Category Archives: Florida Lawyer Ethics and Professionalism

Startup app TIKD sues Florida Bar for alleged antitrust violations; Florida Bar moves to disqualify former president from case

Hello everyone and welcome to this Ethics Alert which will discuss the recent lawsuit filed by Startup app TIKD Services against The Florida Bar and the Ticket Clinic law firm for, inter alia, antitrust violations and the Bar’s Motion to Disqualify its former president, Ramón A. Abadin from representing TIKD, claiming that he was privy to privileged and confidential communications and information related to the matter.  The case is TIKD Services LLC, v. The Florida Bar, et al., Case No. 1:17-cv-24103-MGC (U.S. District Court Southern District of Florida-Miami Division).

The owner of the company, Chris Riley, says he got the idea for TIKD after he received a speeding ticket in Miami and had to pay a lawyer and was assessed fines and costs.  He then came up with an app to help motorists challenge their tickets without having to go to court.  The app permits the ticketed person to upload a photo of the ticket and pay a fixed amount.  TIKD then retains an attorney to represent that person and, if he or she is ultimately is assessed with points against his or her license, TIKD refunds the payment and also pays the cost of the ticket.  The TIKD business model is based on the fact that contested traffic tickets are often dismissed or a lower fine is assessed and, since TIKD deals in volume, it can charge a lower price than a lawyer who is separately retained by an individual.

The Florida Bar issued a staff opinion finding that lawyers who work with TIKD and similar programs could be in violation of various Florida Bar ethics rules, including fee splitting and interference with the lawyer’s independent professional judgment.  TIKD states that its services fully comply with Florida Bar ethics rules and that lawyers who represent the individuals receive a flat fee and are independent practitioners “over whom TIKD does not exercise any direction or control.”

TIKD subsequently filed a lawsuit in federal court alleging conspiracy, restraint of trade, tortious interference with business relationships, and antitrust violations.  The lawyers representing TIKD include Ramón A. Abadin, a recent former President of the Florida Bar.  The defendants include, among others, The Florida Bar and attorney Mark S. Good, who founded The Ticket Clinic; which has offices in Florida, Georgia and California.

According to the federal lawsuit, The Florida Bar advised TIKD that it was opening an unlicensed practice of law investigation into the company’s activities after the company was featured in a Miami Herald story.  A few months later, attorneys with The Ticket Clinic, a Miami law firm that handles traffic tickets, threatened to report two of TIKD’s lawyers to the Bar if they continued to work with TIKD.  Litigation was later filed and the parties reached a settlement last August; however, TIKD alleges that the Bar and the Miami lawyer firm continued a “concerted effort” to put it out of business and that Ticket Clinic lawyers continued filing “baseless ethics complaints” against attorneys represent TIKD customers.

On December 1, 2017, The Florida Bar filed a Motion to Disqualify Ramón A. Abadin alleging that, during his 2015-16 term as president, he “was provided attorney-client and attorney work-product communications and advice about and involving the specific antitrust issues and allegations asserted in this action”, including an amicus brief that was filed in the U.S. Supreme Court case of North Carolina State Board of Dental Examiners v. Federal Trade Commission, 135 S. Ct. 1101 (2015).  In that opinion, the U.S. Supreme Court found that the N.C. dental board did not have state action immunity because its decisions were final and not subject to review. The Florida Bar joined in an amicus brief in that case arguing state action immunity should apply.

Bottom line:  This appears to be the one of the first cases filed in Florida which directly alleges that The Florida Bar’s procedures violate the Sherman Antitrust Act based upon the decision of the U.S. Supreme Court in North Carolina State Board of Dental Examiners v. Federal Trade Commission.  As an added element of intrigue, the Bar’s very recent former president was among the lawyers filing the complaint and the Bar has filed a motion to disqualify him from the matter.

Stay tuned…and be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Filed under Attorney Ethics, Bar antitrust, Bar regulation and antitrust, BAR UPL antitrust, Florida Bar, Florida Bar TIKD antitrust lawsuit, Florida Lawyer Ethics and Professionalism, joe corsmeier, Joseph Corsmeier, Lawyer antitrust, Lawyer ethics, Lawyer Ethics and Professionalism, North Carolina Dental Board, North Carolina dental whitening case and UPL, UPL and professional speech, UPL North Carolina federal judge opinion on regulation of UPL

Four south Florida lawyers arrested for involvement for illegal personal injury solicitation and provider kickbacks

Hello everyone and welcome to this Ethics Alert which will discuss the recent arrests of four south Florida lawyers who are  alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which then paid them cash for the referrals.

According to media articles and criminal charging documents, four south Florida lawyers have been charged with crimes  ranging from money laundering to organized fraud and patient brokering.  The lawyers are Steven Slootsky, whose record Bar address is in Boca Raton, and Adam Hurtig, Mark Spatz, and Vincent Pravato, whose record Bar addresses are in Fort Lauderdale.  The lawyers were arrested on or about September 6, 2017.

The lawyers are alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which paid cash to the lawyers for the referrals.  According to arrest records, the lawyers allegedly paid runners from towing companies and body shops to improperly solicit victims of motor vehicle accidents.  Those individuals were allegedly then referred to clinics for medical treatment and the clinics would illegally pay for the referrals.

The arrest report states that the lawyers “were actively involved in illegal patient brokering and the unlawful solicitation of motor-vehicle accident victims throughout South Florida…after the patient was brokered to the health care facility, the facility was then able to begin treatment and bill the auto insurance companies for claims covered by the PIP benefits, which resulted in fraud on the insurance companies.”

It is illegal under federal law for a doctor, clinic, or other health care provider to pay for patient referrals and for a “patient broker” to receive kickbacks for sending patients to a health care provider.  It is also a violation of the Florida Bar Rules for an agent of a lawyer to improperly solicit a client, for a lawyer to pay non-lawyers and clinics for referrals, and for the lawyer to receive payment or a fee based upon an improper solicitation.  Of course, it is certainly a violation of the Florida Bar Rules to commit a crime.

Bottom line: I have heard anecdotally that these activities have been occurring in south Florida for many years (and potentially throughout our entire state, particularly in urban areas).  These lawyers are certainly presumed innocent unless and until they are proven guilty; however, if the allegations are shown to be true, this is an extremely unfortunate blight on the legal profession.  On the other hand, this could potentially discourage others from doing (or continuing to do) this in the future.

Be careful out there.     Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Miami-Dade Circuit Judge’s Facebook “friendship” with Florida lawyer and former judge leads to motion to disqualify and appeal

Hello everyone and welcome to this Ethics Alert which will discuss the recent denial of a Motion to Disqualify a Miami-Dade County Circuit Judge who was “friends” with opposing counsel on Facebook as well as the pending appeal.  The case is Law Offices of Herssein and Herssein, P.A. d/b/a Herssein Law Group and Reuven T. Herssein v. United Services Automobile Association, Case No.: _______________, Lower Tribunal No.: 2015-015825-CA-43 (Florida Third District Court of Appeal) and the Motion for Writ of Prohibition is here:  http://www.almcms.com/contrib/content/uploads/sites/292/2017/07/FILED-HLG-Petition-for-Writ-of-Prohibition-3D17-1421-1.pdf 

According to the Petition, Miami-Dade Circuit Judge Beatrice Butchko is a “friend” of attorney Israel Reyes on Facebook.  Reyes is also a former Miami-Dade judge who served with Judge Butchko and now has a private law firm in Coral Gables.  Reyes represents a USAA employee in the case who retained separate counsel after Herssein apparently accused the employee of witness tampering.  Herssein told the court that he planned to add the employee as a defendant and Reyes entered an appearance on behalf of the employee/non-party.

The Motion to Disqualify filed by the Herssein law firm on behalf of USAA alleged that the Facebook friendship between the judge and Reyes would cause Reyes to be able to influence the judge, and that she could not be impartial.  The judge denied the motion, stating that it was legally insufficient.  The law firm then filed the Petition for Writ of Prohibition with the Third District Court of Appeal.

The Florida Supreme Court’s Judicial Advisory Committee (JEAC) issued an opinion on this issue in 2009.  The JEAC opinion states that judges should not send or accept social media friend requests from lawyers who may appear before them.  The advisory opinion excludes campaign sites created by a committee.  The opinion is JEAC Op. No. 2009-20 (11/17/09) and is here:  http://www.jud6.org/legalcommunity/legalpractice/opinions/jeacopinions/2009/2009-20.htmlt  The opinion states:

“The Committee believes that listing lawyers who may appear before the judge as “friends” on a judge’s social networking page reasonably conveys to others the impression that these lawyer “friends” are in a special position to influence the judge.  This is not to say, of course, that simply because a lawyer is listed as a “friend” on a social networking site or because a lawyer is a friend of the judge, as the term friend is used in its traditional sense, means that this lawyer is, in fact, in a special position to influence the judge.  The issue, however, is not whether the lawyer actually is in a position to influence the judge, but instead whether the proposed conduct, the identification of the lawyer as a “friend” on the social networking site, conveys the impression that the lawyer is in a position to influence the judge.  The Committee concludes that such identification in a public forum of a lawyer who may appear before the judge does convey this impression and therefore is not permitted.”

The JEAC applied the same analysis in a 2012 opinion related to professional networking websites, such as LinkedIn, and stated that there is no “meaningful distinction” between Facebook, and LinkedIn.  The opinion is JEAC Op. No. 2012-12 (5/9/12) and is here:  http://www.jud6.org/legalcommunity/legalpractice/opinions/jeacopinions/2012/2012-12.html.  The opinions states:

The Committee continues to believe that the process of selecting persons to be connections on LinkedIn, and the communication by the judge of the list of the judge’s connections to others who the judge has approved, violates Canon 2B.  The Committee does not believe that there is meaningful distinction in this regard between Facebook, and LinkedIn, a site used for professional networking, because the selection and communication process is the same on both sites.

The Fourth District Court of Appeal relied on the 2009 opinion in a 2012 decision disqualifying a judge in a criminal case for being Facebook friends with the prosecutor. The court found the social media connection could “create in a reasonably prudent person a well-founded fear of not receiving a fair and impartial trial.”

USAA argued that the 2012 Fourth DCA decision should not apply since it involved a criminal defendant who might have a reasonable fear of prejudice; however, the law firm is more sophisticated and should not have such a fear only because two judges who both previously sat as judges in Miami-Dade County are “friends” on Facebook.

Other states have also provided guidance on judicial social media use and Florida’s opinion is one of the most restrictive.  California, Kentucky and New York have opined that judges may accept Facebook friend requests from lawyers who may appear before them under certain conditions.  California permits judges to be friends with lawyers on Facebook if those pages are used only for professional activities, such as communications with members of a law school alumni group and other factors include how many friends the judge has, whether he or she declines some attorneys’ friend requests but accepts others and how often the attorney appears before the judge.

Bottom line:  As this case illustrates, judges (and lawyers who may appear before them) would be well advised not to be “friends” or otherwise connect on social media and professional networking sites or, if they are already connected and a case is assigned, to immediately remove the connection and disclose it to all parties and provide an option to recuse if the party believes that it would potentially be prejudiced.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19, N., Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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Florida lawyer accused of “planning” Allied Veterans scam is reinstated nunc pro tunc after criminal charges were reversed

Hello everyone and welcome to this Ethics Alert which will discuss the recent Order of the Florida Supreme Court reinstating the license of a lawyer who had been charged with felony crimes for allegedly planning Allied Veterans scam and whose conviction was reversed.  The case is The Florida Bar v. Kelly Bernard Mathis, Case No.: SC13-2031 (Supreme Court of Florida, July 17, 2017) and the SC Order is here:  https://efactssc-public.flcourts.org/casedocuments/2013/2031/2013-2031_disposition_138842.pdf

As some of you may recall, an alleged financial scam involving an entity called Allied Veterans, based in St. Augustine, was in the media extensively a number of years ago.  The alleged scam involved gambling and “internet cafes”.  The lawyer had advised Allied Veterans that the internet cafes were legal and, after a law enforcement investigation, he was charged with planning the scam and with multiple felonies.  In 2013, Attorney General Pam Bondi said that the lawyer was the “mastermind” behind the alleged $300 million racketeering and money laundering scheme with internet cafes where people were actually illegally gambling.

Although 57 people were arrested, the lawyer was the only defendant who went to trial.  He argued that he was giving legal advice to a client and many lawyers were concerned about what that might mean for the potential criminal liability of attorneys who advise clients on a future course of conduct.  The former presidents of the nonprofit pleaded no contest and the former Fraternal Order of Police president and vice president pleaded guilty and faced no prison time.

The criminal prosecutors argued that, although Allied Veterans claimed that it was a nonprofit organization created to help veterans, it had only given about two percent of its profits to charitable causes.  The prosecutors also argued that the lawyer’s law firm had billed the nonprofit about $6 million for his legal services, although his lawyers stated the amount was most likely less than that and that he only billed for actual work his firm had performed.

During the trial, prosecutors presented testimony from witnesses who said that they had purchased hundreds of hours of internet time but never used it because they actually came to gamble. The lawyers wanted to argue in the lawyer’s defense that the lawyer had properly advised Allied Veterans that it was his opinion that offering a sweepstakes game that was legal under Florida law, which permits sweepstakes if they are used to bring a customer into a business that sells a legal product, such as McDonald’s sweepstakes.  The judge rejected their request to make that argument.

After his conviction on 103 criminal counts, the lawyer was sentenced to six years in prison.  He appealed and the Florida Fifth District Court of Appeals reversed the conviction, finding that the trial judge improperly prohibited his lawyers from arguing that the internet cafes were legal and not gambling.  The Attorney General’s office decided not to pursue charges against the lawyer after the conviction was reversed.

In disciplinary matter, The Florida Bar did not oppose the lawyer’s reinstatement and Fourth Judicial Circuit Chief Judge Mark Mahon issued a report in March 2017 recommending that the Florida Supreme Court immediately reinstate the lawyer.  In its July 17, 2017 Order, the Florida Supreme Court reinstated the lawyer nunc pro tunc to the date of his felony suspension in 2013.

Bottom line:  This lawyer was charged with multiple felonies and chose to go to trial instead of accepting a plea bargain which would not have resulted in prison time; however, the conviction would most likely have resulted in his disbarment.  After his trial in 2013, the lawyer was convicted and sentenced to 6 years in prison.  He was also automatically suspended because of the felony conviction.  Pursuant to the Florida Supreme Court’s July 17, 2017 Order, the lawyer was reinstated to practice nunc pro tunc to November 28, 2013, the date of his felony suspension.  The lawyer was ultimately suspended and unable to practice for over 3 ½ years for a conviction that was later reversed.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19, N., Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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New Jersey joint ethics opinion finds that fees paid to Avvo for client referrals violate New Jersey Bar rules

Hello everyone and welcome to this Ethics Alert which will discuss the recent New Jersey joint ethics opinion which found that lawyers in New Jersey are prohibited from participating in client referral services provided by AVVO because the services involve improper lawyer referral fees and fee sharing with a non-lawyer.  The joint ethics opinion is here: https://www.dropbox.com/s/5plgfqgi26zuym1/ACPE%20732%20Avvo%2C%20LegalZoom%2C%20Rocket%20Lawyer%206.21.17.pdf?dl=017  and the New Jersey Supreme Court Notice to The Bar of the joint ethics opinion is here: https://www.judiciary.state.nj.us/notices/2017/n170621i.pdf

The joint ethics opinion found that none of the legal service plans interfered with the independent professional judgment of participating lawyers, and Avvo’s procedure of holding fees until the legal services are performed does not violate lawyer trust account rules.

The joint opinion also describes the services offered by three companies’ websites.  Avvo offers two legal services products through its website: “Avvo Advisor” and “Avvo Legal Services”.  Individuals who use “Avvo Advisor” pay a flat fee for a 15-minute phone conversation with a lawyer, while consumers who use “Avvo Legal Services” purchase specific services, such as an uncontested divorce, for a flat fee.  Avvo then deposits the flat fee into the lawyer’s bank account and withdraws a “marketing fee.”

The ethics opinion found the “marketing fee” is an impermissible referral fee, and not a permitted fee for the cost of advertising, as well as an impermissible shared fee between a lawyer and the non-lawyer.  The ethics opinion referred to ethics opinions in Ohio, South Carolina, and Pennsylvania that found marketing fees charged by “Avvo-type companies” were improper referral fees or constituted impermissible fee sharing.

The opinion found that services provided by LegalZoom and Rocket Lawyer appear to comply with the ethics rules if they were registered with the courts’ administrative office, as required by New Jersey’s rules.  LegalZoom’s “Business Advantage Pro” and “Legal Advantage Plus” charge a flat monthly fee for legal advice and consumers can purchase additional services from participating lawyers at a discounted rate.  LegalZoom keeps the monthly subscription fees.  Rocket Lawyer’s legal services plan charges a flat fee for limited legal advice on document-related matters and a free 30-minute lawyer consultation.  Rocket Lawyer keeps the subscription fees and participating lawyers can offer legal services at discounted rates.

Bottom line:  This ethics opinion is the most recent which has reviewed the recent legal services plans of AVVO (and other entities) and found that the fee charges in AVVO’s plan constitute improper referral fees and fee sharing.  Other jurisdictions may weigh in with their own ethics opinions in the future (or the rules may be changed).  Stay tuned…

…and be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19, N., Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

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Can a lawyer forgive a client’s costs which were contingent on the outcome and the client’s responsibility under the fee agreement?

Hello everyone and welcome to this Ethics Alert which will discuss whether a lawyer can forgive a client’s costs client’s which were contingent on the outcome of the matter and the client’s responsibility under fee agreement.  Florida Bar Ethics Opinion 16-1 states that this would be ethical if the client was not unconditionally responsible for the payment of costs under the fee agreement, the cost forgiveness occurs after the settlement. and the lawyer does not receive any fees for the representation.  The Ethics Opinion is here: Florida Bar Ethics Op. 16-1 and it provides a thorough analysis of ethical considerations surrounding the ethics rule which prohibits providing financial assistance to a client.

Under the facts of the ethics opinion, the lawyer represented a client in a negligence case.  After a lawsuit was filed, an appellate decision changed the law and eliminated the cause of action. A settlement was reached and client’s outstanding medical bills and costs were nearly double the amount of the settlement.  The settlement exceeded the amount of costs advanced by the lawyer by a small amount.

The lawyer had paid the litigation costs on behalf of the client and repayment was contingent on the outcome of the matter. The lawyer stated that he or she would not take fee and would like to reduce the amount of costs owed to the lawyer to allow the client to receive some of the settlement proceeds after payment of liens and any other amounts.

The lawyer requested an opinion as to whether he or she could reduce the amount of the costs that the client owes notwithstanding Florida Bar Ethics Opinion 96-1, which discusses Florida Bar Rule 4-1.8(e) (Financial Assistance to Client) and states that a lawyer cannot agree to be unconditionally responsible to pay for a client’s litigation costs.

The opinion reviewed Florida Bar Rule 4-1.8(e) and discussed Michigan Ethics Opinion RI-14 (1989) which sets forth the underlying reasons for the financial assistance rule.  The Michigan Ethics Opinion states:

“Lawyers may not subsidize lawsuits or administrative proceedings brought on behalf of their clients, including making or guaranteeing loans to their clients for living expenses, because to do so would encourage clients to pursue lawsuits that might not otherwise be brought and because such assistance gives lawyers too great a financial stake in the litigation. These dangers do not warrant a prohibition on a lawyer advancing a client court costs and litigation expenses, including the expenses of diagnostic medical examination used for litigation purposes and the reasonable costs of obtaining and presenting evidence, because these advances are virtually indistinguishable from contingent fees and help ensure access to the courts. Similarly, an exception allowing lawyers representing indigent clients to pay court costs and litigation expenses regardless of whether these funds will be repaid is warranted.”

“MRPC 1.8 (e) is the result of the common law rules against champerty and maintenance. Champerty is an investment in the cause of action of another by purchasing a percentage of any recovery. Maintenance is another form of investment by providing living or other expenses to finance litigation. When a lawyer has a financial stake in the outcome of a client’s lawsuit, there is a legitimate concern that the lawyer’s undivided loyalty to the client may be compromised in an effort to protect the lawyer’s personal financial investment in the outcome. Also financial support to a client could interfere with settlement efforts, by enabling the client to prolong the dispute.”

The opinion then discusses Florida Ethics Opinion 96-1, which addressed the issue of financial assistance to clients.

Under the facts in Ethics Opinion 96-1, a lawyer agreed to be responsible for costs in representing a state agency, regardless of whether there was a recovery.  After discussing Rule 4-1.8(e) and the reasons underlying the rule, the opinion concluded that, “under the plain language of Rule 4-1.8(e), it would be ethically impermissible for the inquiring attorney to unconditionally be responsible for all costs and expenses as provided in the proposed agreement.”

The opinion provides the following summary:

“…the committee is of the opinion that the inquirer’s proposal not to seek reimbursement for some of the costs the inquirer has advanced on behalf of the client is permissible under these specific circumstances: where there has been no agreement for the inquirer to be unconditionally responsible for the costs at the outset of representation, the cost “forgiveness” occurs after settlement, and the inquirer will receive no fees for the representation. The committee believes that the rule’s prohibition is inapplicable because there was no agreement at the outset of representation for the inquirer to be responsible for the costs, and the committee believes that application of the exception to Rule 4-1.8(e) leads to the same result, as the recovery is insufficient to cover all medical bills and litigation costs and the repayment of the costs is therefore “contingent on the outcome of the matter” under the rule.”

Bottom line:  Ethics Opinions are not binding; however, this Florida opinion states that it is not unethical for a lawyer to forgive a client’s costs after settlement, even if the costs are the client’s responsibility under the fee agreement, as long as the client was not unconditionally responsible under the fee agreement, the cost forgiveness occurs after the settlement, and the lawyer does not receive any fees for the representation.

Be careful out there.  

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19, N., Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

Leave a comment

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