Fla. Bar v. Petersen

• Citation: 248 So.3d 1069
• Decision Date: 05 July 2018
• Docket Number: No. SC14–1942,SC14–1942
• Parties: THE FLORIDA BAR, Complainant, v. Byron Gregory PETERSEN, Respondent.
• Court: United States State Supreme Court of Florida

248 So.3d 1069

THE FLORIDA BAR, Complainant,

v.Byron Gregory PETERSEN, Respondent.

No. SC14–1942

Supreme Court of Florida.

[July 5, 2018]

Joshua E. Doyle, Executive Director, Tallahassee, Florida, Navin A. Ramnath, Bar Counsel, and Adria E. Quintela, Staff Counsel, The Florida Bar, Sunrise, Florida, for Complainant

Byron G. Petersen, pro se, Boca Raton, Florida, for Respondent

PER CURIAM.

We have for review a referee's report recommending that Respondent, Byron Gregory Petersen, be found guilty of professional misconduct and suspended from the practice of law for a period of ninety-one days. We have jurisdiction. See art. V, § 15, Fla. Const. As more fully explained below, after consideration of the referee's report, the parties' briefs, the response to the Court's order to show cause why the referee's recommended discipline should not be disapproved and a more severe sanction, up to a three-year suspension, be imposed, and The Florida Bar's (Bar) reply, we approve the recommendations pertaining to the alleged rule violations but disapprove the proposed discipline and suspend Petersen for a period of three years.

BACKGROUND

In October 2014, the Bar filed a complaint alleging that Respondent Petersen engaged in misconduct in violation of the Rules Regulating the Florida Bar (Bar Rules). A referee was appointed to consider the matter. The referee submitted a report and recommendations for the Court's consideration. The Court considered the referee's report, and Petersen's challenges thereto. Thereafter, on November 6, 2017, the Court issued an order directing Petersen to show cause why the referee's recommended discipline, a ninety-one day suspension, should not be disapproved and a more severe sanction, up to and including a three-year suspension, imposed. Petersen filed a response to the Court's order and the Bar filed a reply. Petersen also filed a "Motion for Sanctions Directed to the Response of The Florida Bar's Staff to Show Cause Order," as well as several notices of supplemental authority that are primarily aimed at establishing the correctness of his actions.¹

FACTS

Beginning in 2005, Petersen was retained by Robert and Wendy Gielchinsky to represent the couple and their various business organizations. The testimony indicates that Petersen represented the Gielchinskys in a number of legal matters; however, three cases are at issue here:

The Vibo Case. In late 2004 or early 2005, Robert Gielchinsky and his company, the North American Tobacco Import Company, filed a lawsuit against the Vibo Corporation in the Eleventh Judicial Circuit, alleging breach of settlement agreement and other claims (the Vibo case). This lawsuit arose out of an earlier 2002 case, where Gielchinsky sued Vibo for interference with his intellectual property rights to the Bronco cigarette brand; the case settled when Gielchinsky assigned his intellectual property rights to Vibo in return for certain specified payments. In this subsequent lawsuit, Gielchinsky alleged that Vibo breached the settlement agreement by failing to make the required payments. The complaint was amended several times, but ultimately sought both monetary damages and return of the intellectual property rights.

Petersen was originally brought in as co-counsel on the Vibo case. His original fee agreement appears to have provided for a $3,000 monthly retainer fee, as well as some percentage of the recovery. However, Petersen later took over as sole counsel on the case, and his fee agreement was modified several times. In February 2008, Petersen and the Gielchinskys signed an "Authority to Represent and Contingency Fee Agreement," where Petersen would receive ten percent of "any recovery" resulting from the Vibo case.² Subsequently, in September 2008, Petersen and the Gielchinskys signed an "Amendment to February 2008 Authority to Represent and Contingency Fee Agreement," giving Petersen fifteen percent of "any recovery from any source" resulting from the Vibo case. Then in April 2010, Petersen drafted, and the Gielchinskys signed, a "Retainer Agreement Addendum." The addendum stated:

In the Vibo case I think that my firm's fee agreement with you and Wendy not only covers a percentage "recovery" against a money judgment but also would cover a percentage "recovery" from any assets transferred to you in settlement or through trial (such as a transfer of the Bronco brand to you) or a hybrid of the two. The total recovery for the aforementioned representation is not to exceed $5,000,000.00 (five million dollars). Please print this out, sign below, scan this, and email the scan PDF to me letting me know that you agree with this clarification.

The addendum is signed and dated April 9, 2010.

The referee found that litigation in the Vibo case continued on for several years, and as the case progressed it became clear that the intellectual property rights to the Bronco brand would be the portion of the settlement worth the greatest value, while the monetary damages would be relatively small. The Gielchinskys testified they believed that Petersen's fee would be based on the monetary recovery in the case, while Petersen stated that the fee agreement always contemplated a percentage of the non-monetary recovery. The referee found:

Whether with [the April 2010] addendum or whether with the initial fee agreement or its subsequent revisions, Respondent gained a pecuniary interest in the litigation which could be adverse to the Gielchinskys. Respondent failed to advise the Gielchinskys in writing that they could and/or should seek independent legal counsel to review the initial fee agreement or subsequent revisions ... or addendum prior to execution and failed to give them the opportunity to do so as required by the Rules Regulating The Florida Bar.

The referee also heard testimony from Petersen's former paralegal, Christina Broder. She testified that Petersen made an intentional effort to create conflicts of interest with the Gielchinskys. The referee stated:

Because Respondent was handling many of the Gielchinskys' cases on a contingency fee basis, Respondent could not simply withdraw. If Respondent chose to withdraw from the contingency case without good cause, Respondent would be unable to claim an interest in any recovery received after his withdrawal. In order to withdraw from the cases and still have a claim to fees, Respondent had to show good cause. A conflict of interest with a client is good cause to withdraw from a contingency fee case and still have the ability to make a claim for fees.

In his effort to create conflicts, the referee found that Petersen neglected cases, he failed to effectively communicate with the Gielchinskys, he lost or misplaced documents and evidence that the Gielchinskys were entitled to, and he made misrepresentations to the clients.

In addition, the evidence indicates the case settled in February 2011. Following the settlement, both Petersen and his co-counsel, Ronald Weil (who had been retained in anticipation of a trial), filed charging liens. Petersen was represented by an independent attorney on the charging lien matter. In September 2011, the trial court held a hearing to address the liens; among other witnesses, the court heard testimony from Attorney Robert Josephsberg on the ethics of the fee agreement. Thereafter, on January 26, 2012, the court entered an Order which found, in relevant part, as follows:

This Court finds that pursuant to the terms of the retainer agreement and an email addendum Byron G. Petersen, P.A. is to receive fifteen percent (15%) of the total settlement monetary funds of two hundred twenty five thousand dollars and no cents ($225,000), which is thirty three thousand seven hundred fifty dollars and no cents ($33,750.00).

This Court finds that pursuant to the terms of the retainer agreement Byron G. Petersen, P.A. is to credit Plaintiffs twenty four thousand dollars and no cents ($24,000.00) that will be applied against the fifteen percent (15%) of the settlement monetary funds allocated to Byron G. Petersen. P.A.

This Court finds that pursuant to the terms of the retainer agreement Byron G. Petersen, P.A. is to also receive his documented costs, accompanied with a cost statement and supporting receipts to be finalized at a future hearing.

This Court finds that Byron G. Petersen, P.A. is entitled to a fifteen percent (15%) of the Plaintiffs consent Judgment for seven million dollars and no cents ($7,000,000) against Vibo Corporation and Trademark Holdings, LLC entered in Gielchinsky et. Al v. Vibo Corporation , Case No.: 04–23115 CA 22, in favor of Gielchinsky/North American Tobacco Co and/or his/it's assigns.

This Court finds that Byron G. Petersen, P.A. is entitled to a fifteen percent (15%) ownership interest in the subject intellectual property "Bronco". However, at such time as Byron Petersen, P.A. realizes the sum of five million dollars and no cents ($5,000,000) from any income stream emanating from the BRONCO brand, then and in that event, Byron Petersen's said fifteen percent (15 %) ownership interest in the subject intellectual property "BRONCO" shall automatically revert back to Plaintiff, Robert Gielchinsky by operation of law .

This Court enters a six (6) month stay to allow Plaintiffs to pursue business ventures relating to the subject intellectual property whereby Byron G. Petersen, P.A. may not foreclose any liens or attempt to damage any business interests or operations related to the intellectual property that Plaintiff may establish or attempt to establish.

(Emphasis added.)

The Aldar Case. Beginning in 2008, Petersen represented another of Robert Gielchinsky's companies, the Aldar Tobacco Group, in litigation in the United States District Court for the Southern District of Florida. In July 2011, Petersen withdrew as counsel for Aldar. Subsequently, in September 2011, he filed a notice of charging lien. Aldar, through its successor counsel, filed a motion to strike the lien, arguing that Petersen represented Aldar on a...