State v. MARK MARKS, PAState v. MARK MARKS, PA
H. Dohn Williams, Jr., of H. Dohn Williams, Jr., P.A., Fort Lauderdale, for appellee/cross-appellant-Mark Marks, P.A.
Mark Hicks of Hicks, Anderson & Blum, P.A., and Neal Sonnett, Miami, for appellee/cross-appellant-Marvin Mark Marks a/k/a Mark Marks.
Archibald J. Thomas, III, of Archibald J. Thomas, III, P.A., Jacksonville, for appellee/cross-appellant-Gary Marks.
Edward A. Carhart of Edward A. Carhart, P.A., Coral Gables, for appellee-Irene Porter f/k/a Irene Raddatz.
Ronald S. Guralnick of Ronald S. Guralnick, P.A., Miami, for appellees-Denise Beloff and Noreen Roberts.
J. David Bogenschutz of Bogenschutz & Dutko, P.A., Fort Lauderdale, for appellee-Ronald J. Centrone.
Edward Shohat, Miami, for appellee-Carl Borgan.
PER CURIAM.
Following oral argument, we sua sponte consolidated all three of the subject cases arising out of the trial court‘s three orders of dismissal being appealed, as there is a common constitutional issue among all three; namely, whether
There are two informations involved in this appeal. The first was an amended information, filed in 1992, against eight defendants, containing thirty-five counts, the style of which was as follows:
STATE OF FLORIDA, CASE NO. 90-6433CF10 AMENDED INFORMATION FOR: Plaintiff, COUNT 1: RACKETEER INFLUENCED vs. AND CORRUPT ORGANIZATION ACT (R.I.C.O.) MARVIN MARK MARKS COUNT 2: CONSPIRACY R.I.C.O. a/k/a Mark Marks, COUNT 3: SCHEME TO DEFRAUD GARY MARKS, COUNT 4-13: PERJURY CARL BORGAN, COUNT 14: GRAND THEFT IRENE RADDATZ COUNT 15: INSURANCE FRAUD a/k/a Irene Porter, COUNT 18: GRAND THEFT NOREEN ROBERTS, COUNT 19: INSURANCE FRAUD DENISE BELOFF, COUNT 20: GRAND THEFT RONALD J. CENTRONE, and COUNT 22-23: INSURANCE FRAUD MARK MARKS, P.A., COUNT 29-30: GRAND THEFT a Florida Professional COUNT 31-33: INSURANCE FRAUD Corporation, COUNT 34: GRAND THEFT COUNT 35: INSURANCE FRAUD Defendants.
STATE OF FLORIDA, INFORMATION FOR: Plaintiff, Count 1-2: Insurance Fraud 3 F Count 3: Grant Theft 2 F vs. Count 4-5: Insurance Fraud 3 F Count 6-7: Grant Theft 3 F MARVIN MARK MARKS, Count 8: Insurance Fraud 3 F a/k/a MARK MARKS, Count 9: Grant Theft 3 F GARY MARKS, Count 10: Insurance Fraud 3 F RONALD J. CENTRONE, Count 11: Grand Theft 3 F and MARK MARKS, P.A., Defendants.
Two appeals, consolidated by a prior order of the motion panel in Case Nos. 93-3259 and 93-3308, involved two orders entered by the trial court in October, 1993. One order dismissed counts 15, 18, 19, 22, 23, 29, 30, 31, 32, 33, 34 and 35, as well as predicate acts M, P, Q, T, U, AA, BB, CC, DD, EE, FF and GG of the RICO count in the 1992 amended information. The second order dismissed counts 1, 2, 3, 5, 7, 8, 9, 10, and 11 of the second information in this case. The underlined counts and predicate acts were dismissed because of the trial court‘s view that
On January 27, 1994, the trial court entered a subsequent order, dismissing predicate acts R and S of Count 1, and Counts 20 and 21 of the 1992 amended information, saying:
In the case at bar, this court concludes that unconstitutional vagueness lies only in the fraudulent omission as applied to attorneys
engaged in the representation of their clients. The Court does not address the constitutionality of the term “incomplete” in any other context. Accordingly, the counts charging the Defendant with presenting an incomplete statement in support of a claim along with the corresponding count in grand theft should be dismissed.
The trial court‘s errors can be summarized as too draconian. It was unnecessary to dismiss all of the counts, given the trial court‘s limited, but justified constitutional concern for the word “incomplete” as it applies to attorneys in their representation of clients. Specifically, there was no legitimate reason to invalidate
We, therefore, reverse all of the orders of dismissal and remand with direction to reinstate all of the counts and predicate acts except those which are totally and exclusively dependent upon alleged incomplete statements tendered by the attorneys in representation of their clients. Only to this extent do we affirm the trial court‘s actions, since we find that its application of “vagueness” beyond that to be erroneous.
I
VAGUENESS
In the instant case, appellees were charged pursuant to
Attorneys are guided by numerous different rules, laws, and cases dealing with the atypical obligations of an attorney in an advocate role. Attorneys and their clients enjoy a confidential relationship, which includes constraints upon information that can be disclosed to others. See
The state repeatedly argues, as it did below, that the specific intent required under
However, a requirement of intent does not automatically save a statute from being vague. In State v. DeLeo, 356 So.2d 306 (Fla. 1978), the defendant was charged with official misconduct under
[T]he violation must be proven to have been committed with corrupt intent. This element of the offense might prevent its arbitrary application, but it does not. All that it is necessary for intent to be corrupt is that it be “done with knowledge that the act is wrongful and with improper motive.” This standard is too vague to give men of common intelligence sufficient warning of what is corrupt and outlawed, therefore, by the statute. The “corruption” element, as defined does nothing to cure the statute‘s susceptibility to arbitrary application.
Id. at 308 (footnotes omitted).
In other cases, the Florida supreme court has found a statute to be unconstitutionally vague, despite the presence of a scienter requirement, where other portions of the statute require men of ordinary intelligence to guess what conduct is proscribed by the statute. In State v. Barquet, 262 So.2d 431 (Fla. 1972), the supreme court held Florida‘s abortion statutes vague where “men of ordinary intelligence must guess at the meaning of the words, ‘necessary to preserve the life of such mother,‘” despite requirements in the statutes that the person intend to destroy the child or procure a miscarriage. Id. at 435. In State v. Rou, 366 So.2d 385 (Fla. 1978), the supreme court held
It is argued that the prosecution must prove beyond a reasonable doubt that the officeholder acted with a specific intent of benefiting himself or another in derogation or disregard of the general public welfare. But this is an after-the-fact determination.
Id. at 386 (emphasis added).
The state is trying to use the intent language to make definite that which is undefined in the insurance fraud statute.5 Similarly, it dismisses the continuing education lectures and publications advocating withholding of information by asserting that in these circumstances, “there is no intent to defraud.” However, how does the state know such?
Another troublesome aspect of applying criminal sanctions for fraud against an attorney in an adversarial position for filing an “incomplete” claim is the absence of a duty to disclose the information. The trial court found, and the state concurs on appeal, that the insurance fraud statute does not create a duty of full disclosure. A fraud is committed for the failure to disclose material information only when there is a duty to disclose such; and such duty arises when one party has information that the other party has a right to know because of a fiduciary or other relation of trust or confidence between them. Chiarella v. United States, 445 U.S. 222, 100 S.Ct. 1108, 63 L.Ed.2d 348 (1980). Cases cited by the state to demonstrate that civil fraud causes of action may exist absent a duty to disclose are not relevant to the instant case. These cases involve contractual disputes, and do not support a finding of fraud when an attorney does not disclose material information to his adversary. See, e.g., Ramel v. Chasebrook Constr. Co., 135 So.2d 876 (Fla. 2d DCA 1961).
The state also asserts the requirement that the undisclosed fact be “material” saves the statute from vagueness, as it creates a “double scienter.” Undoubtedly, attorneys know what facts are material when negotiating damages with an insurance company; however, this argument misses the point. The lack of guidance as to what constitutes an “incomplete” claim when an attorney is dealing with an insurance company in an adversarial context, is the root of the evil.
As far as can be ascertained, the state can not specifically identify when an omission of information by an attorney in an adversarial context is fraudulent, other than to say that an omission is fraudulent when there is an intent to defraud. Such circular reasoning cannot withstand appellees’ vagueness challenge. The state‘s interpretation of the statute could lead to arbitrary enforcement. Intent, in so many instances, boils down to a factual finding based on inferences from evidence. The state admits that cases involving “incomplete” claims, specifically those involving omitted medical records, would have to be determined on a case by case basis. It
“What the Constitution requires is a definiteness defined by the legislature, not one argumentatively spelled out through the judicial process which, precisely because it is a process, can not avoid incompleteness.” State v. Wershow, 343 So.2d 605, 608 (Fla. 1977), quoting the dissent in Screws v. United States, 325 U.S. 91, 65 S.Ct. 1031, 89 L.Ed. 1495 (1944). The Wershow court further stated:
It would certainly be dangerous if the Legislature could set a net large enough to catch all possible offenders, and leave it to the courts to step inside and say who could be rightfully detained and who should be set at large. This would, to some extent, substitute the judicial for the legislative department of the government.
Wershow, 343 So.2d at 608, quoting United States v. Reese, 92 U.S. 214, 23 L.Ed. 563 (1876).
In sum,
II
THIRD-PARTY CLAIMS
A. Section 817.234(1), Florida Statutes (1987)
Even though we find
In 1977, the legislature adopted the revised insurance fraud statute, and a predecessor to the current nonjoinder statute for liability insurers. Chap. 77-468, Laws of Fla. Initially, the two statutes, although both dealing with insurance, are not on the same subject matter. The nonjoinder statute was passed in an attempt to preclude third parties from joining insurance companies in lawsuits, and in response to the supreme court‘s decision in Shingleton v. Bussey, 223 So.2d 713 (Fla. 1969), which permitted joinder of insurance companies so that “all the cards are on the table[.]” Id. at 720. The policies behind the nonjoinder statute have to do with judicial expediency and an insurance company‘s ability to avoid litigation until liability is firmly established. At the same time, the insurance fraud statute addresses improper behavior by individuals in the claims process. This statute has remained in substantially the same form since 1977, except that it was renumbered and moved to chapter 817, which addresses all types of fraudulent practices. This suggests that
There is no indication that the legislature intended the insurance fraud statute and the nonjoinder statute to be read together. Compare Major v. State, 180 So.2d 335 (Fla. 1965) (one statute (
In the instant case, the nonjoinder statute does not relate to the insurance fraud section in such a way as to assist a court in determining the applicability of
The trial court relied upon the current nonjoinder statute,
According to the trial court, if a third party does not have an interest in the policy, then it could not file a claim pursuant to the policy. Therefore, since the insurance fraud statute is couched in terms of filing a claim, it necessarily follows that only first party claims, those of the insured under the policy, are susceptible to the provisions of
The cases cited by the trial court do not fortify its position on this matter. Cardenas v. Miami-Dade Yellow Cab Co., 538 So.2d 491 (Fla. 3d DCA), rev. dismissed, 549 So.2d 1013 (Fla. 1989), which held that the term “any person” in
The trial court found the holding in People v. Learman, 281 A.D. 583, 121 N.Y.S.2d 388 (1953), “particularly instructive.” Learman involved an insurance appraiser accused of violating New York‘s insurance fraud statute by filing two loss appraisals on the same
The holding in Learman is not controlling in Florida. We find persuasive two California cases which have applied that state‘s insurance fraud statute to attorneys of third parties. In People v. Benson, 206 Cal. App. 2d 519, 23 Cal. Rptr. 908 (2d Dist. 1962), cert. denied, 374 U.S. 806, 83 S.Ct. 1691, 10 L.Ed.2d 1030 (1963), the attorney defendant claimed he could not be convicted under that state‘s insurance fraud statute since neither of his clients had a contract with the insurance companies.6 The court noted that although a judgment must first be secured before an injured party has a cause of action against an insurer on a policy, the insurance fraud statute applies to every person who has an intent to defraud. Benson, 23 Cal. Rptr. at 916. The court said:
We propose to be realistic in our interpretation of [section 556‘s] coverage, particularly in the light of the circumstances at bar. It is a matter of common knowledge that insurance companies negotiate settlements directly with injured parties or their attorneys because of the liability of the insured.
Id. In so holding, the Benson court specifically declined to follow the holding in Learman. Benson, 23 Cal. Rptr. at 917.
In a more recent decision, a California appellate court reversed an order granting a motion to dismiss charges against an attorney who submitted demand letters containing false information in a third party context. People v. Petsas, 214 Cal. App. 3d 70, 262 Cal. Rptr. 467 (1 Dist. 1989). The court held that the facts of that case supported a finding of probable cause that Petsas had violated the insurance fraud statute in a third party context. Id. 262 Cal. Rptr. at 472.7
In conclusion, we find that
Language in the nonjoinder statute is not dispositive. Although the original versions of the insurance fraud and nonjoinder statutes were passed in the same act, these statutes
The application of similar insurance fraud statutes to third party situations in California and Oklahoma suggest that application of Florida‘s statute to an attorney representing a third party against an insurer would not be an extraordinary and harsh result. Petsas, 262 Cal. Rptr. 467, is particularly instructive, as that case involved an attorney of an injured third party whose demand letters provided the basis for the charges under California‘s insurance fraud statute. This court recognizes, as did the California court in Benson, 23 Cal. Rptr. 908, that insurance companies negotiate with third parties and their attorneys. This is true despite the nonjoinder statute, which impliedly recognizes such by providing that an uninsured would have a cause of action and/or an interest in a policy upon obtaining a settlement. It is axiomatic that settlements are negotiated. Fraud committed in this context should be punishable, assuming a valid statute proscribing punishment for such.
B. Section 817.234(3), Florida Statutes (1987)
In its October 14, 1993 order in trial court case no. 90-6433, the trial court dismissed charges against the attorney defendants brought under
The trial court apparently dismissed these charges because they involved third party claims. In its October 14, 1993 order the trial court found that the meaning of the word “claimant” in
Attorneys are on notice, and
HERSEY, GLICKSTEIN and POLEN, JJ., concur.
ON MOTION FOR REHEARING/CERTIFICATION
We deny the state‘s motion for rehearing, but grant the motion for certification as to
WHETHER SECTION 817.234(1), FLORIDA STATUTES (1987), IS UNCONSTITUTIONALLY VAGUE AS APPLIED TO ATTORNEYS IN THE REPRESENTATION OF THEIR CLIENTS SINCE IT DOES NOT PROVIDE ADEQUATE NOTICE OF WHEN AN OMISSION WILL RESULT IN AN “INCOMPLETE” CLAIM UNDER THE STATUTE.
HERSEY, GLICKSTEIN and POLEN, JJ., concur.
Notes
(1)(a) Any person who, with the intent to injure, defraud, or deceive any insurance company, including, but not limited to, any statutorily created underwriting association or pool of insurers or any motor vehicle, life, disability, credit life, credit, casualty, surety, workers’ compensation, title, premium finance, reinsurance, fraternal benefit, or home or automobile warranty company:
1. Presents or causes to be presented any written or oral statement as part of, or in support of, a claim for payment or other benefit pursuant to an insurance policy, knowing that such statement contains any false, incomplete, or misleading information concerning any fact or thing material to such claim; or
2. Prepares or makes any written or oral statement that is intended to be presented to any insurance company in connection with, or in support of, any claim for payment or other benefit pursuant to an insurance policy, knowing that such statement contains any false, incomplete, or misleading information concerning any fact or thing material to such claim,
is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) All claims forms shall contain a statement in a form approved by the Department of Insurance that clearly states in substance the following: “Any person who knowingly and with intent to injure, defraud, or deceive any insurance company files a statement of claim containing any false, incomplete, or misleading information is guilty of a felony of the third degree.”
(3) Any attorney who knowingly and willfully assists, conspires with, or urges any claimant to fraudulently violate any of the provisions of this section or part XI of chapter 627, or any person who, due to such assistance, conspiracy, or urging on such attorney‘s part, knowingly and willfully benefits from the proceeds derived from the use of such fraud, is guilty of a felony of the third degree, punishable as provided in s. 775.082, s 775.083, or s. 775.084.
In Screws v. United States, 325 U.S. 91, 65 S.Ct. 1031, 89 L.Ed. 1495 (1945), the United States Supreme Court made a statement applicable in the instant case: “Of course, willful conduct cannot make definite that which is undefined. But willful violators of constitutional requirements, which have been defined, certainly are in no position to say that they had no adequate advance notice that they would be visited with punishment.” Id. 325 U.S. at 105, 65 S.Ct. at 1037.
In Hygrade Provision Co. v. Sherman, 266 U.S. 497, 45 S.Ct. 141, 69 L.Ed. 402 (1925), the Supreme Court upheld a statute which made it a crime to falsely represent, with intent to defraud, that foods were kosher or prepared under orthodox Hebrew religious requirements. The Supreme Court noted that whatever difficulty appellants had with determining what was kosher is immaterial since they were “not required to act at their peril but only to exercise their judgment in good faith” to avoid coming under the statute. Hygrade Provision Co., 266 U.S. at 501, 45 S.Ct. at 142. At the same time, the Court stated that the evidence “warrants the conclusion that the term ‘kosher’ has a meaning well enough defined to enable one engaged in the trade [of dealing with kosher foods] to correctly apply it, at least as a general thing.” Id. Hence, Hygrade Provision Co. would not uphold the statute in the instant case as there is no general understanding of the meaning of the term “incomplete” in the context of an adversarial relationship involving an attorney‘s representation of a client.
The California appellate court quoted the insurance fraud statute in its opinion:
Section 556 of the Insurance Code: ‘It is unlawful to: (a) Present or cause to be presented any false or fraudulent claim for the payment of a loss under a contract of insurance. (b) Prepare, make, or subscribe any writing, with intent to present or use the same, or to allow it to be presented or used in support of any such claim. Every person who violates any provision of the section is punishable by imprisonment in the State prison not exceeding three years, or by fine not exceeding one thousand dollars, or by both.’