Alters v. Villoldo , 230 So. 3d 115 ( 2017 )

Third District Court of Appeal
State of Florida
Opinion filed September 6, 2017.
Not final until disposition of timely filed motion for rehearing.
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No. 3D17-715
Lower Tribunal No. 16-8682
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Jeremy Alters, et al.,
Petitioners,
vs.
Alfredo Villoldo, et al.,
Respondents.
On Petition for Writ of Certiorari from the Circuit Court for Miami-Dade
County, Norma S. Lindsey, Judge.
Young, Berman, Karpf & Gonzalez, P.A., and Andrew S. Berman, for
petitioners.
Hall, Lamb, Hall & Leto, and Andrew C. Hall, Matthew P. Leto, and
Vanessa Palacio, for respondents.
Before SUAREZ, LOGUE, and SCALES, JJ.
LOGUE, J.
In the case below, Jeremy Alters and his law firm are being sued by former
clients. Alters moved to recuse the former clients’ lawyers, Andrew Hall and his
firm, because Hall had previously represented both Alters and Alters’s former
clients in unrelated matters. The trial court denied Alters’s motion to recuse.
Alters now petitions for a writ of certiorari to quash the order denying recusal. We
deny the petition.
Facts
In 2008, Jeremy Alters was retained to represent two brothers, Gustavo and
Alfredo Villoldo, in a lawsuit against Fidel Castro, the Republic of Cuba, and
others for acts of terrorism. Alters obtained a judgment in state court for over $1.1
billion. The judgment, however, contained defects that made it uncollectable
under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605. Upon learning of
this problem, the Villoldos terminated Alters and retained Hall to correct the
judgment. After the Villoldos hired Hall to correct Alters’s work, Alters also hired
Hall to represent him in a case in which two Argentine nationals were suing Alters
for a share of the fees in a $410 million class action against Bank of America.
In mid-August of 2011, as he was about to obtain the corrected judgment in
the Cuba case, and while still representing both parties in unrelated matters, Hall
reminded a lawyer in Alters’s law firm that no charging lien had yet been filed in
the Cuba case. Alters testified, and the trial judge found, that Hall was not
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representing Alters’s law firm during that call. The Alters firm duly filed a
charging lien later that month. On the same day, Hall obtained the corrected final
judgment in the Cuba matter.
On June 20, 2013, in his capacity as the Villoldos’s attorney, Hall sent
Alters a letter disputing Alters’s charging lien. “My client has instructed,” Hall
wrote, “that if you do not respond by the close of business tomorrow or should you
insist on the Charging lien being enforced, the Villoldo Defendants will be
compelled to vigorously resist that Charging Lien.” At the time, it appears Hall
was still representing Alters in the Bank of America class action dispute. On
November 25, 2013, Hall wrote Alters saying he could no longer represent him in
the Bank of America matter because Alters was holding itself out as co-counsel
with Hall on the case involving the correction of the Cuba judgment despite having
been previously terminated by the Villoldos.
On December 20, 2013, Alters entered into a settlement agreement with the
Villoldos over the charging lien. The agreement provided that he be paid $175,000
immediately, and later, a percentage of the total amount collected once the
relationship between the United States and Cuba normalized, Cuba was taken off
the list of terrorist nations, and the State Department directed a payment be made.
The agreement contained language indicating that certain conditions be completed
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“through the efforts of Jeremy Alters” or his law firm. Hall did not represent either
party in the dispute or the settlement.
On March 6, 2016, the Villoldos filed the complaint in the instant case
against Alters seeking a declaratory judgment that Alters had no right to further
compensation under the settlement agreement. Hall represented the Villoldos in
that action. Alters and his firm responded by moving to recuse Hall. The trial
court held an extensive evidentiary hearing, made detailed findings of fact, and
denied the motion. Alters and his firm timely filed a petition for writ of certiorari.
Analysis
“[D]isqualification of a party’s lawyer in a civil case [is] a drastic remedy,
one that must be employed only in limited circumstances.” Gutierrez v. Rubio, 126
So. 3d 320, 321 (Fla. 3d DCA 2013). “Motions for disqualification are generally
viewed with skepticism because disqualification of counsel impinges on a party’s
right to employ a lawyer of choice, and such motions are often interposed for
tactical purposes.” Alexander v. Tandem Staffing Sols., Inc., 881 So. 2d 607, 608-
09 (Fla. 4th DCA 2004). “The standard of review for orders entered on motions to
disqualify counsel is that of an abuse of discretion.” Applied Dig. Sols., Inc. v.
Vasa, 941 So. 2d 404, 408 (Fla. 4th DCA 2006).
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The Florida Supreme Court has observed, “the Florida Rules of Professional
Conduct provide the standard for determining whether counsel should be
disqualified in a given case.” Young v. Achenbauch, 136 So. 3d 575, 580 (Fla.
2014). Alters was not Hall’s current client when Hall filed the complaint against
Alters. He was Hall’s former client. The current lawsuit was filed approximately
two-and a-half years after Hall stopped representing Alters in the Bank of America
class action fee dispute. For this reason, the trial court properly determined that
Hall’s responsibility to recuse himself in litigation against Alters is governed by
Rule 4-1.9 of the Rules Regulating the Florida Bar, which deals with a lawyer’s
responsibility to former clients.
In pertinent part, Rule 4-1.9(a) provides that a lawyer who has formerly
represented a client in a matter must not afterwards “represent another person in
the same or a substantially related matter in which that person’s interests are
materially adverse to the interests of the former client unless the former client
gives informed consent.” R. Regulating Fla. Bar 4-1.9(a). The application of this
provision to the current dispute turns on the phrase “substantially related matter.”
The Florida Supreme Court has explained the meaning of “substantially related” in
this context as follows:
Matters are “substantially related” for purposes of this rule if they
involve the same transaction or legal dispute, or if the current matter
would involve the lawyer attacking work that the lawyer performed
for the former client. For example, a lawyer who has previously
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represented a client in securing environmental permits to build a
shopping center would be precluded from representing neighbors
seeking to oppose rezoning of the property on the basis of
environmental considerations; however, the lawyer would not be
precluded, on the grounds of substantial relationship, from defending
a tenant of the completed shopping center in resisting eviction for
nonpayment of rent.
In re Amendments to the Rules Regulating Fla. Bar, 933 So. 2d 417, 445 (Fla.
2006).
Hall’s current representation of the Villoldos against Alters involves a
dispute over the December 20, 2013 Cuba settlement agreement between Alters
and the Villoldos. Hall’s prior representation of Alters involved a dispute over
fees in a class action against Bank of America. As Alters candidly admitted at trial
and in his petition, there is no overlap between the two representations. They do
not involve the same underlying dispute or transaction. In the current case, Hall
will not be required to attack work that he performed for Alters. The two disputes
are not substantially related. Indeed, they have absolutely nothing to do with each
other. For this reason, Rule 4-1.9 does not preclude Hall from representing the
Villoldos in the current matter.
Alters, however, responds by citing to our case, Brent v. Smathers, 529 So.
2d 1267, 1269 (Fla. 3d DCA 1988), as expanding the restrictions of Rule 4-1.9 to
include a prohibition on bringing suit against a former client when to do so would
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violate the principle of client loyalty and create an appearance of impropriety. We
do not read that case so broadly.
Brent involved a petition for certiorari to recuse the law firm of Smathers
and Thompson from representing George Smathers. Smathers and Maxine Brent
had served as co-personal representatives of an estate and co-trustees of a related
trust. The law firm represented both parties in that capacity. Brent then sued
Smathers for breach of fiduciary duty. The law firm defended Smathers, and as a
result, Brent moved to recuse the law firm. The trial court denied the motion, and
Brent appealed.
This Court found that the law firm’s defense of Smathers to Brent’s claim of
breach of fiduciary duty was substantially related to the firm’s representation of
Smathers and Brent as co-representatives and co-trustees: “It is undisputed that
Smathers and Thompson represented Brent in the administration of the estate and
that they now represent co-administrator Smathers and the beneficiaries of that
same trust and estate for which the firm represented Brent.” Id. at 1268.
Accordingly, this Court held that Rule 4-1.9 required the law firm to recuse. Id.
The law firm in Brent, however, countered that the Rules Regulating the
Florida Bar did not apply to that particular case as the Rules only apply when a
client’s expectation of confidentiality is at stake. Id. at 1269. The law firm
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contended that there was no confidentially between Smathers and Brent as co-
trustees. Id.
In response to this argument, this Court noted that the rules protected not
only a client’s right to confidentiality, but also a client’s right to loyalty: “Although
lawyer-client confidentiality is an important factor in determining the
appropriateness of representation, nowhere do the rules reflect that it is the sole
determining factor. The fact that the plaintiff may have no expectation of
confidentiality as between co-trustees is not dispositive of the issue.” Id.
Contrary to Alters’s contention, this court’s ruling in Brent did not modify
Rule 4-1.9 by adding a new substantive prohibition which requires a lawyer to
recuse in a lawsuit against a former client if the representation can be deemed
“disloyal” or creates an “appearance of impropriety.” Any such substantive
change would have to be made by the Florida Supreme Court. The Brent decision
merely explained why the Rules applied even if a client’s reasonable expectation
of confidentiality was not at stake.
For the reasons discussed above, we hold there was no departure from the
essential requirements of law when the trial court exercised its discretion to deny
Alters’s motion to recuse.
Petition denied.
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