Court Opinion

ID: 3066674
Source: CourtListenerOpinion
Date Created: 2015-10-15 15:05:28.641034+00
Date Added: 2024-06-11T10:34:12.047244
License: Public Domain

Supreme Court of Florida
                                  ____________

                                  No. SC14-1730
                                  ____________

    THE FLORIDA BAR RE: ADVISORY OPINION — SCHARRER v.
          FUNDAMENTAL ADMINISTRATIVE SERVICES.

                                [October 15, 2015]

PER CURIAM.

      Pursuant to rule 10-9.1 of the Rules Regulating the Florida Bar (Bar Rules),

and this Court’s decision in Goldberg v. Merrill Lynch Credit Corp., 35 So. 3d 905

(Fla. 2010), Petitioners Beth Ann Scharrer, as the Trustee for the Bankruptcy

Estate of Fundamental Long Term Care, Inc., and Trans Health Management, Inc.

(THMI) (Petitioners), petitioned The Florida Bar Standing Committee on the

Unlicensed Practice of Law (Standing Committee) for an advisory opinion as to

whether certain activities by Fundamental Administrative Services (FAS) and its

in-house counsel, who is not admitted to practice law in the State of Florida, would

constitute the unlicensed practice of law in this state. As required by Bar Rule 10-

9.1(f), the Standing Committee provided notice and held a public hearing to

address the petition, where it considered both live and written testimony. After
considering the issues, the Standing Committee filed its proposed advisory opinion

in this Court. The Court has jurisdiction to review the opinion pursuant to article

V, section 15 of the Florida Constitution, and Bar Rule 10-9.1(g).

      After the proposed advisory opinion was filed, the Court issued an order

inviting Petitioners and any interested parties to file briefs in response to the

opinion; briefs were filed by several individuals and organizations. Counsel for the

Standing Committee filed a brief in response to these comments. We have fully

considered both the proposed advisory opinion and the briefs filed with the Court.

As discussed here, because we conclude that the advisory opinion does not address

the “specified conduct” at issue, as contemplated by the Goldberg decision, we

disapprove the advisory opinion without prejudice to Petitioners submitting a

revised petition for an advisory opinion, and to the Standing Committee

conducting further proceedings consistent with our opinion in this case.

                          The Proposed Advisory Opinion

      Petitioners Scharrer and THMI, and FAS and its in-house counsel, Christine

Zack (an attorney not licensed to practice law in Florida), have been, and continue

to be, involved in lawsuits in several jurisdictions, with potentially significant sums

of money at issue. As is relevant here, Petitioners brought a suit against FAS and

Ms. Zack in the United States District Court for the Middle District of Florida.

The suit alleged that FAS and Zack provided administrative support services to

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FAS’s client, THMI, and served as a “litigation liaison” between THMI and the

Florida lawyers hired to represent THMI in several wrongful death cases brought

against the company in Florida. Petitioners further alleged that FAS’s and Zack’s

substantial involvement in the wrongful death cases constituted the tort of the

unlicensed practice of law. In July 2013, the federal court dismissed the case

without prejudice, citing Goldberg, 35 So. 3d at 907, in which this Court held that

a civil complaint alleging a cause of action for damages based on the unlicensed

practice of law must allege that this Court has ruled that the specified conduct at

issue is the unlicensed or unauthorized practice of law. The federal court

determined that Petitioners had not cited in their complaint any case where this

Court had determined that the specific conduct that FAS and Zack are alleged to

have engaged in was unlicensed practice. However, consistent with Goldberg, the

federal court invited Petitioners to seek an advisory opinion on the issue.

Petitioners’ subsequent petition for an advisory opinion is the first such request

submitted to the Standing Committee pursuant to Goldberg.

      In their petition to the Standing Committee, Petitioners presented six

questions:

      1.     Whether [FAS] engaged in the unlicensed practice of law in
      Florida by employing an attorney not licensed in Florida to provide
      legal advice, strategy and services to third parties in litigation pending
      in Florida in which FAS was not a party.

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2.     Whether FAS engaged in the unlicensed practice of law in
Florida by employing in-house counsel, who is not licensed in Florida,
to hire, direct, manage, control, and supervise Florida lawyers
defending FAS’s third-party customer(s) in Florida litigation when
FAS was not a party to the litigation.
3.    Whether FAS engaged in the unlicensed practice of law in
Florida when, as part of the services it provided to its third-party
customers, FAS’s employees provided legal advice and services in
Florida litigation, to which FAS was not a party, under the supervision
of FAS’s nonlawyer principals or unlicensed lawyer principals.
4.    Whether FAS engaged in the unlicensed practice of law in
Florida when its in-house counsel, who is not licensed in Florida,
controlled, directed, and managed Florida litigation on behalf of
FAS’s third-party customers, including:
       a.   preparing pleadings, discovery responses, and/or other
legal documents;
       b.     making strategic decisions regarding defense strategy for
the third-party, and
      c.     construing and interpreting the legal effect of Florida law
on behalf of the third party.
5.     Whether Ms. Zack engaged in the unauthorized practice of law
in Florida when, without a Florida license, she directed, managed,
controlled, and supervised Florida lawyers’ defense of FAS’s third
party customer(s) in Florida litigation when her employer, FAS, was
not a party to the litigation.
6.     Whether Ms. Zack engaged in the unauthorized practice of law
in Florida when, without a Florida license, she controlled, directed,
and managed Florida litigation, in which FAS was not a party, on
behalf of her employer’s third-party customers, including:
       a.   preparing pleadings, discovery responses, and/or other
legal documents;
      b.    making strategic decisions regarding defense strategy for
her employers’ customers; and
      c.     construed and interpreted the legal effect of Florida law
on behalf of her employers’ customers.

                                  -4-
The Standing Committee consolidated these questions into a single issue:

      Whether a nonlawyer company engages in the unlicensed practice of
      law in Florida when the nonlawyer company or its in-house counsel,
      who is not licensed to practice law in Florida, controls, directs, and
      manages Florida litigation on behalf of the nonlawyer company’s
      third-party customers when the control, direction, and management is
      directed to a member of The Florida Bar who is representing the
      customer in the litigation?

The proposed advisory opinion answers this question in the negative, finding that,

generally speaking, it does not constitute the unlicensed practice of law for a

nonlawyer company or its in-house counsel (who is not licensed in Florida) to

control, direct, and manage Florida litigation on behalf of the nonlawyer

company’s third party customers when the control, direction, and management is

directed to a member of The Florida Bar who is representing the customer in

litigation. However, the Standing Committee also concluded that, while generally

such conduct is not the unlicensed practice of law, there are circumstances where

the opposite may be true, and the activity of the nonlawyer company or its in-house

counsel could constitute unlicensed practice. The answer would be dependent on

the level of involvement of the Florida lawyer versus the level of involvement of

the nonlawyer.

      Petitioners, FAS and Zack, and other individuals and organizations have

submitted briefs in opposition to the Standing Committee’s proposed advisory

opinion, raising a number of procedural and substantive concerns. However, as

                                        -5-
discussed below, because we conclude that the advisory opinion does not properly

address the specified conduct at issue, as contemplated in our decision in

Goldberg, we disapprove the advisory opinion without prejudice.

                     Goldberg v. Merrill Lynch Credit Corp.

      In Goldberg, the petitioners filed class action lawsuits in the circuit court to

recover document preparation fees charged by respondent Merrill Lynch for

services performed by its clerical personnel in processing mortgage loans. 35 So.
3d at 906. Merrill Lynch moved to dismiss the complaints, arguing, among other

things, that the circuit court lacked jurisdiction to hear any claims relating to the

unlicensed practice of law. The circuit court granted the motion and dismissed the

case. The Fourth District Court of Appeal affirmed the dismissals, holding that a

determination from this Court as to whether conduct constitutes the unlicensed

practice of law was a “prerequisite” to bringing a civil suit to recover fees and

damages based on unlicensed practice. Id. at 907.

      On review, this Court held that the petitioners were not precluded from

bringing a private civil suit for damages alleging a cause of action based on

unlicensed practice of law. Id. However, the Court agreed with the Fourth District

Court of Appeal that the petitioners’ complaint failed to state such a cause of

action:

      To state a cause of action for damages under any legal theory that
      arises from the unauthorized practice of law, we hold that the pleading

                                          -6-
      must state that this Court has ruled that the specified conduct at issue
      constitutes the unauthorized practice of law. Stated another way, a
      claimant must allege as an essential element of any cause of action
      premised on the unauthorized practice of law that this Court has ruled
      the activities are the unauthorized practice of law.

Id. (citations omitted). The Court stated that a plaintiff’s complaint could allege

that the conduct complained of has already been ruled on by this Court to be the

unlicensed practice of law, or it could allege that the defendant was the subject of a

Florida Bar proceeding. But the Court made clear that:

      a plaintiff will not be able to state a cause of action premised on the
      unauthorized practice of law on a case of first impression (where this
      Court has not ruled on the actions at issue). In those cases, the
      pleading may be dismissed without prejudice or the action may be
      stayed until a determination from this Court pursuant to the advisory
      opinion procedures of rule 10-9.1 or the complaint and injunctive
      relief procedures of rules 10-5, 10-6, and 10-7 of the Rules Regulating
      the Florida Bar.

Id. at 908.

      In the case at issue here, the federal court, citing Goldberg, concluded that

Petitioners’ complaint did not cite any case where this Court had ruled that the

specific actions alleged to have been committed by FAS and Ms. Zack were held to

be the unlicensed practice of law. Thus, consistent with Goldberg, the federal

court dismissed the case without prejudice and invited Petitioners to seek an

advisory opinion from this Court.

      As a preliminary issue, FAS and Zack suggest that Petitioners’ request for an

advisory opinion is procedurally improper under Goldberg. They raise two

                                         -7-
specific objections: (1) that the Standing Committee lacked authority to consider

Petitioners’ request for an advisory opinion because Petitioners’ civil case in the

federal district court was not “voluntarily” dismissed; and (2) that the Standing

Committee lacked authority to consider Petitioners’ request because other cases

involving the same parties and similar legal issues remain pending in various

courts. The Standing Committee held a special hearing specifically to address

these issues, and determined that Petitioners’ request for an advisory opinion was

proper under Goldberg. We agree.

      As to the first objection, the procedures we established in Goldberg are

satisfied when a civil case is “dismissed without prejudice or . . . stayed until a

determination from this Court.” Id. FAS and Zack cite language in Bar Rule 10-

9.1(c), adopted in response to Goldberg,1 which provides that the Standing

Committee “shall issue a formal advisory opinion under circumstances described

by the court in [Goldberg], when the petitioner is a party to a lawsuit and that suit

has been stayed or voluntarily dismissed without prejudice.” R. Regulating Fla.

Bar 10-9.1(c) (emphasis added). Despite this language in the rule, we agree with

the Standing Committee that our opinion in Goldberg did not require that a case be

“voluntarily” dismissed. Rather, that opinion stated that a plaintiff will not be able

      1. See In re Amends. to Rules Reg. Fla. Bar 10-9.1, 82 So. 3d 66 (Fla.
2012).

                                         -8-
to state a cause of action premised on the unlicensed practice of law on “a case of

first impression,” and that in such cases the plaintiff’s pleading may be “dismissed

without prejudice” or “stayed.” Accordingly, the Petitioners here were authorized

to petition the Standing Committee for a proposed advisory opinion when their

case in federal court was dismissed without prejudice in July 2013. However,

because we recognize that the language in Bar Rule 10-9.1(c) is inconsistent with

Goldberg, in a separate opinion also issued today we sua sponte amend the rule to

remove the word “voluntary.”

      As to the second procedural challenge to the proposed advisory opinion

under Goldberg, we agree with the Standing Committee’s determination that it

could properly consider Petitioners’ petition for an advisory opinion because there

were no pending cases in any court or tribunal in this jurisdiction alleging a cause

of action for unlicensed practice of law. The only case alleging unlicensed

practice, the suit between Petitioners and FAS and Zack in the United States

District Court for the Middle District of Florida, was dismissed without prejudice

before Petitioners submitted their request.

               Applying Goldberg v. Merrill Lynch Credit Corp.

      Although we conclude that Petitioners’ petition for an advisory opinion was

authorized, we nonetheless disapprove the Standing Committee’s proposed

                                        -9-
advisory opinion because it does not address the “specified conduct” at issue in the

underlying federal case, as required by Goldberg.

      Our decision in Goldberg was based on the central principle that the Florida

Constitution requires this Court exclusively to determine whether certain conduct

or activities constitute the unlicensed or unauthorized practice of law. See

Goldberg, 35 So. 3d at 906; see also art. V, § 15, Fla. Const. Thus, in Goldberg,

we established a new process through which the parties to a civil suit alleging a

cause of action based on unlicensed practice—where the Court has not yet ruled

that “the specified conduct” alleged in the suit constitutes the unlicensed or

unauthorized practice of law—could seek a determination from this Court on that

issue, by way of a petition for an advisory opinion from the Standing Committee.

Goldberg, 35 So. 3d at 908. However, integral to this new process is the

requirement that both the party’s request for an advisory opinion, and the Standing

Committee’s resulting proposed opinion, must address the “specified conduct” that

is at issue in the civil suit. Although we recognize that the Standing Committee

does not sit as a trier of fact, and it is not the Committee’s role to decide disputed

issues of fact, our decision in Goldberg does authorize the Standing Committee to

determine whether the specific facts as alleged in a petition for an advisory

opinion, if those facts are taken as true, would constitute the unlicensed or

unauthorized practice of law.

                                         - 10 -
      In this instance, we conclude that Petitioners’ request for an advisory

opinion did not allege the type of specific facts that, if assumed true, the Standing

Committee could use to evaluate whether FAS and Zack engaged in the unlicensed

practice of law. The Standing Committee then consolidated Petitioners’ six

questions into a single and more general question. As a result, we conclude that

the proposed advisory opinion does not adhere to the process the Court established

in Goldberg, in that it does not offer meaningful guidance as to whether the

specified conduct at issue would constitute the unlicensed practice of law.

Accordingly, we disapprove the advisory opinion; however, our decision is without

prejudice to Petitioners submitting a revised petition for an advisory opinion, and

to the Standing Committee conducting further proceedings consistent with our

opinion in this case.

      Finally, we agree with the federal district court, as stated in its July 2013

order dismissing Petitioners’ civil case, that the Court’s opinion in Florida Bar v.

Neiman, 816 So. 2d 587 (Fla. 2002), is inapplicable to the conduct and activities at

issue here. The Standing Committee may wish to consider Chapter 17 of the Rules

Regulating the Florida Bar (Authorized House Counsel Rule), as well as Bar Rule

4-5.5 (Unlicensed Practice of Law; Multijurisdictional Practice of Law), and the

extent to which those rules may impact the specified conduct at issue.

                                        - 11 -
      Accordingly, for the reasons discussed in this opinion, we disapprove the

proposed advisory opinion without prejudice.

      It is so ordered.

LABARGA, C.J., and PARIENTE, LEWIS, QUINCE, POLSTON, and PERRY,
JJ., concur.
CANADY, J., dissents with an opinion.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.

CANADY, J., dissenting.

      In this proceeding, we are asked to give an advisory opinion concerning a

matter that is the subject of litigation. I would dismiss the case on the ground that

the Florida Constitution gives this Court no authority to issue such an advisory

opinion.

      In Goldberg v. Merrill Lynch Credit Corp., 35 So. 3d 905, 909 (Fla. 2010)

(Canady, J., dissenting) (emphasis in original), I expressed the view that the

process adopted by the majority in that case unjustifiably relied on “the grant of

exclusive regulatory authority in article V, section 15, Florida Constitution” to

assert “a type of exclusive judicial authority that is sui generis.” I adhere to the

view I expressed in Goldberg. The regulatory authority granted to us in section 15

of article V does not justify transgressing the limits on our judicial power

established in section 3(b) of article V. In my view, this Court simply lacks the

constitutional authority to issue an advisory opinion of the type sought in this

                                         - 12 -
proceeding. I would recede from Goldberg and abide by the limitations on our

jurisdiction imposed by the Florida Constitution. Consistency between regulatory

decisions and judicial decisions should be maintained through the ordinary

operations of the judicial process without the unprecedented expansion of our

judicial power accomplished by Goldberg.

Original Proceeding – The Florida Bar

Jeffrey Michael Kolokoff, Chair, Standing Committee on the Unlicensed Practice
of Law, Beighley Myrick & Udell, Miami, Florida; Carsandra Denyce Buie, Past
Chair, Standing Committee on the Unlicensed Practice of Law, Tallahassee,
Florida; John F. Harkness, Jr., Executive Director, Lori S. Holcomb, Director,
Client Protection, and Jeffrey Todd Picker, The Florida Bar, Tallahassee, Florida,
on behalf of the Standing Committee on the Unlicensed Practice of Law; and
Steven Mark Berman and Duane Allan Daiker of Shumaker, Loop & Kendrick,
LLP, Tampa, Florida, on behalf of Beth Ann Scharrer and Trans Health
Management, Inc.,

      for Petitioners

Martin Stephen Turner of Broad and Cassel, Tallahassee, Florida, on behalf of The
Doctors Company; Timothy Patrick Chinaris, Nashville, Tennessee; Katherine
Eastmoore Giddings and Kristen Marie Fiore of Akerman LLP, Tallahassee,
Florida, on behalf of Fundamental Administrative Services, LLC; Joseph Arnold
Corsmeier of the Law Office of Joseph A. Corsmeier PA, Clearwater, Florida, on
behalf of Fundamental Administrative Services, LLC; Gerald Barnette Cope, Jr. of
Akerman LLP, Miami, Florida, on behalf of Fundamental Administrative Services,
LLC; Christopher Benton Hopkins of McDonald Hopkins LLC, West Palm Beach,
Florida, on behalf of Fundamental Administrative Services, LLC; Peter Alan
Contreras of Brunner Quinn, Columbus, Ohio, on behalf of Christine Zack; Amar
D. Sarwal, Vice President and Chief Legal Strategist, and Evan P. Schultz, Senior
Counsel and Director of Advocacy, Association of Corporate Counsel,
Washington, District of Columbia; Michael Herman, President, and John J. Price,
Advocacy Liaison & Program Chair, Association of Corporate Counsel-North
Florida Chapter, Jacksonville, Florida; Kelli Joan Cueto, President, and Alan
Jockers, Advocacy Chair, Association of Corporate Counsel-South Florida

                                        - 13 -
Chapter, Hollywood, Florida; S. Todd Merrill, President, and Nicholas Popp,
Advocacy Liaison, Association of Corporate Counsel-West Central Florida
Chapter, Tampa, Florida; Christine Davis Graves and Joseph Hagedorn Lang, Jr. of
Carlton Fields Jorden Burt, P.A., Tallahassee, Florida, on behalf of the Florida
Chamber of Commerce; Marie Elena Abate and Nate Wesley Strickland of
Colodny, Fass, Talenfeld, Karlinsky Abate & Webb, P.A., Tallahassee, Florida, on
behalf of Property Casualty Insurers Association of America, Florida Insurance
Council, American Insurance Association, and National Association of Mutual
Insurance Companies,

      Responding

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