IN THE SUPREME COURT OF FLORIDA

Transcription

1 IN THE SUPREME COURT OF FLORIDA THE FLORIDA BAR, Complainant, Supreme Court Case No. SC v. VICTOR JOSEPH LABRUZZO, Respondent. / The Florida Bar File No ,247(11N-MFC) THE FLORIDA BAR S SECOND AMENDED ANSWER BRIEF and INITIAL BRIEF ON CROSS APPEAL WILLIAM MULLIGAN Bar Counsel Florida Bar No The Florida Bar 444 Brickell Avenue, Suite M-100 Miami, Florida (305) KENNETH LAWRENCE MARVIN Staff Counsel Florida Bar No The Florida Bar 651 East Jefferson Street Tallahassee, Florida (850) JOHN F. HARKNESS, JR. Executive Director Florida Bar No The Florida Bar 651 East Jefferson Street Tallahassee, Florida (850)

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3 TABLE OF CONTENTS PAGE Table of Contents...i Table of Authorities...ii-vi Symbols and References...vii Statement of the Case and of the Facts Summary of the Argument Argument I. A. THE REFEREE PROPERLY FOUND AS AGGRAVATION THAT RESPONDENT HAD A DISHONEST MOTIVE B. REIMBURSEMENT OF $15, TO KLEIN AFTER COMMENCEMENT OF RESPONDENT S CRIMINAL PROCEEDINGS IS NEITHER A MITIGATING NOR AGGRAVATING FACTOR. RECORD DOES SUPPORT REFEREE S FINDING THAT RESPONDENT HAD OBLIGATION TO REFUND MONEY TO KLEIN II. III. THE REFEREE DID NOT ERR IN RECOMMENDING PASSAGE OF ALL PARTS OF THE FLORIDA BAR EXAMINATION PRIOR TO REINSTATEMENT THE REFEREE ERRED IN NOT RECOMMENDING DISBARMENT AS THE APPROPRIATE SANCTION FOR RESPONDENT S GUILTY PLEAS TO 2 ND AND 3 RD DEGREE GRAND THEFT Conclusion...30 Certificate of Service Certificate of Type, Size and Style and Anti-Virus Scan i

4 TABLE OF AUTHORITIES PAGE The Florida Bar v. Anderson, 594 So. 2d 302 (Fla. 1992)...18, 19 The Florida Bar v. Arcia, 848 So. 2d 296 (Fla. 2003).. 19, 20, 22 The Florida Bar v. Barnett, reported as table case, 675 So. 2d 929 (Fla. 1996)..20 The Florida Bar v. Benchimol, 681 So. 2d 663 (Fla. 1996).17 The Florida Bar v. Carswell, 624 So. 2d 259 (Fla. 1993) , 25 The Florida Bar v. Childers, 582 So. 2d 617 (Fla. 1991) , 24 The Florida Bar v. Chosid, 500 So. 2d 150 (Fla. 1987) The Florida Bar v. Della-Donna, 583 So. 2d 307 (Fla. 1989) The Florida Bar v. Diamond, 548 So. 2d 1107 (Fla. 1989) , 28 The Florida Bar v. DuBois, 322 So. 2d 498 (Fla. 1975) The Florida Bar v. Forbes, 596 So. 2d 1051 (Fla. 1992).16 The Florida Bar v. Garcia, 766 So. 2d 223 (Fla. 2000)...13 ii

5 The Florida Bar v. Graham, 605 So. 2d 53 (Fla. 1992) The Florida Bar v. Greene, 926 So. 2d 1195 (Fla. 2006) , 12, 14 The Florida Bar v. Grief, 701 So. 2d 555 (Fla. 1997).. 6, 14 The Florida Bar v. Helinger, 620 So. 2d 993 (Fla. 1993) The Florida Bar v. Hosner, 520 So. 2d 567 (Fla. 1988).. 17 The Florida Bar v. Jahn, 509 So. 2d 285 (Fla. 1987) , 23 The Florida Bar v. Knowles, 500 So. 2d 140 (Fla. 1986).17 The Florida Bar v. Korones, 752 So. 2d 586 (Fla. 2000) Labruzzo v. The Lofts at South Beach, 937 So. 2d 1124 (3d DCA 2006)...4 The Florida Bar v. Layton, 476 So. 2d 667 (Fla. 1985) The Florida Bar v. Lopez, 406 So. 2d 1100 (Fla. 1981)...25 The Florida Bar v. Lowe, 530 So. 2d 58 (Fla. 1988) The Florida Bar v. Lynne, 606 So. 2d 1167 (Fla. 1992)... 20, 21 iii

6 The Florida Bar v. Maynard, 672 So. 2d 530 (Fla. 1996) The Florida Bar v. McMillan, 600 So. 2d 457 (Fla. 1992) The Florida Bar v. Miele, 605 So. 2d 866 (Fla. 1992) The Florida Bar v. Niles, 644 So. 2d 504 (Fla. 1994). 12 The Florida Bar v. Nunn, 596 So. 2d 1053 (Fla. 1992)..17 State of Florida v. Page, 449 So. 2d 813 (Fla. 1984) The Florida Bar v. Pahules, 233 So.2d 130 (Fla. 1970).29 The Florida Bar v. Pettie, 424 So. 2d 734 (Fla. 1982) 10 The Florida Bar v. Rodriguez, 489 So.2d 726 (Fla. 1986). 17 In Re: Disciplinary Proceeding Against Selden, 107 Wash. 2d 246 (1986)...21, 29 The Florida Bar v. Shankman, 908 So. 2d 379 (Fla. 2005) 24 The Florida Bar v. Shanzer, 572 So.2d 1382 (Fla. 1991) The Florida Bar v. Simring, 612 So. 2d 561 (Fla. 1993)...17 iv

7 The Florida Bar v. Smith, 650 So. 2d 980 (Fla. 1995) 25, 26, 27 The Florida Bar v. Thomas, 698 So. 2d 530 (Fla. 1997) 24 The Florida Bar v. Tunsil, 503 So. 2d 1230 (Fla. 1986).. 22, 23 The Florida Bar v. Vining, 761 So. 2d 1044 (Fla. 2000)... 7 The Florida Bar v. Wilson, 643 So. 2d 1063 (Fla. 1994)...19 Rules Regulating The Florida Bar 3-5.1(e) (a)(3)...6, (h)(2)..7, (c)...8 Florida Standards for Imposing Lawyer Sanctions , 14, (b) 7 9.4(a) , 11 v

8 Other Authorities 4 Fla. Jur 2d Attorneys at Law 100 (2007).17 Padovano, Florida Appellate Practice, (1997).. 1 West s Florida Statutes Annotated (2004) 8 vi

9 SYMBOLS AND REFERENCES For the purpose of this brief, The Florida Bar will be referred to as The Bar and Victor Joseph Labruzzo will be referred to as Respondent. References to the transcript of the final hearing held on December 14, 2006 will be by the symbol TR followed by the corresponding page number(s). References to the Report of Referee will be by the symbol ROR followed by the corresponding page number(s). The Bar s and Respondent s exhibits will be cited as BEX and REX, respectively, along with the exhibit number assigned at the final hearing, as well as the page number(s), if applicable. Finally, any references to Respondent s Initial Brief will be by the symbol RIB followed by the corresponding page number(s). vii

10 STATEMENT OF THE CASE AND OF THE FACTS The Bar is unable to accept Respondent s Statement of the Facts as it fails to include a complete listing of the facts and includes information that is not of record in this case. 1 Additionally, Respondent s Statement of the Facts includes some inaccuracies as well. 2 [I]t is essential that the facts be stated fairly and accurately. All of the relevant facts should be included, not just those facts that support the argument of the party writing the brief. Padovano, Florida Appellate Practice, (1997). On June 7, 2006, Respondent pled guilty to two felony counts of grand theft (2 nd and 3 rd degree). TR 30-31, 39, 44, 48-49; BEX 2 at The ROR mistakenly notes that Respondent entered nolo contendere pleas as to both counts. ROR 2. 1 Respondent included certain statements that were not part of the record in this case. Those statements are: 1) None of the funds deposited into the SBI account went into the pocket of his wife, S.L.P. RIB 7. 2) He received no benefit from it whatsoever. RIB 9. 3) Mr. Labruzzo had no ownership interest in SBI. RIB 8. As to no. 2, Respondent is referring to the Sucre transaction. During the final hearing, Respondent testified that none of the $37, related to the Sucre transaction went into his pocket. TR 36. As to whether Respondent received no benefit whatsoever from the Sucre transaction, there was no evidence put forth to that effect. Respondent s counsel, however, did make a statement to that effect during the final hearing. TR Respondent inaccurately stated that The Sutter transaction resulted in no criminal proceedings against Mr. Labruzzo. and that he did not have to pay any of the $45, to The Lofts or Mr. Seidler. RIB The Sutter transaction was actually the basis for the fourth count of the original information filed against Respondent. BEX 2 at 14. Subsequently, Respondent entered a plea to charges in the amended information which did not include the Sutter transaction. However, as to the aforementioned $45,000.00, Respondent was required to pay $7, which was 1

11 Respondent received a withhold of adjudication as to both counts and was placed on administrative probation for a period of six months with the special conditions that he pay $45,000 in restitution to The Lofts At South Beach, Inc. ( The Lofts ), $1,500 in costs to attorney Steven Lehr ( Lehr), who represented J. Scott Klein ( Klein ), a victim of Respondent s criminal conduct, as well as, $3,500 to the Victim s Compensation Fund. TR 8-10, 38; BEX 2 at According to the written restitution agreement in the subject criminal case, the restitution to The Lofts was to be held in abeyance until resolution of a pending civil appeal. BEX 2 at 17-18; BEX 4 at 1. Respondent s subject behavior occurred while working for The Lofts, a company involved in condominium development. Bart Seidler ( Seidler ), the complainant in the subject bar case, was a partner in The Lofts. TR 40, As to the second degree grand theft charge, on or about September 10, 2001, Respondent improperly directed Alejandro Sucre ( Sucre ), a prospective purchaser of a condominium unit, to make a check in the amount of $37,500 payable to South Beach International Investments, Inc. ( SBI ) as a deposit on a unit at The Lofts. Said $37, was inappropriately deposited into an account for SBI. TR 31-32, Respondent was aware that the shareholders agreement for The Lofts required that related to the Sutter transaction. TR 46, 71. 2

12 such initial deposits were to be placed into the escrow account with the law firm of Bedzow, Korn, Brown, Miller, and Zemel ( Bedzow Korn ), yet he disregarded the agreement. TR 32, 51, Respondent claims that he made the subject deposit at the direction of Richard Young ( Young ). TR 32. Yet, Respondent and Seidler s business relationship at The Lofts predated any involvement by Young at The Lofts. Furthermore, the contract for the subject transaction required that deposits were to be held by Bedzow Korn. Finally, the shareholder s agreement for The Lofts noted that any changes to procedures required the consent of both partners. TR There is no evidence that Respondent ever consulted with Seidler about this transaction. As to the third degree grand theft charge, Respondent improperly directed Klein to make a check in the amount of $15, payable to SBI for the purchase of an additional parking space at The Lofts. TR Once again, Respondent failed to direct the funds to the proper escrow account at Bedzow Korn as required by the subject contract and shareholder s agreement. TR Klein finally received reimbursement for said $15, after criminal charges were filed against Respondent, but prior to his entering a guilty plea to two counts of grand theft. TR 48, 71. As previously noted, the restitution in the criminal case was held in abeyance 3

13 until the resolution of a related appellate civil case. In Labruzzo v. The Lofts at South Beach, 937 So. 2d 1124 (3d DCA 2006), the court determined that the Sucre deposit of $37, should have been deposited into The Lofts escrow account, but found that as the money was deposited into the SBI account that Respondent should not have to reimburse those funds. Rather, the court directed The Lofts to look to SBI for the funds that Respondent improperly diverted. REX 1, TR 72. Finally, as to the remaining $7, of the initial $45, restitution figure, this related to the purchase of a parking space at The Lofts by a Mr. Sutter ( Sutter ). TR 37, 46, 71. Once again, Respondent misdirected these funds that should have been placed in The Lofts escrow account. Respondent was required to reimburse The Lofts for said amount as part of the restitution agreement. The aforementioned appellate decision did not have any bearing on the requirement that Respondent pay restitution in the amount of $7, regarding the Sutter transaction. BEX 4, TR 46. 4

14 SUMMARY OF THE ARGUMENT The Referee s finding that Respondent had a dishonest motive. is supported in the record and should not be disturbed. ROR 3. As to the Referee s finding that Respondent waited until after criminal charges were filed against Klein to return his funds, The Bar would agree that this should not have been considered as an aggravating factor. ROR 3. 3 However, the record does support the Referee s finding as to Respondent s obligation to refund money to Klein. Also, the Referee acted within her discretion when she recommended that Respondent be required to take and pass The Florida Bar exam as a disciplinary condition. Generally, this Court will not second-guess the referee s recommended discipline as long as it has a reasonable basis in existing case law and the Florida Standards for Imposing Lawyer Sanctions. The Florida Bar v. Greene, 926 So. 2d 1195, (Fla. 2006). The Referee s recommendation concerning the Bar exam is within the bounds of appropriate discipline for this matter. 3 While The Bar does generally support the Referee s findings of fact, the following aggravating/mitigating factors should not have been included: 1) the Respondent waited until the criminal charges were filed to return the money to Mr. Klein. ROR 3. This is neither an aggravating nor mitigating factor as per the Florida Standards for Imposing Lawyer Sanctions ( Standards ). Fla. Stds. Imposing Law. Sancs. 9.4(a). 2) Respondent s age (64) is not a mitigating factor noted in the Standards. ROR

15 Finally, the Referee erred by recommending a three year suspension in view of the gravity of Respondent s criminal conduct, which warrants nothing short of disbarment. Disbarment is the presumed penalty for a felony conviction. Fla. Stds. Imposing Law. Sancs. 5.11; The Florida Bar v. Grief, 701 So.2d 555 (Fla. 1997). Pursuant to Rule 3-7.2(a)(3) of the Rules Regulating The Florida Bar ( RRTFB ), Respondent is considered a convicted attorney even though adjudication was withheld as to both counts. 6

16 ARGUMENT I A referee s findings of fact regarding guilt carry a presumption of correctness that should be upheld unless clearly erroneous or without support in the record. The Florida Bar v. Vining, 761 So. 2d 1044, 1047 (Fla. 2000). This Court is precluded from reweighing the evidence and substituting its judgment for that of the referee. The Florida Bar v. McMillan, 600 So. 2d 457, 459 (Fla. 1992). The party contending that the referee s findings of fact and conclusions as to guilt are erroneous carries the burden of demonstrating that there is no evidence in the record to support those findings or that the record evidence clearly contradicts the conclusion. The Florida Bar v. Miele, 605 So. 2d 866, 868 (Fla. 1992). The Bar s responses to Respondent s arguments are set forth below in the same order as presented by Respondent. A) THE REFEREE PROPERLY FOUND AS AGGRAVATION THAT RESPONDENT HAD A DISHONEST MOTIVE The Referee correctly found Respondent s dishonest motive to be an aggravating factor under 9.22(b) of the Standards. Under Rule 3-7.2(h)(2) of the RRTFB,... respondent may not contest the findings of guilt in the criminal proceedings. Although Respondent pled guilty to two counts of grand theft, and repeatedly admitted his guilt, he claims not to have had a dishonest motive. 4 His conduct before and after the commission of these crimes, however, indicates otherwise. 4 Interestingly enough, Respondent did not seek review concerning the Referee s 7

17 By entering a guilty plea to two counts of grand theft, he acknowledged that the requisite elements for second and third degree grand theft had been met. following elements: Under of the Florida Statutes, the crime of theft requires the (1) A person commits theft if he or she knowingly obtains or uses, or endeavors to obtain or use, the property of another with the intent to, either temporarily or permanently: (a) Deprive the other person of a right to the property or a benefit from the property. (b) Appropriate the property to his or her own use or to the use of any person not entitled to the use of the property. West s F.S.A (2004). Additionally, grand theft in the second degree applies to property valued at $20,000 or more but less than $100,000, and grand theft in the third degree applies to property valued $10,000 or more but less than $20,000. Without question, it is not necessary that the perpetrator receive a personal benefit to be guilty of grand theft. Furthermore, this Court has stated quite clearly that, the commission of petit theft, or any other offense falling within the scope of chapter 812, Florida Statutes (1981), necessarily involves dishonesty State of Florida v. Page, 449 So.2d 813, 815 (Fla. 1984). By entering a guilty plea to both crimes, Respondent expressly admitted that he had the necessary mental state and that he committed the unlawful acts for both finding that Respondent violated Rule 4-8.4(c) of the RRTFB. 8

18 felony counts of grand theft. In other words, Respondent knowingly directed the funds to the SBI account with the intent to either temporarily or permanently deprive The Lofts of its funds or a benefit therefrom in the amounts noted above. Further, theft is a dishonest act, per se, which inextricably requires a dishonest motive. Thus, Respondent s contention that he lacked a dishonest motive is inconsistent with the guilty pleas that he entered on his own volition. Furthermore, Respondent and Seidler s business relationship at The Lofts predated any involvement by Young. Respondent knew that the shareholders agreement for The Lofts provided that the subject funds were to be deposited into the Bedzow Korn escrow account. Also, the contracts for the subject transactions specifically stated that the deposits were to be placed in the Bedzow Korn escrow account. Regardless, Respondent directed the funds to be deposited into the SBI account. In short, Respondent, a Florida attorney with over 25 years experience at the time of the subject transactions, knew or should have known that he was not supposed to direct the funds from the subject transactions to a bank account that had not been so designated. Be that as it may, if the impropriety was not clearly evident, then he had a duty to investigate or to ascertain whether his actions were proper. Knowing that the shareholders agreement required that any changes in procedures had 9

19 to be made by an agreement between both parties, Respondent should have contacted Seidler to make an inquiry regarding any changes concerning deposits of funds. There is no evidence that Respondent ever addressed this matter with Seidler. It is disingenuous for Respondent to contend that he was simply following Young s instructions when he knew from his experience at The Lofts that Young s instructions were contrary to standard procedures. Respondent s knowledge of the proper procedure and his failure to follow it are indicia of his dishonest motive. In support of his position, Respondent cites to The Florida Bar v. Pettie, 424 So.2d 734 (Fla. 1982). In said case, there is no mention that Pettie was prosecuted criminally for his participation in a criminal conspiracy to import marijuana. As this Court noted in Pettie, there was nothing in his participation that approached lying, cheating, defrauding, or untrustworthiness. Id. at 737. By misdirecting deposits into an improper account, Respondent s actions would certainly approach lying, cheating, defrauding, or untrustworthiness. Id. This is particularly so when considered with the fact that he was aware that he was acting in contravention of subject contracts and the shareholder s agreement. Accordingly, the Referee s finding of a dishonest motive should be upheld. B) REIMBURSEMENT OF $15, TO KLEIN AFTER COMMENCEMENT OF RESPONDENT S CRIMINAL PROCEEDINGS IS NEITHER A MITIGATING NOR AGGRAVATING FACTOR. RECORD DOES SUPPORT 10

20 REFEREE S FINDING THAT RESPONDENT HAD OBLIGATION TO REFUND MONEY TO KLEIN. The Referee found that $15, was returned to Klein, after the criminal charges were brought against the Respondent, but before the case was resolved and the Respondent placed on probation. ROR 2-3. Additionally, she inaccurately found this to be an aggravating factor since said funds were not returned to Klein until after commencement of the criminal proceedings against Respondent. ROR 3. However, in Section IV of her report, the Referee correctly states that she considered Standard 9.4(a) in reaching her disciplinary recommendation which notes that forced or compelled restitution is neither a mitigating nor an aggravating factor. ROR 4; Fla. Stds. Imposing Law. Sancs. 9.4(a). Accordingly, such forced or compelled restitution should not be considered as a mitigator or aggravator in this case. At the final hearing, Respondent stated, S.L.P., through her attorney, paid Mr. Klein the $15,000. TR 36. He also acknowledged that this occurred after the criminal charges had been filed against him. 5 As noted in the Amended Information, Respondent was one of three co-defendants that were charged with third degree grand theft related to the Klein transaction. BEX 1. Respondent ultimately pled guilty to this charge. While Respondent disputes that he was responsible for the 5 Following Respondent s entry of his guilty pleas, he married S.L.P.; however, he denies that any relationship existed between them when the $15,

21 money owed to Klein, the source of the $15, returned to Klein is immaterial. As Respondent was a principal to this criminal offense, he was equally responsible for reimbursement of said funds as any of his co-defendants. In sum, the record provides substantial, competent evidence to support the Referee s finding that the subject funds were returned to Klein after the criminal charges were filed against Respondent, but prior to resolution of the case. ARGUMENT II THE REFEREE DID NOT ERR IN REQUIRING PASSAGE OF ALL PARTS OF THE FLORIDA BAR EXAMINATION PRIOR TO REINSTATEMENT The Referee did not err by recommending discipline that requires Respondent to retake and obtain a passing score on The Florida Bar Examination prior to reinstatement. Generally, this Court will not second-guess the referee s recommended discipline as long as it has a reasonable basis in existing case law and the Florida Standards for Imposing Lawyer Sanctions. Greene at Additionally, a recommendation of discipline by a referee is to be afforded deference unless the recommendation is clearly erroneous or not supported by the evidence. The Florida Bar v. Niles, 644 So.2d 504, (Fla. 1994). was returned to Klein. TR

22 Pursuant to Rule 3-5.1(e) of the RRTFB, A suspension of more than 90 days shall require proof of rehabilitation and may require passage of all or part of the Florida bar examination... As noted above, the RRTFB certainly support the Referee s recommendation. In The Florida Bar v. Garcia, 766 So.2d 223 (Fla. 2000), this Court ordered that Garcia be suspended for three years and that he be required to take and successfully pass all parts of the Florida Bar examination at the end of his three-year suspension. Garcia received said suspension due to his entering a no contest plea to one count of aggravated assault, a 3 rd degree felony, and one count of tampering with a witness, a 3 rd degree felony. Like the subject behavior in Respondent s case, Garcia s acts were not directly related to the practice of law. In The Florida Bar v. DuBois, 322 So. 2d 498 (Fla. 1975), the Court suspended DuBois for three years with any subsequent reinstatement to be conditioned on proof of restitution, rehabilitation in a regular reinstatement proceeding, and successful completion of the regular bar examination following those proceedings. Id. at 500. Dubois had converted client funds and failed to account for and turn over trust funds. In the present case, the Referee s recommended discipline that Respondent retake and pass all parts of the Florida Bar examination is for a remedial purpose. This disciplinary condition is designed to protect the public from a lawyer who has 13

23 undoubtedly engaged in felonious behavior, and whose conduct demonstrates a lack of moral fitness and respect for the law that he took an oath to uphold. Respondent has cited numerous cases attempting to bolster his position, but has failed to do so. Nowhere in any of Respondent s cases does it indicate that the Referee in the subject case was not within her discretion to make such a disciplinary recommendation. Without question, there is a reasonable basis in existing case law and the Florida Standards for Imposing Lawyer Sanctions supporting the Referee s recommendation as to this condition. Greene at ARGUMENT III THE REFEREE ERRED IN NOT RECOMMENDING DISBARMENT AS THE APPROPRIATE SANCTION FOR RESPONDENT S GUILTY PLEAS TO 2 ND AND 3 RD DEGREE GRAND THEFT. (This issue answers Respondent s Argument III and also constitutes the Bar s Cross Appeal.) The Referee erred in not recommending disbarment as the appropriate sanction for Respondent s guilty pleas to 2 nd and 3 rd degree grand theft. Respondent s crimes warrant nothing short of disbarment. Disbarment is the presumed penalty for a felony conviction. Fla. Stds. Imposing Law. Sancs. 5.11; The Florida Bar v. Grief, 701 So.2d 555 (Fla. 1997). The Referee s recommendation as to discipline does not have a reasonable basis in existing case law and the Standards. 14

24 Pursuant to section 5.1 of the Standards, subsection 5.11, Disbarment is appropriate when: (a) (b) a lawyer is convicted of a felony under applicable law; or a lawyer engages in serious criminal conduct, a necessary element of which includes... theft; or (f) a lawyer engages in any other intentional conduct involving dishonesty, fraud, deceit, or misrepresentation that seriously adversely reflects on the lawyer s fitness to practice. Furthermore, under Rule (a)(3) of the RRTFB, a convicted attorney shall mean an attorney who has had either a determination or judgment of guilt entered by the trial court in the criminal proceeding. Therefore, even though Respondent received a withhold of adjudication as to both counts in the criminal case, he is still viewed as a convicted attorney under the RRTFB. Accordingly, Respondent s conduct warrants disbarment based on the three subsections of the Standards noted above. Disbarment is warranted based solely on an attorney s conviction of one felony. On the other hand, Respondent pled guilty to two felonies. Respondent has presented a sterilized view of his crimes. When viewed in conjunction with the applicable aggravating factors (Respondent s dishonest motive and pattern of misconduct), disbarment is the only appropriate sanction. 15

25 As can be seen by the numerous disbarment /resignation cases referenced below, Respondent s conduct warrants disbarment. In The Florida Bar v. Forbes, 596 So. 2d 1051 (Fla. 1992), Forbes was disbarred as a result of his entering a guilty plea to one federal felony count related to the filing of false information on a loan application for a condominium that he was developing. In mitigation, Forbes offered that he had no prior disciplinary history, that he had exhibited full and free disclosure to the disciplinary board, and that he was remorseful. Additionally, the opinion noted that Forbes provided assistance to the federal authorities in relation to the subject matter of his prosecution and matters unrelated to his misconduct. It is apparent that the mitigating evidence in Forbes was more substantial than that of the subject case. Due to the mitigating evidence, Forbes disbarment order was made retroactive to the date of his felony suspension. The case law for like criminal behavior supports disbarment for the case at hand. In The Florida Bar v. Layton, 476 So. 2d 667 (Fla. 1985), this Court held that a conviction for one count of second degree grand theft warranted disbarment. Unlike Layton, who was convicted of one count of grand theft, Respondent in the instant case pled guilty to two counts of grand theft. Similarly, in The Florida Bar v. Lowe, 530 So. 2d 58 (Fla. 1988), the respondent was convicted of two counts of grand theft and was disbarred for 15 years. 16

26 There are a substantial number of cases where this Court has disbarred attorneys for misappropriation of client funds notwithstanding the mitigating evidence presented. 6 While Respondent may not have been practicing law when he committed these crimes, his employment status does not ameliorate the reprehensible criminal acts which he engaged in. Conduct outside of the practice of law can subject one to disciplinary proceedings because lawyers are held to a higher standard of conduct in business dealings than are nonlawyers. 4 Fla. Jur. 2d Attorneys at Law 100 (2007) (citing The Florida Bar v. Della-Donna, 583 So. 2d 307 (Fla. 1989) and The Florida Bar v. Hosner, 520 So. 2d 567 (Fla. 1988)). Given Respondent s legal skills, training, and experience, he surely knew that what he was doing was wrong, but he proceeded in the face of such knowledge despite the risks involved. Respondent has taken great effort to marginalize his criminal conduct by attempting to distance himself from his profession. Respondent has attempted to portray himself as an underling that was simply following orders. That does not ring true when considered with the fact that 6 The Florida Bar v. Shanzer, 572 So.2d 1382 (Fla. 1991); The Florida Bar v. Knowles, 500 So. 2d 140 (Fla. 1986); The Florida Bar v. Graham, 605 So. 2d 53 (Fla. 1992); The Florida Bar v. Simring, 612 So. 2d 561 (Fla. 1993); The Florida Bar v. Nunn, 596 So. 2d 1053 (Fla. 1992); The Florida Bar v. Maynard, 672 So. 2d 530 (Fla. 1996); The Florida Bar v. Benchimol, 681 So. 2d 663 (Fla. 1996); The Florida Bar v. Korones, 752 So. 2d 586 (Fla. 2000); The Florida Bar v. Rodriguez, 489 So.2d 726 (Fla. 1986). 17

27 Seidler and Respondent started this enterprise prior to Young being on board. TR 68. Thus, Respondent s attempt to portray himself as an employee just following the instructions of his boss is disingenuous. This Court has deemed an attorney s misappropriation of public funds to be as serious an offense as the misuse of client funds, whether or not the misappropriation is accomplished while acting as an attorney. The Florida Bar v. Anderson, 594 So. 2d 302, 303 (Fla. 1992). Those who have received intensive education in the requirements of the law cast disrepute on the entire legal profession when they wilfully cast aside their training and knowingly break the very law about which they have been so thoroughly trained and tested.... No one is privileged to commit crime merely because others are doing so. This is especially compelling with a licensed attorney, whose unique and special obligation is to honor the law and encourage others to do so. When others see an attorney breaking the law, they may well assume that such misconduct is acceptable. Attorneys who imitate the crimes of nonlawyers effectively place the imprimatur of their legal training on the misconduct, implying that the law itself either condones such misconduct or at least will ignore it. Id. at 303, 304. As a result, Anderson pled no contest to third degree grand theft and uttering a forged instrument and received a withhold of adjudication as to both counts. Anderson establishes that a lawyer need not be acting as an attorney for the misappropriation of 18

28 funds to be considered an offense worthy of disbarment. Though Respondent did not steal directly from the public, he did steal from members of the public who sought to purchase condominium units and/or parking spaces and entrusted Respondent with their funds. Additionally, Respondent pled guilty to 2 nd and 3 rd degree felonies, while Anderson pled no contest to two 3 rd degree felonies. Stealing is stealing, and such an offense requires the most severe penalty, irrespective of whom the money was stolen from, particularly when the person committing the theft is also a member of The Bar. In The Florida Bar v. Wilson, 643 So.2d 1063 (Fla. 1994), Wilson was disbarred as result of his conviction for grand larceny and conspiracy involving the theft of public Medicaid money. In mitigation, this Court considered Wilson s lack of a prior disciplinary history, his good character and reputation, the imposition of other penalties or sanctions, and his remorse. In aggravation, this Court considered Wilson s dishonest or selfish motive, his pattern of misconduct, multiple offenses, refusal to acknowledge wrongful nature of misconduct, the vulnerability of the victim, and Wilson s substantial experience in the practice of law. While the character evidence was considered substantial, disbarment was entered as the mitigating factors could not outweigh the felony convictions and aggravating factors. In The Florida Bar v. Arcia, 848 So. 2d 296 (Fla. 2003), this Court imposed a three-year suspension for the theft of funds from a law firm employer. Subsequent to 19

29 Arcia s disciplinary sanction in the aforementioned case, he pled nolo contendere to one count of 2 nd degree grand theft and adjudication was withheld for the same conduct that was the subject of the Bar disciplinary case. Once again, in the case at hand, Respondent pled guilty to a 2 nd and 3 rd degree grand theft. Additionally, Arcia made complete restitution prior to The Bar case going to final hearing. Respondent, on the other hand, had to be forced into making restitution through the criminal court. The significance of Arcia is that this Court emphasized that future cases involving theft of firm funds will carry a presumption of disbarment. Id. at 300. Accordingly, the Arcia case extended the presumption of disbarment to thefts beyond those involving client funds. In The Florida Bar v. Barnett, reported as table case, 675 So.2d 929 (Fla. 1996), this Court entered an order granting Barnett s 5-year resignation from the practice of law. Barnett was a partner at a firm wherein he took unauthorized firm funds. He had no prior disciplinary history and contended that he sincerely believed that the fees he took constituted an equitable entitlement for unique services that he had rendered to the firm. In The Florida Bar v. Lynne, reported as table case, 606 So.2d 1167 (Fla. 1992), this Court entered an order granting Lynne s 5-year resignation from the practice of law. Lynne was a partner at a firm where he was responsible for not properly 20

30 accounting for firm funds and for allowing the firm and the firm s auditors to believe that the firm records were adequate. In re: Disciplinary Proceeding Against Selden, 107 Wash.2d 246, 256 (1986), the Supreme Court of Washington held that an attorney s misappropriation of $6, in funds from his law firm warranted disbarment. Selden misappropriated firm funds from April to October 1983, taking no client funds. Selden made restitution in full. Selden, an associate with the firm, claimed that he only took payments made by clients because he deserved and had been promised a bonus. In mitigation, Selden offered that he had no prior disciplinary record, he was under emotional and financial pressure centered around the dissolution of his marriage, he was remorseful, he since has worked for a law firm that gives him a high recommendation, he sought and received psychiatric treatment, and he cooperated with the bar proceedings. The concurring opinion in Selden provided the following compelling language: While we have followed a general rule that stealing from clients warrants disbarment, we have not addressed the question of the appropriate sanction for stealing from an attorney s employer. To give a more lenient sanction to this type of theft would only serve to encourage theft from an employer rather than a client. It would give the impression that certain types of theft are acceptable. All thefts are reprehensible and, absent extraordinary mitigating factors, warrant disbarment. Selden at

31 Respondent has cited various cases in his initial brief to support his position that a suspension and not disbarment is the appropriate sanction for his case. As discussed below, these cases are distinguishable from Respondent s case. In The Florida Bar v. Helinger, 620 So. 2d 993 (Fla. 1993) this Court suspended Respondent for two-years due to Helinger s guilty pleas to multiple misdemeanor counts involving obscene phone calls. Id. at 993. Respondent is trying to equate apples and oranges by citing to Helinger to support his cause. Clearly, this Court cannot look to Helinger to provide assistance as to the appropriate discipline in this case. In The Florida Bar v. Tunsil, 503 So. 2d 1230 (Fla. 1986), Tunsil, unlike Respondent, pled guilty and received a withhold to only one count of grand theft. This Court took into account that Tunsil made restitution, cooperated with the Bar, exhibited remorse, and was suffering from alcoholism during the subject time frame. Clearly, alcoholism can serve to impair one s judgment and this Court viewed it as a very significant mitigating factor. In the subject case, Respondent has not evidenced that he was dealing with any issues that would serve to impair his judgment. Also, since the issuance of the Tunsil opinion, it is evident that this Court has taken a harder stance on thefts not involving client funds. In Arcia, this Court stated loud and clear that theft, whether or not client funds are involved, carries the presumption of disbarment. In The Florida Bar v. Jahn, 509 So.2d 285 (Fla. 1987), the attorney pled nolo contendere to delivery of cocaine to a minor and possession of cocaine. This Court held 22

32 that a three (3) year suspension would be appropriate since the attorney had no prior disciplinary history, no clients were injured, misconduct was directly related to drug addiction, the attorney made efforts to rid himself of chemical dependency, and attorney was candid in accepting responsibility for his actions. Once again, like in Tunsil, this Court places significant weight on the mitigating factor of substance abuse. Furthermore, it was determined that Jahn s misconduct was directly related to drug addiction. Respondent has put forth no such evidence that would in any way explain why he was willing to knowingly divert funds from The Lofts. Respondent also references The Florida Bar v. Childers, 582 So.2d 617 (Fla. 1991), where this Court held that a 90-day suspension from the practice of law is warranted when attorney deposits check made out to attorney, but belonging to law firm, in attorney s personal savings account. As can be seen below, the misconduct involved in Childers is not on the same level as that of Respondent s case. Additionally, the mitigation in Childers was more substantial than that exhibited in the case at hand. The theft involved in Childers amounted to one check for $ The opinion does not indicate that Childers was ever criminally prosecuted for this misdemeanor theft. Subsequently, Childers acknowledged her error and fully cooperated in the Bar proceedings. Additionally, Childers had no prior disciplinary history, expressed remorse, and presented testimonials from numerous people who found this behavior to 23

33 be out of character and a one-time aberration. This court found that Childers did not cause any harm to her former firm or its clients, but rather the only person hurt by her conduct was Childers, herself. As to The Florida Bar v. Thomas, 698 So.2d 530 (Fla. 1997), in mitigation, this Court found that Thomas had no prior disciplinary history and that the misconduct amounted to an isolated incident. There is no indication in the opinion that Thomas was ever criminally prosecuted for failing to pay his client the $ due him. Additionally, there is no indication that this Court found any aggravating factors. On the contrary, Respondent s case involved a pattern of misconduct (amongst other aggravating factors) that resulted in his being criminally sanctioned. As to The Florida Bar v. Shankman, 908 So.2d 379 (Fla. 2005), this Court held that a 91 day suspension was appropriate disciplinary sanction for attorney's conflict of interest in receiving $20,000 bonus from client, failing to disclose bonus to attorney's partners at law firm, failing to make full disclosure to law firm regarding clients attorney took to another law firm, dividing fees with nonlawyers, and failing to timely file response to summary judgment motion in a client's case. It is important to note that this Court did not find a theft or misappropriation of client or firm funds in Shankman. Furthermore, Shankman was not subject to criminal prosecution in this matter. In The Florida Bar v. Carswell, 624 So.2d 259 (Fla. 1993), this Court held that tampering with a witness warrants a 180-day suspension. Carswell, a candidate for 24

34 county court judge pled no contest to one misdemeanor charge of tampering with a witness. Once again, Respondent tries to draw a comparison between his pattern of felony misconduct and isolated instances of misdemeanor misconduct. In Carswell, the referee noted that any aggravating circumstances which may exist are far outweighed by the elements of mitigation. Id. at 260. Such mitigation included: a cooperative and remorseful attitude during the proceedings, an uncompromised reputation for honesty, integrity, and fair dealing, and ample evidence as to his character and reputation in the legal community. Carwell s one-time departure from professional standards of conduct was considered to be an isolated act, thereby justifying the reduced discipline. In The Florida Bar v. Lopez, 406 So. 2d 1100 (Fla. 1981), Lopez was suspended for one year for soliciting false testimony from witnesses in exchange for general releases from prosecution. There is no indication that Lopez ever faced criminal prosecution for such behavior. By all accounts, this case is not germane to the case before the Court. In The Florida Bar v. Smith, 650 So. 2d 980 (Fla. 1995), this Court suspended Smith for three years due to his felony convictions for tax evasion and causing a false statement to be made to the Federal Election Commission. Although Respondent attempts to draw a distinction between theft from the government as opposed to theft from a business client or customer, there is no plausible distinction to be made theft is theft. 25

35 In order to get a full appreciation for the Smith case, one must look closely at the aggravating and mitigating factors. In aggravation, the referee found five aggravating factors, but found two of them to be of little weight (pattern of misconduct and multiple offenses). Additionally, as to the other three aggravating factors, the referee found that: 1) while Smith had a prior public reprimand that the subject matter of the reprimand was part and parcel of the conduct in this case ; 2) while Smith committed dishonest acts, not convinced Smith did so solely for dishonest or selfish motives ; 3) Smith did have substantial experience in the practice of law. Id. at 981. In mitigation, the Referee found that: 1) Smith had an outstanding reputation; 2) Smith had a profound sense of remorse; 3) Smith made a timely good faith effort to make restitution ( referee found Smith voluntarily repaid money owed his campaign fund more than a year before he was charged; and that he voluntarily informed the U.S. Attorney of unreported speech honoraria payments, agreed to pay all tax liabilities, and paid $5,000 fine to the Election Commission ); 4) Smith was fully cooperative; 5) Smith was suffering from personal financial problems that his acts were selfish but his motives were not ; 6) Smith experienced extreme embarrassment due to the media attention, jail time, and fines imposed; 7) Smith s offenses did not involve the practice of law; 8) Smith s character evidence was substantial ( referee found very persuasive character testimony presented by three past-presidents of the Florida Bar, a past-president of the American Bar Association, a member of Congress, and two Federal State Senators. Id. at 981. Clearly, the Smith case is one of overwhelming mitigating evidence. As to the aggravating factors, it is apparent that they were not viewed with nearly the same 26

36 significance. While Respondent also pled guilty to two felony charges, his mitigating evidence pales in comparison. Accordingly, the Smith case lends support to the Bar s position that Respondent should be disbarred. In The Florida Bar v. Chosid, 500 So. 2d 150 (Fla. 1987), this Court suspended Chosid for three years as a result of his guilty plea to one felony count of making and subscribing a false income tax return. Additionally, his only prior discipline was a private reprimand. In his dissenting opinion, Justice Ehrlich notes, I do not believe that the identity of the victim of the theft should make a difference in the gravity of the offense and the bar discipline imposed. If this theft had involved a client or a business associate or a member of the public, anyone except the government, I do not think there would be any question but that disbarment would be viewed as the appropriate discipline. Id. at 151. Unlike Chosid, Respondent pled guilty to two felonies. Accordingly, disbarment is the appropriate sanction. In The Florida Bar v. Diamond, 548 So. 2d 1107 (Fla. 1989), this Court suspended Diamond for three years as a result of his convictions for six counts of mail and wire fraud. As in Smith, the Diamond case involved overwhelming mitigating evidence. The most compelling piece of mitigating evidence came from the judge who conducted the trial of Diamond s criminal case. Said judge advised that, notwithstanding the verdict, he never saw Mr. Diamond as an active participant in an act of fraud. Id. at Additionally, some of the other mitigating factors 27

37 noted by the referee included: his years of service to the Bar, his clients, and the community, the fact that he had no prior disciplinary history, and character evidence from leaders of The Bar and the community (including a past Bar president and past Mayor of Miami Beach) as to Diamond s integrity and ability to be rehabilitated. It is also important to note that there were no aggravating factors noted in the Diamond opinion. Clearly, Respondent did not exhibit such mitigating evidence and also aggravating factors existed in his case. Furthermore, Respondent was clearly an active participant in fraud. As evidenced by the above cases, where the respondent is guilty of felony offenses, this Court generally imposes a suspension rather than disbarment, only where there is substantial mitigation. In mitigation, the Referee took into consideration the following: 1) Respondent s admission of guilt and of responsibility; 2) His lack of a prior disciplinary history; 3) His age; 4) The imposition of other penalties or sanctions; and 5) That he is remorseful. As previously noted, under Rule 3-7.2(h)(2) of the RRTFB,... respondent may not contest the findings of guilt in the criminal proceedings. Therefore, his admission of guilt and responsibility in these proceedings is of little consequence since he had no other choice. Also, as previously mentioned, his age was not a proper mitigating factor under the Standards. As to remorse, once again, Respondent had no other choice than 28

38 to exhibit remorse in these proceedings as guilt had already been established. As stated by the Supreme Court of Washington, An attorney s recognition that theft is wrong and his cooperation with a bar investigation do not merit great commendation. Selden at 256. In sum, Respondent has not shown mitigation sufficient to overcome the presumptive sanction of disbarment. Finally, when considering the three prongs of lawyer discipline as noted in The Florida Bar v. Pahules, 233 So.2d 130 (Fla. 1970), disbarment is the proper sanction. First, it is crucial that the public is protected from Respondent as his disregard for the law in business dealings could just have easily occurred in the legal practice. Such behavior in the legal practice could cause serious detriment to a client if not punished appropriately. Second, it is fair to Respondent that he should be disbarred for his felony acts. Respondent had been an attorney for over 25 years at the time of the offenses. He knew what he was doing was wrong and proceeded anyways. Third, if disbarment is not entered in this case, it will send a message that an attorney s dishonest business dealings are not of great concern to this Court. Theft in any form cannot be tolerated by members of The Bar. Accordingly, the Referee erred in recommending a three year suspension rather than disbarment. 29

39 CONCLUSION The bottom line is that, on more than one occasion, Respondent committed grand theft; Respondent cannot escape that. It is irrelevant whether a personal benefit was shown. The Referee s findings of fact should be approved. The Bar would agree, however, that Respondent s failure to refund money to Klein until after the filing of criminal charges should not have been considered as an aggravating factor as it is neither aggravating nor mitigating. As to the disciplinary recommendation, disbarment, rather than suspension, is the appropriate sanction. WILLIAM MULLIGAN, Bar Counsel Florida Bar No The Florida Bar 444 Brickell Avenue, Suite M-100 Miami, Florida (305) KENNETH LAWRENCE MARVIN Staff Counsel Florida Bar No The Florida Bar 651 East Jefferson Street Tallahassee, Florida (850) JOHN F. HARKNESS, JR. Executive Director Florida Bar No The Florida Bar 651 East Jefferson Street Tallahassee, Florida Tel: (850) 56l

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41 CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original of The Florida Bar s Second Amended Answer Brief and Initial Brief on Cross Appeal was sent via regular U.S. mail to Thomas D. Hall, Clerk, Supreme Court of Florida, 500 S. Duval Street, Tallahassee, Florida and a true and correct copy was sent via (jack@johnaweisspa.com) and regular U.S. mail to Victor Joseph Labruzzo c/o John A. Weiss, Attorney for Respondent, at 2937 Kerry Forest Parkway, Suite B-2, Tallahassee, Florida 32309, and via regular U.S. mail to Kenneth L. Marvin, Staff Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee, Florida 32399; on this day of August, WILLIAM MULLIGAN Bar Counsel 31