The Fla. Bar v. Adorno

• Decision Date: 21 April 2011
• Docket Number: No. SC09–1012.,SC09–1012.
• Citation: 60 So.3d 1016
• Parties: THE FLORIDA BAR, Complainant,v.Henry Nissim ADORNO, Respondent.
• Court: Florida Supreme Court

60 So.3d 1016

THE FLORIDA BAR, Complainant,

v.Henry Nissim ADORNO, Respondent.

No. SC09–1012.

Supreme Court of Florida.

April 21, 2011.

John F. Harkness, Jr., Executive Director and Kenneth Lawrence Marvin, Staff Counsel, The Florida Bar, Tallahassee, FL, and Kasey L. Prato, Bar Counsel, The Florida Bar, Miami, FL, for Complainant.Bruce S. Rogow and Cynthia E. Gunther of Bruce S. Rogow, P.A., Fort Lauderdale, FL; and Andrew S. Berman of Young, Berman, et al., North Miami Beach, FL, for Respondent.PER CURIAM.

Both Henry Nissim Adorno and The Florida Bar petition this Court for review of the referee's report finding Adorno guilty of ethical breaches and recommending a public reprimand. Adorno takes issue with the findings of guilt, and the Bar takes issue with the leniency of the punishment.¹ We have jurisdiction. See art. V, § 15, Fla. Const.

As the number of lawyers increases to an unprecedented level, the responsibility of ensuring that all lawyers conduct themselves within the ethical bounds required by the Rules Regulating the Florida Bar continues to be a top priority for this Court. This case involves one of the more experienced members of the Bar, Respondent Henry Nissim Adorno, who committed serious violations of the Rules Regulating the Florida Bar in connection with his representation of clients in a class action case against the City of Miami involving a challenge to the legality of an assessment.

Adorno settled the lawsuit for $7 million on behalf of seven class action plaintiffs, even though those plaintiffs had damages collectively of only $84,000, and thereafter abandoned his obligations to the thousands of individuals who would have been part of the class. The settlement of $7 million resulted in a fee to the law firm of $2 million.

In the words of the Third District Court of Appeal, which reviewed the propriety of the trial court's decision to set aside the entire settlement after learning of these facts: “It defies any bounds of ethical decency to view class counsel's actions as anything but a flagrant breach of fiduciary duty.” Masztal v. City of Miami, 971 So.2d 803, 809 (Fla. 3d DCA 2007). The referee who heard this case described the settlement with seven individuals “to the detriment of the underdetermined/putative class—under the facts of this case” as “prejudicial, illogical, and unexplainable.”

We approve the referee's findings of fact and recommendations of guilt. For the reasons expressed herein, including the seriousness of the misconduct, we disapprove the referee's recommended sanction of a public reprimand and instead impose a three-year suspension—the most severe sanction short of disbarment.

FACTS

Henry Nissim Adorno was admitted to The Florida Bar in 1973 and at the time of the misconduct in this case was a named partner in the Miami firm of Adorno & Yoss. This disciplinary case arose from an underlying civil case seeking class certification for alleged improper emergency medical assessment fees imposed by the City of Miami on property owners.

The parties to the Bar proceedings did not contest the underlying facts, but disputed whether Adorno's conduct gave rise to any rule violations. The referee stated that a detailed description of the underlying events is set forth in Masztal, which is the appeal from the trial court's order setting aside the $7 million settlement. Again, Adorno does not contest the facts in Masztal; he challenges the referee's findings that his conduct violated the Florida Bar rules.

In Masztal, the Third District examined whether the trial court had properly set aside the underlying settlement after it was discovered that the $7 million settlement was only for the few named plaintiffs and not for the entire class. Because the facts presented in Masztal are an accurate summary of the background, and were relied on by the referee, we refer to that opinion:

In early 1998, a group of citizens joined together to contest the proposed fire rescue assessment. They formed a Florida nonprofit corporation called Tenants and Taxpayers United for Fairness, Inc. Peter Clancy was the President, and nine others made up the original Board of Directors, including Judy Clark and Eva Nagymihaly. The corporation solicited donations from the public to fund their impending litigation. The funds helped defray the cost of hiring the firm of Atlas Pearlman Tropp & Borkson, P.A.

The Atlas Pearlman retainer agreement stated that the case would proceed as a class action. Atlas Pearlman subsequently filed a class action complaint and amended complaint. Clancy created an informational pamphlet to distribute to the public and help secure donations. The pamphlet explained that the “named plaintiffs really represent every other private owner in the City” and why “a class action lawsuit [was] filed.” In his testimony, Clark admitted that the purpose of the lawsuit was to end the fire rescue fee and obtain a refund for all who had paid the assessment.

Atlas Pearlman continued representation until the firm merged its practice with the firm of Adorno & Yoss, LLP in 2002. Assistant City Attorney Charles C. Mays represented the City.

Six years elapsed between the inception of the class action suit and settlement during which time extensive litigation and negotiations took place. Both Atlas Pearlman and Adorno & Yoss pursued class certification. The court deferred class certification pending trial or cross-motions for summary judgment on the refund issue.

The original plaintiffs subsequently moved for summary judgment on the invalidity of Ordinance Number 11584 and the unconstitutionality of section 170.201. The trial court held the ordinance invalid to the extent that it authorized the City to impose a special assessment for emergency medical services, and it declared section 170.201 unconstitutional to the extent that it included the phrase emergency medical services. It also struck that portion of the statute.

The original plaintiffs also moved for summary judgment on the City's affirmative defenses. The trial court struck the City's affirmative defense that the plaintiffs paid the assessment voluntarily and without legal compulsion. The court further struck the City's statute of limitations affirmative defense, finding that the plaintiffs' claims were not time-barred. The trial court set the trial of the refund issue for May 26, 2004. At this time, the class had not yet been certified. It is undisputed, and the trial court so found in its March 17, 2006 Order, that everyone treated the case as though the class had been certified.

Masztal, 971 So.2d at 805–06 (footnote omitted) (emphasis added).

The sole issue set for trial on May 26, 2004, was the amount of money that would be refunded to the entire class. Although the trial court had not yet certified the class, the judge had repeatedly stated that class certification was certain because it was a “no-brainer” issue. Even an Adorno & Yoss memo prepared for trial stated that “the sole issue to be tried is the amount of the ... refund due to the property owners of Miami” and that class certification was a “no-brainer.” In the memo, Adorno & Yoss asked for “$75,450,269.64, representing a refund of the illegally assessed portion” of the property assessment. Adorno himself admitted the issue of class certification was a “no-brainer.” Before the trial, Adorno met with the named plaintiffs to discuss dollar amounts with them—they determined that an acceptable settlement for the entire class would be $35 million.

The class was an easily identified group because it was composed of people who had paid the City's property assessment, so it was not difficult to determine the amounts of the refunds that would be owed. Adorno decided to handle the settlement negotiations from this point forward. Following mediation, which was not successful, Adorno refused to speak with the City Attorneys. He wanted to speak only with the City Manager, Joe Arriola, whom Adorno knew. Adorno wanted to talk with the “businessman.” Thus, Adorno sought out Arriola and would only speak with him.

On the evening of May 25, 2004, which was the night before the refund trial, Adorno called Arriola and discussed the City's liabilities, which Adorno stated were from $20 million to $75 million.² Meanwhile, the City had calculated damages for the entire class and determined its liability for refunds to the entire class was $23 million to $24 million. During the course of the phone conversation on the night before trial, Arriola stated that the City could not pay $35 million, but could offer $5 million. Adorno replied, “[T]here is no frigging way that Judge Lopez is going to approve $5 million.” ³

On the morning of May 26, 2004, just before the refund trial, Adorno met with Arriola at a cafe. The mayor of Miami was present for part of this meeting. Arriola asked Adorno, “[I]s there anything we can do to avoid court today?” Adorno then offered to settle the case for $7 million on behalf of the named plaintiffs. The City agreed to this amount. The record indicates that the named plaintiffs would receive $5 million and the firm would receive $2 million. There is no indication regarding how the firm's fee was determined.

After the meeting, that same day, Adorno went to court before Judge Lopez and stated, “The Plaintiffs and Defendant have agreed to settle this case subject to City Commission approval.” Adorno did not clarify that “plaintiffs” meant the handful of named plaintiffs, rather than the entire class. Adorno also told the court that the parties intended to “maintain the status quo” with respect to the refund aspect of the case—this vague statement apparently meant that there would be no further discovery or other activities until after a City Commission meeting in October. At no point during the refund hearing on May 26, 2004, did anyone make it clear to the judge that the settlement applied only to the named plaintiffs, rather than the entire class of...