IN THE SUPREME COURT OF FLORIDA Case No.: SC L.T. Nos.: 5D , 5D

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1 IN THE SUPREME COURT OF FLORIDA Case No.: SC L.T. Nos.: 5D , 5D NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, v. Petitioner/Cross-Respondent, PAMELA HOLIDAY and LEONARD SHEALEY, Respondents/Cross-Petitioners. / CROSS-REPLY BRIEF OF RESPONDENTS PAMELA HOLIDAY AND LEONARD SHEALEY BRANDON S. PETERS JOHN G. CRABTREE Florida Bar No.: Florida Bar No.: RANDY E. SCHIMMELPFENNIG SHANNON McLIN CARLYLE Florida Bar No.: Florida Bar No.: MORGAN & MORGAN, P. A. 20 N. Orange Ave., 16 th Floor Orlando, FL Crandon Blvd., Suite 225 Telephone: (407) Key Biscayne, FL Facsimile: (407) Telephone: (305) Counsel for Respondents, Facsimile: (305) Pamela Holiday and Co-counsel for Pamela Holiday Leonard Shealey and Leonard Shealey

2 ARGUMENT IN RESPONSE AND REBUTTAL Compensating policyholders attorneys for litigating the amount of a fee award inures to the benefit of policyholders at the time they seek to hire qualified counsel. Under Palma, insurance companies can concede the issue of entitlement and then subject insureds and their attorneys to years of protracted litigation over the amount of fees to be awarded. In that scenario, a concession of entitlement is merely a means to the end of using Palma s artificial distinction as a weapon against insureds and their attorneys. Nationwide is correct that Florida law currently contains two mild deterrents to insurer misconduct; to wit: interest on fee awards and sanctions. (See Answer Brief on Cross Appeal at 12-13). However, that is no argument against the addition of further deterrents. Litigation misconduct by any party is always unacceptable and should be discouraged by this Court as a matter of public policy wherever possible. 1 Nationwide argues that a ruling in Holiday s favor would necessarily lead to increased litigation concerning the amount of attorneys fees. Accurate or not, the inference that this is an intolerable result turns the rule of law on its head by suggesting that the possibility of litigation justifies a 1 To suggest otherwise is equivalent to arguing that American troops in the Middle East do not need air support because they already have M-16 s and Kevlar vests. 2

3 wholesale decision to shut the doors of the courthouse. Further, Nationwide s argument evidences a lack of faith in the ability of trial judges to manage their courtrooms. Surely, no attorney would subject himself to sanctions for pursuing meritless appeals concerning the amount of an attorneys fee award. This Court s decision should reflect the Court s confidence that members of the Florida Bar will only pursue appeals in cases where the amount of fees awarded is otherwise arguably unjust. Nationwide s Answer Brief on Cross Appeal relies on the same arguments that created the Palma legacy in the first place. None of the insurance industry giants filing briefs in this case have rebutted the concerns of those judges whose opinions were cited in Holiday s Initial Brief on the Palma issue. As a jurisprudential matter, it is time for the state of Florida to move forward. That can only be accomplished if the Court strikes down the artificial distinction between litigating amount and entitlement. The simple fact remains that attorneys will never be adequately compensated for representing aggrieved policyholders where, as here, the insurance industry can dilute fee awards through endless litigation over the amount of awardable fees. 3

4 Nationwide attempts to place the burden of reform on the Florida Legislature. However, the plain language of , the statute under review, reveals the flaw in that argument: (1) Upon the rendition of a judgment or decree by any of the courts of this state against an insurer and in favor of any named or omnibus insured or the named beneficiary under a policy or contract executed by the insurer, the trial court or, in the event of an appeal in which the insured or beneficiary prevails, the appellate court shall adjudge or decree against the insurer and in favor of the insured or beneficiary a reasonable sum as fees or compensation for the insured s or beneficiary s attorney prosecuting the suit in which the recovery is had. (emphasis added). The Legislature has already spoken on this issue. The italicized language clearly reveals that the Legislature intended for policyholders attorneys to be able to recover a reasonable sum as fees or compensation on appeal. This Court s only task is to interpret the meaning of a reasonable sum on the facts of this case. Nationwide would have the Court adhere to the arcane and intellectually dishonest dichotomy of Palma. Holiday urges the Court to adopt a more realistic view of the facts and discard that dichotomy. Only in doing so will the Court honor the irrefutable truth that endless litigation over amount dilutes otherwise reasonable fee awards. In short, a reasonable sum must include fees incurred in litigating amount. Any other result would be unfair to policyholders and the counsel they hire. 4

5 CONCLUSION The Court should recede from Palma and award Holiday her attorneys fees for litigating both entitlement to and amount of the fee award, including appellate attorneys fees in this Court and the court below. Respectfully submitted, John G. Crabtree Florida Bar No Crandon Boulevard, Suite 225 Key Biscayne, FL Telephone: (305) Facsimile: (305) Brandon S. Peters Florida Bar No Randy E. Schimmelpfennig Florida Bar No Morgan & Morgan, P. A. 20 North Orange Avenue, 16 th Floor Orlando, Florida Telephone: (407) Shannon McLin Carlyle Florida Bar No La Plaza Grande Professional Center 20 La Grande Boulevard The Villages, Florida Telephone: (352) Facsimile: (352) Counsel for Pamela Holiday and Leonard Shealey 5

6 CERTIFICATE OF SERVICE On June 21, 2005, I mailed a copy of this Reply Brief on Cross Appeal to: Hinda Klein, Esquire Conroy Simberg & Lewis 3440 Hollywood Boulevard, 2 nd Floor Hollywood, Florida Charles W. Hall, Esquire Fowler, White, Gillen, Boggs, Villareal and Banker, P.A. Post Office Box 210 St. Petersburg, Florida Barbara Weiss Green, Esquire 1320 S. Dixie Highway, Suite 450 Coral Gables, Florida Anthony J. Russo, Esquire Bayport Plaza, 3000 Bayport Dr., Suite 1100 Tampa, Florida Matthew J. Conigliaro, Esquire Carlton Fields, P.A. 200 Central Ave., Suite 2300 St. Petersburg, Florida Tracy Raffles Gunn, Esquire Fowler, White, Gillen, Boggs, Villareal and Banker, P.A. Post Office Box 1438 Tampa, Florida Brandon S. Peters 6

7 CERTIFICATE OF COMPLIANCE WITH FONT REQUIREMENT I certify that this brief was typed in 14-point Times New Roman font. John G. Crabtree Florida Bar No Crandon Boulevard, Suite 225 Key Biscayne, FL Telephone: (305) Facsimile: (305) Brandon S. Peters Florida Bar No Randy E. Schimmelpfennig Florida Bar No Morgan & Morgan, P. A. 20 North Orange Avenue 16 th Floor Orlando, Florida Telephone: (407) Florida Bar No La Plaza Grande Professional Center 20 La Grande Boulevard The Villages, Florida Telephone: (352) Facsimile: (352) Counsel for Pamela Holiday and Leonard Shealey 7