David Silver, left, and Steven Katz ()
A Lauderhill lawyer is battling his former bosses in court over a hefty prize: a $1.2 million referral fee for a successful whistleblower case.
Normally, such disputes don’t escalate to legal action — they’re decided by employment contracts between firms and their employees. But South Florida firm Frank Weinberg & Black made no written agreement with Steven Katz about who would be entitled to referral fees after he left the firm in 2013.
A few years later, a case Katz had passed along to a Miami health care firm when he was an associate at Frank Weinberg & Black ended in a $145 million settlement.
The solo practitioner and the 25-lawyer firm have tried to mediate their disagreement, but neither is willing to budge.
“When Mr. Katz left the law firm, he tried to go behind the law firm’s back and get the referral fee for himself,” said Frank Weinberg & Black’s attorney, Steven Katzman of Katzman Wasserman Bennardini & Rubinstein in Boca Raton. “That’s a foul.”
Katz’s lawyers, David Silver and Jeffrey Schneider, see it differently. They say it’s undisputed that after Katz left Frank Weinberg & Black, no one at the firm had any contact with whistleblower Tammie Taylor.
“The ethics rules are pretty clear that you can’t represent someone if they don’t know you represent them,” said Silver, who is with Silver Law Group in Coral Springs. “You can’t abandon a client for years and then claim to be entitled to a fee.”
The Florida Bar rules state that when a lawyer leaves a firm, the firm must notify clients and give them options for representation going forward. Katz’s lawyers said his former firm sent letters to everyone they believed he represented. The firm did not send Taylor a letter, Silver said, because it did not count her as a client of the firm.
Another bar rule addresses two firms splitting a fee, saying the total fee must be reasonable and the division must be in proportion to the services performed by each lawyer or determined by a written agreement with the client. Any such agreement must fully disclose the fee division and provides that “each lawyer assumes joint legal responsibility for the representation and agrees to be available for consultation with the client.”
Katz said in a court filing that he continued to check in with Taylor, the whistleblower, for years after forming his own firm with the understanding that she was his firm’s client.
Florida Bar ethics counsel Elizabeth Clark Tarbert pointed to the bar’s professional ethics committee’s past refusal to opine about what a proper fee split arrangement would be between an associate and a firm if a client of the firm hires the associate.
“This is not an ethics issue or question,” the committee stated in a 1984 opinion, later withdrawn for an unrelated reason. “It is a matter of contract to be decided between the associate and the firm, in accordance with applicable law.”
Katzman said the lack of a written contract doesn’t change the situation.
“The participation fees automatically belong to the firm,” he said. “As long as you continue to be employed by the firm, the firm may pay you bonus compensation for having brought in a matter. … Mr. Katz was an employee. He was acting on the law firm’s behalf when he brought the matter in.”
Schneider of Levine Kellogg Lehman Schneider + Grossman in Miami disagrees.
“You have to actually participate” in representing the client’s interests, Schneider said. “Hence the phrase ‘participation fee.’”
For his part, the Miami lawyer who received the case and won the whopping settlement wants nothing to do with the fee dispute. Anthony Vitale, who did not respond to a request for comment, put the referral fee in a trust account and is waiting for the others to fight it out.
“[The Health Law Offices of Anthony C. Vitale] has no interest in the participation fee and did not cause the conflicting claims between defendant FWB and defendant Katz Law Office,” the firm’s attorney wrote in a Feb. 24 lawsuit requesting an order of interpleader from Broward Circuit Judge Sandra Perlman. The firm “runs the risk of paying the participation fee more than once” if it tries to pick a side, according to the lawsuit.
The firms agreed Wednesday to dismiss Vitale from the case and to let him take about $13,000 out of the referral fee account to pay his lawyer.
As the lawsuit stretches on, more of the disputed funds will wind up going to the attorneys representing the two warring parties.
“That’s the irony of lawyers representing lawyers,” Silver said. “They can’t complain.”