The Florida Bar v. Scot Strems ( 2022 )

Supreme Court of Florida
____________
No. SC20-806
____________
THE FLORIDA BAR,
Complainant,
vs.
SCOT STREMS,
Respondent.
____________
No. SC20-842
____________
THE FLORIDA BAR,
Complainant,
vs.
SCOT STREMS,
Respondent.
December 22, 2022
PER CURIAM.
In these consolidated cases, we have for review two referee
reports recommending that Respondent, Scot Strems, be found
guilty of professional misconduct and suspended for two years for
the gross mismanagement of his law firm (Case No. SC20-806) and
receive a public reprimand for failing to communicate with a client
(Case No. SC20-842).1
As discussed below, we approve the referee’s findings of fact in
both cases, with one exception. We also approve in part and
disapprove in part the referee’s recommendations as to guilt and
findings in mitigation and aggravation in both cases. Last, we
disapprove the referee’s recommendations as to discipline; instead,
we disbar Strems based on his cumulative misconduct.
I. BACKGROUND
Case No. SC20-806
Strems was the sole partner and owner of the Strems Law
Firm, P.A. (SLF), and the firm’s caseload grew significantly from its
inception. By 2016, the firm had only three litigation attorneys,
with each managing approximately 700 cases. SLF’s inadequate
staffing and lack of sufficient office procedures resulted in client
neglect, case dismissals, frustrated judges, and costly sanctions on
a near weekly basis.
1. We have jurisdiction. See art. V, § 15, Fla. Const.
-2-
To deal with these growing pains, Strems hired a litigation
managing attorney, Christopher Aguirre. Aguirre drafted policies
and procedures to improve SLF’s efficiency, and he kept Strems up
to date on firm metrics, such as deadlines for discovery, proposals
for settlement, and deposition requests. But, despite Aguirre’s best
efforts, SLF continued to neglect client matters and accrue court
sanctions that ranged from $5,000 to $15,000 weekly.
Indeed, between 2016 and 2018, and because of SLF
attorneys’ willful violation of court deadlines and procedural rules,
many SLF clients had their cases dismissed pursuant to Kozel v.
Ostendorf, 629 So. 2d 817 (Fla. 1993), which established a set of
factors a trial court must consider in determining whether dismissal
with prejudice is warranted where an attorney has failed to adhere
to filing deadlines and other procedural requirements.
In one client’s case, an SLF attorney, Orlando Romero, failed
to discuss a counteroffer with the client, Carlton McEkron, prior to
making the offer at mediation. Further, in another case, when an
SLF attorney failed to appear at a summary judgment hearing, the
judge called SLF to speak with the attorney but was placed on hold
for more than fifteen minutes before the judge ultimately hung up
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and proceeded with the hearing without an SLF attorney.
Moreover, two judges submitted affidavits describing their
colleagues’ frequent meetings about SLF’s failure to comply with
court orders and rules of procedure.
Strems knew from the Kozel dismissals and weekly sanctions
that there were issues with the management of his firm, but he took
insufficient action to rectify the situation. Rather than focus on his
then-current clients and reduce the caseload SLF attorneys were
expected to manage, SLF continued to accept 20 to 50 new cases
per week, and Strems questioned slowdowns in accepting new
cases.
Further, SLF or its clients were sanctioned under section
57.105, Florida Statutes, in some instances where SLF filed cases
with unsupported claims. For example, in Mora v. United Property
& Casualty Insurance Co., No. 2017-010198-CA-01, order at 5 (Fla.
11th Cir. Ct. Aug. 25, 2020), in what was referred to as “a textbook
example of the appropriateness of [section] 57.105, [Florida
Statutes], to punish and discourage the unfettered pursuit of
frivolous lawsuits,” the court granted a motion for sanctions against
plaintiffs and SLF, stating that they knew or should have known
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that the plaintiff’s claim was “so devoid of merit on the face of the
record that there was little to no prospect that it would succeed.”
And in Mojica v. United Property & Casualty Insurance Co., No.
CACE 16-011382, order at 6-7 (Fla. 17th Cir. Ct. June 22, 2020),
the court sanctioned Mojica after finding his deposition testimony,
sworn answers to interrogatories, and responses to requests for
admissions regarding repairs made to the property to be untruthful.
Although the court found SLF negligent for failing to verify its
client’s testimony and allegations, it did not find that SLF’s conduct
rose to the level necessary for the court to impose sanctions.
On top of mismanaging his firm, Strems also submitted false
or misleading affidavits in two cases where he had attempted to
negotiate settlements. Specifically, Strems attached to an affidavit
a purported email chain between himself and opposing counsel, but
he failed to include seven emails from opposing counsel that
directly conflicted with statements in his affidavit.
Based on these facts, the referee recommends that Strems be
found guilty of violating the following provisions of the Rules
Regulating The Florida Bar (Bar Rules): 4-1.4(a) (Communication –
Informing Client of Status of Representation); 4-3.1 (Meritorious
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Claims and Contentions); 4-3.2 (Expediting Litigation); 4-3.3(a)
(Candor Toward the Tribunal – False Evidence; Duty to Disclose); 4-
3.3(b) (Candor Toward the Tribunal – Criminal or Fraudulent
Conduct); 4-3.4(a) (Fairness to Opposing Party and Counsel (lawyer
must not unlawfully obstruct another party’s access to evidence));
4-5.1(a) (Responsibilities of Partners, Managers, and Supervisory
Lawyers – Duties Concerning Adherence to Rules of Professional
Conduct); 4-5.1(b) (Responsibilities of Partners, Managers, and
Supervisory Lawyers – Supervisory Lawyer’s Duties); 4-5.1(c)
(Responsibilities of Partners, Managers, and Supervisory Lawyers –
Responsibility for Rules Violations); 4-8.4(c) (Misconduct (lawyer
shall not engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation)); and 4-8.4(d) (Misconduct (lawyer shall not
engage in conduct in connection with the practice of law that is
prejudicial to the administration of justice)).
Further, the referee found the following four aggravating
factors: (1) a pattern of misconduct; (2) multiple offenses; (3)
submission of false evidence, false statements, or other deceptive
practices during the disciplinary process; and (4) substantial
experience in the practice of law. Additionally, the referee found six
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mitigating factors: (1) absence of a prior disciplinary record; (2)
absence of a dishonest or selfish motive; (3) timely good faith effort
to make restitution or to rectify the consequences of the
misconduct; (4) character or reputation; (5) interim rehabilitation;
and (6) remorse. As a sanction, the referee recommends that
Strems be suspended for two years, followed by one year of
probation with special conditions, that Strems successfully
complete the Bar’s Ethics and Professionalism School, and that
Strems pay the Bar’s costs.
Strems seeks review of the referee’s findings of fact;
recommendations as to guilt, except as to rules 4-5.1(a) and 4-
5.1(b); findings regarding aggravating and mitigating factors; and
recommended sanction. The Bar also seeks review of the referee’s
recommended sanction and urges this Court to permanently disbar
Strems.
Case No. SC20-842
SLF represented 84-year-old client Margaret Nowak in a claim
against her insurer for damages sustained from a hurricane. She
executed a contingency fee agreement that included the following
provision:
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2. Attorney’s Fees: Litigation: Client hereby authorizes
Attorney to file suit against Client’s insurance carrier or
other responsible party should they deny, reject, or
under-pay Client’s claim. If the payment of attorney’s
fees is required to be determined by the Court, or if
settlement is achieved via negotiations with the
responsible party, attorney shall be entitled to receive all
of such attorney’s fees, including any and all contingency
risk factor multipliers awarded by the Court. If a
settlement includes an amount for attorney’s fees,
attorney shall be entitled to receive all of its expended
and/or negotiated fees. In all cases whether there is a
recovery of court-awarded fees or not, by contract or
statute, the fee shall be thirty percent (30%) or the
awarded amount, whichever is greater. Pursuant to
627.428, Florida Statute, the Insurance Company is
responsible to pay for the Client’s attorney’s fees when
and if, the Client prevails against the Insurance
Company. NO RECOVERY, NO FEE.
Nowak initially informed SLF that she was willing to accept
$30,000 as her prelitigation bottom line, with Nowak receiving
$22,500 and SLF receiving $7,500 in attorney’s fees under the
contingency fee agreement (which entitled the attorney to 25% of a
prelitigation recovery). However, SLF attorney Carlos Camejo was
unable to obtain an acceptable settlement offer from the insurer in
prelitigation, and Nowak authorized SLF to file suit.
After suit was filed, the insurer offered to settle the case for
$30,000. When informed of this offer, Nowak stated that she would
have accepted this offer if she would receive $22,500 and SLF
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would receive $7,500 in attorney’s fees, but SLF’s attorney’s fees
under the fee agreement would have prevented Nowak from
receiving $22,500, since suit had been filed. Thus, Camejo and
Nowak agreed that Camejo would try to obtain a higher settlement
offer.
At this point, Strems took over the settlement negotiations.
Strems failed to follow up and see if Nowak would still accept
$22,500 as her bottom line. However, the file that Strems reviewed
before commencing negotiations indicated that Nowak sought a
higher recovery than her prelitigation bottom line, as evidenced by
Nowak’s emails with Camejo stating she had since had to replace
an expensive tarp on the roof several times, and a mold issue arose
due to the insurer’s delay in settling the case. But Strems agreed to
settle the case with the insurer’s counsel, Matthew Feldman, for
$45,000, without Nowak’s knowledge or consent. Feldman then
emailed Strems to confirm that they “reached a global settlement
agreement” and requested that SLF provide him with the settlement
check breakdown. Strems emailed Feldman with directions to pay
$22,500 to Nowak and $22,500 to SLF. Additionally, Strems wrote
an internal memorandum stating that he relied on Nowak’s
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settlement authority of $22,500 given to Camejo, and he then
negotiated $22,500 for SLF’s statutory attorney’s fees and costs.
The referee found that Strems failed to communicate this
settlement offer to Nowak, who learned of it only when SLF sent the
settlement documents two months later. Nowak objected to SLF
receiving half the insurer’s settlement offer in attorney’s fees,
believing SLF was entitled to receive no more than 30% in attorney’s
fees pursuant to their fee agreement, and being mistaken as to the
applicability of the fee-shifting statute incorporated into the
agreement. Nowak emailed SLF requesting an explanation of the
settlement breakdown and informed SLF that she would not be
signing the documents.
Relying on expert testimony, the referee did not find the
contingency fee agreement to be illegal or prohibited, nor did she
find SLF’s fees to be unreasonable or clearly excessive. Thus, the
referee recommends that Strems be found not guilty of violating
rules 4-1.2 (Objectives and Scope of Representation), 4-1.5 (Fees
and Costs for Legal Services), and 4-1.7 (Conflict of Interest;
Current Clients). However, the referee recommends that Strems be
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found guilty of violating rule 4-1.4 (Communication) based on his
failure to communicate the settlement offer to Nowak.
In recommending discipline, the referee found three
aggravating factors: (1) prior disciplinary offenses, (2) vulnerability
of victim, and (3) substantial experience in the practice of law. As
to mitigation, the referee found the following: (1) absence of a
dishonest or selfish motive, (2) timely good faith effort to make
restitution or to rectify the consequences of the misconduct, and (3)
character or reputation. As a sanction, the referee recommends
that Strems receive a public reprimand and pay the Bar’s costs.
The Bar seeks review of the report of referee, challenging the
referee’s recommendations of no guilt as to rules 4-1.2, 4-1.5, and
4-1.7, findings as to aggravating and mitigating factors, and the
recommended sanction. The Bar asks this Court to consider
Strems’ cumulative misconduct and permanently disbar him.
II. ANALYSIS
A. Findings of Fact and Recommendations as to Guilt
To the extent a party challenges the referee’s findings of fact,
the Court’s review of such matters is limited, and if a referee’s
findings of fact are supported by competent, substantial evidence in
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the record, this Court will not reweigh the evidence and substitute
its judgment for that of the referee. See Fla. Bar v. Alters, 260 So.
3d 72, 79 (Fla. 2018) (citing Fla. Bar v. Frederick, 756 So. 2d 79, 86
(Fla. 2000)). To the extent a party challenges the referee’s
recommendations as to guilt, the Court has repeatedly stated that
the referee’s factual findings must be sufficient under the applicable
rules to support the recommendations as to guilt. See Fla. Bar v.
Patterson, 257 So. 3d 56, 61 (Fla. 2018) (citing Fla. Bar v. Shoureas,
913 So. 2d 554, 557-58 (Fla. 2005)). Ultimately, the party
challenging the referee’s findings of fact and conclusions as to guilt
has the burden to demonstrate that there is no evidence in the
record to support those findings or that the record evidence clearly
contradicts the conclusions. Fla. Bar v. Germain, 957 So. 2d 613,
620 (Fla. 2007).
Case No. SC20-806
We first address Strems’ challenge to the referee’s findings of
fact and recommendation that he be found guilty of violating Bar
Rule 4-5.1(c) (Responsibilities of Partners, Managers, and
Supervisory Lawyers – Responsibility for Rules Violations). Under
rule 4-5.1(c), a lawyer is responsible for another lawyer’s violation of
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the Bar Rules if the lawyer “orders the specific conduct or, with
knowledge thereof, ratifies the conduct involved” or “is a partner or
has comparable managerial authority in the law firm in which the
other lawyer practices or has direct supervisory authority over the
other lawyer, and knows of the conduct at a time when its
consequences can be avoided or mitigated but fails to take
reasonable remedial action.”
Strems failed to responsibly manage SLF and hire enough
attorneys to handle the mounting case load. Additionally, he failed
to ensure that SLF lawyers complied with rules regarding
reasonable diligence and promptness, which led to multiple Kozel
dismissals. Strems’ failure to take reasonable remedial action,
given the substantially growing firm, was, in essence, ratification of
his associates’ actions. His attempts to resolve the case and office
management issues were ineffective, and he continued to take on
new cases rather than focus on the problems consistently plaguing
SLF. Further, when the sanction orders were brought to Strems’
attention, he admonished and spoke with the attorneys involved,
but the sanctions did not stop. We reject Strems’ argument that he
should not be held vicariously responsible for his associates’
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unproven violations because under rule 4-5.1(c), as the sole partner
at SLF, Strems is responsible for what would constitute misconduct
by other SLF attorneys, whether it be due to Strems’ deficient firm
structure or SLF’s general practices. Therefore, the referee’s
findings of fact are supported by competent, substantial evidence
and are sufficient to support the recommendation as to guilt, and
we find Strems guilty of violating Bar Rule 4-5.1(c).
Next, under Bar Rule 4-3.2 (Expediting Litigation), a lawyer
shall make reasonable efforts to expedite litigation consistent with
the interests of the client, and under Bar Rule 4-8.4(d)
(Misconduct), a lawyer shall not engage in conduct in connection
with the practice of law that is prejudicial to the administration of
justice. Strems failed to have measures in place to prevent the
eight Kozel dismissals, as well as the weekly sanction orders.
Strems was aware that there was not enough staff at SLF to handle
the volume of cases for more than two years, yet he failed to rectify
the problem. Further, the record demonstrates that SLF had a
larger pattern of consistently failing to adhere to deadlines and
disregarding court orders. In several of the Kozel cases, for
example, SLF failed to comply with numerous court orders and
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violated multiple Florida Rules of Civil Procedure, and defendants
had to file motions to compel due to SLF’s late or insufficient
discovery responses. Additionally, the affidavits of two trial court
judges referred to SLF’s “blatant obstruction of justice in virtually
every case where he and his firm enter an appearance.” In the
judges’ experience, SLF “engages in dilatory tactics in virtually every
case” by “refus[ing] to participate in discovery, fail[ing] to attend
properly notice [sic] hearings, violat[ing] court orders resulting in
additional litigation and hearing time before the Court.” Therefore,
the referee’s findings are supported by competent, substantial
evidence and are sufficient to support the recommendations as to
guilt. We find Strems guilty of violating both Bar Rules 4-3.2 and
4-8.4(d).
We now turn to Bar Rule 4-3.1(Meritorious Claims and
Contentions), which provides that a lawyer shall not bring or defend
a proceeding unless there is a basis in law and fact for doing so that
is not frivolous. The referee found that SLF brought a frivolous case
in Mora, as evidenced by the sanction order stating that plaintiffs
and their counsel knew or should have known that plaintiffs’ claim
lacked merit. As an initial matter, we reject Strems’ argument that
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consideration of Mora violates his due process rights because it was
not referenced in the Bar’s petition and was added as an exhibit
shortly before trial, because the conduct was “clearly within the
scope of the Bar’s accusations,” and Strems was aware of “the
nature and extent of the charges pending against [him].” Fla. Bar v.
Nowacki, 697 So. 2d 828, 832 (Fla. 1997); see also Fla. Bar v.
Fredericks, 731 So. 2d 1249 (Fla. 1999). Also, we reject his
argument that Mora should not have been considered by the referee
because it was on appeal, because referees in Bar disciplinary
proceedings are “authorized to consider any evidence . . . that they
deem relevant in resolving the factual question.” Fla. Bar v. Rood,
620 So. 2d 1252, 1255 (Fla. 1993). Further, because SLF
voluntarily dismissed its appeal, and the sanction order was not
considered by the district court, much less reversed, Strems has
not demonstrated how consideration of the case has harmed him.
With respect to Strems’ claim that he was not involved in
Mora, the record demonstrates that Strems was responsible for all
settlement negotiations; thus, he presumably was involved in the
case prior to suit being filed, and as sole partner of SLF, Strems
was aware of all cases in the litigation stage. Moreover, after the
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defendant in Mora served the section 57.105 motion for sanctions
on SLF, which was brought to Strems’ attention, SLF failed to
dismiss the case during the safe harbor period. Accordingly, the
referee’s findings are supported by competent, substantial evidence
and are sufficient to support the recommendation as to guilt. We
find Strems guilty of violating Bar Rule 4-3.1.
Strems next challenges the findings of fact and
recommendation that he be found guilty of violating Bar Rule 4-
3.4(a) (Fairness to Opposing Party and Counsel), which provides in
part that a lawyer must not unlawfully obstruct another party’s
access to evidence. The referee, relying on the orders in Mora and
Mojica, found that Strems failed to provide information to opposing
counsel regarding the plaintiffs’ misrepresentations. As discussed
above, we are unpersuaded by Strems’ assertions that
consideration of the cases violates his due process rights and that
the referee did not find that he was involved in or had knowledge of
the cases. Accordingly, the referee’s findings are supported by
competent, substantial evidence and sufficient to support her
recommendation as to guilt, and we find Strems guilty of violating
Bar Rule 4-3.4(a).
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Furthermore, Bar Rule 4-3.3(a) (Candor Toward the Tribunal –
False Evidence; Duty to Disclose) provides that a lawyer shall not
knowingly make a false statement of fact or law to a tribunal.
Additionally, Bar Rule 4-8.4(c) (Misconduct) provides that a lawyer
shall not engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation. The referee found that Strems submitted false
or misleading affidavits in two circuit court cases based on
transcripts and orders from those cases. Contrary to Strems’ claim
that the referee cannot rely on judges’ statements that are not
incorporated into final orders, referees are authorized to consider
any evidence they deem relevant to resolving factual questions. See
Rood, 620 So. 2d at 1255. And the trial court, in one of the cases,
acknowledged the doctored affidavit and Strems’ removal of multiple
emails from the email chain in its order granting the defendant’s
motion for summary judgment as well as in a separate order
directing the defendant to report Strems to the Bar. Thus, because
the referee’s findings of fact are supported by competent,
substantial evidence and are sufficient to support the
recommendations as to guilt, we find Strems guilty of violating Bar
Rules 4-3.3(a) and 4-8.4(c).
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Additionally, Strems challenges the referee’s findings and
recommendation that he be found guilty of violating Bar Rule 4-
3.3(b) (Candor Toward the Tribunal – Criminal or Fraudulent
Conduct), which provides that a lawyer who represents a client and
who knows that a person intends to engage in criminal or
fraudulent conduct related to the proceeding shall take reasonable
remedial measures. The referee found that SLF knew that the client
in Mora engaged or intended to engage in fraudulent conduct.
Although Strems asserts he had no knowledge of the case, “[a]
person’s knowledge may be inferred from circumstances.” R.
Regulating Fla. Bar ch. 4 pmbl. Among other things, the trial judge
in Mora found that SLF: (1) “knew that the property had preexisting
and ongoing damage to the same area of the property claimed in
this lawsuit”; (2) “represented Plaintiffs in a prior action and had
documents in their possession at least two years before the reported
date of loss” that depicted preexisting damage at the property; and
(3) “concealed these documents or failed to make any reasonable
inquiry of their own.” Mora v. United Prop. & Cas. Ins. Co., order at
4-5. Further, SLF had multiple opportunities to dismiss the case
but refused despite the plaintiffs having admitted there was
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preexisting damage. The motion for sanctions was presumably
brought to Strems’ attention, yet he failed to take corrective
measures, such as directing his subordinates to dismiss the case,
and SLF continued to argue before the trial judge that the damage
was covered under the policy. Thus, the referee’s findings that
Strems failed to take remedial measures when his client made a
fraudulent claim are supported by competent, substantial evidence
and are sufficient to support the recommendation that he be found
guilty of violating Bar Rule 4-3.3(b).
Next, Bar Rule 4-1.4(a) (Communication – Informing Client of
Status of Representation) provides in relevant part that a lawyer
shall reasonably consult with the client about how the client’s
objectives will be accomplished. The referee found Strems guilty
based on the case of Carlton McEkron, where SLF attorney Romero
failed to discuss a settlement counteroffer with the client. However,
we disapprove the referee’s recommendation that Strems be found
guilty of Bar Rule 4-1.4(a).
Assuming that Romero’s conduct constitutes a violation of the
rule, under Bar Rule 4-5.1(c), a lawyer shall be responsible for
another lawyer’s violation of the rules if: (1) the lawyer orders the
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specific conduct or, with knowledge thereof, ratifies the conduct; or
(2) the lawyer is a partner and knows of the conduct at a time when
its consequences can be avoided or mitigated but fails to take
reasonable remedial action. Strems was not present at the
mediation in the McEkron case, and there is no record evidence
that he had knowledge of Romero’s failure to consult with McEkron
about the counteroffer, or that he ordered or ratified Romero’s
failure to consult. Thus, we disapprove the referee’s
recommendation and find Strems not guilty of violating Bar Rule 4-
1.4(a).
Case No. SC20-842
The Bar first challenges the referee’s recommendation that
Strems be found not guilty of violating Bar Rule 4-1.2 (Objectives
and Scope of Representation), which states that a lawyer must
abide by a client’s decisions concerning the objectives of
representation and, as required by rule 4-1.4, must reasonably
consult with the client as to how they are to be pursued. We agree
that the referee erred in recommending that Strems be found not
guilty. Nowak clearly sought a higher recovery due to additional
expenses that resulted from the delay in settling the case. Strems
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reviewed the file prior to commencing settlement negotiations and
was presumably aware that the client wanted more money, but he
failed to follow up with Nowak to see if her prelitigation bottom line
had changed. When the insurer offered a higher settlement, Strems
attempted to give Nowak her prelitigation bottom line, which did not
include the additional expenses she had since incurred, and put the
difference towards his attorney’s fees. These facts do not support a
finding that Strems abided by Nowak’s objectives of representation.
We therefore disapprove the referee’s recommendation and find
Strems guilty of violating Bar Rule 4-1.2.
Next, the Bar challenges the referee’s recommendation that
Strems be found not guilty of violating Bar Rules 4-1.5(a) (Fees and
Costs for Legal Services – Illegal, Prohibited, or Clearly Excessive
Fees and Costs)2 and 4-1.7 (Conflict of Interest; Current Clients).
Bar Rule 4-1.5(a) prohibits an attorney from entering an agreement
2. The Bar also asks this Court to expressly disapprove and
prohibit contingency fee agreements, like that used by SLF, “that
allow the lawyer to pick the fee structure that benefits him at the
expense of his client.” Initial Brief at 36. We reject that
characterization of SLF’s fee agreement, and our analysis instead
focuses on Strems’ application of the agreement to the facts of this
case.
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for, charging, or collecting an illegal, prohibited, or clearly excessive
fee or cost. Bar Rule 4-1.7 prohibits a lawyer from representing a
client if the representation creates a conflict of interest, especially if
there is a substantial risk that the representation will be materially
limited by the lawyer’s own personal interests. See R. Regulating
Fla. Bar 4-1.7(a)(2) cmt. (“The lawyer’s own interests should not be
permitted to have adverse effect on representation of a client.”) We
agree with the Bar that the referee erred in recommending that
Strems be found not guilty of violating both rules while representing
Nowak.
The referee relied on Strems’ expert witness, who concluded
that SLF’s attorney’s fees were not unreasonable or clearly excessive
under the rule, and the fact that Nowak signed SLF’s fee agreement,
which communicated the basis or rate of the fees and costs, in
finding that Strems’ fee was not excessive under the fee agreement.
And the referee found that there was no conflict of interest between
Nowak and Strems. But these findings are contrary to the record
evidence.
First, at the final hearing, Feldman, the attorney representing
the insurer, disputed Strems’ claim of a bifurcated settlement,
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stating that all his settlements with SLF were resolved on a global
basis and he would “never” negotiate indemnity and then negotiate
attorney’s fees unless there was a fee hearing. A July 30, 2018,
email from Feldman to SLF stated that his client granted him
additional settlement authority up to $30,000 and that he hoped to
reach “a global resolution” in the case. After receiving this offer,
Camejo told Nowak that he would try to obtain a higher settlement
so that attorney’s fees would be exclusive and Nowak would receive
more, but there was no indication that Strems would only be
negotiating attorney’s fees.
After negotiating with Strems, Feldman emailed him to confirm
that they “reached a global settlement agreement” and requested
that SLF provide him with the settlement check breakdown.
Feldman would not have referred to a “global settlement” and asked
Strems for the settlement breakdown if they had discussed the
bifurcated settlement referenced in Strems’ internal memorandum.
Considering all the circumstances, the referee’s determination that
this was a bifurcated settlement is contradictory to the record
evidence.
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Thus, under the terms of the contingency fee agreement, SLF
was entitled to either a 30% contingency fee or a court-awarded
amount. We reject Strems’ argument that any amount supposedly
negotiated with Feldman is equivalent to court-ordered attorney’s
fees. See Fla. Bar v. Kavanaugh, 915 So. 2d 89 (Fla. 2005). We
also reject the notion that the relevant inquiry is whether a $22,500
fee would have been reasonable in light of the fee-shifting statute
and the work performed on the case. Like the respondent in
Kavanaugh, Strems attempted to collect attorney’s fees exceeding
an amount that is allowed under his contingency fee agreement.
We therefore disapprove the referee’s recommendation and find
Strems guilty of violating Bar Rule 4-1.5.
Moreover, since Strems reviewed the file prior to commencing
negotiations with Feldman, he was clearly on notice of Nowak’s
desire for a higher settlement. However, Strems sought to limit
Nowak’s recovery to her prelitigation bottom line, while attempting
to triple his attorney’s fees. Thus, the record demonstrates that
there was a clear conflict of interest, with Strems unilaterally
seeking to take a higher percentage of the global settlement, entirely
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at his client’s expense. Accordingly, we disapprove the referee’s
recommendation and find Strems guilty of violating Bar Rule 4-1.7.
B. Discipline
Lastly, we address the referee’s recommendations of a
suspension and a public reprimand as the appropriate sanctions in
these two cases. Prior to making a recommendation as to
discipline, referees must consider the Standards for Imposing
Lawyer Sanctions, which are subject to aggravating and mitigating
circumstances, and this Court’s existing case law. See, e.g., Fla.
Bar v. Abrams, 919 So. 2d 425 (Fla. 2006); Fla. Bar v. Temmer, 753
So. 2d 555, 558 (Fla. 1999). 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 the Court’s
responsibility to order the appropriate sanction. See Fla. Bar v.
Kinsella, 260 So. 3d 1046, 1048 (Fla. 2018); Fla. Bar v. Anderson,
538 So. 2d 852, 854 (Fla. 1989); see also art. V, § 15, Fla. Const.
Additionally, the Court, in its discretion, can impose a
combined sanction for all cases and “determine the appropriate
discipline from the totality of the conduct as though all of the
charges had been presented to [the Court] in one proceeding.” Fla.
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Bar v. Greenspahn, 396 So. 2d 182, 183 (Fla. 1981) (considering
cumulatively the alleged misconduct in two complaints). Given the
severity of Strems’ misconduct, we conclude that the referee’s
recommended disciplines are not supported, and disbarment is the
appropriate sanction for these consolidated cases.
Most of the Standards relied on by the referee fail to account
for the more troubling aspects of Strems’ misconduct, particularly
his submission of false affidavits, his inability to adequately manage
SLF and prevent its ongoing failure to comply with court orders and
procedural requirements, and the conflict of interest he created
with Nowak. We conclude that the most relevant Standards are
Standards 4.3(a)(1) (“Disbarment is appropriate when a lawyer
causes serious or potentially serious injury to the client and,
without the informed consent of the affected client[] . . . engages in
representation of a client knowing that the lawyer’s interests are
adverse to the client’s with the intent to benefit the lawyer or
another . . . .”); 6.1(a)(1) (“Disbarment is appropriate when a lawyer
. . . with the intent to deceive the court, knowingly makes a false
statement or submits a false document . . . .”); 6.2(a) (“Disbarment
is appropriate when a lawyer causes serious or potentially serious
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interference with a legal proceeding or knowingly violates a court
order or rule with the intent to obtain a benefit for the lawyer or
another and causes serious injury or potentially serious injury to a
party.”); and 7.1(b) (“Suspension is appropriate when a lawyer
knowingly engages in conduct that is a violation of a duty owed as a
professional and causes injury or potential injury to a client, the
public, or the legal system.”). When the Standards are considered
collectively, they provide for disbarment.
Strems’ argument in Case No. SC20-806 that only Standard
6.2(c), supporting a public reprimand, is applicable lacks merit,
since he was not merely negligent in managing his firm. Standard
1.2(c)-(d) defines “negligence” as “the failure of a lawyer to heed a
substantial risk that circumstances exist or that a result will
follow,” and “knowledge” as “the conscious awareness of the nature
or attendant circumstances of the conduct but without the
conscious objective or purpose to accomplish a particular result.”
Strems mishandled numerous cases that resulted in weekly court
sanctions, case dismissals, and neglected clients. Rather than
focusing on his then-current clients and the high caseloads his
attorneys were inadequately managing, SLF continued to accept
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new cases. Strems knew from the Kozel dismissals and weekly
sanctions that there were issues with his firm, but he consciously
chose not to take appropriate steps.
Further, in Case No. SC20-842, the referee only considered
the provisions regarding a suspension or public reprimand under
Standard 7.1 (Deceptive Conduct or Statements and Unreasonable
or Improper Fees) based on her recommendation that Strems only
be found guilty of violating Bar Rule 4-1.4. However, Standards
7.1(b) and 4.3(a) are applicable, because Strems knew Nowak
wanted to obtain a higher net settlement when he limited her
recovery to her prelitigation bottom line while tripling his attorney’s
fees, and it is incredulous to believe Strems did not know this
constituted a conflict of interest of his own making.
We now turn to consider the referee’s findings as to the
mitigating and aggravating factors. “Like other factual findings, a
referee’s findings in mitigation and aggravation carry a presumption
of correctness and will be upheld unless clearly erroneous or
without support in the record. A referee’s failure to find that an
aggravating factor or mitigating factor applies is due the same
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deference.” Fla. Bar v. Germain, 957 So. 2d 613, 621 (Fla. 2007)
(citation omitted).
In Case No. SC20-806, we disapprove the referee’s finding in
mitigation of a dishonest or selfish motive under Standard 3.3, and
we instead find a dishonest or selfish motive as an aggravating
factor under Standard 3.2. Although the referee based her finding
on Strems’ representation that his goal was to provide good legal
counsel for clients, this finding is unsupported by the record. If
Strems’ goal was to provide good legal counsel, he would not have
let the problems that plagued SLF continue for four years. Rather
than hiring an adequate number of attorneys to handle the
voluminous caseload, he continued to take on between twenty and
fifty new cases each week and questioned slowdowns in the
acceptance of new cases. Strems’ focus on bringing in new cases
rather than implementing sufficient measures to handle SLF’s
volume of cases demonstrates his selfish motive.
As to Case No. SC20-842, we disapprove the referee’s finding
in mitigation of timely good faith effort to make restitution, because
nearly sixteen months passed before Strems agreed to accept 30%
in attorney’s fees under the fee agreement. We also disapprove the
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referee’s finding of absence of a dishonest or selfish motive.
Although the referee found that there was no evidence that Strems
would benefit personally in Nowak’s matter, as the sole owner of
SLF, Strems benefited personally from all fees generated by the
firm. Further, his settlement negotiation of attorney’s fees
amounting to 50% of the settlement offer without providing a higher
amount for Nowak was clearly selfish. We also disapprove the
referee’s failure to find in aggravation that Strems committed
multiple offenses. Strems committed several distinct types of
misconduct—failing to communicate the settlement offer to Nowak,
attempting to collect an excessive fee, failing to abide by the client’s
objectives, and engaging in a conflict of interest. See Fla. Bar v.
Patterson, 330 So. 3d 519 (Fla. 2021) (finding multiple offenses as
an aggravating factor where attorney’s misconduct was not limited
to multiple rule violations based on a single act but several distinct
types of misconduct).
In both cases, we approve the remainder of the referee’s
findings as to mitigation and aggravation that are not challenged by
either party.
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We now consider the relevant case law. In Florida Bar v.
Shoureas, 892 So. 2d 1002 (Fla. 2004), we suspended a lawyer for
three years for agreeing to represent clients, accepting fees, and
then taking little or no significant action and not responding to
client inquiries. Significantly, “[a]lthough the referee did not
specifically find that Shoureas ‘knowingly’ failed to perform the
agreed-upon services, the fact that she failed to respond to repeated
inquiries indicates that she was aware of, or reasonably should
have been aware of, her inaction.” Id. at 1008. Additionally, in
Florida Bar v. Adorno, 60 So. 3d 1016 (Fla. 2011), we suspended a
lawyer for three years for violating Bar Rules 4-1.5, 4-1.7, and 4-8.4
based upon Adorno’s negotiating to the detriment of other class
members when he settled for named plaintiffs in an amount
“grossly disproportionate to the value of their individual claims” and
received a $2 million fee for his firm. Id. at 1024.
Further, Florida Bar v. Kane, 202 So. 3d 11 (Fla. 2016), is
somewhat factually similar to Case No. SC20-842. In Kane, the
Court disbarred three attorneys who secretly negotiated a
settlement that created conflicts of interest between lawyers and
clients, abandoned clients’ claims in favor of greater attorney’s fees
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for themselves, and withheld from clients information about the
settlement to further their own interests. The Court approved the
referee’s finding of the following aggravating factors: (1) pattern of
misconduct over several years, (2) multiple offenses, (3) false
statements during the disciplinary proceedings, (4) refusal to
acknowledge the wrongful nature of conduct, (5) substantial
experience in the practice of law, and (6) indifference to making
restitution. 202 So. 3d at 26.
As in Kane, there are multiple aggravating factors present in
Case No. SC20-842, including a dishonest or selfish motive.
However, Strems’ failure to disclose the settlement to Nowak was
not based on secret negotiations, nor did he abandon his client’s
claims; rather, he created a conflict with his client by negotiating a
larger settlement but limiting Nowak’s recovery to her bottom line
and interpreting his fee agreement as permitting him to take nearly
half the offer for his attorney’s fees.
We have also considered that in excessive fee cases, the Court
has previously imposed ninety-one-day suspensions. See, e.g., Fla.
Bar v. Carlon, 820 So. 2d 891, 899 (Fla. 2002); Fla. Bar v.
Richardson, 574 So. 2d 60, 63 (Fla. 1990). And in conflict-of-
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interest cases, the Court has imposed an eighteen-month
suspension and a one-year suspension. Fla. Bar v. Herman, 8 So.
3d 1100, 1108 (Fla. 2009); Fla. Bar v. Patterson, 257 So. 3d 56 (Fla.
2018). Thus, Strems’ misconduct in Case No. SC20-842 alone
warrants a rehabilitative suspension of at least one year.
Also, Florida Bar v. Springer, 873 So. 2d 317 (Fla. 2004), is
instructive as to both cases. In Springer, an attorney was disbarred
for numerous instances of gross misconduct, spanning over five
years, including: (1) failing to provide competent representation; (2)
failing to act with reasonable diligence; (3) failing to keep his clients
reasonably informed; (4) providing falsified copies of documents to
clients; (5) failing to file pleadings that led to a default judgment
entered against his client; and (6) failing to comply with court
orders regarding discovery.
Strems’ cumulative misconduct in both cases, which ranged
from 2016 to the time of his emergency suspension in 2020, is
similarly worthy of disbarment. For example, Strems failed to
communicate with Nowak regarding the settlement offer in her case
prior to accepting the insurer’s offer and then attempted to keep the
amount offered that was above Nowak’s bottom line as SLF’s
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attorney’s fees. Additionally, multiple clients’ cases were dismissed
with prejudice pursuant to Kozel after SLF failed to comply with
court filing deadlines and procedural requirements. Also, Strems
submitted false affidavits, and SLF should have known that the
clients’ claims in Mora and Mojica were fraudulent. More
significantly, Strems failed to fully address the underlying issues
facing SLF that resulted from continuing to take on new cases
weekly rather than focus on the firm’s already substantial caseload.
When all the violations are considered together, the totality of
Strems’ misconduct warrants disbarment, which would achieve the
three purposes of attorney discipline. See Fla. Bar v. Dupee, 160
So. 3d 838, 853 (Fla. 2015) (“The purposes of attorney discipline
are: (1) to protect the public from unethical conduct without undue
harshness towards the attorney; (2) to punish misconduct while
encouraging reformation and rehabilitation; and (3) to deter other
lawyers from engaging in similar misconduct.”) First, the public
needs to be protected from Strems’ unethical conduct, evidenced by
what appears to be SLF’s practice of interpreting an ambiguously
drafted fee agreement in its favor, as well as its then-ongoing failure
to comply with court orders and procedures. Second, Strems must
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be disciplined for his misconduct, which continued into the
disciplinary proceedings. Third, other lawyers must be deterred
from engaging in similar misconduct. Disbarring Strems will place
other lawyers on notice that this Court will not tolerate similar
misconduct.
Regarding the Bar’s request that Strems be permanently
disbarred, Strems’ misconduct in the instant cases does not
warrant such a sanction. Although he has certainly engaged in
ethically questionable behavior, he has not demonstrated that he is
not amenable to rehabilitation. Permanent disbarment is
warranted only where an attorney’s conduct indicates he or she
engages in a persistent course of unrepentant and egregious
misconduct and is beyond redemption. See, e.g., Fla. Bar v. Norkin,
183 So. 3d 1018 (Fla. 2015); Fla. Bar v. Behm, 41 So. 3d 136 (Fla.
2010).
III. CONCLUSION
Accordingly, Scot Strems is hereby disbarred from the practice
of law in the State of Florida. Because Strems is currently
suspended, this disbarment is effective immediately. Strems shall
fully comply with Rule Regulating The Florida Bar 3-5.1(h). Strems
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shall also fully comply with Rule Regulating The Florida Bar 3-6.1,
if applicable.
Judgment is entered for The Florida Bar, 651 East Jefferson
Street, Tallahassee, Florida 32399-2300, for recovery of costs from
Scot Strems in the amount of $45,563.34, for which sum let
execution issue.
It is so ordered.
MUÑIZ, C.J., and CANADY, POLSTON, LABARGA, COURIEL, and
GROSSHANS, JJ., concur.
FRANCIS, J., did not participate.
THE FILING OF A MOTION FOR REHEARING SHALL NOT ALTER
THE EFFECTIVE DATE OF THIS DISBARMENT.
Original Proceeding – The Florida Bar
Joshua E. Doyle, Executive Director, The Florida Bar, Tallahassee,
Florida, Patricia Ann Toro Savitz, Staff Counsel, The Florida Bar,
Tallahassee, Florida, and John D. Womack, Bar Counsel, The
Florida Bar, Miami, Florida; and Chris W. Altenbernd of Banker
Lopez Gassler, P.A., Tampa, Florida,
for Complainant
Benedict P. Kuehne and Michael T. Davis of Kuehne Davis Law,
P.A., Miami, Florida; Kendall Coffey of Burlington, P.L., Miami,
Florida; Mark Kamilar of Law Office of Mark A. Kamilar, Coconut
Grove, Florida; Scott K. Tozian and Gwendolyn H. Daniel of Smith,
Tozian, Daniel & Davis, P.A., Tampa, Florida; and Nelson David
Diaz of LNL Law Group, PLLC, Miami, Florida,
for Respondent
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