In re Watson, SC13–1333.

• Decision Date: 18 June 2015
• Docket Number: No. SC13–1333.,SC13–1333.
• Citation: 174 So.3d 364
• Parties: Inquiry Concerning a Judge, No. 12–613 re Laura Marie WATSON.
• Court: Florida Supreme Court

174 So.3d 364

Inquiry Concerning a Judge, No. 12–613 re Laura Marie WATSON.

No. SC13–1333.

Supreme Court of Florida.

June 18, 2015.

Rehearing Denied Aug. 31, 2015.

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

Robert A. Sweetapple and Alexander Demetrios Varkas, Jr., of Sweetapple, Broeker & Varkas, PL, Boca Raton, FL; and Colleen Kathryn O'Loughlin of Colleen Kathryn O'Loughlin, P.A., Fort Lauderdale, FL, for Judge Laura Marie Watson, Respondent.

Opinion

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.”

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 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.

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.

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.

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,

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