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Fla. L. Weekly D1989aTop of Form
Fla. L. Weekly D1989aTop of Form
Attorneys
— Disqualification — Trial court properly denied motion to recuse attorney
representing former clients who are suing law firm on ground that attorney had
previously represented law firm where prior representation was on unrelated
matters
— Disqualification — Trial court properly denied motion to recuse attorney
representing former clients who are suing law firm on ground that attorney had
previously represented law firm where prior representation was on unrelated
matters
JEREMY ALTERS, et al., Petitioners,
v. ALFREDO VILLOLDO, et al., Respondents. 3rd District. Case No. 3D17-715. L.T.
Case No. 16-8682. September 6, 2017. On Petition for Writ of Certiorari from
the Circuit Court for Miami-Dade County, Norma S. Lindsey, Judge. Counsel:
Young, Berman, Karpf & Gonzalez, P.A., and Andrew S. Berman, for petitioners.
Hall, Lamb, Hall & Leto, and Andrew C. Hall, Matthew P. Leto, and Vanessa
Palacio, for respondents.
v. ALFREDO VILLOLDO, et al., Respondents. 3rd District. Case No. 3D17-715. L.T.
Case No. 16-8682. September 6, 2017. On Petition for Writ of Certiorari from
the Circuit Court for Miami-Dade County, Norma S. Lindsey, Judge. Counsel:
Young, Berman, Karpf & Gonzalez, P.A., and Andrew S. Berman, for petitioners.
Hall, Lamb, Hall & Leto, and Andrew C. Hall, Matthew P. Leto, and Vanessa
Palacio, for respondents.
(Before SUAREZ, LOGUE, and SCALES,
JJ.)
JJ.)
(LOGUE, J.) In the case below,
Jeremy Alters and his law firm are being sued by former clients. Alters moved to
recuse the former clients’ lawyers, Andrew Hall and his firm, because Hall had
previously represented both Alters and Alters’s former clients in unrelated
matters. The trial court denied Alters’s motion to recuse. Alters now petitions
for a writ of certiorari to quash the order denying recusal. We deny the
petition.
Jeremy Alters and his law firm are being sued by former clients. Alters moved to
recuse the former clients’ lawyers, Andrew Hall and his firm, because Hall had
previously represented both Alters and Alters’s former clients in unrelated
matters. The trial court denied Alters’s motion to recuse. Alters now petitions
for a writ of certiorari to quash the order denying recusal. We deny the
petition.
Facts
In 2008, Jeremy Alters was retained
to represent two brothers, Gustavo and Alfredo Villoldo, in a lawsuit against
Fidel Castro, the Republic of Cuba, and others for acts of terrorism. Alters
obtained a judgment in state court for over $1.1 billion. The judgment,
however, contained defects that made it uncollectable under the Foreign
Sovereign Immunities Act, 28 U.S.C. § 1605. Upon learning of this problem, the
Villoldos terminated Alters and retained Hall to correct the judgment. After
the Villoldos hired Hall to correct Alters’s work, Alters also hired Hall to
represent him in a case in which two Argentine nationals were suing Alters for
a share of the fees in a $410 million class action against Bank of America.
to represent two brothers, Gustavo and Alfredo Villoldo, in a lawsuit against
Fidel Castro, the Republic of Cuba, and others for acts of terrorism. Alters
obtained a judgment in state court for over $1.1 billion. The judgment,
however, contained defects that made it uncollectable under the Foreign
Sovereign Immunities Act, 28 U.S.C. § 1605. Upon learning of this problem, the
Villoldos terminated Alters and retained Hall to correct the judgment. After
the Villoldos hired Hall to correct Alters’s work, Alters also hired Hall to
represent him in a case in which two Argentine nationals were suing Alters for
a share of the fees in a $410 million class action against Bank of America.
In mid-August of 2011, as he was
about to obtain the corrected judgment in the Cuba case, and while still
representing both parties in unrelated matters, Hall reminded a lawyer in
Alters’s law firm that no charging lien had yet been filed in the Cuba case.
Alters testified, and the trial judge found, that Hall was not representing
Alters’s law firm during that call. The Alters firm duly filed a charging lien
later that month. On the same day, Hall obtained the corrected final judgment
in the Cuba matter.
about to obtain the corrected judgment in the Cuba case, and while still
representing both parties in unrelated matters, Hall reminded a lawyer in
Alters’s law firm that no charging lien had yet been filed in the Cuba case.
Alters testified, and the trial judge found, that Hall was not representing
Alters’s law firm during that call. The Alters firm duly filed a charging lien
later that month. On the same day, Hall obtained the corrected final judgment
in the Cuba matter.
On June 20, 2013, in his capacity as
the Villoldos’s attorney, Hall sent Alters a letter disputing Alters’s charging
lien. “My client has instructed,” Hall wrote, “that if you do not respond by
the close of business tomorrow or should you insist on the Charging lien being
enforced, the Villoldo Defendants will be compelled to vigorously resist that
Charging Lien.” At the time, it appears Hall was still representing Alters in
the Bank of America class action dispute. On November 25, 2013, Hall wrote
Alters saying he could no longer represent him in the Bank of America matter
because Alters was holding itself out as co-counsel with Hall on the case
involving the correction of the Cuba judgment despite having been previously
terminated by the Villoldos.
the Villoldos’s attorney, Hall sent Alters a letter disputing Alters’s charging
lien. “My client has instructed,” Hall wrote, “that if you do not respond by
the close of business tomorrow or should you insist on the Charging lien being
enforced, the Villoldo Defendants will be compelled to vigorously resist that
Charging Lien.” At the time, it appears Hall was still representing Alters in
the Bank of America class action dispute. On November 25, 2013, Hall wrote
Alters saying he could no longer represent him in the Bank of America matter
because Alters was holding itself out as co-counsel with Hall on the case
involving the correction of the Cuba judgment despite having been previously
terminated by the Villoldos.
On December 20, 2013, Alters entered
into a settlement agreement with the Villoldos over the charging lien. The
agreement provided that he be paid $175,000 immediately, and later, a
percentage of the total amount collected once the relationship between the
United States and Cuba normalized, Cuba was taken off the list of terrorist
nations, and the State Department directed a payment be made. The agreement
contained language indicating that certain conditions be completed “through the
efforts of Jeremy Alters” or his law firm. Hall did not represent either party
in the dispute or the settlement.
into a settlement agreement with the Villoldos over the charging lien. The
agreement provided that he be paid $175,000 immediately, and later, a
percentage of the total amount collected once the relationship between the
United States and Cuba normalized, Cuba was taken off the list of terrorist
nations, and the State Department directed a payment be made. The agreement
contained language indicating that certain conditions be completed “through the
efforts of Jeremy Alters” or his law firm. Hall did not represent either party
in the dispute or the settlement.
On March 6, 2016, the Villoldos
filed the complaint in the instant case against Alters seeking a declaratory
judgment that Alters had no right to further compensation under the settlement
agreement. Hall represented the Villoldos in that action. Alters and his firm
responded by moving to recuse Hall. The trial court held an extensive
evidentiary hearing, made detailed findings of fact, and denied the motion.
Alters and his firm timely filed a petition for writ of certiorari.
filed the complaint in the instant case against Alters seeking a declaratory
judgment that Alters had no right to further compensation under the settlement
agreement. Hall represented the Villoldos in that action. Alters and his firm
responded by moving to recuse Hall. The trial court held an extensive
evidentiary hearing, made detailed findings of fact, and denied the motion.
Alters and his firm timely filed a petition for writ of certiorari.
Analysis
“[D]isqualification of a party’s
lawyer in a civil case [is] a drastic remedy, one that must be employed only in
limited circumstances.” Gutierrez v. Rubio, 126 So. 3d 320, 321 (Fla. 3d
DCA 2013). “Motions for disqualification are generally viewed with skepticism
because disqualification of counsel impinges on a party’s right to employ a
lawyer of choice, and such motions are often interposed for tactical purposes.”
Alexander v. Tandem Staffing Sols., Inc., 881 So. 2d 607, 608-09 (Fla.
4th DCA 2004). “The standard of review for orders entered on motions to
disqualify counsel is that of an abuse of discretion.” Applied Dig. Sols.,
Inc. v. Vasa, 941 So. 2d 404, 408 (Fla. 4th DCA 2006).
lawyer in a civil case [is] a drastic remedy, one that must be employed only in
limited circumstances.” Gutierrez v. Rubio, 126 So. 3d 320, 321 (Fla. 3d
DCA 2013). “Motions for disqualification are generally viewed with skepticism
because disqualification of counsel impinges on a party’s right to employ a
lawyer of choice, and such motions are often interposed for tactical purposes.”
Alexander v. Tandem Staffing Sols., Inc., 881 So. 2d 607, 608-09 (Fla.
4th DCA 2004). “The standard of review for orders entered on motions to
disqualify counsel is that of an abuse of discretion.” Applied Dig. Sols.,
Inc. v. Vasa, 941 So. 2d 404, 408 (Fla. 4th DCA 2006).
The Florida Supreme Court has
observed, “the Florida Rules of Professional Conduct provide the standard for
determining whether counsel should be disqualified in a given case.” Young
v. Achenbauch, 136 So. 3d 575, 580 (Fla. 2014). Alters was not Hall’s
current client when Hall filed the complaint against Alters. He was Hall’s former
client. The current lawsuit was filed approximately two-and a-half years after
Hall stopped representing Alters in the Bank of America class action fee
dispute. For this reason, the trial court properly determined that Hall’s
responsibility to recuse himself in litigation against Alters is governed by
Rule 4-1.9 of the Rules Regulating the Florida Bar, which deals with a lawyer’s
responsibility to former clients.
observed, “the Florida Rules of Professional Conduct provide the standard for
determining whether counsel should be disqualified in a given case.” Young
v. Achenbauch, 136 So. 3d 575, 580 (Fla. 2014). Alters was not Hall’s
current client when Hall filed the complaint against Alters. He was Hall’s former
client. The current lawsuit was filed approximately two-and a-half years after
Hall stopped representing Alters in the Bank of America class action fee
dispute. For this reason, the trial court properly determined that Hall’s
responsibility to recuse himself in litigation against Alters is governed by
Rule 4-1.9 of the Rules Regulating the Florida Bar, which deals with a lawyer’s
responsibility to former clients.
In pertinent part, Rule 4-1.9(a)
provides that a lawyer who has formerly represented a client in a matter must
not afterwards “represent another person in the same or a substantially related
matter in which that person’s interests are materially adverse to the interests
of the former client unless the former client gives informed consent.” R. Regulating
Fla. Bar 4-1.9(a). The application of this provision to the current dispute
turns on the phrase “substantially related matter.” The Florida Supreme Court
has explained the meaning of “substantially related” in this context as
follows:
provides that a lawyer who has formerly represented a client in a matter must
not afterwards “represent another person in the same or a substantially related
matter in which that person’s interests are materially adverse to the interests
of the former client unless the former client gives informed consent.” R. Regulating
Fla. Bar 4-1.9(a). The application of this provision to the current dispute
turns on the phrase “substantially related matter.” The Florida Supreme Court
has explained the meaning of “substantially related” in this context as
follows:
Matters are “substantially related” for purposes of this
rule if they involve the same transaction or legal dispute, or if the current
matter would involve the lawyer attacking work that the lawyer performed for
the former client. For example, a lawyer who has previously represented a
client in securing environmental permits to build a shopping center would be
precluded from representing neighbors seeking to oppose rezoning of the
property on the basis of environmental considerations; however, the lawyer
would not be precluded, on the grounds of substantial relationship, from
defending a tenant of the completed shopping center in resisting eviction for
nonpayment of rent.
rule if they involve the same transaction or legal dispute, or if the current
matter would involve the lawyer attacking work that the lawyer performed for
the former client. For example, a lawyer who has previously represented a
client in securing environmental permits to build a shopping center would be
precluded from representing neighbors seeking to oppose rezoning of the
property on the basis of environmental considerations; however, the lawyer
would not be precluded, on the grounds of substantial relationship, from
defending a tenant of the completed shopping center in resisting eviction for
nonpayment of rent.
In re Amendments to the Rules
Regulating Fla. Bar, 933 So. 2d 417, 445 (Fla. 2006).
Regulating Fla. Bar, 933 So. 2d 417, 445 (Fla. 2006).
Hall’s current representation of the
Villoldos against Alters involves a dispute over the December 20, 2013 Cuba
settlement agreement between Alters and the Villoldos. Hall’s prior
representation of Alters involved a dispute over fees in a class action against
Bank of America. As Alters candidly admitted at trial and in his petition,
there is no overlap between the two representations. They do not involve the
same underlying dispute or transaction. In the current case, Hall will not be
required to attack work that he performed for Alters. The two disputes are not
substantially related. Indeed, they have absolutely nothing to do with each
other. For this reason, Rule 4-1.9 does not preclude Hall from representing the
Villoldos in the current matter.
Villoldos against Alters involves a dispute over the December 20, 2013 Cuba
settlement agreement between Alters and the Villoldos. Hall’s prior
representation of Alters involved a dispute over fees in a class action against
Bank of America. As Alters candidly admitted at trial and in his petition,
there is no overlap between the two representations. They do not involve the
same underlying dispute or transaction. In the current case, Hall will not be
required to attack work that he performed for Alters. The two disputes are not
substantially related. Indeed, they have absolutely nothing to do with each
other. For this reason, Rule 4-1.9 does not preclude Hall from representing the
Villoldos in the current matter.
Alters, however, responds by citing
to our case, Brent v. Smathers, 529 So. 2d 1267, 1269 (Fla. 3d DCA
1988), as expanding the restrictions of Rule 4-1.9 to include a prohibition on
bringing suit against a former client when to do so would violate the principle
of client loyalty and create an appearance of impropriety. We do not read that
case so broadly.
to our case, Brent v. Smathers, 529 So. 2d 1267, 1269 (Fla. 3d DCA
1988), as expanding the restrictions of Rule 4-1.9 to include a prohibition on
bringing suit against a former client when to do so would violate the principle
of client loyalty and create an appearance of impropriety. We do not read that
case so broadly.
Brent involved a petition for certiorari to recuse the law firm
of Smathers and Thompson from representing George Smathers. Smathers and Maxine
Brent had served as co-personal representatives of an estate and co-trustees of
a related trust. The law firm represented both parties in that capacity. Brent
then sued Smathers for breach of fiduciary duty. The law firm defended
Smathers, and as a result, Brent moved to recuse the law firm. The trial court
denied the motion, and Brent appealed.
of Smathers and Thompson from representing George Smathers. Smathers and Maxine
Brent had served as co-personal representatives of an estate and co-trustees of
a related trust. The law firm represented both parties in that capacity. Brent
then sued Smathers for breach of fiduciary duty. The law firm defended
Smathers, and as a result, Brent moved to recuse the law firm. The trial court
denied the motion, and Brent appealed.
This Court found that the law firm’s
defense of Smathers to Brent’s claim of breach of fiduciary duty was
substantially related to the firm’s representation of Smathers and Brent as
co-representatives and co-trustees: “It is undisputed that Smathers and
Thompson represented Brent in the administration of the estate and that they
now represent co-administrator Smathers and the beneficiaries of that same
trust and estate for which the firm represented Brent.” Id. at 1268.
Accordingly, this Court held that Rule 4-1.9 required the law firm to recuse. Id.
defense of Smathers to Brent’s claim of breach of fiduciary duty was
substantially related to the firm’s representation of Smathers and Brent as
co-representatives and co-trustees: “It is undisputed that Smathers and
Thompson represented Brent in the administration of the estate and that they
now represent co-administrator Smathers and the beneficiaries of that same
trust and estate for which the firm represented Brent.” Id. at 1268.
Accordingly, this Court held that Rule 4-1.9 required the law firm to recuse. Id.
The law firm in Brent,
however, countered that the Rules Regulating the Florida Bar did not apply to
that particular case as the Rules only apply when a client’s expectation of
confidentiality is at stake. Id. at 1269. The law firm contended that
there was no confidentially between Smathers and Brent as co-trustees. Id.
however, countered that the Rules Regulating the Florida Bar did not apply to
that particular case as the Rules only apply when a client’s expectation of
confidentiality is at stake. Id. at 1269. The law firm contended that
there was no confidentially between Smathers and Brent as co-trustees. Id.
In response to this argument, this
Court noted that the rules protected not only a client’s right to
confidentiality, but also a client’s right to loyalty: “Although lawyer-client
confidentiality is an important factor in determining the appropriateness of
representation, nowhere do the rules reflect that it is the sole determining
factor. The fact that the plaintiff may have no expectation of confidentiality
as between co-trustees is not dispositive of the issue.” Id.
Court noted that the rules protected not only a client’s right to
confidentiality, but also a client’s right to loyalty: “Although lawyer-client
confidentiality is an important factor in determining the appropriateness of
representation, nowhere do the rules reflect that it is the sole determining
factor. The fact that the plaintiff may have no expectation of confidentiality
as between co-trustees is not dispositive of the issue.” Id.
Contrary to Alters’s contention,
this court’s ruling in Brent did not modify Rule 4-1.9 by adding a new
substantive prohibition which requires a lawyer to recuse in a lawsuit against
a former client if the representation can be deemed “disloyal” or creates an
“appearance of impropriety.” Any such substantive change would have to be made
by the Florida Supreme Court. The Brent decision merely explained why
the Rules applied even if a client’s reasonable expectation of confidentiality
was not at stake.
this court’s ruling in Brent did not modify Rule 4-1.9 by adding a new
substantive prohibition which requires a lawyer to recuse in a lawsuit against
a former client if the representation can be deemed “disloyal” or creates an
“appearance of impropriety.” Any such substantive change would have to be made
by the Florida Supreme Court. The Brent decision merely explained why
the Rules applied even if a client’s reasonable expectation of confidentiality
was not at stake.
For the reasons discussed above, we
hold there was no departure from the essential requirements of law when the
trial court exercised its discretion to deny Alters’s motion to recuse.
hold there was no departure from the essential requirements of law when the
trial court exercised its discretion to deny Alters’s motion to recuse.
Petition denied