Lawyers at several South Florida personal injury protection firms say they’re relieved after whistleblower suits alleging they systematically underpaid filing fees were tossed.
The seven cases, filed by Miami attorney Maury Udell, claimed plaintiffs lawyers undervalued claims in tens of thousands of cases to pay lower filing fees. The statutory penalty for such a violation is at least $5,000 per case, meaning alleged damages stretched into the tens of millions of dollars.
Amounts of money requested in pre-suit demand letters were higher than what the law firms asked for in lawsuits they filed, alleged a company created by Udell in 2015, EFP Recovery Services.
The firms therefore paid less than they should to file each case, keeping money out of state coffers, the lawsuits claimed. For example, Miami-Dade County Court charges a $300 filing fee for a civil claim over $2,500, but $175 for a case claiming damages of $500 to $2,500.
But Leon Circuit Judge Terry Lewis ruled Oct. 2 that EFP’s allegations had an “inherent flaw.” Lewis was assigned one of the cases, which was filed against Miami attorney Neil Gonzalez and his firm, the Law Offices of Gonzalez & Associates.
“There is no requirement that a litigant seek in his lawsuit the same sum of money that was demanded pre-suit,” Lewis wrote. “There are many reasons why a plaintiff might seek, in a lawsuit, a lesser sum than what he feels is owed, especially when the difference is relatively small.”
Furthermore, a filing fee is based on what is alleged in a complaint, and litigation privilege protects lawyers from being sued if a complaint’s allegations turn out to be false, he found.
EFP also had no valid claim under the Florida False Claim Act because the filing fees involved were publicly available information, Lewis ruled.
At the hearing before Lewis, the Florida Office of the Attorney General’s special counsel for litigation, Russell Kent, said his office declined to pursue the whistleblower investigation because it found the case to be “meritless” based in part on the public disclosure issue. EFP argued the pre-suit demand letters were not public information and were essential evidence of the “fraudulent business practice” alleged.
Lewis dismissed the case against Gonzalez with no opportunity to re-file, and the attorney general’s office used its power as the party in interest to dismiss the six remaining cases filed by EFP as a relator.
The other dismissed cases were against Munir Barakat and Munir Barakat P.A.; Maria Corredor, Lina Husseini, Tim Snedaker and Corredor, Husseini & Snedaker; Kelly Arias, Angel Arias and the Arias Law Group; Bernard Butts, Lewis Mertz and Bernard H. Butts Jr. P.A.; Michael Libman and Michael Libman P.A.; and Todd Landau and Landau and Associates.
“We are very disappointed in the court’s ruling as it appears in contravention to Florida law,” said Udell, whose co-counsel was former Third District Court of Appeal Judge Frank Shepherd, now a Miami shareholder at GrayRobinson. “As for the underpayment of filing fees, in my opinion it appears to be a widespread problem.”
Just ask Miami-Dade Clerk of Courts Harvey Ruvin, Udell said, citing the clerk’s August push for stopgap funding from the county to keep satellite offices open because of a lack of state funds. Clerks of court across Florida have faced funding shortfalls in recent years, and the offices have attributed the problem to a lower number of filings since the end of the foreclosure crisis.
Udell, a Miami partner at BMUL Law, specializes in civil litigation, including PIP insurance cases. He has been across the table from some of the firms EFP went after in the whistleblower litigation.
“All of us know him,” said Tim Snedaker of the Doral firm Corredor Husseini & Snedaker, which was facing at least a $12 million exposure from the whistleblower case. “I was on good terms with him prior to this. So it was unusual to get served with his complaint, to say the least.”
Carlton Fields attorney Kevin McCoy of Tampa defended four of the cases, including the Gonzalez case and the Corredor Husseini & Snedaker case. He said it would have had a chilling effect on the plaintiffs bar if the cases were allowed to proceed.
That’s because the essence of a plaintiffs lawyer’s job is evaluating claims and deciding which ones should go forward, he said.
“You just can’t get any more at the heart of what a litigation lawyer does,” McCoy said. “If this new species of claim had been allowed to go forward in face of the litigation privilege, it would have been open field day. … It was really a privilege to step forward and represent lawyers who do the opposite of what I do and defend the profession.”
Attorneys for the other defendants did not immediately respond to requests for comment.