Category Archives: Lawyer improper fees

Potential Florida Bar ethics advisory opinion 17-2 will address lawyer referral fees and private client matching services

Hello everyone and welcome to this Ethics Alert which will discuss recent decision by the Florida Bar’s Board of Governors (BOG) to consider a potential ethics advisory opinion to address the ethics issues surrounding lawyer referral fees and private client matching services.  The advisory opinion has not been drafted; however, the draft opinion will be identified as Proposed Advisory Opinion 17-2.

The Bar review began after a lawyer sent an ethics inquiry to The Florida Bar asking whether lawyers could participate with a private lawyer referral service which planned to charge a different set fee depending upon the type of case referred.  The lawyer referred to the system “as a ‘pay-per-lead’ structure.”

The lawyer’s inquiry was referred to the BOG and, at its July 21, 2017 meeting in Miami, the BOG unanimously approved the recommendation of the Board Review Committee on Professional Ethics (BRCPE) that it be directed to prepare an advisory opinion on the inquiry, specifically whether lawyer referral services can charge a fee per referral and impose different fees for different types of cases.  The BRCPE has authority to decline drafting an opinion and the BOG could also decide not to issue the opinion if it is drafted.

If an ethics advisory opinion is drafted, it will address the ethics issues created when online entities (such as AVVO) rolled out programs which attempt to match potential clients with lawyers and which make different payments depending on the type of case.  The opinion would also address the Bar rules related to advertising and referral services.  Lawyers and others will be able to comment on the issues before any opinion is drafted and/or approved.

The Florida Bar Rules have long prohibited lawyers from sharing fees with private referral services.  The Bar’s Standing Committee on Advertising (SCA) also rejected “pay-per-lead” plans on previous appeals and the BOG rejected an appeal from a referral service that proposed a payment of $300.00 to participating lawyers for each referred and accepted case in 2012.

Other jurisdictions have published ethics opinions addressing these issues or are in the process of reviewing them.  As I reported in a recent Ethics Alert blog, New York Ethics Opinion 1132 (published August 8, 2017) found that New York lawyers are prohibited from participating in AVVO’s client referral services.  The opinion found that lawyers who participate in AVVO’s client referral services (and any similar services) would violate the New York Bar rules since they involve AVVO’s improper “vouching” for (recommendation of) the lawyer, improper lawyer referral fees, and improper fee sharing with a non-lawyer.

As background, The Florida Bar filed a petition with proposed Bar rule amendments with the Florida Supreme Court in 2015 addressing, inter alia, referral services that offer both legal and medical or other non-legal services. Those proposed rules would have allowed lawyers to participate in those services, as long as clients were informed about potential conflicts, there was no quid pro quo requiring the lawyer to send a referred client for medical or other services offered by the referral agency, and the lawyer’s independent judgment was not affected.

The Florida Supreme Court published an opinion on September 24, 2015 which declined to implement the rule revisions and instructed the Bar to draft rules that “preclude Florida lawyers from accepting referrals from any lawyer referral service that is not owned or operated by a member of the Bar.”    That opinion is here: 9/24/15 SC Opinion

The Florida Bar then filed revised rule amendments designating private entities which match lawyers with potential clients as “qualified providers” and requiring those entities to comply with the Bar rules, including a required review of the advertisements. Participating lawyers would not have been required to carry malpractice insurance.

The Florida Supreme Court heard oral argument in April 2017 and then published an order dismissing the petition on May 3, 2017. That order is here: 5/3/17 SC Order.  The order stated: “In this case, the Bar proposes amendments to rule 4-7.22 that do not comply with the Court’s direction concerning lawyer referral services that are not owned or operated by a member of the Bar and that seek to expand the scope of the rule to include “matching services” and other similar services not currently regulated by the Bar.

The May 3, 2017 Order also stated that the dismissal was without prejudice “to allow the members of this Court to engage in informed discussions with the Bar and those who are in favor or against the proposed regulation of matching and other similar services. The Court lacks sufficient background information on such services and their regulation at this time.”  A meeting was held at the June 2017 Bar Annual Convention in Boca Raton to discuss the issues and was attended by Justices, Bar officials, and representatives of private referral services.

The Bar’s Notice of the proposed ethics advisory opinion was published in the August 15, 2017 issue of the Florida Bar News.  The Bar’s Notice is here: 8/15/17 Notice of Proposed advisory opinion 17-2.

According to the Notice:  “The Board Review Committee on Professional Ethics will consider adopting a proposed advisory opinion at the direction of The Florida Bar Board of Governors based on an inquiry by a member of The Florida Bar, at a meeting to be held on Thursday, December 7, 2017, from 1-3 p.m. at the Ritz-Carlton on Amelia Island.” and “comments from Florida Bar members are solicited on the issues presented. Comments must contain Proposed Advisory Opinion number 17-2, must clearly state the issues for the committee to consider, may offer suggestions for additional fee arrangements to be addressed by the proposed advisory opinion, and may include a proposed conclusion. Comments should be submitted to Elizabeth Clark Tarbert, Ethics Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee 32399-2300, and must be postmarked no later than 30 days from the date of this publication.”

Bottom line:  If the ethics opinion is drafted and approved, Florida will join the growing list of jurisdictions addressing “marketing fees” taken from fees paid by private online entities to lawyers participating in client generation services.  This ethics opinion (like all ethics opinions) would be advisory and for guidance only.

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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Florida Supreme Court disbars 3 lawyers for misconduct in the settlement of multiple PIP and bad faith claims

Hello everyone and welcome to this Ethics Alert which will discuss the recent opinion of the Supreme Court of Florida which disbarred 3 Florida lawyers for misconduct in settling multiple PIP and bad faith claims.  The opinion is The Florida Bar v. Charles Jay Kane, The Florida Bar v. Harley Nathan Kane, The Florida Bar v. Darin James Lentner, No. SC13-388 (October 6, 2016) and the opinion is here:  http://www.floridasupremecourt.org/decisions/2016/sc13-388.pdf.

The lengthy opinion outlines and discusses the complicated underlying facts, including the involvement of the lawyers in settling the PIP claims and failing to inform and misleading both the clients and the lawyers who were handling separate bad faith claims against Progressive Insurance.   Although this is a fairly lengthy Ethics Alert, the relatively short format of my Ethics Alerts do not permit a full discussion of the case, and readers are urged to read the case for more information and clarification.

According to the opinion, the lawyers took on the representation of 441 PIP claims on behalf of various medical providers.  Two other lawyers were retained to file bad faith claims.  The claims were filed in a matter called the “Goldcoast” litigation, in which only 37 of the PIP clients were involved.  Each of the PIP law firms (Kane & Kane, Watson & Lentner, and Marks & Fleischer) and each of the bad faith attorneys executed a contract agreeing to jointly represent all thirty-seven plaintiffs.

During the bad faith litigation, the bad faith lawyers were able to compel disclosure of documents which strengthened the bad faith claims.  At mediation on the bad faith claims, Progressive offered only $3.5 million, which offer was rejected.

The disclosure of the documents apparently caused Progressive to consider settlement.  Progressive’s counsel later initiated settlement negotiations with the PIP lawyers only and the bad faith lawyers were not part of those negotiations.  Progressive  offered an aggregate amount of $14.5 million, to settle all of the claims, including both the PIP and bad faith claims, and attorney fees.  On May 16, 2004, all six of the PIP lawyers (including the disbarred lawyers) met with lawyers from Progressive to put the agreement in writing.  The bad faith lawyers were not told of Progressive’s offers, and they were not asked to attend the meeting.

“As a result of the meeting, the PIP lawyers signed a ‘Memorandum of Understanding’ (MOU) settling all cases and claims, subject to client agreement.  Pursuant to the MOU, the clients were required to release all claims against Progressive, including both PIP claims and bad faith claims. The MOU did not specify how the settlement funds would be allocated and it was left to the PIP lawyers to divide the funds between the claims and the costs and fees.”

“The only requirement to trigger the $14.5 million payment was a certain number of signed client releases: 100 percent of the named Goldcoast case plaintiffs and 80 percent of the remaining PIP clients of all three PIP firms. Also as a part of the MOU, the PIP lawyers agreed to defend, indemnify, and hold the Progressive entities harmless from any claims of their clients.  Several days later, the PIP lawyers, including the disbarred lawyers, met with one of the bad faith lawyers, Larry Stewart, and offered him $300,000 to compensate all three bad faith attorneys for their work on the bad faith case. The PIP lawyers did not disclose the terms of the settlement with Progressive, stating only that the cases and claims had been settled.”

According to the opinion, “the bad faith attorneys then wrote a letter to each of the named plaintiffs in the Goldcoast case, explaining their efforts to compel production of Progressive’s internal documents and the April 2004 mediation. The letter asserted that as a result of the PIP lawyers’ secret settlement with Progressive, the clients’ bad faith claims may have been ‘compromised or even sacrificed.’”

“The bad faith attorneys sent a copy of their letter to each of the PIP law firms and asked the PIP lawyers to forward the letter to their clients who were not named in the Goldcoast case; however, the lawyers did not forward the letter as requested. Instead, Respondent Charles Kane drafted a letter, titled ‘Notice of Disagreement Between Counsel’ (disagreement letter), for the PIP law firms to send to clients who were named as plaintiffs in the Goldcoast case.  The letter contained misleading statements regarding the bad faith attorneys and their efforts to pursue the bad faith claims on behalf of the clients.”

An Amended Memorandum of Understanding (AMOU) was later drafted and, after the law firm contacted the clients and obtained the releases, the settlement funds were paid by Progressive.  Kane & Kane received $5.25 million. The firm paid $672,742 to its PIP clients, $433,202 in costs, and took $4,144,055 in attorney fees. Watson & Lentner received $3,075,000, and the firm paid $361,470 to its PIP clients, $190,736 in costs, and took $2,522,792 in attorney fees. Once the firms received the settlement money, the bad faith attorneys were discharged, and a notice of voluntary dismissal with prejudice was filed, ending the Goldcoast case.

The bad faith lawyers then sued the PIP lawyers and, in April 2008, Judge David F. Crow entered a final judgment in favor of the bad faith attorneys on their quantum meruit and/or unjust enrichment claims. The final judgment included extensive findings as to the PIP lawyers’ actions, noting that the matter “could be a case study for a course on professional conduct involving multi-party joint representation agreements and the ethical pitfalls surrounding such agreements.”

The Supreme Court opinion upheld the finding of guilt and rule violations made by the referee and disbarred all three lawyers.  “We agree with the referee that the PIP lawyers’ most egregious violation occurred when they abandoned their clients’ bad faith claims in favor of a greater fee for themselves.”  The opinion states that the “considerable violation of (the lawyers’) ethical responsibilities to their clients and the legal system, entirely for their own financial interests and at the expense of their clients, warrants disbarment.

Bottom line:  The 3 lawyers were disbarred for the misconduct which is briefly described above and is further detailed in the opinion.

The opinion also addressed a very important practice point for lawyers who handle PIP claims on behalf of medical providers since it upheld the referee’s findings that all three lawyers failed to provide their clients with closing statements in the PIP cases in violation of Florida Bar Rule 4-1.5(f).  “Although there was testimony presented to the referee that a closing statement is not typically provided in a PIP case because the attorney fee is not taken as a portion of the client’s overall recovery, the referee found, and we agree, that there is no specific exception in the Bar Rules authorizing this practice.”  The Court found that lawyers must provide closing statements to clients in PIP first party claims, even though the fees and costs are typically paid by the insurance company and not taken out of the client’s settlement funds.

Be careful out there.

Disclaimer:  this Ethics Alert 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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ABA Formal Opinion 475 addresses when lawyers from different law firms are permitted to share a referral fee

Hello and welcome to this Ethics Alert blog which will discuss the recent American Bar Association Formal ethics Opinion which addresses when lawyers may share a fee in a referral arrangement.  The opinion is ABA Formal Ethics Opinion 475 and was issued on April 21, 2016.  The formal opinion is here: http://www.abajournal.com/files/FO_474.pdf

Under ABA Model Rule 1.5(3) (and the Bar Rules of most jurisdictions), lawyers may refer cases to lawyers in other firms and receive a fee as long as the referring lawyer performs legal services or assumes joint responsibility for the case. Comment 7 to Model Rule 1.5 explains that these arrangements most often occur between a referring lawyer and a trial lawyer.  ABA Formal Ethics Opinion 474 discusses the propriety of referral fees between lawyers, explains that clients must consent in writing to such arrangements, and provides examples of when a lawyer does and does not have a conflict of interest.

The opinion notes that state rules related to referral fees vary widely.  Some states only require client consent and a total reasonable fee and some states prohibit referral fees altogether.  Other states (including Florida) require that the referring lawyer either perform legal services of assume joint responsibility for the case (which would include potential legal malpractice liability) and limit the amount of the fee without court approval.

The client must consent to the referral arrangement and be fully informed of the agreement regarding the division of fees before or within a reasonable time after the representation begins.  A lawyer cannot be involved in the case (or receive a referral fee) if there is a conflict of interest unless the lawyer obtains a waiver which meets the requirements of ABA Model Rule 1.7(b), which includes the requirement that each affected client give informed consent in writing (if the conflict is waivable).  A lawyer cannot perform legal services or assume responsibility for the case, however, if he or she has a conflict of interest.

The opinion also states that “(t)he agreement must describe in sufficient detail the division of the fee between the lawyers including the share each lawyer will receive.”  In addition, a referral agreement should not be entered into toward the end of the attorney-client relationship but must be disclosed and agreed to by the client “either before or within a reasonable time after commencing the representation.”

Bottom line:  Lawyers should be aware that, although most jurisdictions (including Florida) permit referral fees, the Bar rules typically impose the requirement that the client provide informed consent in writing to the referral fee and the fee is also subject to limitations in the amount without court approval (25% in Florida without court approval).  In addition, if a lawyer is unable to represent a client outright because of a conflict of interest that is not waived or waivable, the lawyer will not be able to accept a referral fee since, in Florida and most jurisdictions, the referring lawyer must either perform legal services or assume joint responsibility for the matter (which includes potential legal malpractice liability).  Lawyers should consult the Bar Rules in his or her jurisdiction before participating in a referral fee.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement and does not contain any legal advice 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.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

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Tennessee lawyer who, inter alia, billed clients for watching crime TV shows and was “doggedly unrepentant” is suspended for one year

Hello everyone and welcome to this Ethics Alert which will discuss the recent Tennessee Supreme Court disciplinary opinion which suspended a lawyer for one year for, inter alia, billing clients for watching true-crime shows.  The opinion is Yarboro Sallee v. Tennessee Board of Professional Responsibility, No. E2014-01062-SC-R3-BP (July 23, 2015) and is online here:  http://www.tsc.state.tn.us/sites/default/files/salleeyarboro.opn_.pdf

According to the opinion, the underlying matter involved an accident which occurred on October 15, 2009.  The decedent, Lori Noll, fell down steps in her home and died five days later. Although a medical examiner found that the death was accidental, the Ms. Noll’s parents suspected that their daughter’s husband was motivated by a one-million dollar insurance policy on Ms. Noll’s life and was responsible for her death.

The lawyer was hired by the parents in September 2010 to file a wrongful death action.  The lawyer estimated that the litigation would cost no more than $100,000.00.  The parents agreed to pay the lawyer an hourly rate of $250.00 and paid her an initial retainer of $5,000.00.  The parents paid the lawyer an additional $15,000.00 and, within a month after the initial engagement, the parents paid an additional $19,000.00 in three separate checks: (1) $10,000.00 as a further retainer (2) $4,000.00 flat fee for the juvenile court proceeding, and (3) $5,000.00 to retain a forensics expert.

Less than three months later, the lawyer claimed that she had incurred hourly fees totaling over $140,000.00.  At that point, she had done “little more” than file the wrongful death complaint, file related pleadings in probate and juvenile court, and gather records.  When the lawyer insisted that the clients agree to pay her a contingency fees plus the hourly fees, they terminated her.

After the clients terminated the lawyer, she refused to return to them important evidence and documents related to the wrongful death litigation, including brain tissue slides from their daughter’s autopsy. The clients sued the lawyer to force her to return the withheld items and the lawyer threatened to file criminal charges against them. The clients then filed a complaint against the lawyer with the Tennessee Board of Professional Responsibility.

The Professional Responsibility Board investigated the lawyer, who argued that her conduct had been reasonable and ethical.  She provided the Board documentation of her hourly charges, which claimed that she had worked as many as 23 hours of billable time in a single day and included fees for tasks such as watching many hours of reality and fictional crime TV shows.

A hearing panel found that the lawyer had violated numerous the Bar by charging excessive fees, demanding that the clients agree to pay a contingency fee in addition to hourly fees, failing to communicate with the clients regarding the basis for the fees, improperly withholding items from the clients after they discharged her, and threatening to file criminal charges against the clients. The hearing panel found five aggravating factors: (1) a dishonest and selfish motive; (2) a pattern of misconduct; (3) multiple offenses; (4) refusal to acknowledge the wrongfulness of her conduct; and (5) indifference to making restitution and one mitigating factor: the absence of a prior disciplinary record and recommended a one year suspension.

The lawyer requested judicial review of the hearing panel’s recommendation, and the trial judge upheld the sanction. The lawyer then appealed to the Tennessee Supreme Court, claiming that there was no basis for finding ethical violations and that the one year suspension was too severe.  The opinion upheld the hearing panel’s findings that the lawyer violated multiple ethical rules and the one year suspension.  “At every turn in these proceedings, faced with findings at every level that her conduct breached numerous ethical rules, Attorney Sallee has been doggedly unrepentant. Indeed, her consistent response has bordered on righteous indignation.”

The opinion further stated:  “Assuming arguendo that the hourly rate of $250 per hour is reasonable for Attorney Sallee’s experience and ability, it is important under the Rules that the lawyer ensure that the work for which he or she seeks to charge the client is ‘reasonable.’ For example, a lawyer who represents criminal clients may be interested in watching Perry Mason or Breaking Bad on television, and may even pick up a useful tidbit or two from doing so. The lawyer may not, however, equate that to research for which he or she may charge a client. In this case, the Panel did not err in considering the many hours Attorney Sallee sought to charge the Claimants for watching television shows such as 48 Hours.

“Attorney Sallee also objected to the trial court’s comment that she ‘watched TV and charged her client for it.’ She characterized this statement as ‘ridiculous,’ adding, ‘since when is television not a respectable avenue for research anyway.’ Attorney Sallee pointed to a particular time entry on her ‘billing statement’ as legitimate billable time because it was spent watching a five-hour documentary on the Peterson ‘Stair Case Murder’ in North Carolina. Her motion did not address a 12.5-hour time entry on September 25, 2010, for watching ‘48 Hours’ episodes on similar spousal homicides, a 4.0-hour time entry on October 19, 2010 for watching four ‘48 Hours’ episodes on asphyxia, or a 3.5-hour time entry on October 20, 2010 for watching these same ‘48 Hours’ episodes a second time. At Attorney Sallee’s regular hourly rate, this would amount to over $5,000 for watching episodes of ‘48 Hours.’”

Bottom line: This is an egregious example of a lawyer seriously abusing billable time and charging an excessive fee, including charging as many as 23 billable hours in one day and charging multiple billable hours watching crime TV shows.  To compound her problems, the lawyer refused to turn over the clients’ evidence and information after they had terminated her and apparently completely failed to grasp that she had committed any misconduct.

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.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Illinois Disciplinary Board upholds lawyer’s 6 month suspension for, inter alia, keeping fees and “indefensibly outrageous” statements

Hello everyone and welcome to this Ethics Alert which will discuss the recent Illinois Disciplinary Review Board report which recommended a 6 month suspension (with no automatic reinstatement) of a lawyer who failed to perform legal services for which he was retained, failed to return unearned fees, failed to communicate with clients and failed to reduce fee agreements to writing, and making “indefensibly outrageous” statements about lawyers and a court deputy in litigation cases.  The case is In the Matter of: David Alan Novoselsky, Commission No. 2011PR00043, SC No. 2069881 (April 10, 2015).  The link to the Board recommendation is here: http://www.iardc.org/HB_RB_Disp_Html.asp?id=11701

The Review Board of the Illinois Attorney Registration and Disciplinary Commission upheld a Hearing Board’s findings that the lawyer failed to perform legal services for which he was retained, failed to return unearned fees, failed to communicate with clients, and failed to reduce fee agreements to writing.  According to the Board’s report, the lawyer also called a female lawyer derogatory names, including “b—-,’ ‘‘asshole,” “slut,” “c—,” “pervert,” “whore” and “child molester”.  He called another lawyer an “idiot” and a “cokehead,” and he also called a deputy a “dumbbell” after she asked him to lower his voice.

“(The lawyer) denied making some of the statements and could not remember if he had made other statements. However, he admitted making several of the statements.  He often claimed he was provoked by undocumented personal attacks against him or claimed that the parties were “ribbing” each other, although witnesses confirmed (a witness’s) testimony that she did not provoke, react, or respond to these statements.”  “His attacks on opposing counsel and a court deputy displayed an utter disregard for the integrity of the courts…(w)hile he may still believe that he was provoked, the record indicates otherwise.  We find his conduct to be indefensibly outrageous.”

“Because we find (the lawyer’s) actions to be egregious and because respondent lacks any remorse or understanding of his misconduct, we recommend to the court that he be suspended for six months and until further order of the court.”  The hearing board had recommended a six-month suspension with automatic reinstatement.  The review board also recommended that the lawyer be ordered to return $30,000 in restitution of unearned fees.

The Board noted in mitigation that the lawyer had practiced law for 40 years without being disciplined, he had performed pro bono work, and had been active in bar associations.  There was no mention of any other mitigation, such as substance abuse or other personal issues.

Bottom line:  This case involved an Illinois lawyer who apparently went off the deep end and made outrageous derogatory statements in highly contested litigation cases.  He also apparently kept unearned fees, failed to perform legal services, failed to obtain written fee agreements, and failed to communicate with clients.  The Illinois Supreme Court will review the recommendation and it will be interesting to see if the Court agrees or increases the recommended sanction.  Stay tuned…

Be careful out there (and of course don’t do this).

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.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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New York lawyer suspended for, inter alia, agreeing to assist a client in a malpractice claim against his own law firm

Hello everyone and welcome to this Ethics Alert blog which will discuss the recent New York disciplinary opinion which imposed a one (1) year suspension on a lawyer who, along with other misconduct, entered into an agreement with a client to assist in a malpractice action against his own law firm. The opinion is Matter of Novins, 2014 NY Slip Op 03465 (NY Appellate First Division 5/13/14) and the disciplinary opinion is here: http://www.nycourts.gov/reporter/3dseries/2014/2014_03465.htm

According to the opinion, the lawyer was hired by a New York law firm in 2006 and was assigned to work on a personal injury action filed in 1994 against the City of New York and an off duty New York City police officer on behalf of another off duty New York City police officer (the client), who had been shot and wounded in a bar by that off-duty police officer. Although the lawyer’s firm served the City with a summons and complaint, it never served the defendant police officer. In 2007, the City was granted summary judgment in the personal injury action on the ground that it had not negligently supervised the shooting police officer because it did not have notice of his dangerous propensities. The summary judgment was affirmed in 2008.

In January 2008, while the motion for leave to appeal was pending, the lawyer and the client met in a restaurant and signed a “Personal Services Agreement” under which the client agreed to “give” the lawyer 45% of any net recovery he received related to the shooting incident. This agreement included the personal injury action and a legal malpractice claim against the lawyer’s firm for “negligently failing to timely serve the defendant police officer, for neglecting to work on (the) case over the many years, for failing to take the deposition of the defendant police officer, for having failed to obtain a copy of the defendant police officer’s Personnel File in a timely manner and for failing to bring a Motion … for spoliation of this key evidence.” The agreement was drafted by the lawyer; however, it did not specifically state what services that the lawyer would provide. The lawyer acknowledged during the disciplinary proceedings that he agreed to serve as a witness for the client in the malpractice action against his employer.

During the disciplinary proceedings, the lawyer stated that the client brought up the subject of additional compensation and that the 45% fee was to compensate him for his extraordinary efforts in the personal injury action and for his willingness to assist the client in pursuing the malpractice claim, which would require him to leave his law firm (the putative legal malpractice defendant). The client denied this and stated that the lawyer produced the agreement at the meeting and asked him to sign it, telling him that he had notes and documents that would prove the legal malpractice claim. The lawyer provided the client with a list of legal malpractice attorneys and concealed the agreement from his law firm.

In May 2008 (while the lawyer was still employed with the law firm), a malpractice action was filed against the lawyer’s firm and principals and “(b)etween February and March 2009, (the lawyer) left a series of voice-mail messages for (the client) asking him to call him back. On April 28, 2009, (the lawyer) left (the client) a message in which he referred to risking his neck by putting certain notes back into the personal injury action file which (the client) would need for the malpractice action. In May 2009, respondent left a message stating that he would be leaving the (law) firm in 30 days and would be able to prove the malpractice and coverup.”

On May 28, 2009, the lawyer left a message with the client complaining that he had called him about 30 times but received only one call back. The lawyer falsely stated that he had left his law firm and said that he considered the agreement to be in full force and effect. He also threatened to throw away all the evidence in his possession unless the client called him back. Ten minutes later, the lawyer left another message stating he would take appropriate action to enforce the agreement as soon as he left his firm. The lawyer admitted during the disciplinary proceedings that the purpose of the calls was to compel the client to honor the agreement or at least renegotiate its terms so that he could have a financial recovery for the malpractice claim.

In April or May 2010, during the course of discovery, the lawyer’s law firm learned of the secret agreement with the client, but did not fire the lawyer. On or about August 17, 2010, the law firm learned of the messages that the lawyer left on the client’s voice mail and the lawyer was deposed in the malpractice action on August 20, 2010 and retracted his allegations of malpractice against the law firm.
The client filed a disciplinary complaint against the lawyer on August 26, 2010. The law firm fired the lawyer on August 31, 2010 and filed a disciplinary complaint against him on September 7, 2010. In 2012, the New York Disciplinary Committee brought six charges against the lawyer and a disciplinary panel conducted evidentiary proceedings.

The disciplinary panel found that the lawyer charged an excessive and unreasonable fee, engaged in conduct which reflected adversely on his fitness as a lawyer, acquiesced to the payment of compensation to himself as a witness which testimony was contingent on the outcome of a case, violated his duty of loyalty to both the client and his law firm by attempting to charge a client for information that both he and the firm were ethically obligated to provide and by concealing the agreement from his employer, and threatening to destroy evidence that was apparently essential to the client’s malpractice claim. The panel recommend that the lawyer be suspended from practice for one (1) year.

After considering mitigating and aggravating factors and relevant case law, the opinion granted the Disciplinary Committee’s Motion to approve the hearing panel’s recommendation that the lawyer be found guilty of all counts and suspended him from the practice of law for one (1) year.
Bottom line: This opinion tells a quite sordid tale of duplicity, false statements, disloyalty, attempted coercion, and greed as well as just plain dumb actions by a lawyer who was unbelievably disloyal to both his law firm and to a client. Sometimes you think you have seen it all…

Let’s be careful out there.

Disclaimer: this Ethics Alert blog is not an advertisement and does not contain any legal advice 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.
2454 McMullen Booth Road, Suite 431
Clearwater, Florida 33759
Office (727) 799-1688
Fax (727) 799-1670
jcorsmeier@jac-law.com
http://www.jac-law.com

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Filed under Attorney discipline, Attorney Ethics, Attorney misrepresentation, deceit, dishonesty, Excessive fee, joe corsmeier, Joseph Corsmeier, Lawyer conduct adversely affecting fitness to practice, Lawyer conduct prejudicial to the administration of justice, Lawyer conflict of interest, Lawyer discipline, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer improper fees, Lawyer misrepresentation, Lawyer sanctions

Florida Supreme Court rejects recommended 90 day suspension and imposes 1 year suspension for lawyer’s misconduct in immigration and malpractice matters

Hello everyone and welcome to this Ethics Alert blog which will discuss the recent opinion of the Supreme Court of Florida which rejected a referee’s recommended 90-day suspension as too lenient and imposed a one (1) year suspension for the lawyer’s serious misconduct in an immigration matter and in a subsequent malpractice suit.  The opinion is The Florida Bar v. Whitney, No. SC11-1135.  The opinion is at: http://www.floridasupremecourt.org/decisions/2013/sc11-1135.pdf 

According to the opinion, the referee found the following facts:  the client (Dr. Hill) hired the lawyer on January 19, 2004 to provide immigration and legal advice.  At the initial meeting, the lawyer was told that a Ms. de Oliveira (who was at the meeting) was a native of Brazil and was in the United States illegally for the third time and that she had received a letter from the United States Department of Justice banning her from the country for twenty years because of her two previous illegal entries. The lawyer was also told that the client intended to marry Ms. de Oliveira, but that they were not engaged and the client had only known her since November 2003 when she moved into his house.  Based upon the meeting, a fee agreement was prepared and executed with a flat fee of $15,000.00 and a $5,000.00 deposit for future costs.

The fee agreement provided that the lawyer would represent Ms. de Oliveira (not the client) “in regard to all matters pertaining to her immigration status” and that the lawyer’s obligations under the contract would terminate “upon decision of the Office of the Attorney General granting or denying permission for (Ms. de Oliveira) to reenter the United States.”  The client provided the lawyer with two checks, one dated January 26, 2004, in the amount of $10,000.00, and the other dated February 6, 2004, in the amount of $9,365.00 and also paid for an airline ticket for the lawyer to travel to Brazil.  The lawyer deposited both checks into his personal checking account and used the funds “to pay his personal bills because respondent was experiencing financial problems at the time.”

The lawyer traveled to Brazil twice in early 2004 to allegedly research the requirements for the client and Ms. de Oliveira to marry in Brazil; however, the referee found that this information was easily obtained without leaving the country. The lawyer claimed that one of the trips to Brazil was to obtain information on rental properties for Ms. de Oliveira and to verify her Brazilian documents.  Since the location that the lawyer found was in an area other than where Ms. de Oliveira lived in Brazil, the referee found that that the trip was for a purpose other than for the client’s case.  In September 2004, the lawyer took Ms. de Oliveira’s Brazilian passport, which she advised was a falsified document, and other original Brazilian documents. The referee found that the lawyer “took no further meaningful action with respect to Ms. de Oliveira’s immigration matter.”

The client contacted the lawyer in late 2004 or early 2005 after he had not received any communication since hiring him in January 2004.  The lawyer said that he had not initiated the process to have Ms. de Oliveira remain in the United States or to reenter legally so that they could be married in the United States, that Ms. de Oliveira needed to marry the client in Brazil, and that he would only proceed further after the client paid an additional fee of between $40,000.00 and $60,000.00.  The client then fired the lawyer and demanded a full refund of the fees and costs that he had paid and the return of Ms. de Oliveira’s documents.  The lawyer refused and stated that he had earned the fees and costs.  Ms. de Oliveira sent the lawyer a letter dated February 22, 2005 demanding the return of her original documents and the lawyer then complied with that request and Ms. de Oliveira returned to Brazil in or around April 2005.  The referee found that the lawyer failed to provide an accounting to the client upon his request and failed to timely return Ms. de Oliveira’s documents.

The client filed a civil lawsuit against the lawyer in July 2005 alleging breach of contract, legal malpractice, and unjust enrichment.  The lawyer failed to appear for his properly noticed December 21, 2005 deposition and never contacted opposing counsel or filed a notice of unavailability.  The lawyer also did not produce any documents in the request for production dated September 20, 2005, and which were ordered to be produced by December 19, 2005.  He did not produce any documents until January 4, 2006 and never produced all of the documents.

A hearing was held on the client’s second motion to compel on January 18, 2006 and the lawyer was admonished by the court and advised to fully cooperate with discovery.  At the lawyer’s deposition on January 27, 2006, the lawyer arrived with a client file containing documents that he had not previously produced pursuant to the request for production.  The lawyer produced the documents with redactions without making an objection or stating that a redaction had been made.  The lawyer also failed to produce credit card statements or receipts responding to the client’s first set of interrogatories that the circuit court had ordered him to produce. 

The referee found that “(the lawyer) engaged in a course of conduct (in the malpractice litigation) where he was uncooperative in coordinating the scheduling of hearings”, that he testified falsely and deceptively about advertising and the name of his law firm at his deposition.  He also testified falsely that the only pending litigation in which he was involved was a lawsuit against him by U.B. Vehicle Leasing, Inc. related to a dispute as to the mileage of a car even though a mortgage foreclosure action had been filed against him on November 1, 2004 and was pending at the time of the deposition.  The lawyer further falsely testified that the mortgage on his home had not been in foreclosure.  The referee found the lawyer’s failure to reveal the existence of the foreclosure action “particularly relevant to (the lawyer’s) lawsuit given (the lawyer’s) sworn deposition testimony on January 27, 2006, that he deposited the fees and costs the client paid him into his personal checking account and used the funds to pay, among other things, the mortgage on his home.

The trial court in the malpractice action entered an order granting a motion for sanctions and entry of default judgment on May 30, 2006, striking the lawyer’s defenses and awarding attorney’s fees and costs to the client.  The court also found that “(the lawyer) had ‘willfully failed and refused to comply with previous order (sic) of this Court, failed and refused to participate in pretrial discovery and provided falsified documents’ in the case.”  The trial court entered a final judgment against the lawyer on October 4, 2007, including a principal amount of  $20,000.00, which the lawyer paid to the client.  The lawyer appealed to the Fifth District Court of Appeal, which upheld the final judgment but remanded for a determination of the correct amount of attorney’s fees.  A Second Amended Final Judgment was entered on June 15, 2011 and, as of the date of the referee’s report, the lawyer had not paid any of the additional $24,246.00 in attorney’s fees, expert fees, and taxable costs awarded to the client.

The opinion concluded that the lawyer had “accepted a substantial fee from his client but did not perform notable work in furtherance of that representation. He also misused his client’s funds by twice traveling to Brazil, once for no apparent case-related reason and once as unnecessary to obtaining the information sought.  While the immigration issue may have been complicated, Respondent did not communicate that issue to Dr. Hill and Ms. de Oliveira.  Next, with respect to the malpractice action, Respondent failed to produce documents, did not appear for his first noticed deposition, and offered frivolous responses to the interrogatories.  Respondent has not paid the portion of the judgment awarding attorney’s fees and costs in the malpractice action, and continues to refer to his conduct as negligent.  Based upon the facts in this case and established case law, we find the referee’s recommended sanction of a ninety-day suspension unsupported and instead impose a one-year suspension.”

Bottom line:  This appears to be a somewhat blatant case of a lawyer taking advantage of a client, misusing client funds, and abusing the judicial system.  Based on the facts found by the referee as described in the opinion (and adopted by the court), it is surprising that the court did not impose a more severe sanction. 

Let’s be careful out there!                        

Disclaimer:  this Ethics Alert is not an advertisement and does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.

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

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 3375

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Filed under Attorney discipline, Attorney Ethics, Attorney misrepresentation, Communication with clients, dishonesty, Florida Bar, Florida Lawyer Ethics and Professionalism, fraud, joe corsmeier, Joseph Corsmeier, Lawyer discipline, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer false statements, Lawyer false testimony, Lawyer improper fees, Lawyer misrepresentation, Lawyer wilful failure to comply with court order, Lawyer wilful failure to comply with discovery