Case Title: The Florida Bar v. Ragano

Citation: 403 So. 2d 401

Docket Number: 59246, 59457

State: florida

Court: Florida Supreme Court

Date: 1981-07-23T00:00:00Z

Document:
403 So. 2d 401 (1981)
THE FLORIDA BAR, Complainant,
v.
Frank RAGANO, Respondent.
THE FLORIDA BAR.
In re PETITION of Frank RAGANO for Reinstatement.
Nos. 59246, 59457.

Supreme Court of Florida.
July 23, 1981.
Rehearing Denied October 1, 1981.
Scott K. Tozian, Tampa, and John A. Boggs, Bar Counsels, Tallahassee, for complainant.
Michael Kinney of Marlow, Shofi, Ortmayer, Smith, Connell & Valerius, Tampa, *402 Joseph C. Jacobs of Ervin, Varn, Jacobs, Odom & Kitchen, Tallahassee, and John R. Parkhill, Tampa, for respondent.
PER CURIAM.
These consolidated cases are before the Court by virtue of our jurisdiction to regulate the discipline of persons admitted to the practice of law. Art. V, § 15, Fla. Const. Case no. 59,246 is a disciplinary proceeding against Frank Ragano, a suspended member of The Florida Bar, and is before the Court on the complaint of The Florida Bar, the report of a referee, and the petitions of both parties for review. Case no. 59,457 is a proceeding initiated by Frank Ragano's petition for reinstatement, and is before us upon the report of a referee and The Florida Bar's petition for review thereof.
In case no. 59,246, the disciplinary complaint brought by The Florida Bar, the referee found that in August, 1970, Mrs. Jean Back employed respondent to pursue an appeal of a judgment in dissolution of marriage proceedings. Respondent prepared a written fee agreement pursuant to which he received $5000.00 for representing Mrs. Back on the appeal. The referee found, "The agreement was signed on or about August 10, 1970, at which time the fee agreement contemplated that Mr. Ragano would receive a minimum fee of $5000.00; however, he was going to seek the payment of his fee from Allan L. Back and would reimburse Mrs. Back for any moneys he received up to the $5000.00 from her husband." That is, the respondent represented that Mrs. Back would receive the first $5000.00 in fees collected from her former husband.
Shortly after undertaking representation of Mrs. Back, respondent learned that the judgment of dissolution provided for sale of the marital home and that she was to receive $30,000.00 of the proceeds of the sale. On advice of respondent, Mrs. Back placed this money in trust with him so that it could be held in escrow, thereby avoiding any implied acceptance of or acquiescence in the financial terms of the judgment. The referee reports that this amount was received by respondent on August 21, 1970.
The referee found that on March 20, 1971, Mrs. Back wrote to respondent asking, "Since the case has become more involved, will there be an additional fee charged other than the retainer fee?" Respondent wrote back on March 24, 1971, "I will look to you for no additional fee. If there are any additional fees to be paid, they will be paid by your husband."
The appeal resulted in a remand for further proceedings at the trial court level. Back v. Back, 258 So. 2d 20 (Fla.2d DCA 1972). The decision was rendered on February 16, 1972. The respondent testified that some time after the remand, he and Mrs. Back orally agreed that he would receive further fee payments from her, and that he would take the payments from the $30,000.00 he was holding in trust. Mrs. Back denied any such further fee agreement.
In the proceedings held after the remand, respondent presented expert psychiatric evidence that Mrs. Back was in a seriously unstable emotional condition during the earlier proceedings. The purpose of introducing this evidence was to show that she could not have freely and voluntarily entered into a property and support settlement agreement with her former husband, and thereby to have the judgment based on the agreement set aside. The reports that were presented clearly showed that Mrs. Back's emotional problems were of a continuing nature.
The referee found that respondent kept the $30,000.00 in an account named "F. Ragano, Special Account." Beginning in August, 1972, and over a period of about three years thereafter, he made a series of disbursements to Mrs. Back, totaling nearly eight thousand dollars. Respondent also spent $965.00 on the expenses of the litigation. The record contains respondent's itemized list of these expenditures, including the date of each disbursement.
The referee found that "Mrs. Back has made repeated demands on Mr. Ragano for the return of the balance of her $30,000.00, *403 which Mr. Ragano has refused to return... ." The record shows that the first of these demands was made through another attorney in March of 1974. Mr. Ragano's response to these demands was to maintain, as he did before the referee and now maintains before this Court, that the fee agreement was orally modified.
The referee's report contains no specific finding on the factual question of whether there was an oral modification of the fee agreement. His findings on the issue are as follows:
The referee found that respondent violated the Integration Rule, article XI, rules 11.02(4)(a) and 11.02(4)(b). The referee also found that respondent violated the Code of Professional Responsibility, Disciplinary Rules 9-102(A)(2), 9-102(B)(3), and 9-102(B)(4).
Integration Rule, article XI, rule 11.02(4)(a) requires that trust funds be kept in a separate account "clearly labeled and designated as a trust account."
Integration Rule, article XI, rule 11.02(4)(b) pertains to trust account record keeping and requires that attorneys keep "records clearly and expressly reflecting the date, amount, source, and reason for all receipts, withdrawals, deliveries, and disbursements of the funds or property of a client."
Disciplinary Rule 9-102(A)(2) provides:
Disciplinary Rule 9-102(B)(3) provides:
Disciplinary Rule 9-102(B)(4) provides:
The finding that respondent violated Rule 11.02(4)(a) by depositing the trust money in an account not clearly labeled and designated a trust account is supported by clear and convincing evidence. The referee's findings of the remaining violations are not so clear and require further analysis and discussion.
The referee recommended that respondent "be suspended from the practice of law in Florida for a period of three (3) months, or until such time as he renders an appropriate accounting of the $30,000.00 which he admitted receiving from Mrs. Jean Back, to Mrs. Back and The Florida Bar." Both parties seek review of the recommended discipline. The Florida Bar argues that the discipline is too lenient under the facts of the case. The respondent finds fault with the indefinite nature of the recommended discipline. He asserts that its effect would be to compel him to refund an earned fee in order to retain the privilege of practicing law, and asserts further that the controversy over the $30,000 is a "fee dispute" more appropriately to be settled in civil than in disciplinary proceedings.
Florida Bar Integration Rule article XI, Rule 11.02(4) provides in part:
In order for the referee to have concluded that respondent's actions regarding the money he held in trust warrants disciplinary action with restitution as part of the judgment, he would have had to find that respondent's fee claim was "excessive, extortionate, or ... fraudulent." Moreover, the provision of Rule 11.02 that funds held in trust are not subject to set-off or counterclaim is qualified by the provision that payment of agreed fees from funds so held is not precluded. Therefore the whole question of whether the respondent's conduct regarding the disposition of the $30,000.00 warrants discipline depends upon a factual finding of whether there was an oral modification of the fee agreement.
As was observed above, the report of the referee does not specifically find one way or the other on this crucial factual issue. The referee's conclusion that discipline is warranted is based on an inference from the circumstances that it was highly probable that respondent was guilty of some overreaching. In the absence of a specific finding of overreaching or fraud, supported by clear and convincing evidence, there is no basis upon which to find the ethical violations or to require restitution.
The finding of a violation of Rule 11.02(4)(a) is supported by clear and convincing evidence and is approved. The findings of violation of Rule 11.02(4)(b) and Disciplinary Rule 9-102(B)(3), both pertaining to record keeping, are not so supported and are disapproved. The findings of violations of Disciplinary Rules 9-102(A)(2) and 9-102(B)(4) cannot be approved in the absence of a finding on the issue of whether or not there was a further oral agreement on the payment of fees and expenses from the $30,000.00. We agree with the referee, of course, that Mrs. Back has a legal right to a precise accounting of the money, but the enforcement of that right is not the function of this Court in disciplinary proceedings.
Taking into consideration the respondent's disciplinary history, we conclude that the appropriate discipline for the misconduct found in this proceeding is a three-month suspension from the practice of law, followed by a two-year period of probation, and we hereby impose such discipline. We decline to make reinstatement conditional upon "an appropriate accounting" because the question of the parties' respective rights to the $30,000 is a controversy over fees and therefore is not ground for discipline "unless the amount demanded is clearly excessive, extortionate, or the demand is fraudulent." Fla.Bar Integr.Rule, art. XI, Rule 11.02(4). That is not to say that Ragano is not obliged, as any attorney, to account to his client for funds delivered to him.
In case no. 59,457, the reinstatement proceeding, the referee found as follows:
We approve the findings of the referee and the recommendation that Frank Ragano be reinstated to the practice of law, after serving the additional period of three months suspension imposed in case no. 59246.
Having reviewed the proceedings in both cases, and taking into consideration respondent Frank Ragano's disciplinary history, we hereby order that his suspension from the active practice of law shall continue for three months from the date of this order. At that time he will be automatically reinstated, subject to a probationary period of two years. During the probationary period, Mr. Ragano shall file confidential quarterly reports with the Executive Director of The Florida Bar. These reports shall state the current balance of all trust accounts maintained by Mr. Ragano, together with a statement of the source of each deposit therein and a description of the transaction in connection with which each deposit is received. Mr. Ragano shall also report on the status of all legal proceedings, now pending or newly instituted, in which he is named as a defendant. Furthermore, Mr. Ragano, within 30 days of the date this opinion is filed, shall supply to Mrs. Back and The Florida Bar a full and complete written accounting of the $30,000 fund delivered to him by Mrs. Back or at her direction.
We also assess the costs of both of these proceedings against Mr. Ragano in the amount of $1,0220,40.
It is so ordered.
SUNDBERG, C.J., and BOYD, OVERTON, ENGLAND and McDONALD, JJ., concur.
ALDERMAN, J., concurs in part and dissents in part with an opinion.
ADKINS, J., dissents: "I would not add the additional three months suspension, nor would I require reports of the trust accounts."
ALDERMAN, Justice, concurring in part, dissenting in part.
I agree, in case No. 59,246, that Mr. Ragano should receive an additional three months' suspension. In case No. 59,457, however, because of the additional misconduct that occurred after he was suspended, I would deny Mr. Ragano's petition for reinstatement.