The claim was settled, but the insurer’s attorneys leaked the mediation information, the plaintiffs’ attorney says
An appeals court cannot be used to stop lower court decisions except through the normal appeals process, the Florida Supreme Court ruled Thursday in a case involving some of the most prominent insurance law firms and more than $800,000 in plaintiff’s attorney’s fees.
The case of Mintz Truppman v. Cozen O’Connor and Lexington Insurance Co. began as a claim dispute in Miami but turned into a lawsuit over the confidentiality of mediation proceedings. The case has been through federal and state courts for eight years, despite a settlement of the original claim that was reached in 2016.
And it’s far from over: The Supreme Court on Thursday handed Florida’s Case 3 backst Circuit Court of Appeals, with instructions to send it back to the district court in Miami-Dade County.
Attorneys for the insurance could not be reached for comment. But they have said in court filings that the latest legal wrangling is mostly about the plaintiff’s attorney looking for a way to increase his fees. Timothy Crutchfield, with the plaintiffs’ firm Mintz Truppman, said he is not seeking more money, but that his secondary lawsuit is essential to help prevent the parties from disclosing sensitive information discussed in confidential mediation proceedings.
“It is extremely important that attorneys not ignore the confidentiality of mediation,” Crutchfield said. Otherwise, attorney fee information can be taken out of context, published and distorted, he said.
And with more Florida property insurers moving to resolve claim disputes through mediation and arbitration, the issue could take on new weight in the coming years.
“This has never been addressed by the appellate courts on this issue,” Crutchfield said.
The case began in 2014, when a broken pipe caused significant water damage to Daphne Query’s Miami home. She hired Mintz Truppman and filed suit against her insurer, Lexington Insurance Co.
Lexington retained Cozen O’Connor, one of the largest insurance defense firms in Florida, and Cole, Scott & Kissane, another well-known defense firm. The case was removed to federal court in south Florida.
In 2016, after mediation, the parties reached a settlement agreement for the amount of damages — $125,000, court records show. But they can’t agree on the amount of the plaintiff’s attorney’s fee. Mintz’s attorneys argued that $828,000 was the appropriate amount, taking into account the lodestar factor and a fee multiplier of 2.0, reflecting the reported difficulty of the case and other factors.
Cozen objected, saying the fees should be more than $75,000. Ultimately, it was left to a federal judge to decide, who won $240,000. The magistrate did not include the multiplier. Query’s lawyers did not contest or appeal the decision. In 2017, Lexington paid attorney’s fees and the $125,000 claim.
That was the end of the claim dispute, but not the end of the litigation.
Before the settlement payment was finalized, Crutchfield objected to what he called a breach of mediation confidentiality. He filed suit in Miami-Dade County District Court, charging that Lexington and Cozen violated a 2004 Florida statute by disclosing to the federal court the homeowner’s initial claim amount, something that was discussed only in mediation proceedings.
Lexington’s attorneys said they submitted the original claim amount as a way to show that the insured had, in fact, claimed a different amount early on. They also argued that the disclosure was good as it was part of larger court proceedings. And anyway, the federal court had approved the settlement and fees, effectively barring the state court from intervening in the case.
Cozen’s attorneys asked the Miami-Dade County District Court to dismiss Crutchfield’s lawsuit. The judge refused. Cozen then asked the 3rdst The U.S. District Court of Appeals stepped in and issued an extremely rare injunction, blocking a Miami judge from upholding Crutchfield’s motion to dismiss his mediation-confidentiality lawsuit.
3st The DCA agreed with Cozen’s lawyers and stayed the lower court’s decision, noting that the trial court lacked jurisdiction.
Crutchfield said the DCA judges had misinterpreted the nature of his lawsuit. He appealed to the state’s highest court.
The Florida Supreme Court ruled Thursday that the DCA had misinterpreted the nature of a restraining order. The instrument can only be used to prevent the action of a lower court, not to correct it.
“If we were to allow litigants to seek estoppel in any case in which a trial judge denies a motion to dismiss based on collateral estoppel, res judicata, or some other affirmative defense, the writ could be used to complete our rules on appeals in general. and interlocutory appeals in particular,” Judge John Couriel wrote for the court. No justice dissented from the opinion.
The court vacated the DCA’s decision and remanded the case to the Third Circuit with instructions to deny Lexington’s and Cozen’s claims for a writ of prohibition and to adjudicate arguments on certiorari that it had previously declared moot.
“That’s good. It shows that a restraining order should have a very limited use,” Crutchfield said.
For the underlying mediation confidentiality claim, it may take another year or two before it is finally resolved.
“It has to go back to court and be fully resolved,” he said. “There are still many questions that need to be answered.”
Attorneys Cozen and attorneys Cole, Scott, Kissane could not be reached for comment on the decision.
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