The Florida Bar v. Davis, 61435

• Decision Date: 26 August 1982
• Docket Number: No. 61435,61435
• Parties: THE FLORIDA BAR, Complainant, v. Thomas J. DAVIS, Jr., Respondent.
• Court: Florida Supreme Court

Page 325

419 So.2d 325

THE FLORIDA BAR, Complainant, v. Thomas J. DAVIS, Jr., Respondent.

No. 61435.

Supreme Court of Florida.

Aug. 26, 1982.

Stanley A. Spring, Staff Counsel, Tallahassee, and Stephen M. Zukoff, Bar Counsel, Miami, of The Florida Bar, for complainant.

Lionel Barnet of the Law Offices of Lionel Barnet, Miami, for respondent.

PER CURIAM.

This is a disciplinary action brought by The Florida Bar against Thomas J. Davis, Jr., a Florida lawyer. Both the bar and Davis have petitioned for review of the report and recommendation of the referee. We have jurisdiction. Art. V, § 15, Fla.Const.

The complaint against Davis contained three counts. The first count alleged various offenses arising out of his involvement in the sale of time-share unit-weeks at a vacation development in the Florida keys. Count II alleged improper disbursements from a trust account, and count III alleged that Davis misled the bar during the investigation leading to count I.

As to count I the referee found that Davis served as the president, a director, and the resident agent of Vacation Wonderlands of America, Inc. (Vacation), a corporation that purchased land in the Florida keys. At the same time Davis served as an officer, a director, and the resident agent of Encore Resorts International, Inc. (Encore), whose purpose was to sell time-share unit-weeks to the public. Vacation and Encore had certain common officers and directors, including Davis, and he acted as counsel for both corporations.

On December 31, 1973 Vacation purchased a tract of land on Long Key, Florida, for $252,500.00, making a $75,000.00 down payment and executing a $177,500.00 purchase money mortgage. Two days later, Vacation and Encore entered into a contract for deed wherein Encore agreed to purchase the land from Vacation for $205,000.00 to be paid in three annual installments of $68,334.00 plus interest. Vacation agreed to convey the land to Encore upon receipt of the final payment due in January 1977. This contract was never recorded.

Sometime in February 1974 Encore began selling time-share unit-weeks for townhouses located on the property. The agreement for deed given each purchaser specifically provided that upon payment in full the purchaser would receive a warranty deed and title insurance coverage. Encore never provided these to the purchasers because of the mortgage encumbrances and because Encore did not own title to the property.

The referee found that Davis was closely associated with both Vacation and Encore, not only as the companies' attorney, but also as an officer and a director to whom other officers, directors, and employees of the companies looked for advice and guidance. Accordingly, he must have realized, as an attorney, the impossibility under the circumstances of delivering warranty deeds and title insurance to the purchasers of units who paid the purchase price in full. Failure to provide adequate protection for those purchasers was, in the referee's opinion, a breach of Davis' professional responsibility.

In April 1975 the original owners of the property brought a foreclosure action against Vacation, but Encore continued to sell units after this time. Seventy-five purchasers contributed approximately $194,510.00 towards the purchase of the units from Encore between 1974 and 1976. On October 5, 1976 the property was sold pursuant to a foreclosure order, and all of the purchasers lost their units.

Because of his close connection with Vacation and Encore and his knowledge of the foreclosure suit, the referee found that Davis had a duty as a member of the bar to insist that Encore immediately cease and desist from selling unit-weeks. Davis' conduct in not doing so was clearly unprofessional, in complete disregard for the consequences to the purchasers, and prejudicial to the legal profession. The referee also found that it reflected on his fitness to practice law. The bar introduced no competent evidence at trial, however, to indicate that Davis benefited financially from the operation of either Vacation or Encore.

The referee found Davis guilty as to count I for violating Florida Bar Code of Professional Responsibility, Disciplinary Rules 1-102(A)(5) and (6), 7-102(A)(7) and (8), and Florida Bar Integration Rule, article XI, rule 11.02(2). He was found not guilty as to counts II and III dealing with disbursements from an escrow account and misleading the bar. The referee then recommended a public reprimand and suspension from the practice of law for three months with automatic reinstatement. He assessed costs against Davis in the amount of $5,026.39 from the total costs of $16,977.36. Both the bar and Davis have raised issues in their petitions.

The bar's petition for review objects to the proposed disciplinary measures as inadequate. In view of the seriousness and fraudulent nature of the misconduct involved, the bar requests that Davis be disbarred. The bar also requests that Davis be found guilty of count III, misleading the bar, and that the full cost of the proceedings be assessed against him.

Davis...