Court Opinion

ID: 4151012
Source: CourtListenerOpinion
Date Created: 2017-03-08 16:01:15.12401+00
Date Added: 2024-06-11T14:50:18.363856
License: Public Domain

Case: 15-11223   Date Filed: 03/08/2017   Page: 1 of 9

                                                          [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                               No. 15-11223
                           Non-Argument Calendar
                         ________________________

                   D.C. Docket No. 1:12-cv-22439-MGC

MICCOSUKEE TRIBE OF INDIANS OF FLORIDA,

                                                                       Plaintiff,

BERNARDO ROMAN, III,
BERNARDO ROMAN III, P.A.,

                                                       Respondents-Appellants,

                                   versus

BILLY CYPRESS, et al.,

                                                                     Defendants,

DEXTER WAYNE LEHTINEN,
Esquire,
GUY A. LEWIS,
Esquire,
MICHAEL R. TEIN,
Esquire,
LEWIS TEIN PL,
A professional association,

                                                         Defendants-Appellees.
              Case: 15-11223     Date Filed: 03/08/2017    Page: 2 of 9

                           ________________________

                    Appeal from the United States District Court
                        for the Southern District of Florida
                          ________________________

                                  (March 8, 2017)

Before TJOFLAT, WILLIAM PRYOR and FAY, Circuit Judges.

PER CURIAM:

      Bernardo Roman III, appeals judgments that disqualified his counsel and

that sanctioned him and his law firm (collectively “Roman”) for filing in bad faith

a civil action on behalf of the Miccosukee Tribe of Indians of Florida against its

general counsel, Dexter Wayne Lehtinen, and attorney Lewis Tein. Roman argues

that the district court erred by disqualifying his counsel of choice and by

sanctioning him. Roman also argues that the district court erroneously based its

sanctions award on billing records that were submitted under seal. We affirm the

judgments to disqualify counsel and to sanction Roman, but we vacate the

sanctions award and remand for the district court to unseal the billing records, to

give Roman the opportunity to respond, and to provide an explanation for the

amount awarded to Lehtinen and Tein.

      The disqualification of counsel requires that we review de novo the

application of the rules of professional conduct and related findings of fact for

clear error. Bayshore Ford Truck Sales, Inc. v. Ford Motor Co., 380 F.3d 1331,

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1338 (11th Cir. 2004). We review for an abuse of discretion all aspects of the

imposition of sanctions. Peer v. Lewis, 606 F.3d 1306, 1311 (11th Cir. 2010). A

district court “must afford the sanctioned party due process, both in determining

that the requisite bad faith exists and in assessing fees.” In re Mroz, 65 F.3d 1567,

1575 (11th Cir. 1995).

       We reject Roman’s argument for reversal based on the disqualification of his

lead counsel, Angel Cortinas. Roman argues that the district court failed to “clearly

identify a specific Rule of Professional Conduct which is applicable . . . [and

explain how his] attorney violated that rule,” Schlumberger Techs., Inc. v. Wiley,

113 F.3d 1553, 1561 (11th Cir. 1997), but we disagree. The district court stated

that Cortinas was disqualified because he was in “partnership with Mr. Lehtinen”

when Lehtinen allegedly made false statements about his client, the Tribe.

Cortinas’s representation of Roman and the Tribe, the district court stated, violated

the “model rule [which] says that a lawyer in the firm cannot ignore the behavior

of other lawyers in the firm” who had a conflict of interest that could be imputed to

Cortinas. See Fla. R. Prof’l Conduct 4-1.09, 4-1.10(a).

       Even if we assume that the district court erred in disqualifying Cortinas

under Rules 4-1.09 and 4-1.10, any error was harmless. See Fed. R. Civ. P 61

(“Unless justice requires otherwise, no error . . . by the [district] court . . . is [a]

ground . . . for vacating, modifying, or otherwise disturbing a judgment or order.”).

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Roman, as the “plaintiff in a civil case[,] [had] no constitutional right to counsel.”

Bass v. Perrin, 170 F.3d 1312, 1320 (11th Cir. 1999), and he opposed Tein’s and

Lehtinen’s requests for sanctions for two years. Roman does not argue that his or

his firm’s substantial rights were affected by proceeding with Cortinas’s associate,

Jonathan Kaskel. See Fed. R. Civ. P. 61. Roman also fails to identify anything that

could have been done differently or more effectively by Cortinas. See Richardson–

Merrell, Inc. v. Koller, 472 U.S. 424, 439 (1985) (“If respondent were to proceed

to trial and there received as effective or better assistance from substitute counsel

than the disqualified attorney could provide, any subsequent appeal of the

disqualification ruling would fail.”). Cortinas and Kaskel did not enter a notice of

appearance until after the first evidentiary hearing on the motions for sanctions and

after we had affirmed the dismissal of the Tribe’s complaint for lacking the

particularity required to state a claim for relief, Miccosukee Tribe of Indians of Fla.

v. Cypress, 814 F.3d 1202 (11th Cir. 2015). Roman investigated Tein and

Lehtinen; thrice revised the complaint against them; and defended against their

requests for sanctions. In the light of Roman’s familiarity with the facts, his legal

abilities, and his retention of Kaskel, we cannot say that disqualifying Cortinas

harmed Roman or his firm.

      The district court did not abuse its discretion when it determined that Roman

filed the second amended complaint in bad faith. A party exhibits bad faith by

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pursuing a claim that it knows is frivolous. Peer, 606 F.3d at 1316. Roman alleged

that Lehtinen countenanced the misappropriation of millions of dollars from Tribe

members while falsely representing that the funds were being held in trust accounts

to satisfy tax liabilities they potentially owed to the federal government and

violated his fiduciary duty to the Tribe by disclosing its financial information to the

Internal Revenue Service. But Lehtinen established the allegations were

objectively frivolous by introducing testimony that the Tribe created two reserve

accounts to satisfy potential federal tax liabilities, by submitting financial records

and minutes from Tribe meetings about the balances in the reserve accounts, and

by presenting a letter recounting that attorney Larry Blum’s submitted the Tribe’s

financial documents to the Agency. Tein likewise controverted the allegations that

he had funneled to the Tribe Chairman millions of dollars in excessive fees

charged for fictitious or unnecessary services that Tribe members paid for using

loans obtained from, but not approved by or intended to be repaid to, the Tribe.

Tein introduced evidence that a Tribe member approved Tein’s invoices and was

repaying a loan obtained for legal fees; that Roman billed the Tribe large amounts

for his legal services; that Roman had in his custody records of Tribe members’

loan payments; that an accountant for the Tribe was fired after telling Roman about

existing loan schedules; and that an independent audit detected no financial

irregularities. Roman failed to produce any evidence that Tein transferred money

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to the Chairman or that Tein overbilled or falsely charged for his legal services.

      The district court did not abuse its discretion when it sanctioned Roman

under Federal Rule of Civil Procedure 11 for frivolously accusing Lehtinen of

wrongdoing. Rule 11 exists “to deter baseless filings in district court.” Peer, 606

F.3d at 1311. The use of Rule 11 is particularly appropriate when a party

knowingly makes allegations that are objectively frivolous and persists in that

“position after it is no longer tenable.” Id. (quoting Rule 11 advisory committee

note (1993)). As the district court stated, Roman conducted an “investigation that

led to results differing” from his suspicions of wrongdoing by Lehtinen and then

“willfully abused the judicial process” by filing the second amended “complaint

that contained false and unsupported allegations” against Lehtinen. Sanctioning

Roman for falsely denunciating Lehtinen was necessary to prevent, the district

court reasonably determined, a “wayward and emboldened . . . counsel” from

“asserting such baseless allegations in the future.”

       The district court also did not abuse its discretion when it exercised its

inherent authority to impose sanctions on Roman for pursuing baseless claims

against Tein. Tein sought sanctions under Federal Rule of Civil Procedure 11, yet

he failed to renew his motion after Roman filed the second amended complaint,

which would have given Roman 21 days to withdraw or correct the pleading. See

Fed. R. Civ. P. 11(c)(1)(A). That procedural misstep did not thwart the ability of

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the district court to proceed against Roman under its inherent authority. See Peer,

606 F.3d at 1314–15. If Roman “acted in bad faith, vexatiously, wantonly, or for

oppressive reasons,” the district court had the inherent authority to impose

sanctions. See Chambers v. NASCO, Inc., 501 U.S. 32, 46 (1991). Based on the

parties’ numerous filings and the material submitted during an eight-day

evidentiary hearing, the district court found that Roman knew or should have

known that his allegations against Tein were patently frivolous when there was no

evidence of kickbacks or fraudulent loans and Roman possessed ample information

that flatly contradicted his theories of wrongdoing. Because Roman filed a

complaint against Tein in bad faith, the district court acted within its authority to

sanction “conduct which [it found] abuse[d] the judicial process.” See id. at 44–45.

      Roman argues that he was denied due process before being sanctioned under

the inherent authority of the district court, but we disagree. Roman was apprised of

the basis on which sanctions were imposed. Tein moved to sanction Roman for

filing the first amended complaint without factual support and in bad faith. See

Peer, 606 F.3d at 1314. Tein reacted similarly to the second amended complaint by

submitting a bench memorandum seeking the imposition of sanctions based on

Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927, or the inherent authority of

the court. Tein’s filings provided Roman notice that his conduct was sanctionable

and why, and he was given ample opportunity to respond. See Mroz, 65 F.3d at

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1575. In addition to Roman’s testimony and arguments he made during the multi-

day evidentiary hearing, he submitted a bench memorandum and a supplemental

memorandum that opposed the district court using its inherent power to impose

sanctions. With all the information in hand, the district court determined that

Roman, despite receiving “continuous notice [of] sanctions . . . based on the

allegations in its [first amended] complaint,” made “more salacious and

astonishing allegations” in the second amended complaint without “evidence, or

[based on] patently frivolous evidence.” The district court afforded Roman due

process in determining whether to sanction him.

      The district court violated Roman’s right to due process in determining the

amount of sanctions. The district court ordered Lehtinen and Tein to submit their

billing records under seal, which denied Roman notice of and an opportunity to

examine the amount of attorney’s fees and costs sought and to object, if warranted,

to their reasonableness. See Mroz, 65 F.3d at 1575. The order entered by the

district court likewise hampered Roman’s ability to challenge the calculation of the

sanctions because the order merely identified the amounts awarded and stated that

Lehtinen was not entitled to recover the value of his time attributable to

representing himself. The order is devoid of any discussion of how much time

counsel for Lehtinen and Tein worked on their cases or the amount the district

court applied as a reasonable hourly rate. See Dillard v. City of Greensboro, 213

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F.3d 1347, 1353 (11th Cir. 2000). Without that information, we cannot

meaningfully review the sanctions award. See Norman v. Hous. Auth. of City of

Montgomery, 836 F.2d 1292, 1304 (11th Cir. 1988). Because the district court

determined the sanction awards, which it described as “sizable,” in a manner that

denied Roman due process, we vacate that part of the order that awarded amounts

to Lehtinen and Tein and remand for the district court to unseal the billing records,

to give Roman an opportunity to respond, and to provide an explanation for the

amount of each award imposed.

      We AFFIRM the imposition of sanctions on Roman, but we VACATE that

part of the order that awarded amounts to Lehtinen and Tein and REMAND for

further proceedings related to the sanctions award.

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