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THE WELCOME TREND AWAY FROM ATTORNEY FEE MULTIPLIERS IN FORECLOSURE CASES

In some cases, when assessing the amount of attorneys’ fees to award a prevailing party in a lawsuit, Florida courts apply a “multiplier.”  A “multiplier” is simply a number that a trial court uses to enhance an attorney fee award. It is usually greater than one but less than three.

Generally, an award of attorneys’ fees is computed by multiplying the number of hours an attorney expended on the case by the attorney’s hourly rate. Both the number of hours and the hourly rate must be deemed reasonable by the Court. Testimony as to reasonableness usually requires an expert witness.

Once the trial court determines a reasonable hourly rate and number of hours, referred to as the “lodestar,” the trial court has discretion to decide what multiplier, if any, it will use to enhance a fee award. The Court looks to factors in the case to determine if a higher fee would be appropriate. The Florida Supreme Court provided some guidelines for this analysis:

If the trial court determines that success was more likely than not at the outset, it may apply a multiplier of 1 to 1.5; if the trial court determines that the likelihood of success was approximately even at the outset, the trial judge may apply a multiplier of 1.5 to 2.0; and if the trial court determines that success was unlikely at the outset of the case, it may apply a multiplier of 2.0 to 2.5.[i]

Use of a multiplier is only appropriate in certain circumstances and upon specific findings by the trial court. In its evaluation, the trial court should consider:

(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel;

(2) whether the attorney was able to mitigate the risk of nonpayment in any way; and

(3) whether any of the factors set forth in the precedential case Florida Patient’s Fund v. Rowe[ii] are applicable, especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client.

Trial courts rely on multipliers in the foreclosure context primarily due to the potential risk of non-payment and to encourage “competent counsel” to take foreclosure defense cases.[iii] The effects of a multiplier are significant, as they can more than double an attorney fee award. In J.P. Morgan Mortg. Acquisition Corp. v. Golden, the district court of appeals approved a multiplier of 2.5 in a residential mortgage foreclosure affirming a fee award of $37,500.00 for defense counsel. Fortunately, Florida trial courts appear to be trending away from applying multipliers in foreclosure matters.

  • In the case of Bank of America, etc., v. Ruiz, the trial court made a specific finding that the Sixth Circuit (Pasco & Pinellas counties) “has numerous competent foreclosure defense counsel and there was no evidence that the Defendant was unable to obtain such counsel without a contingency fee.”[iv] The Court also concluded the issues in the case were not complex.
  • Similarly, in February of this year, in Broward County Florida, a trial judge reached the same result refusing to apply a multiplier in a foreclosure case wherein the borrower successfully defended against foreclosure.[v] The Court looked to prior cases where a multiplier was found to be “not awardable.”

Undoubtedly, there will be some cases in which the trial court deems it appropriate to apply a multiplier; however, with the increase in available foreclosure defense counsel and the redundant nature of the issues raised in defensive pleadings, it will be more difficult for defendants to establish that foreclosure defense requires a contingency fee multiplier to obtain competent counsel or that the matter involves a level of complexity that warrants an enhanced fee award.

[i]Standard Guaranty Ins. Co. v. Quanstrom, 555 So. 2d 828, 834 (Fla. 1990).

[ii]Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985).

[iii]J.P. Morgan Mortg. Acquisition Corp. v. Golden, 98 So. 3d 220, 224 (Fla. 2d DCA 2012).

[iv]Bank of America, etc., v. Ruiz, Case No. 12-009919-CI (Fla. 6th Cir. Fla. October 27, 2016).

[v]The Bank of New York Mellon, etc. v. Norton, Case No. 08-10673 CACE (Fla. 17th Cir. February 9, 2017).