Lee v. Florida Dept. of Ins. & Treasurer

586 So. 2d 1185, 1991 Fla. App. LEXIS 9085, 1991 WL 180685
CourtDistrict Court of Appeal of Florida
DecidedSeptember 11, 1991
Docket90-3831
StatusPublished
Cited by13 cases

This text of 586 So. 2d 1185 (Lee v. Florida Dept. of Ins. & Treasurer) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lee v. Florida Dept. of Ins. & Treasurer, 586 So. 2d 1185, 1991 Fla. App. LEXIS 9085, 1991 WL 180685 (Fla. Ct. App. 1991).

Opinion

586 So.2d 1185 (1991)

Michael D. LEE, Petitioner,
v.
FLORIDA DEPARTMENT OF INSURANCE AND TREASURER, Respondent.

No. 90-3831.

District Court of Appeal of Florida, First District.

September 11, 1991.
Rehearing Denied October 14, 1991.

*1186 Thomas M. Ervin, Jr., and Melissa Fletcher Allaman, Ervin, Varn, Jacobs, Odom & Ervin, Tallahassee, and Edward A. White, Jacksonville, for petitioner.

S. Marc Herskovitz, Div. of Legal Services, Florida Dept. of Ins., Tallahassee, and L. William Porter, II, Tallahassee, for respondent.

ZEHMER, Judge.

Michael D. Lee invokes the jurisdiction of this court to review a nonfinal order entered in this administrative disciplinary proceeding against him by the Department of Insurance. The petition seeks review of a *1187 hearing officer's order that denied disqualification of the Department's attorney, L. William Porter II, to represent the Department in these proceedings. Because it appears that review of the final agency decision would not provide an adequate remedy, we accept jurisdiction pursuant to section 120.68(1), Florida Statutes (1989), and rule 9.100, Florida Rules of Appellate Procedure. For the reasons hereafter stated, we quash the appealed order and remand with directions to disqualify Porter from further representation of the Department in these proceedings.

Petitioner Lee holds a license as a general lines insurance agent issued by the Department. This administrative proceeding was initiated by the Department to revoke his license on numerous grounds arising out of transactions and events that were involved in a civil action filed in the United States District Court for the Middle District of Florida by the National Council on Compensation Insurance (NCCI).[1] NCCI made claims for damages against Lee and his business, and Lee counterclaimed for damages against NCCI. Counsel for NCCI in that action included the law offices of Frederick Leo Bateman, Jr. Porter, then a salaried associate with that firm, appeared and signed papers filed in that case. During his participation in the federal court action, Porter allegedly received and gained substantial information and knowledge through his representation of NCCI. The federal court suit was settled pursuant to a written settlement between NCCI, Lee and the other parties to the suit dated February 26, 1990. Attorney Bateman participated in negotiating and reaching this settlement as attorney for NCCI, but he did not sign the agreement. The settlement agreement provided in paragraph 8 that:

Counsel for NCCI Plaintiffs, FREDERICK L. BATEMAN JR., and the Law Offices of Frederick LEO BATEMAN, JR., [sic] will not represent the Department of Insurance, State of Florida, nor participate in any administrative proceedings brought by the Department of Insurance to revoke or suspend the license issued by [sic] the Department of Insurance and Treasurer, State of Florida, to MICHAEL D. LEE as a general lines agent, and NCCI will so instruct and direct its attorney, Frederick L. Bateman, Jr. and the Law Office of Frederick Leo Bateman, Jr. [sic] not to so represent or participate in said administrative proceeding.

Pursuant to the settlement agreement, NCCI was paid the sums as agreed by the parties, and a joint motion to dismiss with prejudice was filed in federal court. An order of dismissal was entered on March 7, 1990.

Attorney Porter terminated his association with Bateman's law office shortly thereafter, on February 28, 1990, and established his own law firm. The Department instituted these disciplinary proceedings on July 9, 1990. On August 31, 1990, Porter having been employed by the Department to represent it in this case, formally appeared in these proceedings as attorney for the Department. Petitioner Lee immediately filed a motion to disqualify Porter from representing the Department based on the provisions of paragraph 8 of the settlement agreement. The Department responded to the hearing officer's order to show cause, and an evidentiary hearing was held before the hearing officer on the matter. In the order denying the motion, the hearing officer found, in addition to the facts recited above, that there were no written or oral agreements between Porter and Bateman restricting Porter's future employment. The specific grounds for denial then recited:

6. The Department argues in its brief that restrictions on employment are against public policy. The Respondent *1188 argues that ethical considerations prevent Mr. Porter from taking any action contrary to the interest of his former client and that his participation would breach the settlement agreement contrary to the client's interest.
7. Restrictions on any attorney's right to practice as part of a partnership or employment agreement, or as a settlement agreement between private parties are prohibited. See, Rule 4-5.6, Rules of Professional Conduct.
Therefore, the motion to disqualify counsel is hereby DENIED.

We hold that the hearing officer erred in ruling that the provision in paragraph 8 of the settlement agreement is prohibited and thus made void by rule 4-5.6 of the Florida Bar's Rules of Professional Conduct.[2]

We first would note that the application of rule 4-5.6 to invalidate or render void a provision in a private contract between two parties is beyond the scope and purpose of the Rules and constitutes error. As the preamble to the Rules states, they "simply provide a framework for the ethical practice of law." The preamble further explains:

Failure to comply with an obligation or prohibition imposed by a rule is a basis for invoking the disciplinary process... .
Violation of a rule should not give rise to a cause of action nor should it create any presumption that a legal duty has been breached. The rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability. Furthermore, the purpose of the rules can be subverted when they are invoked by opposing parties as procedural weapons... . Accordingly, nothing in the rules should be deemed to augment any substantive legal duty of lawyers or the extra-disciplinary consequences of violating such duty.

To use rule 4-5.6 as the basis for invalidating a private contractual provision is manifestly beyond the stated scope of the Rules and their intended legal effect. Until paragraph 8 of the settlement agreement has been voided, canceled, or nullified by a court of competent jurisdiction, it must be treated as valid and binding on all parties legally affected by its terms.[3] Whether attorney Bateman acted unethically in violation of the Rules by participating in the negotiation of a settlement agreement that included the provisions in paragraph 8 and should be disciplined therefor is not the issue in this proceeding. Rather, the critical issue is whether Porter, as an associate lawyer employed in Bateman's law office who worked on NCCI's case, can be ethically and legally disqualified from representing the Department in respect to the same transactions and events as those in which *1189 he had previously represented NCCI in view of the presumptively valid contractual provision in paragraph 8 between Lee and NCCI.

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Bluebook (online)
586 So. 2d 1185, 1991 Fla. App. LEXIS 9085, 1991 WL 180685, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lee-v-florida-dept-of-ins-treasurer-fladistctapp-1991.