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Law Practice - Ethics Updates

Two recent cases have highlighted issues that should be a fundamental for every attorney practicing law. 

In Florida Bar v. Mirk, Case No. SC08-1423 (Fla. April 7, 2011), the Court disbarred an attorney for multiple trust account violations with the admonition:

Once again, we emphasize to the members of the Bar that an attorney is never permitted to withdraw or otherwise use client funds held in trust except as specifically authorized under the Bar Rules. To engage in such conduct, a lawyer risks full disciplinary sanctions under the Rules Regulating the Florida Bar, including disbarment. As we have stated, disbarment is presumed the appropriate discipline when an attorney misappropriates client money held in trust and [Lawyer] simply has not presented any arguments to rebut the presumption in this case.

Slip opinion at p. 11.

The case is also instructive on the need to have in place a written agreement setting forth the nature of the representation and the arrangements for compensation.  The primary dispute concerned the Lawyer’s compensation for work he did for the client.  There was no written agreement between the Lawyer and the client.  The Lawyer testified that he had an oral agreement that he would be paid a $40,000 flat fee for each company he established and $100,000 per year to act as corporate counsel.  The Client testified that there was no flat fee agreement and that the Lawyer agreed to be paid a portion of the future profits in the event that the venture was successful.  The referee believed the client.  Id. at p. 4.

The Court noted” “When a lawyer fails to place an agreement for representation in writing, he or she is always at risk of becoming involved in a fee dispute with a client.”  Id. at p. 10.

In Golden Gate Home, LC v. Levy et al, Case No. 3D10-1209 (Fla. 3d DCA April 13, 2011), the Court, in reversing a summary judgment entered which dismissed with prejudice portions of a legal malpractice complaint, held:  “Whether [lawyers] neglected a reasonable duty and proximately caused Golden Gate’s loss (and whether the actions of Golden Gate and successor counsel were an intervening, superseding cause) are, at this stage, questions of fact and not law.”  Slip opinion at pp. 12-13. 

The underlying facts indicated that in the course of the lawyers’ representation of Golden Gate, and subsequent to the matter being set for trial, the lawyers did not file a witness or exhibit list; nor did Golden Gate respond to interrogatories or a request for production. Despite a subsequent court order compelling Golden Gate to respond to the outstanding discovery requests, Golden Gate did not file any response to the outstanding discovery.  A month later the lawyers moved to withdraw from the case.  The motion to withdraw was granted and Golden Gate was given 15 days to obtain substitute counsel, who filed a “conditional” notice of appearance, stating that it would undertake the representation only if the court granted a continuance of the scheduled trial date. The trial court denied the motion for continuance. Eventually, the trial court dismissed the complaint for failure to obtain subsequent counsel, then reinstating it after obtaining counsel, and then reconsidering that order and dismissing the complaint with prejudice.

Golden Gate filed a legal malpractice action against the lawyers, alleging that the lawyer's "actions during the [litigation], together with their late withdrawal from the [litigation], left Golden Gate without counsel who could come into the case and properly prepare for a trial that was less than thirty days away. [The lawyers] moved to dismiss, contending that it was not their withdrawal from the case, but rather the independent, superseding actions of Golden Gate and its subsequent counsel that caused whatever losses Golden Gate claims to have suffered."  Id. at pp. 8-9.

The Court noted that “the fact the [lawyers] had withdrawn from the case does not necessarily absolve them of potential liability for subsequent events.”  Id. at p. 9. Citing to a Fourth District case, Dadic v. Schneider, 722 So. 2d 821 (Fla. 4th DCA 1999), the Court stated:

We recognize that the attorney-client relationship here ended before the ultimate conclusion of the underlying lawsuit.  However, while employment is an element, an attorney need not be in privity with the client throughout the entire course of the underlying action.  Where the attorney-client relationship ends before its conclusion, the question is whether the attorney proximately caused the client’s damages.

Id. at  p. 11.

Ethics Update

Potential Criminal Law Implications of Filing a False Memorandum of Voting Conflict

Section 112.3143(3), Florida Statutes, prohibits a local public officer from voting in certain situations, including when the matter he or she is voting upon inures to his or her special private gain or loss, to the special private gain or loss of a principal by whom he or she is retained, or to the special private gain or loss of a relative or a business associate.  Specifically, the statute provides as follows:

No county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(2); or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of the officer's interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes.

A public official who violates Section 112.3143(3), Florida Statutes, is subject to the penalties set forth in Section 112.317, Florida Statutes, which includes imposition of a civil penalty not to exceed $10,000.   There are no criminal penalties attached to a violation of the voting conflicts statute.

However, that is not the end of the story. 

In the 2009, the Fourth District Court of Appeal affirmed the conviction of a city commissioner for two counts of official misconduct in violation of Section 838.022(1)(a), Florida Statutes, for filing falsified voting conflict forms.  Wasserstrom v. State, 21 So. 3d 55 (Fla. 4th DCA 2009).   Section 838.022(1)(a), Florida Statutes, provides that “[i]t is unlawful for a public servant, with corrupt intent to obtain a benefit for any person or to cause harm to another, to … [f]alsify, or cause another person to falsify, any official record or official document….”

With respect to this statutory provision, the Court held that, in order to establish a prima facie case, the state must establish that a defendant: (1) was a public servant; (2) acted with corrupt intent, as that term is defined in the statute; (3) acted to obtain a benefit, as that term is defined; and (4) falsified an official record or document. The Court concluded that the underlying facts supported the jury’s determination that the public officer would have benefitted from the measure under consideration and that he acted with corrupt intent when he falsely stated that his law firm would have not benefitted from the measure.

More recently, a public official in Broward County was charged with four violations of Section 839.13(1), Florida Statues, for falsifying or avoiding a record in that she failed to list her brother’s interest in a vote, from which she abstained, on her voting conflict form.  Section 839.13(1), Florida Statutes, provides as follows:

Except as provided in subsection (2), if any judge, justice, mayor, alderman, clerk, sheriff, coroner, or other public officer, or employee or agent of or contractor with a public agency, or any person whatsoever, shall steal, embezzle, alter, corruptly withdraw, falsify or avoid any record, process, charter, gift, grant, conveyance, or contract, or any paper filed in any judicial proceeding in any court of this state, or shall knowingly and willfully take off, discharge or conceal any issue, forfeited recognizance, or other forfeiture, or other paper above mentioned, or shall forge, deface, or falsify any document or instrument recorded, or filed in any court, or any registry, acknowledgment, or certificate, or shall fraudulently alter, deface, or falsify any minutes, documents, books, or any proceedings whatever of or belonging to any public office within this state; or if any person shall cause or procure any of the offenses aforesaid to be committed, or be in anywise concerned therein, the person so offending shall be guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.

In addition, the public official was charged with a violation of Section 839.13(1), Florida Statues, for falsifying the proceedings of the city commission “by uttering false statements before the Commission regarding her familial interest” and her knowledge of the financial relationship between her brother and the agency that was the subject of votes of the city commission. 

Accordingly, it is incumbent upon public officers to accurately and truthfully complete voting conflict forms required pursuant to Section 112.3143, Florida Statutes, lest they find themselves charged with serious criminal violations.

Prepared by:     Mark Herron

                                mherron@lawlfa.com

Ethics Update

The Fifth District Court of Appeal reversed an order issued by the Florida Commission on Ethics that concluded that a state senator violated Section 112.313(6), Florida Statutes, by asserting his position as a state senator to bully a deputy sheriff into permitting him access to a stadium parking lot through a barricaded roadway.  A copy of the opinion, styled Siplin v. Comm’n on Ethics, Case No. 5D09-3638 (Fla. 5th DCA Feb. 25, 2011) can be found here.

 The Fifth District held that substantial competent evidence did not support the administrative law judge’s factual findings, which were adopted by the Florida Commission on Ethics, that concluded that the state senator acted “corruptly,” which is an element of the misuse statute, Section 112.313(6).  “Corruptly” is statutorily defined as being “done with a wrongful intent and for the purpose of obtaining, or compensating or receiving compensation for, any benefit resulting from some act or omission of a public servant which is inconsistent with the proper performance of his or her public duties.”  Fla. Stat. § 112.312(9).  The Fifth District held:

 No allegation has been made that Siplin used his position in an attempt to avoid receiving or paying the traffic citation. Instead, the ethics violation is based on his allegedly using his position to bully [the deputy sheriff] into letting him access the parking lot through a barricaded route.  The Commission points to no law or ethics code that prohibited Siplin from asking to go through the barrier.  In fact, Siplin was ultimately allowed to go through the barricade not because he was “corruptly” using his official position as a state senator but because he was creating a scene by refusing to move his vehicle as instructed by law enforcement.

 

Prepared by:     Robert Telfer III

                        rtelfer@lawfla.com

Ethics Law Update

Section 112.326, Florida Statutes, authorizes the governing body of any political subdivision to impose upon its own officers and employees, by ordinance, additional or more stringent standards of conduct and disclosure requirements than those specified in the Code of Ethics for Public Officers and Employees, Part III of Chapter 112, Florida Statutes, provided that those standards of conduct and disclosure requirements do not otherwise conflict with the provisions of the Code of Ethics.   

Persons violating county ordinances are prosecuted and punished as provided by law. Section 125.69(1), Florida Statutes, provides that violations of county ordinances are prosecuted in the same manner as misdemeanors in the name of the state in a court having jurisdiction of misdemeanors and are punishable by a fine not to exceed $500 and/or by imprisonment in the county jail not to exceed 60 days.

Three bills enacted by Legislature in 2010 impact the enforcement of local government ethics codes that establish more stringent standards of conduct and disclosure requirements than those specified in the Code of Ethics for Public Officers and Employees. 

·    HB 1301 (2010 Session) makes violation of any provision of an ordinance imposing standards of conduct and disclosure requirements pursuant to Section 112.326, Florida Statutes, is punishable by a fine not to exceed $1,000 or a term of imprisonment in the county jail not to exceed one year.  Current law limits penalties to payment of fine to exceed $500 and/or by imprisonment in the county jail not to exceed 60 days.

·    CS/SB 551 (2010 Session) makes confidential the complaint and any record relating thereto held by a county or municipal investigatory process established to enforce more stringent standards of conduct and disclosure requirements pursuant to Section 112.326, Florida Statutes. 

·    HB 7085 (2010 Session) reenacts, pursuant to the Open Government Sunset Review Act, the public record exemption for a complaint or any records relating thereto or to any preliminary investigation by the Commission on Ethics or a Commission on Ethics and Public Trust established by a county or a municipality and the public meeting exemption for any proceedings regarding a complaint or preliminary investigation by such agencies.

These bills have not yet been presented to the Governor for his approval.

Prepared by: Mark Herron

  mherron@lawfla.com

Ethics Law Update

There are several points at which Florida’s Code of Ethics and Florida’s elections laws overlap.  In a series of complaint proceedings made public on October 28, 2009, the Commission on Ethics addressed alleged violations involving the conduct of public officers and employees in using their public position or the property and resources within their trust to engage in political activity.  The alleged violations investigated by the Commission on Ethics involve Section 112.313(6), Florida Statutes, which prohibits misuse of public position.

 

The Commission found probable cause to believe that an employee of the Brevard County property appraiser’s office misused his position by holding a meeting in a county office building, during regular work hours, with subordinate employees asking them to help with a fundraising event for the local political party executive committee.  Complaint No.  07-72. (See also Section 104.41, Florida Statutes, Florida’s “little Hatch Act” and Section 106.15(4), Florida Statutes, which prohibits soliciting a political contribution in a building owned by a governmental entity.)

 

The Commission also found probable cause to believe that an employee of the Brevard County property appraiser’s office misused his position by soliciting one or more campaign contributions from his office during working hours.  Complaint No. 08-148. (See also: Section 106.15(4), Florida Statutes, which prohibits soliciting a political contribution in a building owned by a governmental entity.)

 

Finally, the Commission found probable cause to believe that an employee of the Brevard County property appraiser’s office misused his position by typing campaign-related letters during office hours.  Complaint No. 08-149.  (Section 106.15(3), Florida Statutes, which prohibits a candidate from using the services of any state, county, municipal officer or employee in furtherance of his or her candidacy during working hours.)

 

Prepared by: Mark Herron

Ethics Update

Without comment, the First District Court of Appeal affirmed an advisory opinion issued by the Commission on Ethics in which it concluded that a city attorney who serves in that capacity because his firm is retained as an independent contractor is required to file annual financial disclosure. Williams v. State of Florida, Commission on Ethics, Case No. 1D09-43 (Fla. 1st DCA October 21, 2009), which can be found here.

 

The advisory opinion – CEO 08-27 – noting that Section 112.3145(1)(a)3., Florida Statutes, specifies that any person holding the position of “municipal attorney” is required to file an annual statement of financial interests, concluded “[t]hat Section does not differentiate between an enumerated city attorney who is a city officer, a city attorney who is a city employee, an attorney retained by contract directly with the attorney in his or her individual capacity, or an attorney whose firm was hired via contract when that attorney does the majority City’s work for the firm.” 

 

Prepared by: Mark Herron

Ethics Law Update

Ethics and Criminal Law: Official Misconduct

            In a case that may have a significant impact on the pending criminal trial State Representative Ray Sansom, the Fourth District Court of Appeal held that in establishing that a public servant falsified an official record in a prosecution for official misconduct pursuant to Section 838.022, Florida Statutes, the state is required to prove only that the public servant “misrepresented the underlying facts on the form.”  Wasserstrom v. State, Case No. 4D08-720 ( Fla. 4^th DCA September 30, 2009), which can be found here. In motions to dismiss, Representative Sansom and the other defendants argued that misrepresentation was not sufficient to prove that an official record was falsified for the purposes of the official misconduct statute.

            In Wasserstrom the issue presented was whether a member of the Hollywood City Commission misrepresented the potential benefit that would inure to him on the required memorandum describing a voting conflict (Commission on Ethics Form 8B) from a measure being voted on the City Commission on which he abstained from voting.  The District Court held that the evidence admitted at trial was sufficient for a jury to conclude he did.

Prepared by:

Mark Herron

Ethics Update

Florida

Legislature Extends Scope of Code of Ethics

 

The Florida Legislature has enacted legislation (SB 252) that extends the standards of conduct (Section 112.313), financial disclosure (Section 112.3145), gift (Section 112.3148), and honoraria (Section 112.3149) provisions of the Code of Ethics for Public Officers and Employees to directors, officers and employees of private entities that perform the functions of chief administrative officer and employee of a political subdivision.

 

The legislation extends the Code of Ethics to individuals whose relationship with a governmental entity as an “independent contractor” in the limited instance when serving as the chief administrative officer and employee of a political subdivision.

 

The legislation, if approved by the Governor, will take effect July 1, 2009.