Kelly Paton v. Geico General Insurance Co.

Supreme Court of Florida
____________
No. SC14-282
____________
KELLY PATON,
Petitioner,
vs.
GEICO GENERAL INSURANCE CO.,
Respondent.
[March 24, 2016]
LEWIS, J.
Kelly Paton seeks review of the decision of the Fourth District Court of
Appeal in GEICO General Insurance Co. v. Paton (Paton II), 133 So. 3d 1071 (Fla.
4th DCA 2014), on the ground that it expressly and directly conflicts with the
decision of this Court in State Farm Fire & Casualty Co. v. Palma, 555 So. 2d 836(Fla. 1990), on a question of law. We have jurisdiction. See art. V, § 3(b)(3), Fla.
Const.
FACTS
Paton was injured in a car accident due to the negligence of an underinsured
driver. GEICO Gen. Ins. Co. v. Paton (Paton III), 150 So. 3d 804, 805 (Fla. 4th
DCA 2014). After Respondent GEICO General Insurance Company (GEICO)
failed to pay the total amount claimed by Paton under the underinsured motorist
(UM) policy maintained by her mother, she filed an action against GEICO. See
id.; see also Paton v. GEICO Gen. Ins. Co. (Paton I), No. 09CACE013697, 2010
WL 10129165, at *1 (Fla. 17th Cir. Ct. June 24, 2010) (trial court order). The jury
returned a verdict in favor of Paton for $469,247, which the trial court reduced to
$100,000, the limit of the UM policy. Paton III, 150 So. 3d at 805.
Paton subsequently amended her complaint to add a claim of bad faith
against GEICO under section 624.155, Florida Statutes (2010). Id. She obtained a
jury verdict in her favor for $369,247, the amount of the excess verdict in the UM
trial. Id. at 806. Thereafter, she moved for attorney’s fees and costs, and as the
fees were being highly contested, she sought discovery related to her opposition’s
attorneys’ time records. Paton II, 133 So. 3d at 1071. Specifically, Paton served
on opposing counsel a request to produce the following records:
1. Any and all time keeping slips and records regarding time spent
defending GEICO in the bad faith action in Paton v. GEICO General,
Case No.: 09-013697 (12).
2. Any and all bills, invoices, and/or other correspondence for
payment of attorney’s fees for defending GEICO in the bad faith
action in Paton v. GEICO General, Case No.: 09-013697 (12).
3. Any and all retainer agreements between you and/or your
respective law firm for defending GEICO in the bad faith action in
Paton v. GEICO General, Case No.: 09-013697 (12).
-2-
GEICO objected to the request to produce on the basis that the information was
privileged and irrelevant, and relied on Estilien v. Dyda, 93 So. 3d 1186 (Fla. 4th
DCA 2012), and HCA Health Services of Florida v. Hillman, 870 So. 2d 104 (Fla.
2d DCA 2003). In Estilien, the Fourth District held that where a party seeks to
discover the billing records of opposing counsel solely to support a claim for
attorney’s fees, the party seeking the discovery must establish that the material
requested (1) is actually relevant to a disputed issue, (2) is necessary, and (3) that
its substantial equivalent cannot be obtained from another source. 93 So. 3d at1188-89 (citing Hillman, 870 So. 2d at 107). The circuit court overruled GEICO’s
objections, but provided that GEICO “may redact privileged information.”
Paton also propounded Lodestar/Multiplier Fee Determination
Interrogatories to GEICO. GEICO objected, again on the basis of Estilien and
Hillman, to the following interrogatory:1
1. The following interrogatory was also included:
2. As to each of the following provisions, please provide
your position on this bad faith case:
(A) the time and labor required, the novelty,
complexity, and difficulty of the questions involved, and
the skill requisite to perform the legal service properly.
GEICO responded, “[t]he time required will be provided. This was not a novel or
complex case. The questions were simple and this was a routine bad faith case
where carrier had opportunities to settle and declined each opportunity.” It is
unclear whether GEICO intended to respond that the time would not be provided,
but the circuit court ordered GEICO to provide an answer to this interrogatory.
-3-
8. Did you or your attorneys spend any attorney’s time in prosecuting
or defending this lawsuit? If so, list a description of each such item of
attorney’s fees, the date incurred, hourly rate and the hours incurred
on each such date. (Note: you may answer this question by stapling
your time records to the answers to interrogatories as long as those
records are legible and complete or indicating that you are relying on
attached time records for your answer).
Again, the circuit court overruled GEICO’s objection. This order did not reference
redaction of any privileged information.
GEICO filed a petition for writ of certiorari in the Fourth District, requesting
that the district court quash the orders relating to the request to produce and the
interrogatory. GEICO alleged that Estilien and Hillman establish that a party must
make a special showing prior to the discovery of the billing records of opposing
counsel, and Paton failed to make such a showing. GEICO also alleged that the
materials were privileged and irrelevant.
The Fourth District granted the petition and quashed the orders of the circuit
court. Paton II, 133 So. 3d at 1071. The district court held that Estilien controlled,
and noted that the court in Estilien stated that the records of opposing counsel are,
at best, only marginally relevant to the determination of reasonable attorney’s fees.
Id. (citing Hillman, 870 So. 2d at 107). The court recognized that Estilien required
a party to establish that the billing records of opposing counsel are actually
The ruling with respect to this interrogatory was not challenged in the petition for
writ of certiorari.
-4-
relevant and necessary, and their substantial equivalent could not be obtained
elsewhere. Id. The district court concluded Paton failed to make the necessary
showing. Id.Paton sought review of Paton II in this Court, alleging it conflicted with
Palma, 555 So. 2d 836, which concerned the appropriate range for a contingency
fee multiplier in the computation of a reasonable attorney’s fee. In Palma, this
Court considered the billing records of opposing counsel to be relevant to our
analysis, and explicitly noted the number of hours expended by opposing counsel
in our decision. Id. at 837. In Palma, we explained that “the trial court found that
650 was a reasonable amount of hours and that a reasonable hourly rate was $150.
Further, the trial court applied a multiplier of 2.6. We note that State Farm’s
counsel [(opposing counsel)] expended 731 hours on this case.” Id. (emphasis
added). The number of hours expended by counsel for both the plaintiff and
defendant in Palma demonstrated the complexity and significance of the issue,
which involved only a $600 medical bill. Id. at 836. Our recognition that State
Farm expended more hours than those the trial court found to be reasonable for the
plaintiff demonstrates that the number of attorney hours expended by counsel for
State Farm was highly relevant to the determination of a reasonable attorney’s fee
for the plaintiff. Thus, the statement in Paton II that the billing records of counsel
for GEICO were “at best, only marginally relevant,” conflicts with our analysis in
-5-
Palma. We accept jurisdiction to clarify the relevance of the time expended by
opposing counsel to the issue of reasonable hours for a party who is entitled to
payment of his or her attorney’s fees when the fees are contested.
ANALYSIS
The scope of discovery is provided in Florida Rule of Civil Procedure
1.280(b)(1), which states:
Parties may obtain discovery regarding any matter, not privileged, that
is relevant to the subject matter of the pending action, whether it
relates to the claim or defense of the party seeking discovery or the
claim or defense of any other party . . . . It is not ground for objection
that the information sought will be inadmissible at the trial if the
information sought appears reasonably calculated to lead to the
discovery of admissible evidence.
Relevant evidence is defined by statute as evidence that tends to prove or disprove
a material fact. See § 90.401, Fla. Stat. (2015). Additionally, we have previously
explained that the definition of relevancy is broader in the context of discovery
than it is during trial. Bd. of Trs. of Internal Improvement Tr. Fund v. Am. Educ.
Enter., LLC, 99 So. 3d 450, 458 (Fla. 2012) (citing Amente v. Newman, 653 So.
2d 1030, 1032 (Fla. 1995)).
The decision below relied on Estilien, which, in turn, was founded on the
decision of the Second District Court of Appeal in Hillman. In Hillman, the trial
court granted the plaintiffs’ motion to compel a response to a subpoena duces
tecum that sought production of the following: “timesheets, invoices, bills,
-6-
reimbursements, payments, correspondence, contract for services, fee agreement,
hourly fee schedules, all computer generated records pertaining to attorneys’ fees,
costs, expenses . . . , or other related documents.” 870 So. 2d at 106 (alterations in
original). However, the order of the trial court also provided that any material that
was protected by the attorney-client or work-product privileges should be redacted,
with an unredacted copy to be provided to the trial court. Id. The defendant
medical center petitioned the Second District for a writ of certiorari, which was
granted. Id. at 108. The district court concluded that the billing records of
opposing counsel are only sometimes relevant to an attorney’s fees claim and, even
when relevant, are protected by the attorney-client and work-product privileges.
Id. at 107. Florida Rule of Civil Procedure 1.280(b)(4)2 provides that privileged
information may be obtained:
upon a showing that the party seeking discovery has need of the
materials in the preparation of the case and is unable without undue
hardship to obtain the substantial equivalent of the materials by other
means. In ordering discovery of the materials when the required
showing has been made, the court shall protect against disclosure of
the mental impressions, conclusions, opinions, or legal theories of an
attorney or other representative of a party concerning the litigation.
The Second District granted certiorari review and held that the billing records of
opposing counsel are privileged materials that can be obtained only if the party that
2. At the time Hillman was decided, this portion of rule 1.280 fell under
subdivision (b)(3).
-7-
seeks such discovery demonstrates the material is actually relevant to a disputed
issue, is needed to prepare for the attorney’s fees hearing, and that substantially
equivalent material cannot be obtained elsewhere. Hillman, 870 So. 2d at 107
(citing Fla. R. Civ. P. 1.280(b)(3)).
In Estilien, the Fourth District relied on the analysis in Hillman to grant
certiorari review of a trial court order that allowed discovery of the billing records
of opposing counsel. 93 So. 3d at 1187. In Estilien, the plaintiff prevailed during
trial and subsequently filed a motion for attorney’s fees pursuant to the offer of
judgment statute. Id. (citing § 768.79(6)(b), Fla. Stat. (2012)). In connection with
that motion, the plaintiff requested production of the billing records of the
attorneys for the defendant, who objected on the basis that such information was
both irrelevant and protected by the attorney-client and work-product privileges.
Id. The trial court ordered the discovery, but provided that any privileged
information be redacted. Id. The defendant filed a petition for writ of certiorari in
the district court, which was granted. Id. The district court noted that it had
previously held in Heinrich Gordon Batchelder Hargrove Weihe & Gent v. Kapner,
605 So. 2d 1319, 1319 (Fla. 4th DCA 1992), that billing records of opposing
counsel were not discoverable if they contained privileged or irrelevant
information, and the Second District in Hillman held that the billing records of an
attorney are generally protected as work product. Id. at 1188. The Fourth District
-8-
concluded that the trial court order compelled the production of protected attorney-
client information without a showing of relevancy, and imposed the same standard
delineated in Hillman. Id. at 1188-89.
In contrast, the First District Court of Appeal denied a similar petition for
writ of certiorari that concerned an order of a Judge of Compensation Claims
(JCC) that compelled the disclosure of the hourly fee and time spent by opposing
counsel on the basis that the order did not depart from the essential requirements of
the law. Anderson Columbia v. Brown, 902 So. 2d 838, 840 (Fla. 1st DCA 2005).
In Anderson Columbia, the plaintiff asserted that a workers’ compensation statute
that limited an award of attorney’s fees based on prevailing in a claim for medical
benefits to $1500 was unconstitutional. Id. (citing § 440.34(7), Fla. Stat. (2003)).
To support that claim, the plaintiff sought discovery of the billing records of the
defendant’s counsel. Id. The defendant objected on the basis that the information
was protected by either the attorney-client or work-product privilege, but the JCC
rejected this claim and ordered production. Id.
The First District in Anderson Columbia denied the petition for writ of
certiorari filed by the defendant on the basis that the order of the JCC did not
mandate the disclosure of information protected by either privilege. Id. With
regard to work-product privilege, the district court stated that the order did not
require defense counsel to provide information that contained descriptions of the
-9-
services rendered, and therefore did not require defense counsel to reveal their
mental impressions, conclusions, opinions, or legal theories. Id. (citing Fla. R.
Civ. P. 1.280(b)(3)). With respect to attorney-client privilege, the district court
stated that the defendant did not demonstrate how the disclosure of fees would
have a “chilling effect” on communications related to the legal rights, obligations,
or circumstances of the client. Id. at 841. Thus, the district court concluded that,
where relevant, the discovery of the billing records of opposing counsel is best left
to the sound discretion of the trial court. Id. at 841-42. Prior to Estilien, the Fourth
District had also denied similar petitions for writs of certiorari because the redacted
materials did not contain privileged information and the disclosure of such
materials would not result in irreparable harm. See Brown Distrib. Co. of W. Palm
Beach v. Marcel, 866 So. 2d 160, 161 (Fla. 4th DCA 2004); see also Finol v. Finol,
869 So. 2d 666, 666 (Fla. 4th DCA 2004).
We agree with the rationale of the First District in Anderson Columbia and
conclude that the billing records of opposing counsel are relevant to the issue of
reasonableness of time expended in a claim for attorney’s fees, and their discovery
falls within the discretion of the trial court when the fees are contested. When a
party files for attorney’s fees against an insurance company pursuant to sections
624.155 and 627.428, Florida Statutes, as occurred here, the billing records of the
defendant insurance company are relevant. The hours expended by the attorneys
- 10 -
for the insurance company will demonstrate the complexity of the case along with
the time expended, and may belie a claim that the number of hours spent by the
plaintiff was unreasonable, or that the plaintiff is not entitled to a full lodestar
computation, including a multiplying factor. See Palma, 555 So. 2d at 837(rejecting the claim that a multiplier should apply only to cases where the
plaintiff’s fee arrangement was based on the amount recovered because, although
the amount of the underlying claim was small, the case was highly litigated and the
risk of nonpayment justified the use of a multiplier).
Moreover, the entirety of the billing records are not privileged, and where
the trial court specifically states that any privileged information may be redacted,
the plaintiff should not be required to make an additional special showing to obtain
the remaining relevant, non-privileged information. Additionally, even if the
amount of time spent defending a claim was privileged, this information would be
available only from the defendant insurance company, and the plaintiff has
necessarily satisfied the second prong of the test delineated by Florida Rule of
Civil Procedure 1.280(b)(4) for the discovery of privileged information—i.e., the
information or its substantial equivalent cannot be obtained by other means without
undue hardship. Thus, we conclude that by granting the petition for certiorari, the
Fourth District improperly infringed on the sound discretion of the trial court and
required Paton to meet an unnecessarily high standard.
- 11 -
Moreover, the district court improperly employed its certiorari jurisdiction
when it granted the petition on an issue that did not depart from the essential
requirements of the law and would not cause irreparable harm to GEICO.
Certiorari review of interlocutory orders is an extraordinary remedy that should be
granted only in very limited circumstances. See, e.g., Bd. of Trs. of Internal
Improvement Trust Fund, 99 So. 3d at 454; Jaye v. Royal Saxon, Inc., 720 So. 2d
214, 214-15 (Fla. 1998) (“This Court has emphasized, however, that certiorari
review in this instance ‘is an extraordinary remedy and should not be used to
circumvent the interlocutory appeal rule which authorizes appeal from only a few
types of non-final orders.’ ” (quoting Martin-Johnson, Inc. v. Savage, 509 So. 2d
1097, 1098 (Fla. 1987), superseded by statute on other grounds, § 768.72, Fla. Stat.
(1989))). To be entitled to certiorari review, a petitioner must demonstrate that the
order constitutes a departure from the essential requirements of the law and results
in material injury for the remainder of the case that cannot be corrected on appeal.
Bd. of Trs. of Internal Improvement Trust Fund, 99 So. 3d at 454 (citing Reeves v.
Fleetwood Homes of Fla., Inc., 889 So. 2d 812, 822 (Fla. 2004)). Simple
disagreement with the decision of the trial court is an insufficient basis for
certiorari jurisdiction. E.g., Ivey v. Allstate Ins. Co., 774 So. 2d 679, 683 (Fla.
2000) (citing Haines City Cmty. Dev. v. Heggs, 658 So. 2d 523, 525 (Fla. 1995)).
- 12 -
Here, the trial court correctly concluded the discovery was relevant and
provided that GEICO could redact any privileged information. Therefore,
compliance with the discovery orders did not depart from the essential
requirements of the law and would not result in any irreparable harm to GEICO,
and certiorari jurisdiction was not properly exercised by the district court.
Moreover, not only did the district court improperly grant this extraordinary
remedy based on its simple disagreement with the trial court order, the court
erroneously quashed legally correct trial court orders that allowed for the discovery
of relevant and non-privileged information.
CONCLUSION
We hold that the hours expended by counsel for the defendant insurance
company in a contested claim for attorney’s fees filed pursuant to sections 624.155
and 627.428, Florida Statutes, is relevant to the issue of the reasonableness of time
expended by counsel for the plaintiff, and discovery of such information, where
disputed, falls within the sound decision of the trial court. For this reason, we
quash the decision of the Fourth District in Paton II and remand for further
proceedings consistent with this opinion.
It is so ordered.
LABARGA, C.J., and PARIENTE, and PERRY, JJ., concur.
QUINCE, J., dissents with an opinion, in which CANADY and POLSTON, JJ.,
concur.
- 13 -
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.
QUINCE, J., dissenting.
Because I conclude that the decision of the Fourth District Court of Appeal
in GEICO General Insurance Co. v. Paton, 150 So. 3d 804 (Fla. 4th DCA 2014),
does not expressly and directly conflict with decisions of the other district courts of
appeal or this Court, I would dismiss this case for lack of jurisdiction under article
V, section 3(b)(3), of the Florida Constitution.
The majority accepted jurisdiction of this case on the basis that Paton
expressly and directly conflicts with our decision in State Farm Fire & Casualty.
Co. v. Palma, 555 So. 2d 836, 838 (Fla. 1990), where this Court concluded “that a
contingency adjustment multiplier may be applied to those contingency fee
arrangements in which the amount of the attorney’s fee is not controlled by the
amount of the recovery.” In detailing the events that transpired below, we noted
that the trial court, in awarding attorney’s fees to the plaintiff, determined that 650
hours expended by plaintiff’s counsel were reasonable. Id. at 837. We also
observed that opposing counsel expended 731 hours. Id. Unlike in Palma, the
district court in Paton addressed a different question of law, namely, whether, in
support of a claim for attorney’s fees, opposing counsel’s billing records were
discoverable. Paton II, 133 So. 3d at 1071.
- 14 -
Therefore, I conclude that this Court is without jurisdiction to review Paton
based on express and direct conflict. Accordingly, I dissent.
CANADY and POLSTON, JJ., concur.
Application for Review of the Decision of the District Court of Appeal - Direct
Conflict of Decisions
Fourth District - Case No. 4D13-2166
(Broward County)
Bard Daniel Rockenbach of Burlington & Rockenbach, P.A., West Palm Beach,
Florida, and Richard Mark Benrubi of Liggio Benrubi, West Palm Beach, Florida,
for Petitioner
James Kendall Clark of Clark, Robb, Mason, Coulombe, Buschman & Charbonnet,
Miami, Florida,
for Respondent
- 15 -