Some homeowners who are given the run around by their insurance carrier when they file a claim for damage to their home assume they have no real recourse.  While policyholders might understand that they can file a lawsuit for breach of contract, they might be concerned about their ability to afford attorney fees on an out-of-pocket basis.  Our law firm, however, handles claims by policyholders for denied insurance benefits on a contingency fee basis.  Further, Florida courts can award attorney fee awards when an insurance carrier loses a breach of contract action.  In the recent case from the Florida 3rd District Court of Appeals, Citizens Property Insurance Corp. v. Pulloquinga, 2015 WL 9584387 (Fla. 3rd DCA 2015), the court not only granted attorney fees but applied a 1.5 multiplier to the amount of the fee award.

The insured filed a homeowner’s claim with Citizens after her house was destroyed by fire.  The insured promptly provided notice of the loss to her insurer and participated in an Examination Under Oath (EUO) without an attorney.  At the EUO, the insured provided documents supporting her claim.  Citizens issued a check for $5,000 to the insured but paid nothing more for the complete loss of her home.  The insured filed suit, and the carrier defended based on allegations of arson, insurance fraud, and misrepresentation in the application for insurance.  The homeowner was forced to continue paying her mortgage during the two year period between the fire and date of trial.  She also was forced to seek out meager alternative housing and to stay with friends.  Because the homeowner had to maintain her mortgage while living somewhere else, she experienced extreme financial hardships during this period. 

The trial court granted summary judgment in favor of the policyholder regarding the insurance carrier’s defenses.  The insurer paid policy limits the day before the trial.  The trial court awarded attorney fees and costs to the policyholder based on a 1.5 multiplier, and the insurer appealed the application of the multiplier to the attorney fees.

On appeal, the court cited the following factors as relevant to determining whether application of the multiplier for attorney fees is appropriate: (1) whether a contingency fee multiplier is necessary for the insured to obtain a qualified attorney; (2) ability of the attorney to mitigate the risk of non-payment; and (3) whether factors like the result obtained, type of fee arrangement, and amount of money involved are applicable.  The appellate court found the trial court’s application of the factors in applying the multiplier persuasive.

In applying the first factor, the court noted the trial judge relied on testimony that no other attorney in the relevant market agreed to accept the insured’s case on a contingency basis.  Further, the policyholder needed the billing to be based on a contingency fee because of her complete financial loss and need to pay the mortgage, which also precluded accepting a partial settlement of her loss.

With regard to the second factor, the court observed that the attorney was unable to mitigate against the insured’s non-payment of fees because she had no means from which to pay fees despite the significant time involved in pursuing the case.

Finally, the appellate court acknowledged the case was not a “run of the mill” case because the insurer utilized defenses that included allegations of arson, insurance fraud, and material misrepresentation in the application for insurance.  Citizens also contested both that the house was a “total loss” and the insured’s “ownership interest” in the home.  The insurer also contended that coverage was not appropriate because the insured allegedly ran a business out of the house.  All of these issues required “significant high quality time, labor and effort by her attorney” explained the court.  Further, the attorney obtained excellent results because the recovery was for the maximum amount sought in pursuing the claim.   The court also pointed to the trial court’s observation that the novelty and complexity of the issues raised by the insurer interfered with the insured’s attorney’s ability to work on other cases and take on new clients.  The court found that the complexity of the case was compounded by the complete destruction of the insured’s home and personal belongings, which left her and her family without any property or place to live.  The urgency of pursing these complex issues was magnified by the insured’s dire economic straights while trying to afford maintaining both a mortgage payment and rent on replacement housing.

Based on the application of these factors by the trial court, the appellate court upheld the trial judge’s decision to award attorney fees with a 1.5 multiplier.  This case provides an example of the power of a court to not only award attorney fees in insurance claims disputes but to award more than the full amount of fees.  Concerns about your ability to afford legal representation should never discourage you from seeking legal advice and representation in an insurance claims dispute.  

You can reach Attorney J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email J.P. directly at [email protected].

J.P. Gonzalez-Sirgo
J.P. Gonzalez-Sirgo, P.A.
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