Orr v. Black & Furci, PA

• Decision Date: 03 February 1995
• Docket Number: No. 93-642-CIV-ORL-18.,93-642-CIV-ORL-18.
• Citation: 876 F. Supp. 1270
• Parties: James C. ORR, Trustee, Plaintiff, v. BLACK & FURCI, P.A., Roy Black, Defendants.
• Court: U.S. District Court — Middle District of Florida

876 F. Supp. 1270

James C. ORR, Trustee, Plaintiff, v. BLACK & FURCI, P.A., Roy Black, Defendants.

No. 93-642-CIV-ORL-18.

United States District Court, M.D. Florida, Orlando Division.

February 3, 1995.

COPYRIGHT MATERIAL OMITTED

Kevin F. Foley, Maguire, Voorhis & Wells, P.A., Orlando, FL, for plaintiff.

Robert A. Soriano, James B. Baldinger, Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tampa, FL, Scott A. Kornspan, Black & Seiden, P.A., Miami, FL, for defendants.

ORDER

G. KENDALL SHARP, District Judge.

This case is before the court on Defendants' motion for summary judgment. Plaintiff James C. Orr (Orr) is the Chapter 11 Trustee of Timothy S. Brumlik's (Brumlik) and Patricia Brumlik's estate in the related bankruptcy case, No. XX-XXXXX-XC1. Orr brought this case against Defendants Black & Furci, P.A. and Roy Black (Black), alleging that Black was negligent in his representation of Brumlik in a federal criminal matter in 1990. Orr seeks damages for professional malpractice and for breach of contract, an accounting of Roy Black's expenses in representing Brumlik, and rescission of the Fee Agreement between Black and Brumlik. Upon review of the case file and the applicable law, the court concludes that Defendants are entitled to summary judgment on all counts.

I. Facts

Timothy S. Brumlik was arrested on September 15, 1989, pursuant to an undercover operation conducted by the Florida Department of Law Enforcement (FDLE) and the Internal Revenue Service (IRS). This arrest ultimately led to a six count federal indictment for money laundering, forfeiture, wire fraud, and attempting to import cocaine. Brumlik's potential exposure under this indictment included life imprisonment. Brumlik retained Black & Furci, P.A. to represent him in the criminal proceeding in the United States District Court, Middle District of Florida in Orlando. On October 18, 1989, Roy Black and Brumlik signed a Fee Agreement wherein Black agreed to represent Brumlik in the specific criminal proceedings then against him in exchange for $250,000 plus expenses. The fee was to include representation "up to the filing and arguing of a motion for a new trial; it includes interlocutory appeals, but not an appeal from a final judgment of guilt...." (Fee Agreement). The Fee Agreement also provided that "should the case be settled in any other manner than by contested trial, no part of the fee is to be returned." The Brumliks ultimately paid $301,435 in fees and costs to Black & Furci. The Brumliks also retained James Russ (Russ) to serve as co-counsel in the case.

The lead FDLE agent in the investigation against Brumlik, Juan (Tony) Iturrey (Iturrey), also was arrested in late October 1989. Iturrey was charged with violating federal bribery laws, because he forced the confidential informant in the Brumlik case to pay a portion of the informant's reward to him. Conversations between Iturrey and the informant were recorded. Black filed a motion to require the government to provide copies of these tapes. The information contained on these tapes, including a statement by Iturrey that Brumlik was not a money launderer, was such that the government acknowledged that it might have to provide them to Brumlik's attorneys as exculpatory information under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963).

Black and Russ began to investigate the facts and law of the case and to prepare for trial. Before translating all of the Iturrey-informant tapes (from Spanish), Black and Russ recommended that Brumlik plead guilty to a reduced charge. On January 12, 1990, Brumlik's attorneys met with Assistant United States Attorney Ronald Hayward and two IRS agents for a lengthy settlement conference. Out of this conference emerged a Plea Agreement, to which Brumlik agreed on January 19. On January 22, Brumlik pled guilty to a superseding information charging him with one count of money laundering in violation of 18 U.S.C. § 1956(a)(3)(B) (1988). At the arraignment, Brumlik admitted that he had committed the crime charged. Brumlik explained to the court that a man had approached him seeking to purchase real estate with money obtained from illegal drug sales. Despite this fact, Brumlik agreed to sell a piece of real estate to the individual. With this explanation, the court accepted Brumlik's guilty plea.

The Plea Agreement specified that Brumlik would "cooperate fully with the government and ... testify ... in connection with the charges in this case in other matters.... and make himself available for interviews by law enforcement officials." In turn, the government agreed to consider whether such cooperation qualified as "substantial assistance," thus qualifying Brumlik for a reduced sentence. In addition, the government agreed not to charge Brumlik with any additional crimes to which he admitted during any interviews with the law enforcement personnel. The Plea Agreement did not provide for a shield protecting Brumlik from jeopardy assessments or immediate levies to be issued by the IRS based on information gained from the interviews.

In accordance with the Plea Agreement, Brumlik submitted to extensive debriefings by government agents. The government agents debriefed Brumlik for 16 or 17 full days; Black did not attend any of these sessions, while Russ attended the sessions for four days. While the plea negotiations were ongoing, Black and Russ consulted attorneys in Washington, D.C. who advised Brumlik with regard to communications matters. Black and Russ were concerned about the indirect impact of a guilty plea on Brumlik's television station licenses. The affidavit of Plaintiff's expert, John P. Hume, asserts that Black should have been aware that Brumlik also was exposing himself to potentially severe civil tax liability. Black did not advise Brumlik, however, of the potential civil tax consequences of Brumlik's debriefings.

Brumlik was sentenced on April 22, 1990. During the proceedings, Brumlik announced, "There's no question in my mind ... that I take responsibility for what I did." The court reduced Brumlik's sentence level by two units for Brumlik's acceptance of responsibility, ending with a Total Offense Level of 22, and a jail term of 48 months. The Eleventh Circuit affirmed the judgment of the court on appeal. United States v. Brumlik, 947 F.2d 912 (11th Cir.1991).

In conjunction with Brumlik's arrest the IRS had executed search warrants and seized a large amount of Brumlik's business records. The IRS was able to learn information previously unknown to it through the debriefings. On April 30, the IRS issued two jeopardy assessments, one to Brumlik and one to Brumlik and his wife, immediately executing on the Brumliks' remaining assets. On May 1, Brumlik sent a letter to Black terminating Black & Furci's representation.

Brumlik collaterally attacked his sentence pursuant to 28 U.S.C. § 2255 (1988), claiming that he received ineffective assistance of counsel. Brumlik claimed that his counsel had failed to object to the government's failure to file a downward departure motion or to recommend the lower end of the sentencing guidelines range, based on Brumlik's cooperation with law enforcement officials. Also, Brumlik asserted that his counsel had failed to object to the use of sting money to enhance his offense level. Both of these claims were denied by the court, holding that "Defendant has not met his burden of demonstrating that counsel's conduct fell below an objective standard of reasonableness.... and has not shown prejudice with regard to this matter, as it was within the Government's discretion to file a substantial assistance motion, and the Court was not required to accept the Government's recommendations."

II. Legal Discussion

Orr has filed suit as Chapter 11 Trustee of the Brumlik estate against Black & Furci, P.A. and Black, on four state law counts. Count I calls for an accounting of the funds Brumlik gave to Black for legal representation. Count II alleges breach of the Fee Agreement between Black and Brumlik, and requests damages on the agreement. Count III alternatively seeks rescission of the Fee Agreement. Finally, Count IV asserts that Defendants are liable for professional malpractice for Black's representation of Brumlik. Defendants have filed a motion seeking summary judgment on all counts pursuant to Federal Rule of Civil Procedure 56. The court will address the professional malpractice claim first, followed by the contract claims and the request for an accounting.

A. Summary Judgment Standards

Summary judgment is authorized if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). "At the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249, 106 S.Ct. at 2511. "The substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Id. at 248, 106 S.Ct. at 2510.

The moving party bears the burden of proving that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). In determining whether the moving party has satisfied the burden, the court considers all inferences drawn from the underlying facts in a light most favorable to the party opposing the motion, and resolves all reasonable doubts against the moving party. Anderson, 477 U.S. at 255,...