Court Opinion

ID: 2809805
Source: CourtListenerOpinion
Date Created: 2015-06-18 16:06:11.934401+00
Date Added: 2024-06-11T15:38:01.174803
License: Public Domain

Supreme Court of Florida
                                    ____________

                                   No. SC13-1333
                                   ____________

               INQUIRY CONCERNING A JUDGE, NO. 12-613
                     RE: LAURA MARIE WATSON.

                                   [June 18, 2015]

PER CURIAM.

      This matter is before the Court to review the determination of the Florida

Judicial Qualifications Commission (“JQC”) that Laura Marie Watson has violated

the Rules Regulating Professional Conduct and its recommendation that she be

removed from office. We have jurisdiction. See art. V, § 12, Fla. Const. Article

V, section 12(c)(1) of the Florida Constitution provides that we “may accept,

reject, or modify in whole or in part the findings, conclusions, and

recommendations of the commission . . . .” Further, section 12(c)(1) provides that

“[m]alafides, scienter, or moral turpitude on the part of a justice or judge shall not

be required for removal from office of a justice or judge whose conduct

demonstrates a present unfitness to hold office.” And, while we are mindful that

removal is the ultimate sanction, “we will impose that sanction when we conclude
that the judge’s conduct is fundamentally inconsistent with the responsibilities of

judicial office.” In re Hawkins, 151 So. 3d 1200, 1202 (Fla. 2014) (citing In re

Shea, 759 So. 2d 631, 638 (Fla. 2000)). For the reasons we explain below, we

conclude that the JQC’s findings and conclusions are supported by clear and

convincing evidence and agree with the JQC’s recommendation that Judge Watson

be removed from the bench.

                    FACTS AND PROCEDURAL HISTORY

      At some point prior to 2002, the law office of Laura M. Watson, P.A. d/b/a

Watson & Lentner entered into a joint business plan with Marks & Fleischer, P.A.,

and Kane & Kane, acting through the firm principals, Gary Marks, Amir Fleischer,

Charles Kane, Harley Kane, Darin James Lentner, and Watson (collectively, “the

PIP attorneys”), to represent healthcare provider clients in numerous lawsuits

involving Personal Injury Protection (“PIP”) claims against Progressive Insurance

Company. The firms shared expenses for marketing and the procurement of

clients. Each firm maintained and managed its own clients and files, but entered

into joint representation contracts in which all of the firms agreed to represent the

clients and assume joint responsibility for the claims. The PIP attorneys alleged

that Progressive had systematically underpaid health care providers in a scheme

known as a “silent PPO.”

                                         -2-
      The PIP attorneys retained the services of Slawson Cunningham Whalen &

Stewart, P.A., to initiate a bad-faith case against Progressive filed in the name of

Drs. Fisher & Stashak, M.D., P.A. d/b/a Gold Coast Orthopedics and Gold Coast

Orthopedics and Rehabilitation (“Gold Coast”). Todd Stewart was the attorney

working the case. When Todd Stewart left Slawson Cunningham, and formed

Todd S. Stewart, P.A., he elicited the help and expertise of his father, Larry

Stewart of Stewart Tilghman Fox & Bianchi, P.A.

      In or about February 2002, the PIP attorneys met with Larry Stewart to

discuss the Gold Coast case and bad faith claims. Larry Stewart eventually asked

William C. Hearon to assist with the prosecution of the bad faith claims. (Todd

Stewart, William C. Hearon, and Larry Stewart are collectively referred to as the

“bad faith attorneys.”)

      On or about April 24, 2002, the PIP attorneys and bad faith attorneys

reached an agreement concerning how the work would be handled and the fees to

be split. The clients were to receive sixty percent of the recovery and the

attorneys’ fees would amount to forty percent. Of the attorneys’ fees, the bad faith

attorneys were to receive sixty percent.

      Initially, the Gold Coast case encompassed approximately 40 health care

providers, and it was contemplated that the bad faith claims would ultimately be

asserted on behalf of all the clients of the PIP attorneys once those claims became

                                           -3-
perfected, which was approximately 441 clients. This list of 441 clients was used

in settlement negotiations with Progressive.

      The bad faith attorneys participated in extensive discovery in which they

were successful in obtaining an order compelling Progressive to produce internal

documents. During this time, the PIP attorneys continued to encourage the bad

faith attorneys to pursue their claims by joining in the bad faith claims, or by

settling the PIP claims while preserving the bad faith claims. Due to the pressure

placed on Progressive by the bad faith attorneys over the following two years,

Progressive commenced settlement negotiations with both sets of attorneys. On

numerous occasions, the PIP attorneys referred settlement negotiations of the bad

faith claims to the bad faith attorneys and gave full authority to the bad faith

attorneys to negotiate a global settlement of all of the bad faith claims, including

the ones filed through the PIP attorneys.

      On January 21, 2004, the bad faith attorneys met with Progressive and

demanded $20 million to settle all of the bad faith claims and reported this to the

PIP attorneys. Progressive counter-offered with a $3.5 million settlement of all the

bad faith claims, but the bad faith attorneys did not accept the offer and no

settlement was reached. The bad faith attorneys continued to pressure Progressive

to produce more documents.

                                         -4-
      On May 14, 2004, the PIP attorneys accepted an aggregate settlement offer

from Progressive in an undifferentiated amount of $14.5 million to settle the PIP

claims as well as all bad faith claims, perfected or potential, without notifying the

bad faith attorneys. After the settlement was accepted, Progressive and the PIP

attorneys drafted a memorandum of understanding (“MOU”), which made clear

that the settlement applied to all PIP claims and bad faith claims irrespective of

whether they were perfected.

      The MOU did not allocate any recovery to the bad faith claims, but required

the release of those claims. After learning of the MOU, the bad faith attorneys

objected. The PIP attorneys amended the MOU to award $1.75 million to the bad

faith claims.

      The PIP attorneys then notified their clients, via letter, of the settlement but

did not disclose the conflicts of interests, provide closing statements, or advise the

clients of the material facts necessary to make an informed decision about their

cases or execution of the releases.

      On or about June 22, 2004, the PIP attorneys received funds from

Progressive, which were placed in the attorneys’ respective trust fund accounts.

Watson’s firm received $3,075,000, from which $361,470.30 was paid to clients.

The clients still did not receive closing statements.

                                         -5-
      The bad faith attorneys notified the PIP attorneys that, in accordance with

The Florida Bar rules governing claims of disputed property, all of the attorneys’

fees should be held in a separate escrow account. The PIP attorneys did not hold

the funds.

      The bad faith attorneys subsequently sued the PIP attorneys for fraudulent

inducement and in quantum meruit for the work they performed. During the bench

trial, Judge David Crow carefully reviewed all of the facts and circumstances

surrounding the joint business plan between the PIP attorneys and the bad faith

attorneys.

      In April 2008, the trial court found that the actions taken by the PIP

attorneys, including the settlement of the bad faith claims without notifying the bad

faith attorneys or notifying the clients with bad faith claims that their claims would

be released and they would be receiving little to no compensation for those claims,

violated several rules of professional conduct. The trial court also found that the

PIP attorneys exaggerated the number of hours they spent working on these PIP

and bad faith claims. Ultimately, the trial court awarded the bad faith attorneys

additional attorneys’ fees due to an unjust enrichment the PIP attorneys received

and for the cost of the work performed by the bad faith attorneys during the two-

year span. Additionally, Judge Crow sent a copy of his order to The Florida Bar.

                                         -6-
      The Florida Bar began grievance proceedings against the PIP attorneys. In

her response, Watson requested that the prosecution be deferred until after she

finished appealing Judge Crow’s April 2008 final judgment. The Fourth District

Court of Appeal affirmed the trial court’s judgment on February 29, 2012, see

Kane v. Stewart Tilghman Fox & Bianchi, P.A., 85 So. 3d 1112, 1113 (Fla. 4th

DCA 2012), and the Bar proceeded with its investigation.

      In June 2012, Watson was advised that her case was being referred to a

grievance committee for probable cause review, and then in October 2012, she was

advised that the grievance committee had found probable cause. In November

2012, Watson was elected to the Seventeenth Judicial Circuit; she assumed office

in January 2013. Accordingly, The Florida Bar forwarded its file to the JQC;

additionally, Larry Stewart filed a formal complaint.

      On July 24, 2013, the JQC filed a Notice of Formal Charges against Judge

Laura Marie Watson alleging that she violated Canons 1 and 2A of the Code of

Judicial Conduct and violated Florida Rules of Professional Conduct 3-4.2, 3-4.3,

4-1.4(a), 4-1.4(b), 4-1.5(f)(1), 4-1.5(f)(5), 4-1.7(a), 4-1.7(b), 4-1.7(c), 4-1.8(g), 4-

8.4(a), 4-8.4(c), and 5-1.1(f).

      At the conclusion of its proceedings, the JQC determined that:

              Watson and the others hired Larry Stewart, who warned them in
      advance that the PIP claims and bad faith claims were adverse,
      requiring careful handling throughout settlement negotiations, with
      full client transparency. When Progressive dangled a pot of money,

                                          -7-
      ethical restraints were swept aside. Watson and the PIP lawyers (at
      Progressive’s insistence) excluded the only attorney sufficiently
      experienced and knowledgeable to see them through settlement
      negotiations, and reached a quick (and ethically flawed) settlement
      agreement.
“Watson never told her PIP clients that Progressive paid funds to settle the bad

faith claims, and they weren’t allowed to participate in that recovery, despite the

fact they were required to release these claims.” The JQC concluded that Watson

unilaterally decided that those clients had no interest in the bad faith case and that

they had no duty to pay or include unknown people who may or may not someday

have a claim. Additionally, the JQC concluded that Watson “entered into an

undisclosed side deal with Gold Coast, contrary to the interests of the other bad

faith claimants,” and further concluded that Watson failed to disclose material

information to her clients, including the conflicts of interest and the methodology

of allocating funds between the PIP and bad faith claims that substantially

decreased the funds available for distribution to the clients. Under this

methodology, the PIP attorneys took $10,960,000 in fees in addition to their

portion of the Gold Coast attorneys’ fees.

      Based on these facts, the JQC concluded that

      attorney Watson violated R. Reg. Fla. Bar 3-4.2 (violating Rules of
      Professional Conduct); 3-4.3 (commission of acts contrary to honesty
      or justice); 4-1.4(a) (failing to keep clients informed about the status
      of a matter); 4-1.4(b) (failing to explain matter to the extent
      reasonably necessary to permit clients to make informed decision
      regarding the representation); 4-1.5(f)(1) (failing to provide written

                                         -8-
      statement to bad faith clients stating the outcome of the matter, the
      remittance to the client, and the method of its determination); 4-
      1.5(f)(5) (failing to provide closing statements to bad faith clients
      reflecting an itemization of costs and expenses, together with the
      amount of fees received by participating lawyers or firms); 4-1.7(a)
      (representing clients with directly adverse interests); 4-1.7(b)
      (representing clients where representation was materially limited by
      lawyers’ responsibilities to other clients, third persons, and the
      lawyers’ own interests); 4-1.8(g) (making an aggregate settlement of
      the claims of two or more clients without requisite disclosure or
      consent); 4-8.4(a) (violation of the Rules of Professional Conduct by
      herself, and through the acts of others); 4-8.4(c) (engaging in conduct
      involving deceit); and 5-1.1(f) (failing to treat disputed funds as trust
      property).
Additionally, the JQC concluded that “[t]here was no clear and convincing

evidence presented, and Judge Watson is not guilty of violating Rule 4-1.7(c) . . . .”

      Based on these findings and conclusions, the JQC determined that Judge

Watson “sold out her clients, her co-counsel, and ultimately herself. This conduct

is ‘fundamentally inconsistent with the responsibilities of judicial office,’ and

mandates removal.”

                                     ANALYSIS

      In judicial disciplinary proceedings, this Court reviews the findings of the

JQC to determine if they are supported by clear and convincing evidence, and

reviews the recommendation of discipline to determine whether it should be

approved. In re Andrews, 875 So. 2d 441 (Fla. 2004). Clear and convincing

evidence is “ ‘a standard which requires more proof than a “preponderance of the

evidence” but less than “beyond and to the exclusion of a reasonable doubt.” ’ ” In

                                         -9-
re Henson, 913 So. 2d 579, 589 (Fla. 2005) (quoting In re Graziano, 696 So. 2d
744, 753 (Fla. 1997)). In In re Davey, 645 So. 2d 398 (Fla. 1994), this Court

fleshed out its standard of review in JQC inquiries:

             This intermediate level of proof entails both a qualitative and
      quantitative standard. The evidence must be credible; the memories
      of the witnesses must be clear and without confusion; and the sum
      total of the evidence must be of sufficient weight to convince the trier
      of fact without hesitancy.
             [C]lear and convincing evidence requires that the
             evidence must be found to be credible; the facts to which
             the witnesses testify must be distinctly remembered; the
             testimony must be precise and explicit and the witnesses
             must be lacking in confusion as to the facts in issue. The
             evidence must be of such weight that it produces in the
             mind of the trier of fact a firm belief or conviction,
             without hesitancy, as to the truth of the allegations sought
             to be established.

      Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

Id. at 404; see also In re Holloway, 832 So. 2d 716, 726 (Fla. 2002).

      Additionally, this Court has noted that any conflicts in the evidence should

be resolved in favor of the JQC’s findings. In re Henson, 913 So. 2d 579, 591-92

(Fla. 2005) (“Resolving conflicts in the evidence in favor of the Hearing Panel’s

findings, we conclude that the accusation . . . is supported by clear and convincing

evidence.”). According to article V, section 12(c)(1) of the Florida Constitution,

this Court has discretion to either accept, reject, or modify the commission’s

findings and recommendation of discipline. Although this Court gives the JQC’s

findings and recommendations great weight, the ultimate power and responsibility

                                       - 10 -
in making a determination to discipline a judge rests with this Court. In re Angel,

867 So. 2d 379 (Fla. 2004).

      We have emphasized that the object of these “proceedings is not for the

purpose of inflicting punishment, but rather to gauge a judge’s fitness to serve as

an impartial judicial officer.” In re McMillan, 797 So. 2d 560, 571 (Fla. 2001).

“In making this determination, judges should be held to higher ethical standards

than lawyers ‘by virtue of their position in the judiciary and the impact of their

conduct on public confidence in an impartial justice system.’ ” In re Hawkins, 151
So. 3d at 1212 (citing In re McMillan, 797 So. 2d at 571).

      Additionally, at the outset, we note that despite Judge Watson’s protestations

to the contrary, the JQC and this Court have jurisdiction over her conduct. See In

re Henson, 913 So. 2d at 588 (“Misconduct committed by an attorney who

subsequently becomes a judge falls within the subject-matter jurisdiction of this

Court and the JQC, no matter how remote. . . . JQC proceedings are

constitutionally authorized for alleged misconduct by a judge during the time he or

she was a lawyer.”); see also In re Davey, 645 So. 2d at 403 (“[T]he Commission

has constitutional authority to investigate pre-judicial acts and recommend to this

Court the removal (for unfitness) or reprimand (for misconduct) of a sitting

judge.”).

                                        - 11 -
      We have reviewed the entire record of this proceeding and conclude that

clear and convincing evidence supports the JQC’s factual findings and conclusions

that Judge Watson violated Florida Rules of Professional Conduct 3-4.2, 3-4.3, 4-

1.4(a), 4-1.4(b), 4-1.5(f)(1), 4-1.5(f)(5), 4-1.7(a), 4-1.7(b), 4-1.8(g), 4-8.4(a), 4-

8.4(c), and 5-1.1(f). The JQC heard testimony from Larry Stewart and Laura

Watson; and as character witnesses, Thomas Lynch, IV, Terrence O’Connor, and

Lawrence Kopelman. Larry Stewart, in particular, testified at length regarding the

details of the agreement between the PIP attorneys and the bad faith attorneys.

Larry Stewart stated that he could only say that Watson was present for each of the

meetings he held with the PIP attorneys; he could not testify as to exactly what she

said. Nevertheless, Larry Stewart testified that Watson never objected or corrected

any of the agreements or understandings reached at those meetings. Stewart’s

interpretation of the meetings is bolstered in particular by one e-mail from Watson

wherein she congratulated Stewart on getting the favorable discovery ruling and

stated, “We need to keep our foot on their throat and not let them lose [sic].”

      Watson’s argument that she was not involved in making the agreement with

Stewart’s firm, and in fact had no knowledge of any agreement with Larry Stewart

to pursue bad faith claims on behalf of any of her clients, including Gold Coast, or

that she was not aware that he was in settlement negotiations with Progressive is

not a reasonable inference from this record. Accordingly, Watson’s arguments

                                          - 12 -
were justifiably disregarded by the JQC. Watson’s primary contention that the PIP

attorneys never contracted with Larry Stewart’s firm is belied by her e-mail

correspondence with him and her admission that he won favorable rulings in the

Gold Coast case.

      As it relates to them, the clients were provided with a form release letter to

sign that only disclosed the amount they would receive. The settlement was

structured so that the clients would receive the PIP payment they were due from

Progressive, and little or nothing towards the bad faith recovery. In exchange the

bad faith claims were released. The clients were never informed of the entire

amount of the offers of settlement received from Progressive, or even that there

had been multiple offers. The clients were also not informed of the amount of the

settlement that would be retained by the attorneys. In response to this allegation,

Watson only offers that she complied with the contracts she had with her clients,

which only provided for the PIP claim recovery. Additionally, the clients were

never fully informed that the bad faith claims were not compatible with the PIP

recovery claims. It is undisputed that Watson failed to provide closing statements

to any of the clients. In fact, Watson stated that it is common practice for these

types of cases not to have closing statements. Furthermore, it is undisputed that no

client was aware of the aggregate settlement. Likewise, Watson did not obtain

written consent for aggregate settlement.

                                        - 13 -
      Finally, after the bad faith attorneys disputed the settlement agreement, the

PIP attorneys placed $710,000 in escrow in connection with the settlement of the

Gold Coast case. The escrow account was created for the purpose of setting aside

the forty percent attorneys’ fees in that case. On or about May 31, 2006, Watson

transferred $515,000 to the law firm of Stewart Tilghman Fox & Bianchi, P.A.,

leaving the remainder in dispute. Watson therefore agreed to disburse the balance

subject to court control. On June 1, 2006, Judge Crow ordered that no further

distributions from the account be made without further order of his court. On June

5, 2006, the bad faith attorneys executed a settlement agreement with all the PIP

attorney firms except Watson & Lentner. Because the dispute between Watson

and Stewart was not resolved until either Judge Crow entered his order in April

2008, or the appeal from his order become final in 2012, the JQC’s finding is

supported by clear and convincing evidence.

                                  CONCLUSION

      As stated by Judge David Crow of the Fifteenth Judicial Circuit in and for

Palm Beach County, the complex facts of the underlying case “could be a case

study for a course on professional conduct involving multi-party joint

representation agreements. . . .” We have previously found that a pattern of deceit

and deception “casts serious doubt on [a judge’s] ability to be perceived as truthful

by those who may appear before her in her courtroom.” In re Ford-Kaus, 730 So.

                                        - 14 -
2d 269, 277 (Fla. 1999). Further, “[s]uch conduct diminishes the public’s

confidence in the integrity of the judicial system.” Id. at 277. Under these

circumstances, “removal from judicial office is the appropriate sanction,” because

Judge Watson’s “conduct is fundamentally inconsistent with the responsibilities of

judicial office.” Id. at 276. Additionally, this Court has previously removed a

judge from office for conduct that occurred, in part, while she was still a practicing

attorney. See In re Hapner, 718 So. 2d 785 (Fla. 1998).

      Based on the foregoing, we find that Judge Watson’s actions while a

practicing attorney, and her demeanor during these proceedings “cast[ ] serious

doubts” on her “ability to be perceived as truthful by those who may appear before

her in her courtroom.” Accordingly, we find that removal is the appropriate

sanction.

      It is so ordered.

LABARGA, C.J., and PARIENTE, LEWIS, QUINCE, CANADY, POLSTON,
and PERRY, JJ., concur.

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

      Original Proceeding – Judicial Qualifications Commission

Ricardo Morales, III, Chair, and Michael Louis Schneider, General Counsel,
Tallahassee, Florida; Judge Kerry I. Evander, Hearing Panel Chair, Daytona
Beach, Florida; Lauri Waldman Ross of Ross & Girten, Hearing Panel Counsel,
Miami, Florida; Marvin E. Barkin and Lansing Charles Scriven of Trenam,
Kemker, Scharf, Barkin, Frye, O’Neil & Mullis, P.A., Special Counsel, Tampa,
Florida,

                                        - 15 -
      for Judicial Qualifications Commission, Petitioner

Robert A. Sweetapple and Alexander Demetrios Varkas, Jr., of Sweetapple,
Broeker & Varkas, PL, Boca Raton, Florida; and Colleen Kathryn O’Loughlin of
Colleen Kathryn O’Loughlin, P.A., Fort Lauderdale, Florida,

      for Judge Laura Marie Watson, Respondent

                                      - 16 -