Hello welcome to this JACPA Ethics Alert blog which will discuss the very recent Florida Supreme Court opinion wherein the Court increased a referee’s discipline of a Florida lawyer from an admonishment to a 91 day rehabilitative suspension for misrepresenting facts in an affidavit filed with the court and attempting to limit his liability for malpractice. The opinion is The Florida Bar v. (Koko) Head — So.3d —-, 2012 WL 851045 (Fla. March 15, 2012).
According to the opinion, The Florida Bar filed a 2 count complaint against Head and a referee was appointed who held hearings and made findings and recommendations.
In Count 1, Head represented a company called Nations Fence (Nations) in a “fiercely contested commercial tenant eviction” litigation. The opposing party, Johnson and his company, Superior Fence & Rail of North Florida (Superior), were represented by a lawyer named Wharton. Superior was a competitor of Nations (which was Head’s client) but was negotiating to purchase Nations’ assets, fixtures, inventory, and current job contracts.
Nations had defaulted on its lease. On March 19, 2009, Johnson went to the Nations’ premises to pick up “furniture, fixtures, equipment and inventory” with a signed letter identifying him as an “authorized agent” of Nations. Johnson claimed that Head illegally and unethically prevented him from removing items from the leased premises by improperly claiming a landlord’s lien for Nations. Nancy Allen, an employee of Nations, also went to the leased premises at the same time to retrieve business records to respond to a sales tax audit. Allen testified that she told Head and the landlord, James Lucas (who was also Head’s client), that she needed the books and records for the audit and both the lawyer and Lucas did not permit her to take the items.
The facts were unclear as to whether the landlord (Lucas), Nations, or Superior had a higher interest to the furniture, fixtures, or inventory on the premises. The referee noted that Nations was in default of its lease and concluded that the landlord had a statutory lien on the tenant’s property that attached when the property was brought onto the premises. The referee also found that the landlord’s lien was possessory (the landlord would have lost his lien if the property was removed from the premises), so Head’s client had a direct interest in preserving his landlord’s lien and preventing the removal of property from the leased premises and Head prevented everyone from removing any property from the premises and Head did not commit any misconduct by preserving the status quo until matters could be reviewed by a court.
Head testified that he expressly made the records available to Nations on that date; however, Allen testified that she drove to the leased premises in her car and another Nations employee drove a truck to help transport the files and she also brought banker’s boxes. She indicated that she was there to gather the files; however, the landlord (Lucas) denied her access to the leased premises. She stayed until about 2:30 or 3:00 pm and eventually told the truck driver to leave since she could take a significant number of files in her car. When Head arrived, he refused to allow her to remove any files.
Head later filed the Affidavit of Compliance claiming that he had made the records available. The referee found that Head’s testimony that he did not misrepresent the facts in his affidavit was not credible and noted that his testimony directly conflicted with the plain language of an e-mail he sent to Allen that evening, which stated that “upon receipt of the signed letter in the form I have prepared, the files you need for the audit will be made available to you.”
The Bar alleged that Head violated Florida Bar Rule 4-3.3(a), (candor towards the tribunal) and 4-8.4(c) (dishonesty, fraud, deceit, or misrepresentation) when he misrepresented in an Affidavit of Compliance which he filed with the court in the eviction case that he had made certain business records available to Allen, when he had actually denied the tenant access to those records on that date. The referee found that Head’s statement in the Affidavit of Compliance was ”inaccurate and untrue” and recommended that Head be found guilty of violating Bar Rule 4-3.3 (but not Rule 4-8.4(c)) for filing the inaccurate and untruthful affidavit with the court.
Wharton (the lawyer for Superior) also testified that on March 19, 2009, Head misrepresented in a letter (that was posted on the leased premises) that a Complaint for distress for rent had actually been filed and used that misrepresentation to his client’s benefit. The letter had a case number purporting to be the case number for the distress proceedings; however, that the case number had nothing to do with the landlord tenant matter. The distress proceedings had in fact not been filed when the letter was sent and Head claimed that the incorrect case number was a simple clerical mistake.
The referee found that a case number could never have been provided because the case was not yet filed and that Head placed a fictitious case number in the letter to create a tactical benefit to protect the landlord’s lien. The referee recommended that Head be found guilty of violating Bar Rule 4-4.1 by posting the letter on the leased premises but that “(s)uch violation was minor and of no consequence in the case. No evidence was presented that showed that the letter was relied upon by anyone or caused damage or harm.” The referee further found that the Bar failed to prove by clear and convincing evidence that Head intended to steal the tenant’s business and stated that the evidence offered by the parties clearly established that Respondent was only attempting to protect the landlord’s interests.
The referee recommended that Head be found guilty in Count I of violating Rules Regulating the Florida Bar 4-3.3(a) (candor towards the tribunal), 4-4.1(truthfulness in statements to others), and 4-8.4(c) (a lawyer shall not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation).
In Count II, Head represented Tastan related to allegations of water intrusion into his condominium. Tastan filed a Bar inquiry alleging that Head had not represented him properly and that he had undermined his case by failing to provide copies of documents including an offer of settlement; drafting poor responses; delaying the case unnecessarily by requesting many extensions; responding late on several occasions to important time sensitive documents; and failing to communicate with him. Head eventually withdrew from the representation and Tastan hired another attorney, Brad Hughes, who settled the case. According to the referee, the record established that Head knew of Hughes’ involvement on behalf of the client shortly after he initially withdrew.
Tastan’s inquiry was initially closed by the Bar as a fee dispute; however, after a failed request for fee arbitration, Head sent Tastan a letter dated August 9, 2009 attaching a statement of claim for fees allegedly owed and stating that he would not file a lawsuit if Tastan signed a mutual general release. Tastan did not sign the mutual release, consulted with Hughes, and forwarded the letter to the Bar with an inquiry form. The Bar then reopened Tastan’s earlier inquiry and alleged that Head violated Bar Rule 4-1.8(h) by failing to advise Tastan of his right to independent counsel when he attempted to limit his liability with the mutual release.
Bar Rule 4-1.8(h) provides: “Limiting Liability for Malpractice. A lawyer shall not make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless permitted by law and the client is independently represented in making the agreement. A lawyer shall not settle a claim for such liability with an unrepresented client or former client without first advising that person in writing that independent representation is appropriate in connection therewith.”
Interestingly, Head argued to the referee that Tastan had not alleged malpractice and that the Bar neither pled malpractice nor proven it. He also claimed that when he sent the letter, Tastan was represented by counsel in the water intrusion case; therefore, he could not violate Bar Rule 4-1.8(h) because Tastan was already represented.
The referee found that Head had a duty to advise Tastan in writing that independent representation by counsel was appropriate when he considered the mutual release and settlement and, since Head did not advise Tastan of this right to independent counsel he recommended that Head be found guilty of violating Bar Rule 4-1.8(h).
As to discipline, the referee recommended an admonishment for minor misconduct; a one (1) year probation wherein Head would be required to complete at least five hours of continuing legal education in ethics or professionalism; payment of $500.00 to The Florida Bar’s Client Security Fund, as a sanction for Head’s failure to cooperate in the Bar matter; and payment of The Florida Bar’s costs of $3,655.26. The referee found no mitigating factors and the following aggravating factors: (a) prior disciplinary offense (admonishment for minor misconduct on November 12, 2007); (b) dishonest or selfish motive; (c) a pattern of misconduct; (d) multiple offenses; (e) refusal to acknowledge wrongful nature of conduct; and (f) substantial experience in the practice of law.
The SC opinion upheld all of the referee’s findings of fact and rule violations. As to discipline, the opinion stated “(b)y these acts, Respondent has engaged in severely dishonest conduct. Further, with regard to violations of rule 4-8.4(c), the Court has repeatedly stated that “basic fundamental dishonesty … is a serious flaw, which cannot be tolerated.” (quoting cases) In addition, the Court has plainly stated that it “does not view violations of rule 4-8.4(c) … as minor.” (John Vernon) Head, 27 So.3d at 8. In fact, rule 3–5.1(b), “Minor Misconduct,” clearly provides: (1) Criteria. In the absence of unusual circumstances misconduct shall not be regarded as minor if any of the following conditions exist:….(E) the misconduct includes dishonesty, misrepresentation, deceit, or fraud on the part of the respondent…as there are no unusual circumstances present that explain or excuse Respondent’s dishonest conduct, we disapprove the referee’s finding that Respondent’s misconduct was minor misconduct.”
After discussing the referee’s findings of fact and rule violations and the case law, the opinion imposed a 91 day suspension, one (1) of probation which will begin upon when the lawyer is reinstated to practice and as a condition, the lawyer will be required to complete at least five hours of continuing legal education by attending The Florida Bar’s Ethics School and a Florida Bar professionalism course.
Bottom line: As I have stated many times in previous Ethics Alerts and seminars, a 91 day suspension is “rehabilitative”; therefore, the lawyer will be required to file a Petition for Reinstatement and prove rehabilitation before being reinstated and this process will take far longer than the 91 day suspension. This opinion makes it abundantly clear that the Florida Supreme Court has taken the position that it will not tolerate “severely dishonest conduct” by lawyers and will also not hesitate to impose rehabilitative suspensions (or worse) on those who engage in such conduct, notwithstanding a referee’s recommendation that the lawyer receive an admonishment for minor misconduct.
Be careful out there!
As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding these or any other ethics, risk management, or other issues, please do not hesitate to contact me.
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