The Fla. BAR v. SHANKMAN

• Decision Date: 08 July 2010
• Docket Number: No. SC08-1107.,SC08-1107.
• Citation: 41 So.3d 166
• Parties: THE FLORIDA BAR, Complainant, v. Richard Stuart SHANKMAN, Respondent.
• Court: Florida Supreme Court

41 So.3d 166

THE FLORIDA BAR, Complainant, v. Richard Stuart SHANKMAN, Respondent.

No. SC08-1107.

Supreme Court of Florida.

July 8, 2010.

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

John F. Harkness, Executive Director, Kenneth Lawrence Marvin, Staff Counsel, The Florida Bar, Tallahassee, FL, and Karen Boroughs Lopez, Bar Counsel, and Cynthia Lois Miller, Assistant Bar Counsel, The Florida Bar, Tampa, FL, for Complainant.

Steven C. Whalen, P.A., Palm Harbor, FL, and John M. Klawikofsky, and David R. Ristoff of Williams, Ristoff and Proper, PLC, New Port Richey, FL, for Respondent.

PER CURIAM.

We have for review the referee's report recommending that the respondent, Richard Stuart Shankman, be found guilty of professional misconduct and suspended for a period of ninety days. Shankman seeks review of the referee's recommendations as to both guilt and discipline, as well as an adverse evidentiary ruling. The Florida Bar cross-petitioned, seeking review of the referee's recommendation that Shankman be found not guilty of violating rule 4-8.4(c) of the Rules Regulating the Florida Bar, the finding of no aggravating factors, as well as the recommended discipline. We have jurisdiction. See art. V, § 15, Fla. Const.

BACKGROUND

The Florida Bar filed a four-count complaint against Shankman on June 11, 2008, alleging violations of a number of the Rules Regulating the Florida Bar with respect to his representation of a seventeen-year-old female client. Following appointment of a referee and holding a final hearing, the referee submitted a report recommending Shankman be found guilty of violating the following rules: under Count I, rule 4-1.5(a) (an attorney shall not enter into an agreement for, charge, or collect an illegal, prohibited, or clearly excessive fee); under Count II, rules 4-1.1 (a lawyer shall provide competent representation to a client) and 4-1.4(b) (a lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation); and under Count III, rules 4-1.7(b) (conflict of interest) and 4-8.4(d) (conduct prejudicial to the administration of justice). With respect to Count IV, however, the referee recommends finding Shankman not guilty of violating rule 4-8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation). The referee also recommends that Shankman be suspended for ninety days, ordered to attend the Florida Bar's Ethics School, and that costs be awarded to the Bar.

Shankman petitioned for review, challenging the referee's recommendations of guilt with respect to Counts I, II, and III, the recommended sanction of a ninety-day suspension, and the referee's ruling in which he took judicial notice of a federal district court order and report and recommendation underlying that order, issued by the United States District Court, Middle District of Florida, Tampa Division, Case No. 8:02-CV-2323-T-17EAJ. The case, brought by Shankman in a petition for quantum meruit, involved the client with whom Shankman's conduct gave rise to these proceedings.¹ The Bar cross-petitioned, challenging the referee's recommendation of not guilty as to Count IV, the finding of no aggravating factors, and the recommended discipline. In an order dated March 9, 2010, the Court suspended Shankman for a period of six months, effective thirty days from the date of the order. The opinion of the Court now follows.

ANALYSIS

1. Judicial Notice

Shankman challenges the referee's ruling taking judicial notice of the federal district court judge's order and the magistrate's report and recommendation in Shankman's civil action against the client, seeking quantum meruit relief.

Shankman argues that the referee misapplied section 90.202(2), Florida Statutes (2009).² In addition, Shankman contends that the facts in those documents tainted the instant proceedings and compromised the referee's impartiality.

We reject Shankman's claim. Bar disciplinary proceedings are not civil or criminal in nature, but quasi-judicial; therefore, the rules of evidence are not binding upon the referee. Fla. Bar. v. Tobkin, 944 So.2d 219, 224 (Fla.2006). "[T]his Court has reviewed referees' actions regarding the admissibility of evidence in discipline cases using an abuse of discretion standard." Fla. Bar v. Rotstein, 835 So.2d 241, 244 (Fla.2002). The case law unequivocally supports the referee's taking judicial notice of the federal report and recommendation and order in this bar disciplinary case. See, e.g., Fla. Bar v. Head, 27 So.3d 1 (Fla.2010); Tobkin, 944 So.2d at 224; Fla. Bar v. Vining, 707 So.2d 670, 672 (Fla.1998); Fla. Bar v. Calvo, 630 So.2d 548, 549-50 (Fla.1993); Fla. Bar v. Rood, 620 So.2d 1252, 1255 (Fla.1993). Thus, the referee could properly consider the federal district court's order and magistrate's report, and, although not done here, the referee could have relied "upon them as support for the disciplinary findings of fact." Head, 27 So.3d at 8.

2. Recommendations of Guilt

In reviewing a referee's findings of fact and recommendations concerning guilt, the Court's standard of review is well-established: "This Court has repeatedly stated that with regard to facts, this Court's review is limited, and if a referee's findings of fact are supported by competent, substantial evidence in the record, this Court will not reweigh the evidence and substitute its judgment for that of the referee." Fla. Bar v. D'Ambrosio, 25 So.3d 1209, 1215 (Fla.2009).

Count I

Under Count I, the Bar alleged Shankman sought an excessive fee, in violation of rule 4-1.5(a). In July 2002, a seventeen-year-old woman (the client) hired Shankman to represent her in a civil matter. The year before, during spring break in Daytona Beach, Florida, the client had participated in a "wet t-shirt contest." Unbeknownst to the client, the contest had been videotaped. When the videotape was broadcast on cable television, the client contacted the law firm Shankman, Tancredo & Co. L.C. regarding potential claims arising out of the videotaping and distribution of the videotape.

At that time, Shankman had been practicing law for less than three years and had no experience litigating in federal court. Shankman associated with Trenam Kemker, a Tampa law firm with trial and federal court experience. The client entered into a contingency fee agreement with Shankman and the Trenam Kemker firm, providing that the attorneys would receive 40 percent of her gross recovery. Under this agreement, Shankman was to receive 9.6 percent of the gross recovery. Because Shankman was dissatisfied with Trenam Kemker's advice to settle the case, Shankman convinced the client to fire the firm.

Thereafter, Shankman advised the client to hire a second law firm, Gary, Williams, Parenti, Finney, Lewis, Watson & Sperando, P.L. She entered into a contingency fee agreement with the firm and Shankman, which provided for a 45 percent contingency fee to the attorneys. Under this agreement, Shankman's share of the fees increased to approximately 11.25 percent of the client's gross recovery. After the Gary law firm attorneys arranged a settlement conference with one defendant, Shankman convinced the client to fire the Gary law firm.

The client then signed a contingency fee agreement with Shankman's newly formed law firm, Litigation Concepts, L.C. Shankman advised the client to hire a third law firm, Arthur Tifford, P.A. She signed a fee agreement addendum, providing for a 45 percent contingency fee to be split equally between the Tifford firm and Litigation Concepts. Thus, under this agreement, Shankman's fee share again increased. For a third time, Shankman convinced the client to fire the associated law firm. Following the hiring and firing of a fourth and fifth law firm, the client fired Shankman and retained new counsel.

Based upon these findings of fact, the referee recommends finding Shankman guilty of violating rule 4-1.5(a), which provides that "[a]n attorney shall not enter into an agreement for, charge, or collect an illegal, prohibited, or clearly excessive fee or cost." Under rule 4-1.5(a)(1),

[a] fee or cost is clearly excessive when:

(1) after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee or the cost exceeds a reasonable fee or cost for services provided to such a degree as to constitute clear overreaching or an unconscionable demand by the attorney....

Accordingly, a lawyer may properly charge his or her client for the time that reasonably should be devoted to accomplish a particular task. Fla. Bar v. Richardson, 574 So.2d 60, 63 (Fla.1990). Moreover, rule 4-1.5(b) identifies numerous factors that can be considered in determining what constitutes a reasonable fee, including the time and labor required, the novelty, complexity, and difficulty of the questions involved, and the skills requisite to perform the legal services properly.

In recommending that Shankman be found guilty of violating rule 4-1.5(a), the referee relied upon two facts—i.e., that the percentage of Shankman's fee increased with each subsequent hiring of a new law firm and that Shankman sought 45 percent of the client's recovery in his action for quantum meruit in federal court. While the record supports these findings of fact, they are an insufficient basis upon which to conclude that Shankman's fee was excessive. Moreover, the Bar did not present expert testimony to establish that Shankman's fee was unreasonable. Therefore, we disapprove of this portion of the referee's report. Cf. Fla. Bar v. Hollander, 607 So.2d 412, 414-15 (Fla.1992) (termination-of-services clause and withdrawal clause of contingency fee agreement violated rule 4-1.5(a) because "[b]oth clauses provided that [the client] promptly pay for all services, fees, charges, and expenses incurred through the date of either the termination or withdrawal, ......