via  Michael Alex Wasylik

IN THE SUPREME COURT OF FLORIDA
(Before a Referee)

THE FLORIDA BAR,
Complainant,

v.

DAVID JAMES STERN,
Respondent.

EXCERPTS:

This type of misconduct persisted and was again discovered in the spring of 2009. Assignments of mortgages were filed throughout the state which contained fraudulent notarizations. The Bar submitted 40 assignments into evidence which on their face were notarized by 11 different notaries and revealed that they were not notarized on the date reflected. Not only were the dates false, but the evidence established through the testimony of Kelly Scott that Cheryl Samons executed approximately 1,000 assignments per day, moving from floor to floor in the Stern firm. Kelly Scott testified that there was never any witness or notary present when Ms. Samons executed the document. Tammie Kapusta testified to the same procedure. (The Florida Bar Exhibit 41, page 24). Also, notaries’ stamps were freely exchanged between the notaries, according to Tammie Kapusta. (The Florida Bar Exhibit 41, page 23). Several paralegals actually signed Cheryl Samons’ name, according to Kelly Scott on assignments, without any indication of the true signatory. Mr. Stern failed to present any evidence upon which I should disregard this sworn testimony. I find that the circumstances establish Mr. Stern was aware of these procedures as a result of his regular presence at the firm, his direct and imperviable relationship with Cheryl Samons, as well as the fact, as testified to by several witnesses, that he knew everything that occurred at his firm. His corrective action of additional instructions to the notary with the threat of termination did not resolve the problem as indicated by the Toledo and Suarez affidavits.

Mr. Stern testified about one notary, Terry Rice, who executed an assignment with a notary stamp that could not have been in existence on the date the document existed. He recounted Ms. Rice’s explanation that although she was actually present when the document was signed and mistakenly notarized months later with her new notary stamp. Although plausible, the existence of the 40 assignments by 11 different notaries with the same defect reflects otherwise.

Further, these false notarizations, witnessing, and backdating are not innocuous. Attorney Michael Wasylik testified to the submission of a corrected assignment prepared by David Stern reflecting that it was filed “to correct the effective date”. In fact, the date was not in error. (The Florida Bar Exhibits 16, 17). Rather, the corrected assignment was filed to cover the improper notarization of the original assignment. The “corrected” assignment was a subterfuge and/or fraud.
The preamble to Chapter 4 of the Rules Regulating The Florida Bar provides that actual knowledge can be inferred from the circumstances. Based on the evidence I find that Mr. Stern was aware of the misconduct of Cheryl Samons. She was rewarded by Mr. Stern for her work. In 2009, Cheryl Samons received a bonus which was payable even if terminated. (The Florida Bar Exhibit 37).

[…]

IV. STANDARDS FOR IMPOSING LAWYER SANCTIONS

I considered the following Standards to be applicable:
Standard 4.41: Disbarment is appropriate when: (a) a lawyer abandons the practice and causes serious or potentially serious injury to a client; or (b) a lawyer knowingly fails to perform services for a client and causes serious or potentially serious injury to a client; or (c) a lawyer engages in a pattern of neglect with respect to client matters and causes serious or potentially serious injury to a client.

Standard 6.21: Disbarment is appropriate when a lawyer knowingly violates a court order or rule with the intent to obtain a benefit for the lawyer or another, and causes serious injury or potentially serious injury to a party or causes serious or potentially serious interference with a legal proceeding.

Standard 7.1: Disbarment is appropriate when a lawyer intentionally engages in conduct that is a violation of a duty owed as a professional with the intent to obtain a benefit for the lawyer or another, and causes serious or potentially serious injury to a client, the public, or the legal system.

V. CASE LAW

Given the magnitude of the misconduct and its widespread impact on the judiciary and public, disbarment is the appropriate sanction. Most recently the Supreme Court of Florida was confronted with a case in which an office manager of a firm misappropriated funds. The Court addressed the responsibility of the firm’s two partners, who they disbarred.

As the referee stated, “Respondents cannot abdicate, by delegation to the bookkeeper, the ultimate responsibility for trust account maintenance….” Their failure to exercise care and discretion in managing the trust account resulted in a massive theft of client funds—approximately $4.38 million was stolen from the account. If Respondents had adhered to the minimum trust account requirements set forth in the Rules Regulating the Florida Bar, they could have safeguarded their clients from this enormous amount of theft. While recognizing Respondents argument that the funds had been stolen by Bookkeeper, the referee concluded that this argument might hold for an isolated and recent conversion of trust funds, but the sheer size of the $4.38 million deficit proves that Bookkeeper had been embezzling for many months, if not years. Respondents had tried to delegate their responsibilities to a non-lawyer employee in the firm, and did not effectively monitor the employee or the trust account. As the referee noted, the ultimate responsibility for the trust account monies rests with Respondents. They are the lawyers.

The Florida Bar v. Rousso and Roth, 117 So.3dd 756 (Fla. 2013)
Mr. Stern is similarly situated. His failure to exercise care resulted in massive injury to the system. The incidents were not isolated, but rather a representation of the culture of the firm, as to the low level of competence and ethics. He is the lawyer. It was his firm. Mr. Stern is responsible.5

In The Florida Bar v. Riggs, 944 So.2d 167 (Fla. 2006), that attorney was suspended for three years when he assigned responsibilities to his paralegal and failed to supervise her. Here, the lack of supervision is massive.

In The Florida Bar v. Ribowsky-Cruz, 529 So.2d 1100 (Fla. 1988) the Supreme Court of Florida disbarred an attorney who abandoned her law practice. That is precisely what Mr. Stern did when he announced his intentions to the Chief Judges of this state in his letter dated March 4, 2011 and failed to take any action on the remaining cases in which no withdrawal occured.

Further, Mr. Stern was publicly reprimanded in 2002. The misconduct involved an affidavit that contained inaccurate information. The instant matter, in part, involves false information in affidavits and assignments in David Stern’s office. The repetition of the same misconduct establishes that Mr. Stern has no regard for the requirements and responsibilities of the Rules Regulating The Florida Bar.

Additionally, Mr. Stern’s letter of abandonment states that he did not have the financial resources to properly withdraw from his pending cases. Mr. Stern’s declaration revealed his net worth and that he did in fact possess sufficient resources to properly withdraw from cases. I am not persuaded by his argument that his reference to lack of financial resources related to the firm’s net worth only. David Stern and the firm are one entity. His statement was a misrepresentation. I find it to be an aggravating circumstance in these proceedings.

Mr. Stern has not expressed any remorse in these proceedings. He has taken no responsibility. The mistake or difficulties are the actions of others.
Lastly, Mr. Stern has not presented me with any evidence of mitigation. As such, I have no basis to recede from the Bar’s recommendation of disbarment. It is the appropriate result.

VI. RECOMMENDATION AS TO DISCIPLINARY MEASURES TO BEAPPLIED

I recommend that respondent be found guilty of misconduct justifying disciplinary measures, and that respondent be disciplined by:
A. Disbarment.
B. Payment of The Florida Bar’s costs in these proceedings.

VII. PERSONAL HISTORY, PAST DISCIPLINARY RECORD

Prior to recommending discipline pursuant to Rule 3-7.6(k)(1), I considered the following:
A. Personal History of Respondent:
Age: 53
Date admitted to the Bar: November 27, 1991
B. Aggravating Factors:
9.22(a) prior discipline: October 24, 2002 – public reprimand before the Board of Governors
9.22(b) dishonest or selfish motive
9.22(c) a pattern of misconduct
9.22(d) multiple offenses
9.22(g) refusal to acknowledge wrongful nature of conduct
9.22(h) vulnerability of victim (court system)
9.22(i) substantial experience in the practice of law (admitted 1991)
C. Mitigating Factors:
None

VIII. STATEMENT OF COSTS AND MANNER IN WHICH COSTS SHOULD BE TAXED

I find the following costs were reasonably incurred by The Florida Bar:

Administrative Fee $ 1,250.00
Investigative Costs 7,340.33
Bar Counsel Costs 8,374.26
Court Reporters’ Fees 14,810.73
Witness Expenses 2,992.30
Expert Witness Brian Spector 15,000.00
TOTAL $49,767.62

It is recommended that such costs be charged to Respondent and that interest at the statutory rate shall accrue and be deemed delinquent 30 days after the judgment in this case becomes final unless paid in full or otherwise deferred by the Board of Governors of The Florida Bar.

Dated this 28th day of October, 2013.

/s/ Nancy Perez________
Nancy Perez, Referee

image: PI Bill Warner

Comments

comments