Florida Bar Files New Complaint for Strems Over Fees Settlement and Agreement

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The plaintiffs attorney Florida insurers love to hate could see his two-year suspension end this month. But new allegations from the state bar could lead to further penalties or even permanent disbarment.

A 25-page lawsuit filed last month accuses Miami attorney Scot Strems and his law firm in 2018 of telling a client about a settlement with a property insurance company, but then secretly paid double with the insurer and tried to pocket a large unauthorized amount. costs.

“Even more troubling is the Respondent’s contention that this pattern of conduct is how his business conducts its affairs in the normal course,” reads the complaint, filed by the Law Society’s Grievance Committee in the Supreme Court of New York. Florida.

Strems also provided false and misleading information to the bar when investigators questioned him about his actions representing 85-year-old owner Margaret Nowak in a claim related to Hurricane Irma.

“The thrust of this case is simple: the respondent betrayed his ethical obligations to his elderly client in order to enrich himself at that client’s expense,” the complaint reads. “As the record exhaustively shows below, the Respondent committed a litany of ethical violations both in his representation of Ms. Nowak and during the Florida Bar’s investigation.”

Strems had become the poster child for what insurance groups said was widespread abuse of the legal system by attorneys for some Florida plaintiffs. He was accused of filing thousands of lawsuits against insurers, many over the same claim, and was suspended from practicing law in 2020. The bar had sought disbarment, but an arbitrator in the case ruled recommended a two-year suspension. The Supreme Court granted an emergency stay in June 2020, noting that the lawyer was suspended until further court order.

A Bar Association official said Strems requested oral argument on the latest complaint. The Nowak case would not affect his current suspension but could result in further penalties, said Florida Bar communications director Jennifer Krell Davis.

Nowak’s case began in 2017 when she filed a claim with her insurer, Florida Peninsula Insurance Co. The lawsuit’s lawsuit did not explain how Nowak hired the law firm Strems, but the agreement of emergency indicated that the firm would charge a 25% fee. . If the claim went to litigation, the company would receive 30% of the award or the amount awarded by the court, whichever is greater.

Strems’ company hired Contender Claims Consultants, a public surveying firm, which estimated that Nowak’s home suffered $64,000 in damage from the storm. Contender Claims is also well known to Florida insurers. Carriers and attorneys said the firm worked closely with Strems to exaggerate damages in numerous benefit assignments and other claims. In May, the appraiser, a restoration company and Strems agreed to settle a $1 million lawsuit filed by Citizens Property Insurance Corp. who had accused managers of fraud in hundreds of insurance claims.

In Nowak’s claim, Florida Peninsula advised Strems’ company that it would settle the claim for $30,000, leaving $22,500 to the owner and $7,500 in attorney’s fees to Strems. One of Nowak’s sons agreed, but the lawyer for the Strems law firm suggested he could get a little more, the law society’s complaint explained. Despite several attempts by Nowak’s son to reach Strems’ firm in the following weeks, the law firm did not respond easily.

It turned out that Strems’ company had negotiated a $45,000 settlement with Peninsular Florida and arranged for the insurer to send Nowak a check for $22,500 and another check for $22,500. to the company Strems. When told of the 50% attorney’s fee, Nowak’s sons vigorously objected.

“I actually just reviewed the documents and am shocked to see that you actually got an additional $22,500, but none of which will benefit my mother,” Ken Nowak wrote to a Strems staffer. “This is unacceptable to me. Unless you can get my mother back the $30,000, we will reject this settlement.

The law firm responded that Florida laws allow higher fees. But Dennis Nowak fired back.

“The Florida law cited in your closing statement does not override the terms of your recognizance agreement and, in any event, applies only to court-awarded fees, not negotiated settlements,” he wrote. “So unless you tell me this case has gone to trial, the fee law you are referring to is irrelevant.”

After that, the Strems firm ceased pursuing settlement and litigation except to file a notice with the court that the matter had been “settled out of court”. The court closed the case.

“To date, the $45,000 global settlement agreement has not been consummated,” the law society said in the complaint. “Based on information and beliefs, (Florida Peninsula) still has the proceeds of the settlement and stands ready to deliver them. To date, Ms. Nowak has not received a penny due to the representation of the respondent in this case.

It was unclear whether the Nowak family had complained to the Law Society. But when Law Society investigators asked Scot Strems about the case, the lawyer offered a “gross misrepresentation of the facts”. Strems said Nowak had never been a client and had not personally provided legal services, the law society said. He also failed to hand over any documents requested by investigators, but said the practice of attorneys’ fees was “standard procedure”.

“From the foregoing facts, it appears that the allegations in this complaint are not the result of an isolated indiscretion,” argues the Bar Association’s complaint. “To the contrary, the misconduct alleged in this complaint is systemic in the Respondent’s practice.”

Strems faces other pending disciplinary action from the bar, which could result in further suspensions or the permanent termination of his law practice.

After Strems was suspended in 2020, the bar decided to find Strems dismissive of the way his law firm was disbanded, with most attorneys at the firm simply moving to a new firm known as The Property Advocates . The arbitrator named in the case, Miami-Dade Judge Dawn Denaro, denied the motion last year. But the bar is now urging the state Supreme Court to take a harder line, arguing that the arbitrator misunderstood the nature of Strems’ actions, which were intended to avoid some of the impact of the earlier suspension on his law office.

Strems also informed clients of his suspension in a way that the bar association said was misleading, lawyers for the bar wrote.

Strems and his attorneys could not be reached for comment.

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