.

Defense Digest

New Jersey Medical Provider Claims Are Contingent Upon Jurisdiction Over Underlying Claim

Defense Digest, Vol. 27, No. 1, January 2021

January 29, 2021

by Kiara K. Hartwell

Key Points:

  • For a New Jersey workers’ compensation court to have jurisdiction over Medical Provider claims, there must be jurisdiction over an underlying claim.
  • Jurisdiction can be determined by place of injury, place of contract, place of employment, place where industry is localized, place of residency, place decided on by a contract or place of sufficient contacts.
  • The Appellate Division cautions litigants against disrespectful characterizations of unfavorable decisions by workers’ compensation judges.

In a recently consolidated appeal, the New Jersey Appellate Division clarified the scope of jurisdiction granted to workers’ compensation courts in medical provider claims. The New Jersey Workers’ Compensation Act provides “[e]xclusive jurisdiction” to the courts over disputed medical charges “arising from any claim for compensation for a work-related injury or illness.” Although the jurisdiction inquiry is fact-sensitive, the Appellate Division went further to explain that a single day of treatment in New Jersey was insufficient without any other contacts.

In the first of the two consolidated cases, Anesthesia Assoc. of Morristown, PA v. Weinstein Supply Corp., 2020 WL 5944009 (N.J. Super. App. Div. Oct. 7, 2020), Anesthesia Assoc. of Morristown, PA provided services to an injured worker at a New Jersey hospital on March 22, 2018. The underlying workers’ compensation claim was filed in Pennsylvania because the accident occurred in Pennsylvania, the injured worker was a resident of Pennsylvania, and Weinstein Supply Corp. was based in Pennsylvania. Anesthesia Assoc. submitted a claim to the Pennsylvania Department of Labor and Industry and received a payment per the applicable fee schedule. It subsequently sought payment of the balance from Weinstein’s insurance carrier.

When Weinstein’s insurer failed to make payment on the balance, Anesthesia Assoc. filed a Medical Provider claim in New Jersey. Weinstein filed a motion to dismiss for lack of jurisdiction, which the New Jersey workers’ compensation court ultimately granted. In doing so, the court concluded it did not have personal jurisdiction over the underlying workers’ compensation claim because none of the “Larson factors” (found in Williams v. Port Auth. of N.Y. & N.J., 175 N.J. 82, 87-88 (2003)) applied:

[the employee] lived in [Pennsylvania], worked in [Pennsylvania], and the accident occurred in [Pennsylvania]. The contract of hire occurred in [Pennsylvania]. No contract exists between [Anesthesia Assoc.] and Weinstein. The only connection to New Jersey is that [the employee] underwent one day of medical treatment with [Anesthesia Assoc.] in New Jersey.

The court explained that, just as the courts have found an injured worker’s New Jersey residence alone was insufficient for jurisdiction, “one day of treatment in New Jersey” was also insufficient.

In the second case, Surgicare of Jersey City v. Waldbaums, 2020 WL 5944009 (N.J. Super. App. Div. Oct. 7, 2020), the injured worker, a resident of New York, was injured in New York while working for his New York employer, Stop & Shop. The worker filed a claim in New York and, on August 11, 2017, underwent surgery at Surgicare of Jersey City. Surgicare submitted a claim for payment in New York and subsequently filed a Medical Provider claim in New Jersey. Similar to Weinstein, Waldbaums filed a motion to dismiss for lack of jurisdiction. Surgicare argued that Waldbaums did business in New Jersey and that treatment was rendered in New Jersey, establishing jurisdiction there. However, the New Jersey workers’ compensation court granted Waldbaums’ motion, noting that the injured worker “was directed by his New York doctor to a surgical center in New Jersey for a single, one-day visit. The patient’s same-day surgery was performed by a New York doctor using equipment and devices ordered by the New York doctor.” The judge ruled that this single day of treatment was insufficient to “rise to the standard of sufficient purposeful minimal contacts” for personal jurisdiction.

In reviewing the consolidated appeals, the Appellate Division concluded that “[u]nless the Division [of Workers’ Compensation] has jurisdiction over the underlying claim for a compensable work-related injury, it does not have jurisdiction over a [Medical Provider claim] for payment.” After applying the six “Larson factors” to both cases, the Appellate Division agreed with the workers’ compensation courts in finding that no jurisdiction existed for either claim and held that both were appropriately dismissed.

Finally, feeling compelled to comment on various hyperbolic and inflammatory remarks in the appellants’ briefs, the Appellate Division cautioned against baseless, future attacks accusing the workers’ compensation judges of either abusing their authority or rendering incoherent or preposterous decisions. It was noted that such comments were unwarranted and did little to advance a client’s position, while, on the other hand, eroding the public’s trust in the judiciary.

As these cases illustrate, medical providers seeking reimbursement must establish jurisdiction over the underlying workers’ compensation claim. Although this is a fact-sensitive inquiry, these cases confirm that New Jersey workers’ compensation courts require, at the very least, more than a single day of treatment in New Jersey. The inquiry going forward will be whether two days of treatment or other similar examples will be sufficient bases for jurisdiction. In order to avoid any possibility of paying under the New Jersey payment scheme, where there is no set fee schedule, employers and carriers handling non-New Jersey claims should strive to direct care within their respective states as much as possible. This is not only because whether New Jersey has jurisdiction is fact-sensitive to each case, but also because New Jersey has no fee schedule and only pays the “usual and customary charges” for services.

*Kiara is an associate in our Mount Laurel, New Jersey office. She can be reached at (856) 414-6404 or kkhartwell@mdwcg.com.

Defense Digest, Vol. 27, No. 1, January 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2021 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

In a recently consolidated appeal, the New Jersey Appellate Division clarified the scope of jurisdiction granted to workers’ compensation courts in medical provider claims. The New Jersey Workers’ Compensation Act provides “[e]xclusive jurisdiction” to the courts over disputed medical charges “arising from any claim for compensation for a work-related injury or illness.” Although the jurisdiction inquiry is fact-sensitive, the Appellate Division went further to explain that a single day of treatment in New Jersey was insufficient without any other contacts.

In the first of the two consolidated cases, Anesthesia Assoc. of Morristown, PA v. Weinstein Supply Corp., 2020 WL 5944009 (N.J. Super. App. Div. Oct. 7, 2020), Anesthesia Assoc. of Morristown, PA provided services to an injured worker at a New Jersey hospital on March 22, 2018. The underlying workers’ compensation claim was filed in Pennsylvania because the accident occurred in Pennsylvania, the injured worker was a resident of Pennsylvania, and Weinstein Supply Corp. was based in Pennsylvania. Anesthesia Assoc. submitted a claim to the Pennsylvania Department of Labor and Industry and received a payment per the applicable fee schedule. It subsequently sought payment of the balance from Weinstein’s insurance carrier.

When Weinstein’s insurer failed to make payment on the balance, Anesthesia Assoc. filed a Medical Provider claim in New Jersey. Weinstein filed a motion to dismiss for lack of jurisdiction, which the New Jersey workers’ compensation court ultimately granted. In doing so, the court concluded it did not have personal jurisdiction over the underlying workers’ compensation claim because none of the “Larson factors” (found in Williams v. Port Auth. of N.Y. & N.J., 175 N.J. 82, 87-88 (2003)) applied:

[the employee] lived in [Pennsylvania], worked in [Pennsylvania], and the accident occurred in [Pennsylvania]. The contract of hire occurred in [Pennsylvania]. No contract exists between [Anesthesia Assoc.] and Weinstein. The only connection to New Jersey is that [the employee] underwent one day of medical treatment with [Anesthesia Assoc.] in New Jersey.

The court explained that, just as the courts have found an injured worker’s New Jersey residence alone was insufficient for jurisdiction, “one day of treatment in New Jersey” was also insufficient.

In the second case, Surgicare of Jersey City v. Waldbaums, 2020 WL 5944009 (N.J. Super. App. Div. Oct. 7, 2020), the injured worker, a resident of New York, was injured in New York while working for his New York employer, Stop & Shop. The worker filed a claim in New York and, on August 11, 2017, underwent surgery at Surgicare of Jersey City. Surgicare submitted a claim for payment in New York and subsequently filed a Medical Provider claim in New Jersey. Similar to Weinstein, Waldbaums filed a motion to dismiss for lack of jurisdiction. Surgicare argued that Waldbaums did business in New Jersey and that treatment was rendered in New Jersey, establishing jurisdiction there. However, the New Jersey workers’ compensation court granted Waldbaums’ motion, noting that the injured worker “was directed by his New York doctor to a surgical center in New Jersey for a single, one-day visit. The patient’s same-day surgery was performed by a New York doctor using equipment and devices ordered by the New York doctor.” The judge ruled that this single day of treatment was insufficient to “rise to the standard of sufficient purposeful minimal contacts” for personal jurisdiction.

In reviewing the consolidated appeals, the Appellate Division concluded that “[u]nless the Division [of Workers’ Compensation] has jurisdiction over the underlying claim for a compensable work-related injury, it does not have jurisdiction over a [Medical Provider claim] for payment.” After applying the six “Larson factors” to both cases, the Appellate Division agreed with the workers’ compensation courts in finding that no jurisdiction existed for either claim and held that both were appropriately dismissed.

Finally, feeling compelled to comment on various hyperbolic and inflammatory remarks in the appellants’ briefs, the Appellate Division cautioned against baseless, future attacks accusing the workers’ compensation judges of either abusing their authority or rendering incoherent or preposterous decisions. It was noted that such comments were unwarranted and did little to advance a client’s position, while, on the other hand, eroding the public’s trust in the judiciary.

As these cases illustrate, medical providers seeking reimbursement must establish jurisdiction over the underlying workers’ compensation claim. Although this is a fact-sensitive inquiry, these cases confirm that New Jersey workers’ compensation courts require, at the very least, more than a single day of treatment in New Jersey. The inquiry going forward will be whether two days of treatment or other similar examples will be sufficient bases for jurisdiction. In order to avoid any possibility of paying under the New Jersey payment scheme, where there is no set fee schedule, employers and carriers handling non-New Jersey claims should strive to direct care within their respective states as much as possible. This is not only because whether New Jersey has jurisdiction is fact-sensitive to each case, but also because New Jersey has no fee schedule and only pays the “usual and customary charges” for services.

*Kiara is an associate in our Mount Laurel, New Jersey office. She can be reached at (856) 414-6404 or kkhartwell@mdwcg.com.

Defense Digest, Vol. 27, No. 1, January 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2021 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Firm Highlights

Thought Leadership

First DCA Reverses Excessive Jury Award Unsupported by the Evidence

In December 2019, the plaintiffs filed a claim with Universal for damages caused by a water and sewage back up through the plumbing system and existing through multiple fixtures including the washing machine drain, kitchen sink, dishwasher, bathtub and toilet. Universal investigated the claim, issued payment for resulting water damage totaling $7,000.00 in actual cash value ($12,000.00 in replacement cost value). The plaintiffs sought additional benefits for work needed to access the below-slab cast iron plumbing system due to the failure of the system from rust, deterioration, corrosion and breaks in the line. Universal denied any additional benefits for access. In 2021, the plaintiffs filed suit. During litigation, Universal sent a plumber to inspect the home and the plumber concluded the pipes were clogged but could be cleaned. The plaintiffs’ plumber testified that the plumbing system needed to be replaced due to holes and openings in the pipes. The plaintiffs introduced two estimates prepared by Triad Restoration services totaling $79,680.22 in replacement cost value and $50,219.97 in actual cash value and an executed contract with another company for repairs with the amounts of repair redacted. Since the insurance policy did not provide coverage for repair or replacement of the plumbing system, the jury only had to decide whether the plumbing system needed to be replaced, and if it did, Universal would owe for the access costs; the jury verdict form required the jury to determine both the replacement cost value and actual cash value amounts. The jury asked if it had to rely on the Triad estimates for their amounts. The trial court advised the amount awarded had to be based on the evidence presented at trial and the law given by the trial court. The jury awarded $335,000.00 in replacement cost value or $305,000.00 in actual cash value. Universal motioned for a new trial arguing the amount awarded was unsupported by the evidence and then moved for remittitur. The trial court denied both motions and this appeal followed. The court found that while a jury’s verdict should only be disturbed with caution and discretion, the trial court must give the properly challenged award close scrutiny and determine whether it bears a reasonable relation to the damaged provided, is supported by the evidence, and could have been reached in a logical manner by reasonable means §768.74(3), (5)(d)-(e), Fla. Stat. The court found the trial court did consider the statutory requirements at the hearing on Universal’s remittitur motion and was concerned about a reasonable relation to the amount of damages proved and injury suffered and whether the award was supported by the evidence, but ultimately denied the motion, reasoning that the jury had been properly instructed to fairly and adequately compensate the plaintiffs. The court noted the only evidence providing the basis for the jury verdict was Triad’s estimates and those valued the plaintiffs' claimed loss at $79,680.22 in replacement cost value and $50,219.97 in actual cash value; no valuation evidence reasonably supported the jury verdict. The plaintiffs argued that the jury was entitled to consider more than the estimates, but the court conveyed the evidence provided did not give the jury a way to reach the amounts they awarded. The court was also not swayed by the plaintiffs’ argument regarding inflation and later price increases, but the court noted that no evidence via the contract, nor testimony regarding increase in labor, material, fuel or construction costs were entered into the record.  The court concluded the jury may draw reasonable inferences from the evidence, but it may not supply a damages number by speculation. The court did not find any of the plaintiffs’ remaining argument persuasive either. The court reversed the denial of Universal’s remittitur motion and motion for new trial as to damaged and remanded the case. The court ended its opinion with advising the trial court must determine whether replacement cost value or actual cash value is the property measure of damages under the policy and order remittitur in an amount consistent with that determination and the evidence.

News

106 Marshall Dennehey Attorneys Recognized in the 2027 Editions of The Best Lawyers in America® and the Best Lawyers: Ones to Watch® in America

Marshall Dennehey is proud to highlight the firm’s 106 attorneys who have been recognized in the 2027 editions of The Best Lawyers in America® and the Best Lawyers: Ones to Watch® in America. Less than 6% of all practicing lawyers in the U.S. were selected by their peers for this recognition. Additionally, four of the firm’s attorneys received the Best Lawyers® 2027 “Lawyer of the Year” awards in their respective practice areas and demographic regions. Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. For more information, please visit https://www.bestlawyers.com/. OUR 2027 LAWYERS OF THE YEAR Harrisburg, PA Christopher Reeser, Personal Injury Litigation - Defendants Kacey Wiedt, Workers Compensation Law - Employers Roseland, NJ Justin F. Johnson, Medical Malpractice Law - Defendants Leonard Leicht, Personal Injury Litigation - Defendants   OUR 2026 BEST LAWYERS IN AMERICA Philadelphia, PA Nicholas D. Bowers, Personal Injury Litigation - Defendants Josh J. T. Byrne, Professional Malpractice Law - Defendants Jefferey J. Chomko, Insurance Law James H. Cole, Insurance Law John J. Delany III, Personal Injury Litigation - Defendants Laurianne Falcone, Personal Injury Litigation - Defendants John P. Gonzales, Employment Law - Management John Hare, Appellate Practice Daniel D. Krebbs, Personal Injury Litigation - Defendants Michele Punturi, Workers' Compensation Law - Employers Bradley D. Remick, Product Liability Litigation - Defendants Andrea Cicero Rock, Workers' Compensation Law - Employers Robin M. Romano, Workers' Compensation Law - Employers Daniel J. Ryan, Jr., Personal Injury Litigation - Defendants Gary M. Samms, Professional Malpractice Law - Defendants Christopher N. Santoro, Personal Injury Litigation – Defendants; Product Liability Litigation -Defendants Josh D. Scheets, Personal Injury Litigation - Defendants Robert P. Schenk, Workers' Compensation Law - Employers Robert E. Smith, Insurance Law Robin Snyder, Litigation - Health Care Michael L. Turner, Commercial Litigation; Criminal Defense: White-Collar; Mass Tort Litigation / Class Actions - Defendants Claire Breaux Ventola, Product Liability Litigation - Defendants Pittsburgh, PA Melissa Devich Cochran, Commercial Litigation; Mass Tort Litigation / Class Actions – Defendants; Product Liability Litigation - Defendants  John F. Deasy, Personal Injury Litigation – Defendants; Product Liability Litigation - Defendants Daniel W. Deitrick, Workers' Compensation Law - Employers Douglas C. LaSota, Litigation - Construction; Mass Tort Litigation / Class Actions - Defendants Joseph V. Lesinski, Product Liability Litigation – Defendants   Christian D. Marquis, Personal Injury Litigation - Defendants Patricia A. Monahan, Insurance Law; Litigation - Insurance Patrick T. Reilly, Commercial Litigation; Mass Tort Litigation / Class Actions – Defendants; Product Liability Litigation - Defendants Brett C. Shear, Medical Malpractice Law - Defendants Teresa O. Sirianni, Education Law; Employment Law – Management; Litigation - Labor and Employment Stuart Sostmann, Product Liability Litigation – Defendants Danielle M. Vugrinovich, Mass Tort Litigation / Class Actions - Defendants Scranton, PA Sarah E. Argo, Litigation - Insurance Michael J. Connolly, Personal Injury Litigation – Defendants; Professional Malpractice Law - Defendants Matthew Keris, Litigation - Health Care; Medical Malpractice Law - Defendants John T. McGrath, Jr., Insurance Law; Medical Malpractice Law – Defendants; Product Liability Litigation - Defendants William J. McPartland, Insurance Law John R. Nealon, Product Liability Litigation - Defendants Victoria Scanlon, Health Care Law; Litigation - Health Care; Medical Malpractice Law - Defendants Michael A. Sebastian, Workers' Compensation Law - Employers Thomas A. Specht, Insurance Law; Litigation - Insurance Suzanne Tighe, Litigation Insurance Harrisburg , PA Casey Alan Coyle, Administrative/Regulatory Law; Appellate Practice; Commercial Litigation Brittany E. Bakshi, Personal Injury Litigation - Defendants Shannon P. Fellin, Workers' Compensation Law - Employers Allison Krupp, Insurance Law John R. Ninosky, Litigation – Insurance; Personal Injury Litigation - Defendants Christopher Reeser, Personal Injury Litigation - Defendants Kacey Wiedt, Workers' Compensation Law – Employers King of Prussia, PA  Michael L. Detweiler, Construction Law Joseph L. Hoynoski III, Medical Malpractice Law - Defendants Gregory J. Kelley, Construction Law, Litigation - Construction Anthony Natale III, Workers' Compensation Law - Employers Francis X. Wickersham, Workers' Compensation Law - Employers A. Judd Woytek, Workers' Compensation Law – Employers Erie, PA Patrick M. Carey, Personal Injury Litigation - Defendants Joel M. Snavely, Health Care Law; Insurance Law New Haven, CT Michael Wrona, Commercial Litigation, Litigation - Bankruptcy  Mount Laurel, NJ David D. Blake, Litigation - Insurance Barbara Davis, Personal Injury Litigation - Defendants Lynne Nahmani, Litigation - Health Care John H. Osorio, Personal Injury Litigation - Defendants John L. Slimm, Legal Malpractice Law – Defendants; Professional Malpractice Law – Defendants Roseland, NJ Robert T. Evers, Medical Malpractice Law - Defendants Justin F. Johnson, Medical Malpractice Law - Defendants Julia Klubenspies, Medical Malpractice Law - Defendants Leonard C. Leicht, Personal Injury Litigation - Defendants Patricia M. McDonagh, Appellate Practice Sunny Sparano, Litigation - Construction Randall S. Watts, Health Care Law New York, NY Tonya M. Lindsey, Medical Malpractice Law - Defendants Tampa, FL Michael Archibald, Personal Injury Litigation - Defendants Lindsay G. McCormick, Litigation – Construction Orlando, FL Thomas F. Brown, Personal Injury Litigation - Defendants Dante C. Rohr, Commercial Litigation Fort Lauderdale, FL Kimberly Kanoff Berman, Appellate Practice Patrick M. Delong, Personal Injury Litigation – Defendants Jacksonville, FL  Heather Byrer Carbone, Workers' Compensation Law - Employers Linda Wagner Farrell, Workers' Compensation Law - Employers Elizabeth B. Ferguson, Litigation - Construction James P. Hanratty, Personal Injury Litigation – Defendants Wilmington, DE Sarah B. Cole, Litigation - Insurance Benjamin K. Durstein, Workers' Compensation Law - Employers Maria R. Granaudo, Medical Malpractice Law - Defendants  Keri L. Morris-Johnston, Workers' Compensation Law - Employers Cincinnati, OH Timothy B. Schenkel, Personal Injury Litigation - Defendants David E. Williamson, Personal Injury Litigation - Defendants Cleveland, OH Vincent E. Cononico, Litigation – Insurance, Personal Injury Litigation - Defendants Jillian L. Dinehart, Personal Injury Litigation - Defendants David J. Fagnilli, Insurance Law Jason P. Ferrante, Health Care Law, Litigation - Health Care Andrew H. Isakoff, Transportation Law Leslie M. Jenny, Litigation - Health Care; Medical Malpractice Law – Defendant OUR 2026 BEST LAWYERS: ONES TO WATCH Jacksonville, FL Sean J. Reeves, Personal Injury Litigation – Defendants; Product Liability Litigation - Defendants Orlando, FL Carolin A. Pacheco, Insurance Law Mount Laurel Stacey Gorin, Insurance Law Melville, NY Kimberly Gitlin, Personal Injury Litigation – Defendants Matthew A. Gray, Insurance Law; Personal Injury Litigation - Defendants Philadelphia, PA Holli K. Archer, Health Care Law; Medical Malpractice Law – Defendants; Professional Malpractice Law Emily Pritchyk, Commercial Litigation; Product Liability Litigation – Defendants Pittsburgh, PA Taylor E. Kosko, Mass Tort Litigation / Class Actions – Defendants; Personal Injury Litigation - Defendants Alana Staniszewski, Workers' Compensation Law - Employers Michael D. Winsko, Product Liability Litigation – Defendants; Transportation Law King of Prussia, PA Richard Lechette, Commercial Litigation; Insurance Law, Personal Injury Litigation – Defendants

Thought Leadership

Appeals Court Reverses Trial Court Order Awarding Attorney’s Fees Due to Lack of Evidence to Support Fee Awarded

The Fourth District Court of Appeal reversed the trial court’s order awarding appellate fees to People’s Trust Insurance Company based upon a lack of evidence to support the attorney’s fee award in RM & Assocs. Consulting, Inc. v. People's Trust Ins. Co., 2026 Fla. App. LEXIS 4654 (Fla. 4th DCA 2026). People’s Trust was the insurer of a residential property that had sustained water damage. RM & Associates Consulting was hired by the homeowner to perform mitigation services at the property. The homeowner assigned post-loss benefits to RM and RM subsequently filed suit against People’s Trust alleging that it had not been paid the money it was owed for the mitigation services. People’s Trust defended the lawsuit on the ground that the policy required the insured to notify the insurer before authorizing repairs so People's Trust could elect to use its preferred contractor. Because the owner did not comply with that provision, People's Trust asserted its liability was limited to the amount that its preferred contractor would have charged for the work, which People's Trust contended was $2,000. People's Trust paid that amount to RM before RM filed suit. People’s Trust filed a motion for summary judgment which was granted. RM appealed the summary judgment ruling and the ruling was upheld by the Fourth District Court of Appeal. The appellate court also granted People’s Trust’s entitlement to appellate attorney’s fees, subject to the trial court’s determination of the amount of fees, based upon an offer of judgment made by People's Trust. On remand, the trial court held an evidentiary hearing to determine the amount of attorney’s fees People’s Trust was entitled to. At the hearing, People’s Trust presented testimony from it’s fee expert, supervising trial counsel and appellate counsel. People’s Trust sought recovery of $24,866.17 for work performed by appellate counsel. The request primarily consisted of work performed in preparation of the answer brief. The fee expert testified that more than ninety hours spent preparing the answer brief was reasonable given the complexity and significance of the underlying issue. The appellate court found that the fee expert’s testimony fell short of meeting the necessary standard of demonstrating that the hours expended were necessary. The appellate court found that the billing records did not serve to cure the deficient testimony, as the billing records did not contain adequate details regarding the specific tasks performed. Rather the records contained entries such as “answer brief” which the appellate court found to be insufficient. The appellate court noted that neither the fee expert or counsel addressed how the prior research and briefing in the parallel litigation informed the work in the instant matter. The appellate court noted this was significant in that a court's attorney's fees award must exclude excessive, redundant, or otherwise unnecessary hours, citing Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). Based upon the record failing to support the finding of the trial court, the 4th DCA remanded the case to the trial court for a reconsideration and redetermination of reasonable appellate attorney’s fees supported by competent substantial evidence. The 4th DCA reiterated that the fee expert’s focus on the quality of the work and the importance of the work to People’s Trust did not make up for the perceived deficiencies in the position that spending over ninety hours on a single answer brief was reasonable. Whether moving for attorney’s fees or challenging the amount of fees being sought by an opposing party, practitioners should be mindful of the evidence being used to support the claims being made. Parties should pay close attention to whether the hours being sought may be impacted by prior litigation either party may have engaged in. A party must be prepared to address how prior litigation efforts did or did not impact the amount of hours being claimed in current litigation. Lastly, billing records must be sufficiently detailed so as to support any potential future fee claim.

Thought Leadership

United State District Court for the Middle District of Florida finds Evidence of Replacement Cost Value is Admissible and Recoverable Even When Repairs Have Not Been Made

The plaintiff filed a claim for damage as a result of Hurricane Ian. It claimed damages were over $24 million, but the carrier accepted partial coverage and paid $8,307.49 for secondary components. The carrier found hurricane damage to the building, but it was below the insurance policy’s $3.6 million deductible. The plaintiff sued for breach of the insurance policy. The carrier argued in a motion for summary judgment that plaintiff could not recover replacement cost value (RCV) because the property repairs had not been effectuated. The policy provided for RCV, but only after the repairs were completed. The carrier argued that because the repairs were not completed, the plaintiff was not entitled to RCV damages. The plaintiff argued the carrier could not withhold the actual cost value (ACV) due, which was the main allegation of the lawsuit, then fault it for not making the repairs to unlock the RCV. The United States District Court for the Middle District of Florida rejected the carrier’s argument, finding that when an insurer allegedly breached the policy by withholding coverage, it could not hide behind a repair-contingent provision to block the insured from RCV damages at trial. The court found the issue to be whether the contractual language designed to preclude certain coverage until after repairs are completed barred an insured from seeking those damages at trial when repairs were not complete. The court noted the Eleventh Circuit had not resolved this issue and neither side pointed to a definitive answer from the Florida Supreme Court. The court reasoned that it must look to the Sixth District Court of Appeal (6th DCA), which is the court which would have heard this case if it was in state court. The court noted the 6th DCA recently addressed this issue in Universal Prop. & Cas. Ins. Co. v. Rodriguez, 427 So. 3d 676 (Fla. 6th DCA 2026). The Rodriguez Court found that a breach of contract action is designed to adjudicate not only whether the contract was breached, but also evaluate the damages incurred had the breach not occurred, which the Rodriguez court found to be recovery of the RCV. This court also noted basic Florida contract principles compelled the same result, as a material breach frees the nonbreaching party to suspend its own performance and can demand the full benefit of its bargain, including RCV damages. Finally, the court found the distinction between a full denial and partial denial did not compel a different result. It found the policy required the carrier to acknowledge coverage and pay ACV for all covered damages, and the failure to do that is a material breach, entitling the insured to all of the damages available under the contract, which included the RCV.