Chandris, S.A. v. Yanakakis

• Decision Date: 21 December 1995
• Docket Number: No. 82934,82934
• Citation: 668 So.2d 180
• Parties: , 20 Fla. L. Weekly S603 CHANDRIS, S.A., etc., et al., Appellants, v. Basil YANAKAKIS, et al., Appellees.
• Court: Florida Supreme Court

Page 180

668 So.2d 180

1996 A.M.C. 2668, 20 Fla. L. Weekly S603

CHANDRIS, S.A., etc., et al., Appellants, v. Basil YANAKAKIS, et al., Appellees.

No. 82934.

Supreme Court of Florida.

Dec. 21, 1995.

Rehearing Denied Feb. 16, 1996.

Certified Question of Law from the United States Court of Appeals for the Eleventh Circuit--Case No. 91-5542.

David J. Horr of David J. Horr, P.A., Miami; Joseph T. Stearns, New York City; and Reginald M. Hayden, Jr. of Hayden & Milliken, Miami, for Appellants.

Joel D. Eaton of Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin, P.A., Miami; Tony Cunningham of Cunningham Law Group, P.A., Tampa; and Ira H. Leesfield of Leesfield & Blackburn, P.A., Miami, for Appellees.

HARDING, Justice.

This case is before the Court to review two questions of law certified by the United States Court of Appeals for the Eleventh Circuit in Yanakakis v. Chandris, S.A., 9 F.3d 1509 (11th Cir.1993). The questions presented are expressed as follows:

(1) WHETHER AN OUT-OF-STATE ATTORNEY, WHO RESIDES IN FLORIDA BUT IS NOT ASSOCIATED WITH A FLORIDA LAW FIRM, ENGAGES IN THE UNAUTHORIZED PRACTICE OF LAW WHERE THAT ATTORNEY ENTERS INTO A CONTINGENT FEE AGREEMENT IN FLORIDA, THEREBY RENDERING THAT FEE AGREEMENT VOID.

(2) WHETHER A FEE AGREEMENT OF A FLORIDA LAW FIRM BORN OF A FEE AGREEMENT THAT IS VOID AS THE UNAUTHORIZED PRACTICE OF LAW IS ITSELF VOID.

Id. at 1513-14. We have jurisdiction pursuant to article V, section 3(b)(6) of the Florida Constitution. We answer both questions in the affirmative based upon our conclusion that in order to further the public interest we must regulate contingent fee agreements entered by attorneys in Florida for legal services to be performed in Florida. Specifically, we find that Florida contingent fee agreements entered by attorneys not subject to our professional regulations are unauthorized legal services and are void as against public policy. Florida contingent fee agreements entered into by attorneys subject to our regulations but which do not comply with the regulations are likewise void as against the public interest.

This case involves an action for damages alleging tortious interference with contracts for legal representation. Basil Yanakakis, a Massachusetts attorney and Florida resident who is not a member of The Florida Bar entered into a contingent fee agreement with an injured Greek seaman, Nikolas Miliaresis, in Miami, Florida. Miliaresis subsequently signed a second fee agreement in which Yanakakis and the Florida law firm of Leesfield & Blackburn, P.A. (Leesfield), were retained to prosecute the seaman's claim.

Miliaresis discharged Yanakakis and Leesfield after he settled directly with the operators of the ship and its insurer, Chandris, S.A., Chandris, Inc., and Transport Mutual Services, Inc. (Chandris). Yanakakis and Leesfield filed an action in federal district court alleging that Chandris used fraud and coercion to induce Miliaresis to discharge the attorneys. The jury returned a verdict in favor of Yanakakis and Leesfield, and awarded both compensatory and punitive damages. The district court entered judgment accordingly and denied Chandris's post-trial motions.

Chandris raised a number of issues on appeal to the Eleventh Circuit Court of Appeals, including an assertion that the district court erred in denying Chandris's cross-motion for summary judgment. The Eleventh Circuit concluded that the resolution of that issue could be dispositive of Chandris's appeal. The court further determined that the issue presented questions of first impression under Florida law and certified two questions to this Court, namely, whether an out-of-state attorney who resides in Florida but is not associated with a firm may enter into retainer agreements in Florida and whether a contingent fee agreement born of a void fee agreement is invalid.

We cite the opinion of the circuit court to more fully explain the relevant facts and circumstances in this case:

On October 3, 1984, Nikolas Miliaresis (hereinafter "Miliaresis"), a Greek seaman, was injured while the ship on which he worked was docking in Cozumel, Mexico. Miliaresis was airlifted to a hospital in Miami, Florida, where his leg was amputated.

Basil Yanakakis, at the request of a Greek Orthodox priest, visited Miliaresis, who spoke little English, at Jackson Memorial Hospital in Miami, Florida. Yanakakis was born in Greece. He was admitted to the Massachusetts Bar in 1964. Between 1964 and 1979, Yanakakis practiced law and taught at Suffolk Law School. He specialized in international and maritime law. In addition, Yanakakis was admitted to practice before the United States District Court of Massachusetts, the First Circuit Court of Appeals, the United States Court of Customs and Patent Appeals, the United States Tax Court, and the United States Supreme Court. In 1980, however, Yanakakis discontinued the practice of law and moved to Florida where he established his domicile. Upon moving to Florida, he became involved in real estate and managed personal investments. Yanakakis is not, and has never been, a member of the Florida Bar.

Yanakakis met with Miliaresis in the hospital on several occasions. During those visits Miliaresis learned that Yanakakis was a member of the Massachusetts Bar. Yanakakis told Miliaresis that he was not a member of the Florida Bar. On October 16, 1984, Miliaresis signed a retainer agreement written in English and titled "Authority to Represent" which stated that Miliaresis retained "BASIL S. YANAKAKIS, ATTORNEY from the Commonwealth of Massachusetts as my attorney to represent me...." The retainer agreement did not state that Yanakakis was not licensed to practice in Florida. Yanakakis told Miliaresis he would represent him and find a local attorney for him. Additionally, at some point, Yanakakis gave Miliaresis's brother a label that stated: "Basil S. Yanakakis, Attorney at law, Suite 801 New World Tower, 100 North Biscayne Boulevard, Miami, Florida 33132."

In November of 1984, Yanakakis contacted Ira H. Leesfield to discuss retaining Leesfield & Blackburn, P.A., for prosecution of Miliaresis's claim. Pursuant to arrangements made between Yanakakis and Leesfield, an attorney from that firm met with Miliaresis. At that time, Miliaresis orally retained the Leesfield firm to assist Yanakakis. Soon thereafter, the firm initiated an investigation of Miliaresis's claim. On March 18, 1985, Miliaresis executed an agreement retaining "the Law Offices of Leesfield and Blackburn and Basil S. Yanakakis as my attorneys...." The fee agreement dated March 18 was signed by Yanakakis, but not by Leesfield & Blackburn. The agreement was silent as to the distribution of fees as between Yanakakis and the Leesfield firm.

Ultimately, Miliaresis settled directly with defendants and discharged Yanakakis and the Leesfield firm. Plaintiffs filed an action alleging that defendants intentionally induced Miliaresis, by fraud and coercion, to discharge the plaintiffs, thereby tortiously interfering with the plaintiffs' advantageous business relationship with Miliaresis. Following judgment for the plaintiffs, defendants Chandris, S.A., Chandris, Inc., and Transport Mutual Services, Inc., appeal.

9 F.3d at 1511-12 (footnotes and record citations omitted).

Chandris argues that Yanakakis procured the original agreement with Miliaresis through the unauthorized practice of law in violation of section 454.23, Florida Statutes (1983), ¹ and thus the agreement is void ab initio. Yanakakis contends that because Miliaresis's claim was based on the Jones Act ² Florida may not enjoin an attorney from advising about this federal legislation. He essentially argues a federal law exception to the unauthorized practice of law, and cites Sperry v. Florida ex rel. Florida Bar, 373 U.S. 379, 83 S.Ct. 1322, 10 L.Ed.2d 428 (1963), as authority.

In Sperry, the United States Supreme Court determined that Florida could not enjoin a nonlawyer registered to practice before the United States Patent Office from preparing and prosecuting patent applications in Florida, even though those activities constitute the practice of law. The Court's ruling was based upon the federal statute and patent office regulations that specifically authorize practice before the patent office by nonlawyer agents. 373 U.S. at 384, 83 S.Ct. at 1325. The Court recognized that "Florida has a substantial interest in regulating the practice of law within the State and that, in the absence of federal legislation, it could validly prohibit nonlawyers from engaging in this circumscribed form of patent practice." Id. at 383, 83 S.Ct. at 1325. The Court further noted that because "patent practitioners are authorized to practice only before the Patent Office, the State maintains control over the practice of law within its borders except to the limited extent necessary for the accomplishment of the federal objectives." Id. at 402, 83 S.Ct. at 1335.

Unlike the federal patent law at issue in Sperry, the Jones Act does not authorize practice by nonlawyers and gives state and federal courts concurrent jurisdiction over such claims. See Engel v. Davenport, 271 U.S. 33, 37, 46 S.Ct. 410, 412, 70 L.Ed. 813 (1926). In Norfolk & Western Railway Co. v. Beatty, 400 F.Supp. 234 (S.D.Ill.), aff'd, 423 U.S. 1009, 96 S.Ct. 439, 46 L.Ed.2d 381 (1975), a federal district court upheld the constitutionality of an Illinois court rule limiting the participation of out-of-state attorneys in pending Federal Employers' Liability Act and Jones Act litigation. Even though the cases were of "federal origin," the district court refused to "create a limited federal or national bar and to impose it on the states." Id. at 237. The court concluded that to do so would be in total disregard of the state's great interest in controlling the practice of law in its own courts. Id. at 237 & n. 2. The United States Supreme Court has also stated that "[t]here is no right of federal origin...