GROSSMAN ROTH, P.A., APPELLANT,
v.
KRISTI MELLEN, INDIVIDUALLY AND AS PERSONAL REPRESENTATIVE OF THE ESTATE OF MICHAEL MUNSON, DECEASED, APPELLEE
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Grossman Roth, P.A. appealed a trial court judgment upholding a legislative claims bill provision that limited the law firm's contingency fee to $290,000 despite a preexisting agreement for 25% of recovery. The Florida District Court of Appeal reversed, finding that the Legislature's fee limitation unconstitutionally impaired the fee agreement, applying the controlling precedent of Searcy Denney Scarola Barnhart & Shipley v. State.
The court reversed the trial court's judgment, holding that the Legislature's fee limitation in the claims bill unconstitutionally impairs the preexisting contingency fee contract. The court applied Searcy Denney Scarola Barnhart & Shipley v. State, which established that section 768.28(8)'s 25% fee limitation applies to claims bills as well as circuit court judgments, and that fee limitations in claims bills that contradict this statutory provision are unconstitutional.
[1] A legislative claims bill provision limiting an attorney's contingency fee unconstitutionally impairs a pre-existing fee agreement between the parties.
[2] When payment of a judgment against a state entity is ordered by the Legislature through a claims bill, attorney's fees are permitted up to the statutory limit established…
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“that the valid portion of the act may be severed from the invalid portion and still accomplish the beneficial purpose of the act in providing compensation due to the injured child”
Establishes that the unconstitutional fee limitation can be severed from the claims bill while preserving the compensation award to the claimant.
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Join FLexlaw to unlock all legal intelligenceThe law firm represented Mellen in a medical malpractice action against a state hospital. A consent final judgment of $3,000,000 was entered, but only…
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Grossman Roth, P.A. (“the law firm”) appeals an order granting final summary judgment in a declaratory judgment action in favor of Kristi Mellen, Individually and as Personal Representative of the Estate of Michael Munson. We find merit in the law firm’s first argument on appeal, that the trial court erred in upholding a provision of a claims bill limiting the law firm’s contingency fee. The Legislature’s claims bill provision is an unconstitutional impairment of the fee agreement between the parties, and we reverse. As to the second issue raised, we affirm without further discussion.
The law firm represented Mellen in a medical malpractice action against a hospital. The hospital was a state entity and thus enjoyed a sovereign immunity damages limitation of $200,000 per incident or occurrence under section 768.28(5), Florida Statutes (2008).1 However, section 768.28(5) permits a claimant to seek recovery of a judgment exceeding this amount from the Florida Legislature. Such recovery may be sought through a claims bill, but pursuant to the Rules of Senate, such a bill may not be heard or considered by the Senate “until all available administrative and judicial remedies have been exhausted.” Fla. S. Rule 4.81(6) (2012). Attorney’s fees under section 768.28 are limited to “25 percent of any judgment or settlement.” § 768.28(8), Fla. Stat. (2008).
The parties entered into a contingency fee contract under which Mellen agreed to pay the law firm an amount based on her gross recovery “in accordance with the guidelines and limits established by the Supreme Court of the State of Florida with regard to cases of this type.” The contract specifically accounted for claims against governmental entities, citing the twenty-five percent contingency fee limitation of section 768.28(8) and stating, “Certain claims against governmental entities may have statutory limits on attorney’s *685fees. In all cases the attorney’s fees will be the maximum amount permitted under law or by the Courts.”2
Pursuant to discussions with the law firm, the hospital agreed to settle the matter for $3,000,000 and to support the passage of a claims bill by the Legislature to effectuate recovery. Pursuant to the agreement, the trial court entered a consent final judgment for $3,000,000 against the hospital and ordered the hospital to tender the statutory limit of $200,000. It also entered an order approving the settlement, including the payment of an attorney’s fee of “25% pursuant to contract” and costs.
The law firm then pursued and obtained a claims bill on Mellen’s behalf. Chapter 2012-250, Laws of Florida, awarded the remaining $2,800,000 to Mellen, limited attorney’s fees to “15 percent of the first $1,000,000 awarded under this act, 10 percent of the second $1,000,000 awarded under this act, and 5 percent of the remainder awarded under this act, for a total of $290,000,” and provided that taxable costs may additionally be recovered.
The law firm disputed the propriety of the legislatively imposed $290,000 fee limitation and Mellen agreed to the law firm holding an additional $410,000 in escrow pending settlement of the fee dispute.3 Mellen then brought an action for a declaratory judgment seeking an award of the escrow balance and the law firm counterclaimed for a declaratory judgment pronouncing the fee limitation provision of the claims bill unconstitutional.
The trial court entered judgment in favor of Mellen. It found two cases controlling, Gamble v. Wells, 450 So.2d 850, 853 (Fla. 1984), and Noel v. Sheldon J. Schlesinger, P.A., 984 So.2d 1265, 1267 (Fla. 4th DCA 2008), each of which generally holds that the Legislature is not bound by an existing contingency fee agreement when it voluntarily distributes funds as an “act of grace” through a private relief act or claims bill.
In ruling, the trial court did not have the benefit of the Florida Supreme Court’s recent opinion in Searcy, Denney, Scarola, Barnhart & Shipley, etc. v. State, 209 So.3d 1181 (Fla. 2017), a case very similar to the one at hand. There, a claims bill awarded a total of $15,000,000 to a claimant, but limited attorney's fees to $100,000 despite an existing agreement for a twenty-five percent fee. Id. at 1185-86. The trial court determined that Gamble and Noel compelled compliance with the bill’s limitation on attorney’s fees, and a majority of this court agreed. Searcy Denney Scarola Barnhart & Shipley, P.A. v. State, 194 So.3d 349, 354 (Fla. 4th DCA 2015). However, on a motion for certification of questions of great public importance, we certified the following question to the supreme court:
AFTER THE ENACTMENT OF SECTION 768.28, FLORIDA STATUTES, AND THE ADOPTION OF FLORIDA SENATE RULE 4.81(6), IS IT CONSTITUTIONALLY PERMISSIBLE FOR THE FLORIDA LEGISLATURE TO LIMIT THE AMOUNT OF ATTORNEYS’ FEES PAID FROM A GUARDIANSHIP TRUST ESTAB*686LISHED BY A LEGISLATIVE CLAIMS BILL?
Searcy Denney Scarola Barnhart & Shipley, P.A. v. State, 190 So.3d 120, 121 (Fla. 4th DCA 2015).
■ In answering the question in the negative, the Supreme Court noted that in section 768.28, the Legislature “specifically directs that recovery of any amounts that exceed the limited waiver of sovereign immunity may be collected only by way of a legislative claims bill” and “provides for a limit on attorneys’ fees to be paid from the judgment amounts recovered.” Searcy, Denney, 209 So.3d at 1190. Read collectively “to achieve a consistent whole,” the Court concluded “that the Legislature intended in section 768.28(8) to allow fees to be charged, demanded, received, or. collected up to 25 percent of the judgment amount when payment is ordered by the circuit court, as well as when payment of all or part of that judgment is ordered by the Legislature in a claims bill, as expressly provided for in- section 768.28(5).” Id. at 1189-90 (citation omitted). The Court further found that the fee limitation in the claims bill at issue unconstitutionally impaired the preexisting contract between Searcy Denney and the claimant. Id. at 1193-94. It ultimately held “that the valid portion of the act may be severed from the invalid portion and still accomplish the beneficial purpose of the act in providing compensation due to the injured child” and quashed this court’s opinion. Id. at 1197.
Searcy, Denney is controlling in the instant case. Consequently, we reverse and remand for the trial court to proceed consistently therewith.
Reversed and remanded,
Warner and Taylor, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Searcy v. State, 209 So. 3d 1181 (Fla. 2017)
- Gamble v. Wells, 450 So. 2d 850 (Fla. 1984)
- Wilson v. State, 984 So. 2d 1265 (Fla. 1st DCA 2008)
- Searcy Denney Scarola Barnhart & Shipley, P.A. v. State, 194 So. 3d 349 (Fla. 4th DCA 2015)
- Searcy Denney Scarola Barnhart & Shipley, P.A. v. State, 190 So. 3d 120 (Fla. 4th DCA 2015)