260 So. 3d 72
Fla.2018Background
- The Florida Bar filed a complaint alleging Alters’ law firm made numerous improper transfers (≈$2.05M) from the trust account to the operating account between Sept 2009–Dec 2010; Alters was temporarily emergency-suspended in 2011 and later reinstated in Jan 2012.
- The referee found some trust-account mismanagement, credited many defense witnesses, rejected key comptroller evidence as unreliable, and recommended guilt only on two trust-account rules (4-1.15 and 5-1.1(b)) and no further discipline.
- The Bar sought review, challenging (among other things) exclusion of evidence about Alters’ misrepresentations of his personal tax status when securing outside financing, the referee’s limited factual findings, and the recommendation of no discipline and an award of defense costs to Alters.
- The Court held the referee abused her discretion by excluding evidence about Alters’ tax misrepresentations as relevant to dishonesty allegations.
- On the merits, the Court found additional undisputed record evidence that Alters used one client’s funds to pay obligations owed to another, failed to implement safeguards after discovery of shortages, and therefore violated Bar Rules 4-8.4(c) and 5-1.1(a) in addition to the referee’s findings.
- The Court disapproved the referee’s mitigation findings as to absence of dishonest/selfish motive and unreasonable delay, disbarred Alters (effective immediately), and assessed The Florida Bar’s full costs ($305,360.03) against Alters.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of evidence about Alters’ personal tax misrepresentations | Tax-status misrepresentations are relevant to dishonesty and motive for obtaining funds to cover shortages. | Irrelevant character evidence; inadmissible. | Court: referee abused discretion; tax-status evidence was admissible and relevant. |
| Violation of Rule 4-8.4(c) (dishonesty, fraud, deceit, misrepresentation) | Alters knowingly or negligently engaged in deceit by using trust funds for other obligations and failing to prevent misappropriation. | No intentional deceit; lack of direct evidence that Alters created false documents or intended misappropriation. | Court: record supports finding Alters engaged in dishonest/deceitful conduct; rule violation proven. |
| Violation of Rule 5-1.1(a) (nature of entrusted funds / commingling) | Alters deposited personal/loan/co-counsel funds into trust and failed to report or safeguard client funds — impermissible under rule in effect then. | Later rule amendments would have permitted replenishment; therefore conduct not commingling. | Court: applies rule as of misconduct date; finds commingling and violation of 5-1.1(a). |
| Discipline and costs | Disbarment and full recovery of Bar’s costs are appropriate given misuse of client funds and aggravating factors. | Referee recommended no further discipline and awarded Alters substantial defense costs due to delay and publicity. | Court: disbars Alters, disapproves no-discipline recommendation, disapproves mitigation findings re: motive/delay, and awards Bar costs $305,360.03. |
Key Cases Cited
- Florida Bar v. Rousso, 117 So. 3d 756 (Fla. 2013) (gross negligence in trust accounting can warrant disbarment)
- Florida Bar v. Riggs, 944 So. 2d 167 (Fla. 2006) (sloppy bookkeeping can satisfy intent element for rule prohibiting dishonesty)
- Florida Bar v. Johnson, 132 So. 3d 32 (Fla. 2013) (misdelegation and gross negligence in trust-account supervision may warrant disbarment depending on circumstances)
- Florida Bar v. Brownstein, 953 So. 2d 502 (Fla. 2007) (depositing operating or personal funds into trust account can violate rule 5-1.1)
- Florida Bar v. Schiller, 537 So. 2d 992 (Fla. 1989) (misuse of client funds is among the most serious lawyer offenses; disbarment is presumptively appropriate)