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

Miami-Dade Circuit Judge Beatrice Butchko threw out a 5-year-old defamation lawsuit brought by Broward Circuit Judge Laura Watson against a Miami law firm that won a judgment against her.

The firm of Stewart Tilghman Fox & Bianchi and attorneys Larry Stewart, Todd Stewart and William Hearon were sued by Watson after Palm Beach Circuit Judge David Crow entered a $1 million judgment against her. He found her law firm was unjustly enriched by its participation in a secret $14.5 million settlement with Progressive Insurance.

Watson’s firm was one of three personal injury protection law firms that initiated a quasi class action against Progressive to recoup money allegedly owed to the medical providers of auto accident victims. The PIP attorneys brought in the Stewart Tilghman team to handle bad faith claims.

After Crow’s decision, Larry Stewart was quoted in a 2008 Daily Business Review article saying, “They were screwing us, and they were screwing the doctors out of settlement money. We sued them for screwing us.”

Watson objected to the comment and sued in Broward Circuit Court for defamation, abuse of process and malicious prosecution. Her lawsuit claimed Crow exonerated her because the judgment was against her firm and not her personally.

Watson was elected to the bench in November 2012, escaping a Florida Bar finding of probable cause that would have led to a full ethics inquiry if she had stayed in private practice.

On Feb. 12, the state Judicial Qualifications Commission concluded a three-day ethics trial examining her role in the 2004 settlement. Watson never paid the judgment, but she testified during the trial that she spent $800,000 defending herself.

While the JQC was preparing for trial, Stewart Tilghman filed a motion to strike Watson’s causes of action “as a sham.” Chief Broward Circuit Judge Peter Weinstein moved the case to Miami-Dade.

In Butchko’s order Thursday, she reviewed Crow’s judgment and Watson’s claim that “she successfully defended and defeated an action” and “was exonerated of all wrongdoing”

“The court finds that Ms. Watson’s allegations to that effect are false and untrue,” Butchko said.

As for Stewart’s statements, Butchko said they were in accord with Crow’s findings.

“There is no factual basis for the plaintiff’s defamation claim. That claim is demonstrably false,” Butchko wrote. “Instead, it is clear from Judge Crow’s findings that he did in fact determine that Ms. Watson and the other defendants in the underlying action had committed various breaches of fiduciary duty and had attempted to defraud co-counsel.”

Butchko acknowledged the judgment was against Watson’s firm, then said the law firm’s misdeeds were “based entirely on her own misconduct.”

“In fact, Judge Crow was sufficiently dismayed by Ms. Watson’s conduct that she was referred to the Florida Bar,” she said.

On Watson’s abuse of process and malicious prosecution claims, Butchko cited the Florida Supreme Court’s 2007 decision in Echevarria v. Cole, which reinforced absolute immunity in all causes of action that relate to a judicial proceeding.

“It is inconceivable that plaintiff was not aware of the Supreme Court’s very specific findings in Echevarria at the time that she initiated what can only be characterized as unfounded litigation,” Butchko wrote.

She reserved jurisdiction to hear a motion assessing legal fees and costs.

Stewart Tilghman declined to comment.

Watson was represented by Stephen Rakusin, a Fort Lauderdale real property and probate attorney. Watson is assigned to the family division. She and Rakusin did not respond to requests for comment by deadline.