Laura M. Watson
Laura M. Watson (CANDACE WEST / COPYRIGHT 2013)

An attorney for Broward Circuit Judge Laura Watson warned the ethics panel trying her Wednesday that the state Judicial Qualifications Commission was moving into a realm once occupied by the Soviet Union’s KGB intelligence agency.

Calling the KGB as a “heinous organization,” Robert Sweetapple of Sweetapple Broeker & Varkas in Boca Raton described the Watson inquiry as a test case on the limits of the JQC authority.

“You have to have some present conduct—the judge either campaigning or while a judge has done something wrong—that’s when the JQC gets jurisdiction. Then they can look back,” Sweetapple said in his closing argument of a three-day trial.

Watson is accused of Florida Bar ethics violations for her conduct in insurance litigation that she worked on as an attorney from 2001 to 2004. Watson was elected to the bench in November 2012. She risks removal from the bench if found guilty.

Sweetapple argued the commission’s scope covered matters such as a judge taking bribes or drugs.

“That’s understandable—a pattern, a composite,” Sweetapple said. “Not no judicial misconduct and let’s go look at your past. We cannot go there.”

The JQC’s 1966 rule, upheld by the Florida Supreme Court, allows the commission to look at a conduct of judges when they were attorneys. Sweetapple warned a mandate so broad can be abused.

“It’s the scariest thing I can think of,” he said. “Any group of lawyers and judges that can go confront judges privately with anything about their past, they control the judiciary.”

She was charged over her role in a settlement she helped draft in 2004 in a quasi class action involving about 2,100 personal injury protection claims against Progressive Insurance, which was accused of shorting or denying claims by medical professionals collecting for services from PIP policies in auto accidents.

Watson’s firm, along with two other PIP law firms, reached a $14.5 million settlement, which excluded fees for a fourth law firm, Stewart Tilghman Fox & Bianchi of Miami, which was retained to handle bad faith claims. Stewart Tilghman was fired shortly before the PIP attorneys settled.

No One Complained

In a 2008 trial, Palm Beach Circuit Judge David Crow ruled for Stewart Tilghman on an unjust enrichment claim against the other law firms. He concluded the PIP firms misinformed their clients and ordered a revised legal fee split to include Stewart Tilghman.

A Florida Bar investigation was delayed by years of appeals. Although the Bar ultimately found probable cause, the case was closed when Watson was elected because the Bar has no jurisdiction to police the ethics of sitting judges.

JQC prosecutor Miles McGrane of the McGrane Law Firm in Coral Gables said the case is about how Watson dealt with her clients and how the PIP attorneys “set up this procedure for resolving the case where clients weren’t told things.”

McGrane concluded: “Her argument is the end justifies the means. The end is, ‘I’ve got clients who got their PIP benefits, and no one’s complained about it. Therefore, it must be OK.’ ”

The PIP attorneys arbitrarily decided to pay the clients in three ways. Some clients were paid in full. Some were paid PIP claims and a portion of a $1.75 million trust account for bad faith claims. A third group was paid its PIP claims and half of the bad faith account.

This created conflicts of interest among the groups, but they weren’t informed of the different treatment or given details of the global settlement, McGrane said.

Another key aspect in the case was Stewart Tilghman’s role. Crow found the bad faith firm’s negotiations were pivotal in motivating Progressive to settle, and it was likely the clients could have gotten much more than $1.75 million for the bad faith claims.

Watson offered expert PIP testimony Tuesday from Lawrence Kopelman of Kopelman & Blankman in Fort Lauderdale. He disagreed with Crow, noting the PIP attorneys proceeded with a bad faith cause of action on the theory that Progressive’s practice amounted to an illegal silent preferred provider organization discount.

Kopelman testified by video deposition that, during the litigation, an appeals court ruled the discounting practice was permissible.

“At the time, the bad faith cases were hanging by a thread,” Kopelman said.

McGrane disputed Kopelman’s claim that the bad faith punitive damages, at most, would be $2 million. If that were so, Progressive would never have made a $3.5 million offer in talks with Stewart Tilghman, he said.

‘Person With Integrity’

McGrane characterized the PIP attorneys as an unsophisticated group. He said Progressive realized its real exposure came from Stewart Tilghman and that team had to be removed.

Perhaps the most damning evidence was Watson’s agreement to stand in the shoes of Progressive and defend the insurer against any clients who disagreed with the settlement. During trial, Watson changed her response several times but in the end acknowledged the legal implication of the indemnification clause.

Sweetapple emphasized Watson’s surprise at how the clause put her in an adverse position to her clients. He argued she was “out-lawyered” by the Progressive legal team, but that shouldn’t be cause to remove her.

Fort Lauderdale Mayor Jack Seiler of Seiler Sautter Zaden Rimes & Wahlbrink said he has known Watson for years and respected her as a lawyer for her hard work and legal acumen. He called her “a person with integrity.” Seiler added she has built a good reputation for her knowledge and demeanor on the bench.

Seiler represented Watson’s ex-husband and former law partner Darin Lentner in the trial against Stewart Tilghman.

Fifth District Court of Appeal Judge Kerry Evander, who chairs the JQC panel, said he would consider the panel’s findings and submit a report to the Florida Supreme Court. He gave no indication when that might be.