The Florida Bar v. Frederick, No. SC90007

• Decision Date: 04 May 2000
• Docket Number: No. SC90007, No. SC90387.
• Citation: 756 So.2d 79
• Parties: THE FLORIDA BAR, Complainant, v. Mark Evan FREDERICK, Respondent.
• Court: Florida Supreme Court

756 So.2d 79

THE FLORIDA BAR, Complainant, v. Mark Evan FREDERICK, Respondent.

Nos. SC90007, SC90387.

Supreme Court of Florida.

May 4, 2000.

John F. Harkness, Jr., Executive Director, John Anthony Boggs, Staff Counsel, and Olivia Paiva Klein, Bar Counsel, Tallahassee, Florida, for Complainant.

W.H.F. Wiltshire, Pensacola, Florida, for Respondent.

PER CURIAM.

Mark Evan Frederick petitions this Court to review a referee's report recommending that he be found guilty of violating several of the Rules Regulating the Florida Bar and suspended from the practice of law for ninety-one days. We have jurisdiction. See art. V, § 15, Fla. Const.

I. FACTS

The Florida Bar filed two unrelated complaints against Frederick:

Case No. 90,007

Case number 90,007 arose from a dispute between Frederick and members of a class action suit he had represented. According to the Bar's complaint, fourteen people were originally expected to participate in the class action suit at $2000 each, for a grand total of $28,000 to be paid to Frederick. The Bar alleged that Frederick originally advised members of the class that $5000 of the $28,000 was to be placed in trust and used to pay costs, and that a written contingency fee contract later entered into on behalf of the class provided that $20,000 was a nonrefundable retainer; $8000 was a cost deposit; $13,100 had been paid to Frederick; and $14,900 was owed.

The Bar further alleged that only nine people ultimately participated in the class action suit, and those nine people paid Frederick an additional $4900 which, in addition to the $13,100 already paid, amounted to a total of $18,000 (i.e., $2000 each). The Bar alleged that members of the class at all times believed that the $2000 each had paid included all costs of the litigation, but that Frederick did not place any portion of the $18,000 into his trust account for payment of costs. The Bar alleged that instead, upon later withdrawing from representation, Frederick asserted that the $18,000 represented only his fees, and that he had paid costs of $5500 out of his own operating account. According to the Bar's complaint, Frederick accordingly refunded $12,500 to the class and had each of the nine members of the class sign the following release:

This release will acknowledge receipt of my file from MARK EVAN FREDERICK, P.A., Attorney at Law. We further release said attorney from any further liability in this matter and request that he not perform any more work in my file. We have expressed dissatisfaction with Attorney Mark Evan Frederick regarding his fees and he has offered to meet with us, he has written to us once, and talked to us twice, and we accept his voluntary offer of $12,500.00, to be paid to us within 2 days of his receipt of this release, as complete satisfaction of my fee dispute. Further, we agree to not write the Florida Bar and if we have already, we agree to voluntarily withdraw it. If the undersigned violates this Release agreement, the undersigned has been made aware that we can be sued for the recollection of these funds voluntarily paid to us.

(Emphasis added.) By reason of the foregoing, the Bar charged Frederick with violating Rules Regulating the Florida Bar 4-1.15(a) ("Clients' and Third Party Funds to be Held in Trust"); 4-8.4(d) ("A lawyer shall not ... engage in conduct in connection with the practice of law that is prejudicial to the administration of justice"); and 5-1.1(a) ("Nature of Money or Property Entrusted to Others").

Case No. 90,387

Case number 90,387 arose from Frederick's employment of a disciplinarily resigned attorney, William D. Barrow. According to the Bar's complaint, Barrow had direct contact with one of Frederick's clients, and Frederick was aware of, directed, and acquiesced to such contact. By reason of the foregoing, the Bar charged Frederick with violating Rules Regulating the Florida Bar 3-6.1(c) (1990) ("No suspended, resigned, or disbarred attorney shall have direct contact with any client"), and 4-5.3(a), (b), (c)(1), and (c)(2) ("Responsibilities Regarding Nonlawyer Assistants").

The Referee's Report

The two cases were consolidated, a referee was appointed, and a disciplinary hearing was held. As to case number 90,007, the referee ultimately found at length:

1. Respondent met with a group of men who were anticipating bringing a class action suit against the U.S. Navy. At this meeting in Panama City, Respondent discussed with the group their claims against the Navy and also discussed with them his fees and costs. Initially it was believed that fourteen people would be named as plaintiffs. The financial arrangements were that each person would pay $2,000 and that $5,000 of this would go as a cost retainer.

2. Respondent memorialized this meeting and agreement by letter dated August 18, 1994.

3. On August 31, 1994, Respondent again met with the group, this meeting being held in Destin. At this meeting, Respondent had two of the group, Robert Jones and Sammy Barnes, acting on behalf of the entire group, execute a written agreement for representation.

4. The written agreement, which was a standard form for a contingency fee arrangement, was modified by Respondent who wrote the following terms on the form: "$20,000 nonrefundable retainer; $8,000 cost deposit. $13,100 received today; balance of $14,900 due by September 22, 1994." It was still assumed at this time that the plaintiffs would equal fourteen in number when their suit was filed.

5. At this meeting, Respondent told Robert Jones, one of the two signers for the group, that this contract provided the terms they had discussed at their Panama City meeting.

6. Ultimately, nine people, instead of the anticipated fourteen, participated in the litigation. Respondent was paid $18,000, in keeping with the $2,000 per person. None of this money was deposited into the Respondent's trust account to cover costs.

7. In a later meeting with the group at the Bay County Courthouse, Respondent agreed to proceed with the case as set forth in paragraph numbered six above, in spite of his earlier desire to have at least ten plaintiffs.

8. According to the testimony of the members of the group, which the referee finds convincing, Respondent never told them of his intentions to use the entire $18,000 as his attorney's fees. They still had the understanding that some of this money was to pay costs and expenses, and that this amount would be placed in, as they termed it, an escrow account.

9. On January 25, 1995, Respondent sent his paralegal, Tammy Tikell to a meeting with the nine group members, again in Panama City. At this meeting, Ms. Tikell had each of the group's members sign a straight contingency fee contract to meet what she understood to be a requirement for individual contracts in federal class action law suits.

10. At the time the clients signed the contract, no handwritten language was contained thereon.

11. Ms. Tikell later added language that indicated that the members acknowledged that their individual $2,000 payments made on September 24, 1994, were non-refundable retainers. All of the members of the group who testified at the hearing in this matter vehemently denied the presence of the handwritten notation when they signed the contract. The referee finds their testimony to be more credible than Ms. Tikell's.

12. It was always represented to the group by Respondent that a certain sum of their money would go to pay costs. This was clearly represented in Complainant's exhibits numbered A [Respondent's August 18, 1994 letter] and B [the written contingency fee contract], as well as in his conversations with the clients. At no time was their fee arrangement renegotiated.

13. Respondent failed to maintain any records by which he could establish specific costs incurred in this litigation.

14. In spite of testimony offered by Tammy Tikell that she mailed letters to the clients concerning their delinquent standing on the issue of cost money, Respondent is unable to produce any documentation showing that the clients were billed for any outstanding fees, this in spite of an order to produce.

15. Due to health concerns, Respondent was preparing to withdraw from representation of certain federal litigation matters. In doing so, Respondent prepared letters to be sent to certain clients informing them of this decision.

16. Tammy Tikell, who at the time was in a salary dispute with Respondent, discovered a draft of a withdrawal from representation letter Respondent had prepared for this group of clients.

17. Tammy Tikell informed the group of Respondent's intentions to withdraw from representing them. She eventually showed them a copy of the draft.

18. As a result of seeing the draft, the group sent Respondent a letter demanding $15,000 of their money back or they would "file a Florida bar complaint and sue ... for legal malpractice."

19. Upon receiving the group's letter, Respondent replied by mail offering to refund $7,500.

20. After other negotiations, it was agreed that Respondent would refund the group $12,500.

21. Sammy Barnes, one of the spokespersons for the group[,] was informed by Respondent's secretary that before she could give them the $12,500 check, they would each have to sign a release.

22. The release prepared by Respondent stated the financial terms of their agreement and then provided that "... we agree to not write the Florida Bar and if we have already, we agree to voluntarily withdraw it."

23. The clients thought that they had to sign the release as it was prepared in order to get their money back.

24. The wording of the release and the accompanying wording on the check eventually picked up by the clients clearly show that the provision that the clients not contact The Florida Bar was a condition precedent to the money being refunded to the clients.

25. The clients had at this time made arrangements to retain another attorney to represent them in this matter, and the fee they were to pay her was to come from the

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