Lawyers have more to worry about than licensing issues when it comes to violating professional ethics rules. One federal court admitted expert testimony regarding an attorney’s purported ethics violations to support a nonclient’s claim of unfair or deceptive trade practices against an opposing attorney. While the decision may open the door for third parties to sue lawyers who have harmed them, ABA Litigation Section leaders do not predict there will be a new wave of unfair practices claims against attorneys by clients.
In Wyndham Vacation Ownership, Inc. v. Sussman, a group of timeshare developers sued a law firm doing business as Timeshare Exit Team (TET) and its contract attorney for tortious interference with its contracts and violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). As its name suggests, TET helped timeshare owners get out of their timeshare contracts. TET’s contract attorney reviewed timeshare contracts and negotiated with timeshare companies on behalf of TET clients, even though he was licensed in California and not in Florida.
In support of their FDUTPA claim, the plaintiffs sought to introduce expert testimony regarding the contractor attorney’s violations of California’s and Florida’s Rules of Professional Conduct regarding fee-sharing arrangements, supervision of non-attorneys, attorney advertising, and the unauthorized practice of law, among other things. A claim for unfair or deceptive practices under the FDUTPA “may be based upon… [a]ny law, statute, rule, regulation, or ordinance which proscribes unfair methods of competition, or unfair, deceptive, or unconscionable acts or practices.”
The contract attorney moved to exclude the expert’s testimony for lack of relevance, arguing that the preamble to the Florida Rules of Professional Conduct (FRPC) states that the ethical rules do not give rise to independent causes of action. The court disagreed, pointing out that the preamble also states that “since the rules do establish standards of conduct by lawyers, a lawyer’s violation of a rule may be evidence of a breach of the applicable standard of conduct.” Because the plaintiffs were not asserting claims for violations of the FRPC, the court concluded that the defendant’s ethical violations could serve as evidence in support of the plaintiffs’ FDUTPA claim.
Likewise, the court rejected the defendant’s arguments that a jury lacked jurisdiction to determine whether he engaged in the unauthorized practice of law. Though the prosecution of disciplinary actions is reserved for the Florida Bar, the court noted that the jury would simply be considering whether the evidence of defendant’s ethical violations constituted an unfair or deceptive practice—not whether the defendant’s actions had actually violated an ethical rule.
The court also dismissed arguments that the expert’s opinions were unreliable because he did not perform scientific analysis in forming his opinions, as required by Daubert v. Merrell Dow Pharms. Inc. It noted that no scientific inquiry was required for analyzing compliance with the rules of professional conduct and that Federal Rule of Evidence 702 allows the testimony of experts whose “specialized knowledge will help the trier of fact to understand the evidence.” Nor would the testimony be equivalent to instructing the jury on a legal issue because the expert would not be opining on the ultimate issue in the case—whether the lawyer violated the FDUTPA.
According to Litigation Section Leaders, this decision is not likely to change the claims clients bring against attorneys. “I do not expect to see clients bringing trade practices claims against their former attorneys because they already have remedies in traditional claims like breach of contract, breach of fiduciary duty, and malpractice,” explains Michael S. LeBoff, Newport Beach, CA, cochair of the Section’s Professional Liability Committee. Nevertheless, “allowing third parties who have been injured by attorney misconduct an avenue for relief, in extreme circumstances, is a positive thing.”
“Lawyers should not be surprised if a plaintiff invokes a violation of the ethics rules to support a claim against a lawyer, whether based in common law or statute,” warns John M. Barkett, Miami, FL, cochair of the Section’s Ethics & Professionalism Committee. “The consequences of violating the rules of professional conduct may extend beyond a grievance,” concludes Barkett. “Even if your client does not come after you, a third party might,” agrees LeBoff.
