Alters v. Villoldo

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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