Florida Bar v David J. Stern - Consent Judgment

8/9/2019 Florida Bar v David J. Stern - Consent Judgment

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IN THE SUPREME COURT OF FLORIDA(Before a Referee)THE FLORIDA BAR, Case No: SC02-1991

Compla inant , TFB Case Nos. 1998-50,098(17D)2000-51,788(17D)v.DAVID JAMES STERN,

Respondent .

CONSENT JUDGMENTThe respondent, David James Stern, hereby tenders this Consent Judgment

pursuant to Rule 3-7.9(b), Rules Regulating The Florida Bar, and says:1. Conditional Nature.

The respondent acknowledges that this consent judgment ultimately must beapproved by The Florida Bar Board o f Governors pursuant to Ru le 3-7.9(e) and bythe referee and the Supreme Court of Florida pursuant to Rules 3-7.9(b) and 3-7.9(c) . Respondent states that he is entering into this co nsent judgm ent freely andvoluntarily after having had the advice of counsel of his own choosing.Respondent further states that it is his understanding that if this co nsent judg m entis not accepted by any of the abo ve, non e of the statements mad e during settlementnegotiation or in this document may be used in subsequent proceedings againsthim.


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2. Factual Basis.The respondent hereby agrees to the following facts as a proced ural basis

fo r this consent judgmentA. The respondent was admitted to the Florida Bar in 1991. The

respo nde nt's pro fessiona l association, of which he has always be en the soleshareholder, is known as The Law Offices of David J. Stem, P.A. Theprofessional association was created in or about 1993.

B . Respondent's law firm represents banks and other lending institutionsin mortgage foreclosures.

C. As p art of the fo reclosure process, it is necessary to determine theidentity of parties who may claim some interest in the real property beingforeclosed. This is typically done through a title search.

D. Respondent owned Professional Title and Abstract Com pany ofFlorida, Inc. ("Professional Title"). Pro fessiona l Title has, since 1995, been a dulylicensed title company with the Florida Department of Insurance. Prior to 1999,however, respondent did not operate Pro fession al Title as an entity separate fromhis law firm, but instead used personnel employed and paid by The Law Offices ofDavid J. Stern, P.A. to do the abstracting work for the foreclosures handled by hislaw firm.


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E. As industry standard, lenders use loans docum ents that provide fo rpayment of their attorneys' fees and costs incurred in foreclosure proceedings.Respondent was required to file affidavits of fees and costs in order to receive anaward of fees and co sts in foreclosure proceedings. Up to 1999, Respondent'sfirm routinely filed sworn affidavits stating that costs in the amount of $325,00had been paid fo r abstracting services. In fact, respondent's firm had not paidcosts to a separate entity, because all work was performed by staff em ployed byrespondent's law firm.

F. Beginning in August 1999, respondent began using Professional Titleto perform these abstracting services. Though this com pany is located onrespo nde nt's firm 's prem ises, it is a separate legal entity. Since Aug ust 1999, ithas been operated as a separate legal entity, adhering to all requisite legal andaccounting formalities. Its employees are paid separately throug h a ProfessionalTitle bank account, and respondent's firm, through its operating accou nt, paysProfessional Title for services performed.

G. The affidavits filed by respondent's firm up to August 1999 were nottechnically accurate. Although the total amo unt of fees an d costs charged byrespondent was not excessive, the affidavits do not reflect that the "abstractingcosts" had n ot be en paid to a third party but that those services had be en


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performed by respondent's law firm 's in house personnel. Accordingly, theaffidavits were potentially m isleading to a party or court who wished to makeinquiry into the costs sought by respondent's firm.3. Rules Violated.

For the purposes of the consent judgm ent, respondent admits that hisaffidavits regarding abstract costs prior to A ugust, 1999 were in violation of Rule4-8.4(d) of the Rule R egulating The Florida Bar (a lawyer shall not engage inconduct prejudicial to the administration of justice), as set forth in Count I o f theCom plaint. W ith regard to Counts II, III and IV of the Complaint, Respondentdenies the material allegations and generally denies that his conduct as set forth inthose counts violates the Rules Regulating The Florida Bar.4. Florida Standards. Aggravating and Mitigating Factors.

It is the position of Complainant, The Florida Bar, that S tandard 6.12 of theFlorida Standards for Impo sing Law yer Sanctions cou ld apply to his situation, andthat suspension could be an appropriate sanction, but fo r the fact that respondenttook remedial measures to correct the proce dures that gave rise to this action.Complainant and Respo ndent agree, therefo re, that Standard 6.13 applies, and thatpublic reprimand is the appro priate sanction-"Public reprimand is appropriatewhen a lawyer is negligen t either in determ ining whether statements or documents


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are false or in taking action when m aterial information is being withheld."The parties agree that the following aggravating factors apply to this matter:

9.22(c) [a pattern of miscond uct]; 9.22(d) [multiple offenses, through a singlepractice repeated in multiple cases]. The parties further agree that the follow ingmitigating factors apply to this matter: 9.32(a) [absence of a prior disciplinaryrecord]; 9.32(e) [full an d free disclosure to disciplinary b oard an d cooperativeattitude toward proceedings].5. Discipline.

The respondent agrees to discipline consisting of a public reprimand, to beadministered before T he Florida Bar Board of Governors.6. Additional Conditions.

During the period of one year from the date of entry of the court orderapproving the Report of Referee in this matter the respon dent agrees to submit totw o on-site inspections of his law firm by bar counsel, during which bar counselshall be allowed to speak with random ly selected staff of respondent and reviewrandomly selected files, documents and records. The respondent m ay haveindependent cou nsel present at any such inspection and present during anycomm unications between bar counsel and respond ent's staff. Respondentacknowledges that discov ery during these inspections of any conduct that

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poten tially violates the R ules Regu lating The Florida Bar w ill result in the openingof a Florida Bar investigatory file and appro priate investigation. The respondentshall have no costs associated with these inspection s and there shall be nom onitoring fees associated w ith the disciplinary matters that are the subject of thisplea charged to responden t during the year.

Respond ent further agrees that during the one year following entry of thecourt 's order, if probable cause is found as to any Florida Bar complaint arisingout of activity that took place during the o ne year inspection perio d herein,respond ent will imm ediately prov ide notice of the grievance to the client he wasrepresenting during the co nduct in question, and pro vide The Florida B ar with acopy of this notice and a written acknowledgment from the client that it wasnotified of the grievance.

Respondent further agrees that if probable cause is found as to any new barcomplaint arising out of activity that took place during the one year inspectionperiod, The Florida Bar may reop en any matter closed pursuant to the resolutionunderlying this consent judgm ent. If The Florida Bar reopens any matter due to afinding of probable cause, the responden t acknow ledges that he cannot raise resjudicata, estoppel, latches, dou ble jeop ardy , or prior dismissal of any allegations asa defense. Respondent may assert an y other defenses to any such proceeding.


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7. Costs.Respon dent agrees to pay The Florida B ar's costs incurred in this matter in

the total am ount o f $750.00.

Dated this day of 2002 .

David James Stejrn, Esq.Respondent801 S. University Drive, Suite 500Plantation, FL 33324Phone(954)233-8000Fla. Bar No. 911054

Dated this day of , 2002.

;ffrey Allen Tew, Esq.Counsel for Respondent201 S. Biscayne Blvd.Miami, FL 33131Phone (305) 536-8452Fla. Bar No . 121291


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Certificate ofSeryiceI hereby certify that the original of the fo rego ing was furnished to The

Honorable Elizabeth Maass, Referee, by Hand Delivery, and a true and correctcopy have been furnished to John Anthony Boggs, Staff Counsel, The Florida Bar,650 Apalachee Parkway, Tallahassee, Florida 32399-2300 by Hand D elivery, an dto Jeffrey Allen Tew, Esq., Counsel fo r Respondent, 201 S. Biscayne Blvd.,Miami, FL 33131 by facsimile an d U.S. M ail, this Q^day of October, 2002 .

* \m*r+*~^ *^""Barry William Rigby

Florida Bar v David J. Stern - Consent Judgment

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