The Florida Bar v. Kavanaugh, SC03-1899.
| Decision Date | 15 November 2005 |
| Docket Number | No. SC03-1899.,SC03-1899. |
| Parties | THE FLORIDA BAR, Complainant, v. Kenneth J. KAVANAUGH, Respondent. |
| Court | Florida Supreme Court |
John F. Harkness, Executive Director, John Anthony Boggs, Staff Counsel, Tallahassee, FL, Lillian Archbold, Bar Counsel, Fort Lauderdale, FL, for Complainant.
Kevin P. Tynan of Richardson and Tynan, P.L.C., Tamarac, FL, for Respondent.
We have for review a referee's report regarding alleged ethical breaches by Kenneth J. Kavanaugh. We have jurisdiction. See art. V, § 15, Fla. Const. We approve the referee's factual findings, recommendations as to guilt, and recommended discipline, with the exceptions noted below.
Harry Pollak hired attorney Kenneth J. Kavanaugh to assist in his effort to cancel an automobile lease agreement and recover his trade-in automobile from Endicott Buick. When the initial effort failed, Pollak and Kavanaugh entered into a contingency fee agreement and Kavanaugh filed suit on Pollak's behalf against Endicott Buick for deceptive and unfair trade practices.
The contingency fee contract provided:
If there is a recovery, the fee for the professional services of the Attorney will be the greater of that amount awarded by the Court (to be paid by the Defendants) or that amount determined according to the following schedule:
. . . .
(b) From the time of filing an Answer or the demand for appointment of arbitrators through the entry of judgment:
(1) 40% of any recovery up to $1 million . . . .
The parties settled prior to trial for $44,868.06 entitling Kavanaugh to a fee of 40% of the recovery. However, Kavanaugh withheld a fee of 53% of the proceeds and had his client sign a copy of the closing statement which showed the retention of the 53% which amounted to some $23,780.07. When Pollak later realized the fee charged was in excess of the 40% agreed upon in the fee contract, he filed a complaint with The Florida Bar ("the Bar").
The matter proceeded to a hearing before a referee, and the referee made the following findings of fact:
B. On or about January of 1999, the Respondent was hired by Harry Pollak to represent him in a Deceptive and Unfair Trade Practices action against Endicott Buick.
C. Pollak and the Respondent agreed to a contingency fee contract which stated that Respondent would receive: "the greater of the amount awarded by the Court (to be paid by the defendants) or that amount determined according to the following schedule:. . . 40% of any recovery up to $1 million. . . ."
D. The case was eventually settled before trial in March of 2001 for $44,868.06.
E. After settlement of the case, Kavanaugh signed a final closing statement and presented it to Pollak on April 3, 2001. In the final closing statement, Kavanaugh's attorney's fee was $23,780.07, which amounted to 53% of the net proceeds.
F. Because Respondent charged an amount of fees above the limits set forth in the terms of the contingency agreement, respondent was required to get prior court approval for his increased fee.
G. Attorney Kavanaugh asserts in his defense that the amount of fees is appropriate and in conformity with the language set forth in the contract for representation. Kavanaugh claims that the contingency fee provision of the contract is not applicable in that Kavanaugh claims a greater amount of attorney's fees was awarded by the court. Kavanaugh argues the settlement reached in this matter is the equivalent to court ordered attorney's fees.
H. There is no evidence that any judge signed a settlement agreement. Nor was there a court order which delineated what portion of the $44,868.06 net proceeds was to be applied to attorney's fees.
I. It is unequivocal that at no time prior to the disbursement of funds was the matter of any award of attorney's fees submitted to the trial court. Rather, in September 2001, Kavanaugh motioned the court for its entry of an order approving fees charged. The trial court found that it lacked jurisdiction over the matter and denied Kavanaugh's motion as moot in that the proceeds of the lawsuit had already been disbursed.
J. Respondent failed to get prior court approval for his increased fee.
K. Respondent arbitrarily awarded himself 53% of the net proceeds.
Based on these findings, the referee recommended that Kananaugh be found guilty:
I recommend that Respondent be found guilty of violating [Rule of Professional Conduct 4-1.5(a)], which provides that an attorney shall not enter into an agreement for, charge, or collect a clearly excessive fee.
The referee also made the recommendations as to disciplinary measures to be imposed:
A. Public reprimand before the Supreme Court. . . .
B. Restitution to Pollak in the amount of $4,307.83, plus interest at the statutory rate from April 3, 2001 (the date of the final closing statement) to the present, to be payable within thirty (30) days of the entry of this order.
C. Revocation of the Respondent's Florida Bar Board Certification in Civil Trial Law.
D. Payment of the Bar's costs in these proceedings.
In recommending imposition of the above disciplinary measures, the referee took into account the following factors:
A. Personal history of the Respondent:
Age: 61.
Date admitted to the Bar: June 1, 1976.
Board Certification: Civil Trial Law.
B. Aggravating factors:
9.22(b) Dishonest or selfish motive.
9.22(g) Refusal to acknowledge wrongful nature of conduct.
9.22(h) Vulnerability of victim.
9.22(i) Substantial experience in the practice of law.
9.22(j) Indifference to making restitution.
C. Mitigating factors: None.
Kavanaugh has petitioned for review, arguing that he should be found not guilty of the alleged violation or, alternatively, that he should only be admonished and required to refund $4,307.83. The Bar has cross-petitioned, arguing that a thirty-day suspension, not a public reprimand, is the appropriate sanction.
The Court's standard of review for evaluating a referee's factual findings and recommendations as to guilt has been articulated in numerous decisions:
This Court's review of such matters is limited, and if a referee's findings of fact and conclusions concerning guilt 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. Rose, 823 So.2d 727, 729 (Fla.2002). Implicit in this standard is the requirement that the referee's factual findings must be predicated upon evidence presented at the disciplinary hearing. Kavanaugh contends that the referee's recommendation that he be found guilty of collecting a clearly excessive fee is not supported by the evidence. We disagree.
The referee made findings that Kavanaugh and Pollak signed a contingency fee contract; the contract provided that Kavanaugh's fee would be the greater of either the amount awarded by the court or 40% of the recovery amount; the court did not award any fees; and Kavanaugh withheld 53% of the net recovery for his fees. A review of the record shows that each of these factual findings is supported by the testimony and uncontested documentary evidence. Kavanaugh's claim that the contractual fee provision was modified by an implied amendment to the agreement pursuant to his fee statement and his client's signature thereon is simply a re-argument of this fact-based claim before the referee. We approve the referee's rejection of this claim and the referee's factual findings, as well as the referee's recommendation that Kavanaugh be found guilty of collecting a clearly excessive fee in violation of rule 4-1.5(a).1
The Court's standard of review for evaluating a referee's recommended discipline is as follows:
In reviewing a referee's recommended discipline, this Court's scope of review is broader than that afforded to the referee's findings of fact because, ultimately, it is our responsibility to order the appropriate sanction. However, generally speaking, this Court will not second-guess the referee's recommended discipline as long as it has a reasonable basis in existing case law and the Florida Standards for Imposing Lawyer Sanctions.
Fla. Bar v. Springer, 873 So.2d 317, 321 (Fla.2004) (citations omitted). In the present case, we conclude the recommended discipline meets this standard with the exceptions noted herein.
Initially, we conclude the recommended sanction of a public reprimand has a reasonable basis in existing case law. See Fla. Bar v. Hollander, 594 So.2d 307 (Fla.1992) (); Fla. Bar v. Johnson, 526 So.2d 53 (Fla.1988) (). In contrast, the cases cited by the Bar to support suspension are distinguishable. See Fla. Bar v. Forrester, 656 So.2d 1273 (Fla.1995) (); Fla. Bar v. McAtee, 601 So.2d 1199 (Fla.1992) (); Fla. Bar v. Richardson, 574 So.2d 60 (Fla.1990) (...
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