Judge gives $65 million to lawyers in Surfside settlement

Judge Michael Hanzman gestures as he spoke to attorneys in court in May after a $1 billion settlement had been reached for Surfside collapse victims.

Judge Michael Hanzman gestures as he spoke to attorneys in court in May after a $1 billion settlement had been reached for Surfside collapse victims.

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Dozens of attorneys who attained a landmark $1.1 billion wrongful-death settlement in the Surfside condominium calamity learned their cut of the class-action case on Monday. It won’t be as much as they had hoped to receive from a Miami-Dade judge.

Miami-Dade Circuit Judge Michael Hanzman awarded attorneys’ fees of $65 million — about two-thirds of the $100 million lawyers had requested before the settlement was approved in June. In addition, Hanzman granted an extra $6.5 million in fees to lawyers who participated in his recent review of victims’ damage claims in the collapse of Champlain Towers South.

Some relatives of the 98 people who died when the building tumbled down on June 24, 2021, said that while their lawyers did and excellent job, they deserved less because more of the damages should go to the victims. Hanzman countered that the attorneys took a “substantial risk” because he had warned them at the outset that they would have to work for free and may receive compensation at their hourly rate only if they recovered significant damages — an unknown quest.

“It’s a fair result for the class members and it’s a fair result for the lawyers,” said Hanzman, who noted that the plaintiffs’ attorneys were not only “hall of famers” but they also spent countless hours with their clients in an uncharacteristic manner of a major class action.

“They bled for these clients,” he said. “They cried for these clients.”

Under Florida law, Hanzman was allowed to consider a “multiplier” to compensate the attorneys since they were being paid at an hourly rate — not on the basis of a customary contingency fee in wrongful-death and personal-injury cases.

In June, 17 South Florida law firms and 132 attorneys, paralegals and assistants submitted more than 34,200 hours of billable time, according to a 400-page motion with attachments filed in Miami-Dade Circuit Court. A legal expert hired by the lawyers to calculate their fees came up with a “melded” hourly rate of $715 for a total of about $24.7 million — but then reduced that amount to $22.2 million to account for excessive billable time, according to his declaration. The lawyers’ expert then applied a multiplier of 4.5 — at the high end of a 1 to 5 scale under Florida law — because of the significant “risk factor” in collecting damages. As a result, their expert recommended total legal fees of $100,092,784.

Hanzman did not dispute their billable time, saying he made the lawyers work around the clock to resolve this difficult case as quickly as possible for the financial benefit of the grieving relatives of the Surfside victims. But the judge did disagree with the proposed 4.5 multiplier, saying it was too high.

“A multiplier is clearly warranted,” Hanzman said. “But the request for a 4.5 multiplier is pretty much the highest fee that can be granted” in Florida, stressing “that was not the deal going in.” As a result, he reduced it to a multiplier of about 3.

In a final order, Hanzman said his decision means that the plaintiffs’ lawyers will receive about 6.5 percent of the wrongful-death damages — far less than the typical contingency fee of 25 to 30 percent in a mass injury case.

But Hanzman also pointed out that the plaintiffs’ lawyers did not have to cover the cost of litigation out of their own pockets, which is typical in a class-action case. The court-appointed receiver for the Champlain Towers South condo association provided about $5 million for their expenses.

The receiver, attorney Michael Goldberg with the Akerman law firm, played a neutral role in the class action, dealing with the victims, lawyers and the judge, as well as managing the nearly two-acre oceanfront site and the property sale to a wealthy Middle Eastern developer for $120 million.

Goldberg was given high praise by the judge, lawyers and condo members who attended Monday’s hearing in person or by Zoom. The receiver originally agreed to work for $475 per hour, half his normal billing rate. But the judge agreed on paying him at his full hourly rate of $950. As result, Goldberg will see his earnings, based on about 1,400 hours of work, boosted to $1.3 million. The judge also gave Goldberg’s paralegal, Kim Smiley, a bonus of $25,000.

Overall, the Akerman law firm will collect about $4.1 million for its collective work on the case, but that money will come out of other revenue, not the wrongful-death settlement. Goldberg was also assisted by attorney Paul Singerman and his law firm, which will be paid $650,000.

“This is a case unlike any other the court has ever seen,” said Hanzman, who was an accomplished class-action lawyer for nearly 30 years before becoming a judge a decade ago. “There were so many nuances and intricacies and so many land mines that could have been stepped on.

“They have done a remarkable job from Day One throughout this proceeding, without so much as a fumble,” he said.

Hanzman, who was assisted by retired Miami-Dade Circuit Judge Jonathan Colby in the damage claims reviews over the past month, singled out mediator Bruce Greer for forging not only the $1.1 billion wrongful-death settlement with more than 30 parties but also the separate $96 million settlement with the 136 Champlain Towers South unit owners. The source of revenue for the property payments, based on independent appraisals of each unit, has come out of the sale of the beachfront land.

The judge praised Greer, who provided his legal services for free, for steering lawyers for the plaintiffs’ class and defendants’ insurance companies towards agreements so swiftly, sparing the victims of uncertainty and unpleasantness if their negligence claims had gone to trial. Hanzman also singled out prominent plaintiffs’ attorneys with the Miami law firms Grossman Roth Yaffa Cohen, Kozyak Tropin & Throckmorton, Podhurst Orseck, and Silva & Silva, which represented dozens of clients in the wrongful-death settlement.

In turn, during Monday’s hearing, the lawyers and others stood up in the courtroom and applauded Hanzman for his helmsmanship of the emotionally charged case.

Despite the financial resolution of the tragic case — damage award checks will be issued by the receiver in September — some relatives of family members who died in the 12-story Surfside tower’s collapse expressed their opposition to the lawyers’ fee request.

Among them: Tali Naibryf, who flew from Argentina to appear at Monday’s hearing, is the sister of Ilan Naibryf, 21, a University of Chicago student who died along with his girlfriend when the Champlain Towers South fell down.

Tali Naibryf told the judge that he had done a “tremendous job” in resolving the complex case so quickly. But she also reminded Hanzman that he had warned the lawyers that they would have to work for free at the initial stages of the class-action case and may only be paid for their hourly work in the end.

“You said no one was going to be enriched in this case,” she said. “I’m been fighting from Day One that no one profits from the loss of my brother Ilan and the other 97 victims.”

She said she was shocked by the lawyers’ request of a 4.5 multiplier, which would boost their hourly fees to $100 million. “I struggle to see the substantial risk,” she told Hanzman. “The fees will come out of the pain and suffering that we will suffer for a lifetime.”

Miami Herald staff writer Linda Robertson contributed to this story.

This story was originally published August 29, 2022 3:47 PM.

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Jay Weaver writes about federal crime at the crossroads of South Florida and Latin America. Since joining the Miami Herald in 1999, he’s covered the federal courts nonstop, from Elian’s custody battle to A-Rod’s steroid abuse. He was part of the Herald team that won the 2001 Pulitzer Prize for breaking news on Elian’s seizure by federal agents. He and three Herald colleagues were 2019 Pulitzer Prize finalists for explanatory reporting for a series on gold smuggling between South America and Miami.

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