney’s fees to a percentage of benefits achieved rather than the hours spent by claimant’s counsel to obtain those benefits was unconstitutional. The First District rejected the various constitutional challenges and arguments and held the statute, as passed by the Florida Legislature, did not violate a claimant’s due process rights, equal protection rights, access to courts, right to contract, or the separation of powers doctrine. 

The First District also certified the exact same statutory interpretation question to the Florida Supreme Court it had previously certified in the Wood case.  On August 21, 2006, the Florida Supreme Court decided it would not accept the case for review.

II.          Chester Campbell v. Aramark, 933 So. 2d 1255 (Fla. 1st DCA 2006) rev den. 944 So. 2d 986 (Fla. 2006)
           
            In Campbell, the Claimant’s attorney argued that the 2003 changes to Section 440.34, Florida Statutes did not prevent a judge of compensation claims from awarding an attorney’s fee greater than the statutory percentage formula. The First District, relying upon its decisions in Wood and Lundy rejected the Claimant’s argument in a brief opinion. However, the Court certified the same question it certified in Wood and Lundy to the Florida Supreme Court. On November 20, 2006, the Supreme Court indicated it would not accept jurisdiction to review the decision.

III.         Emma Murray v. Mariner Health, 946 So. 2d 38 (Fla. 1st DCA 2007) reh den. (Fla. 1st DCA 2007) rev den. 956 So. 2d 456 (Fla. 2007)

This was another appeal challenging the JCC’s decision to award a statutory fee on various constitutional grounds.  The First District followed its holdings in Wood, Lundy and Campbell and upheld the attorney fee award.  The Court also certified the same question to the Florida Supreme Court it had previously certified in other cases.

            On April 17, 2007, the Supreme Court ruled it would not consider the case as one of great public importance.  However, the Claimant had also requested the Court consider the case based upon the statute being found constitutional.  The Court requested jurisdictional briefs from the parties, and the matter has been pending before the Supreme Court since May 31, 2007.

            The Supreme Court heard oral arguments in the case on April 19, 2008. However, it did not issue an opinion prior to its summer recess.  The Court will next issue opinions on August 28, 2008.
           
IV.        John W. Gardner v. Meadows Steel Products, 946 So. 2d 1073 (Fla. 1st DCA 2007)

            The JCC entered an order finding the Claimant was entitled to temporary partial/total disability benefits, reimbursement of co-payments and medical bills and that the Claimant’s attorney was entitled a reasonable fee and taxable costs. At the attorney fee hearing, the Claimant and the Employer/Carrier stipulated the value of the benefits secured was $7,769.39.  The JCC found the Claimant’s attorney reasonably spent 62.3 hours to obtain the benefits secured.  The JCC acknowledged the Claimant’s expert witness testimony that he could no longer undertake the representation of claimants due to attorney’s fee limitations. However, the JCC held that he was constrained to follow the law in existence on the date of the accident and could not award an attorney’s fees greater than $1,415.41. 

            The Claimant and his attorney appealed the attorney fee award asserting various constitutional arguments and contending the attorney fee statute created an unlawful irrebutable presumption.  The First District Court of Appeals upheld the trial judge’s award of a statutory fee in a per curiam affirmed decision.

V.        LaPetite Academy v. Jacqueline Duprey, 948 So. 2d 868 (Fla. 1st DCA 2007)

            This case involved a November 4, 2003 date of accident.  The JCC awarded the claimant impairment benefits, an increase in the average weekly wage, recovery of past benefits, along with penalties and interest, and attorney’s fees and costs from the employer/carrier for prevailing on those claims.

            At the attorney’s fee hearing, Judge Thurman granted a fee of $20,500.00, which was equal to 82 hours at $250.00 per hour and construed Section 440.34 as permitting the award of a “reasonable attorney’s fee.”  Had the judge limited the fee to a statutory percentage of the recovery, the fee would have been approximately $505.12 based upon benefits of $2,526.40.  Judge Thurman construed Section 440.34 to permit the awarding of an attorney’s fee in excess of the statutory guideline whenever a judge concluded it would be reasonable to do so. 

            The Employer/Carrier appealed the order asserting the judge had no statutory authority to award a fee which exceeded the statutory percentage.  The Employer/Carrier relied upon the prior decisions in Wood, Lundy and Campbell.  The Claimant cross-appealed, asserting the statute was unconstitutional. 

            The First District Court reversed the award of a an attorney’s fee in excess of the statute and rejected the Claimant’s cross-appeal, as the statute had been found to be constitutional.        

            The Claimant sought review in the Florida Supreme Court challenging the 2003 attorney fee statute based upon “conflict certiorari”.  The Florida Supreme Court was asked to exercise its discretionary jurisdiction based upon an asserted conflict between the District Court’s opinion upholding the constitutionality of the statute and other decisions which ruled that limiting an attorney’s fee to a percentage was not proper or constitutional.  The Supreme Court may exercise its jurisdiction to decide cases in which there is an express and direct conflict between opinions of the intermediate appellate courts.  In a brief opinion, the Supreme Court indicated it would not be accepting jurisdiction and awarded the Employer/Carrier/ Respondent an attorney’s fee to be determined by the JCC on remand.  Duprey  v. La Petite Academy, 963 So. 2d 227 (Fla. 2007).

VI.        Maria Buitrago  v. Landry's, 949 So. 2d 1046 (Fla. 1st DCA 2007) reh. den (Fla. 1st DCA 2007)

            The Claimant appealed an order awarding an attorney’s fee in accordance with the formula outlined in Section 440.34, Florida Statutes (2005).  On appeal, the Claimant raised constitutional challenges similar to those considered in Lundy and Campbell.  Although the Court upheld the award based upon its decision in Wood, it certified the same question to the Supreme Court that it certified previously in Wood, Lundy and Campbell.

CONSTITUTIONAL CHALLENGES (AS APPLIED)

I.          Daniel O'Shea v. Progress Energy, Case No.: 1D07-3278

In this case, Judge Sculco awarded Claimant’s counsel a statutory fee of $1,628.65 based upon $9,191.01 in benefits achieved.  However, the judge also explained why he thought the attorney fee statute was unconstitutional as applied in this case, and that he should have the authority to go outside the statutory fee whenever he found a case to be complex or unusual.  The judge relied upon a series of cases which held the statutory fee schedule for attorneys representing death row defendants could be exceeded when the fee impaired a defendant’s Sixth and Fourteenth Amendment right to counsel.

The Claimant appealed the JCC’s order and will be arguing Section 440.34 is unconstitutional as applied in workers’ compensation cases.  No briefs have yet been filed, but the Claimant’s Initial Brief is due on or before November 13, 2007.

II.          Darlene Pudvah v. Osprey Nursing Center, Case No.: 1D07-5086

This appeal is very similar to that of O’Shea.  It involves the same Claimant’s attorney.  Here, Judge Murphy entered an attorney fee order which limited the fee to the statutory fee.  However, he also to concluded the statute should be construed so as to provide him with the authority to award a fee greater than the statute in appropriate cases. 

The Claimant appealed the JCC’s order, and the case is in its early stages of appeal.

CHALLENGES TO CLAIMANT PAID FEES

I.          Abubaker Eshlibi v. Consolidated Box Manufacturing, 962 So. 2d 377 (Fla. 1st DCA 2007)

            In this case, the trial judge refused to approve the attorney’s fee to be paid by the Claimant out of a lump-sum settlement under Section 440.20(11)(c) Florida Statutes (2006) because the Claimant’s attorney would not provide a detailed accounting of the costs being taken out of the settlement.

            The Claimant appealed the denial and the Court held a JCC did not have the statutory authority to deny the amount of the fee based upon the costs charged to the client.  The Court reversed the denial of an attorney’s fee.

II.          Michael Celeste v. Kerns, Gevity Leasing, Case No.:  1D07-3453

            This case involves a challenge to the portion of 440.34 which limits the amount an employee/claimant may pay their attorney when no benefits were secured by the attorney’s efforts.  At issue is whether a judge of compensation claims can approve a claimant paying their attorney for legal services for which no benefits were obtained for the claimant through that attorney’s efforts.
           
            No briefs have been filed, but the Initial Brief was due by October 26, 2007.  To date, the First District Court of Appeals Docket does not reflect any appearance by counsel for the Employer/Carrier.