Collapse of an Evil Empire! PART I

This is Part I regarding deceptive practices by some attorneys and their cohorts to steal from others, including their own clients.

If allegations in the  numerous documents I’ve been provided are true we may all be witnessing the historical collapse of an enterprise so prolific and sinister it almost defies description.

Since these alleged practices of just this one firm, The Strems Law Firm (SLF), are so instructive regarding Florida’s property insurance market and the need for tort reform, additional articles may be necessary to provide a more complete picture, examine the potential impact on rates and develop meaningful long term solutions. 

Let’s start with a blog I wrote February 2017 about Strems titled, “Bad Apple Attorneys!”  Read it. It’s based on my research into litigation methods employed by SLF, particularly the filing of multiple suits for the same location, risk or loss (See NOTE #1 below). I even sent a letter to the Florida Bar later that same year regarding several attorney firms but did not receive a response.

Anyway, this month on June 9, 2020, the Supreme Court responded to the Florida Bar’s “emergency” request to immediately suspend Strems’ license to practice law (see: Bar petition June 5, 2020).  (See NOTE #2 below).  It demanded that Scot Strems immediately cease the practice of law and comply with other demands while/if he appeals the ruling. He cannot resume practice during any appeal should there be one. (See NOTE #3 below)

The Bar accuses Scot Strems of engaging in “mendacious, bad-faith conduct” lying to clients, judges and opposing parties.  And, declares that “He sits at the head of a vast campaign of unprofessional, unethical, and fraudulent conduct that now infects courts and communities across the state.”

For those doubting the breadth of what’s been going on, documents paint a picture of what sounds very much like an “evil empire.”  With only 20 attorneys (according to its website) and according to a deposition from the firms former litigation manager, SLF ushers something close to 10,000 lawsuits at a time through an alleged corrupt system. You read correctly…10,000!

Think about it.  If there are 10,000 cases in the hopper and billable fees were around, oh, say $5,000 each–that’s $50 million! Of course, $5,000 per case might be too low since, according to the Bar’s allegations, some Strems attorney’s charge $750 an hour. Heck, with rates like that, fee multipliers and contingency fee practices like those you’ll read about next, SLF could’ve pulled down as much as $100 million for every 10,000 case cluster.

Keep this in mind as you look at what the Florida Bar just dropped in the Supreme Courts’ hopper (Thursday June 11)–only a few days after suspending Scot Strems.  It regards SLF attorney Gregory Saldamando and is another complaint (Filing # 108753108) alleging another member of the enterprise “…betrayed his ethical obligations to his clients in order to enrich himself at the clients’ expense.”

Here’s one appalling example:

Based upon [Saldamando’ s] representations, his clients agreed to accept a settlement of $100,000.00, approving a fee of $35,000.00 for SLF, with the balance of $65,000.00 going to the clients.

then…

Without the clients’ knowledge or approval, [Saldamando] secured and finalized a second global settlement of $157,500.00.

then…

Without the clients’ knowledge or approval, [Saldamando] did not allocate any of the increased settlement amount to the clients. Instead, [Saldamando] allocated a fee of $92,500.00 for his firm, while allocating only the client’s original authority ($65,000.00) to the clients. [Emphasis added]

Read the entire complaint yourself for details of Saldamando’s defense. But, one of the most remarkable statements in the Bar’s allegation is that Saldamando’s actions are not only a “pattern of misconduct [is] remarkably similar to that charged against [Scot] Strems…”  but, they are apparently business as usual for the entire firm!

The Bar says Saldamando’s approach was “…part and parcel of SLF’s day-to-day practices.”  And, lending credence to the idea of a pending collapse is that Saldamando, a former Assistant State Attorney, throws the whole firm under the bus, in writing: “…this is standard practice for The Strems Law Firm regarding settlement of first party insurance cases…”

Wonder how many other plaintiff firms employ this so called “standard practice.”

There’s more.

It’s possible many of the 10,000 clients were as unwitting as those in a class action filed against Strems earlier this year (April 24) by Lee Jacobson (Hale, Hale & Jacobson, P.A.).  This class action alleges numerous counts against SLF including “…Civil Conspiracy…Racketeering…Unfair and Deceptive Practices…” and more and requests a punitive award of “treble damages.”  (See NOTE #4 below)

In Ortiz v The Strems Law Firm we learn that one SLF method of acquiring so many clients was to utilize Public Adjusters, or those posing as public adjusters, water firms and other contractors to recruit plaintiff homeowners. These “feeders” scour for plaintiffs, conduct inspections, identify damage (often more than one claim) and ask for a signature on an electronic tablet.  The suit alleges that at least some don’t know that in addition to a work order, they are also signing a contingency agreement for Scot Strems or his firm.

And, even when/if they know and object their signature still winds up on a Strems contingency contract–in at least one case, according to the suit.  Result?  When the consumers’ claim payment arrives, usually many months later, it’s minus a 25% contingency fee paid to the Strems firm.  Apparently, recouping those lost funds is tedious enough that it’s rarely pursued by the homeowner.

According to the suit…“The Strems Law Firm and various third parties work together to unethically and illegally solicit, engage and profit off of unwilling and unsuspecting consumers throughout the State of Florida.”

Even without a cadre of feeders, it’s easy to see how so many unsuspecting property owners might get sucked in.  Strems has locations in Coral Gables, Tampa, Orlando, Broward and Jacksonville. It has one of the slickest websites I’ve seen, with some really professional video’s.

Finally, and so typical of “billboard” plaintiff firms portraying themselves as knights in shining armor, SLF’s tag line ironically asserts that it is “Florida’s Most Trusted Law Firm.”

NOTE: readers are reminded that I’m not a lawyer and these are only my opinions based on formal allegations and 700 pages of supporting documents presented to the Supreme Court and other research.

Let’s close Part I with a brief summary:

Based on my opinion of the allegations and supporting documents, one firm with only 20 attorneys is using various forms of subterfuge to process or ignore up to 10,000 lawsuits using three prime tactics: one, multiple claims/lawsuits filed for a single location, loss or risk; two, utilizing feeders armed with tablets it gathers electronic signatures on contingency agreements concomitant with work authorization orders, and; three, it applies a sophisticated assembly-line style to manage a high volume of cases at least some of which have inflated billable hours and/or fraudulently acquired contingency fees.   

Stay tuned–there’s more to come in “Collapse of an Evil Empire!” Part II.

###end###

NOTE #1:   According to fourteen (14) transmittal letters DFS provided me, covering only eight months, the Strems firm filed 448 lawsuits against 22 insurance companies, including 78 multiple lawsuits.  “Multiples” are when more than one suit (usually two but, sometimes as many as four) is filed by the same policyholder against the same insurer. A practice unique to Strems.

So, I queried DFS service of process (SOP) records and found that during one two-year period, just one lawyer, Scot Strems, filed 2,057 individual lawsuits against insurance companies. See the DFS report here.  And, from this data my researcher identified 223 times when one homeowner filed “multiple” suits against the same insurer for the same risk or policyholder.

When I contacted a carrier with a lot of policies in Southeast Florida, here’s the response:

“It is very common for one of his ‘feeders’ to arrive on the scene to investigate a purported water loss from a plumbing leak, look around the property and perhaps identify a stain on the ceiling, and then report a roof leak as well. Both will be reported on the same day, but given different dates of loss.”

NOTE #2: The State Bar of Florida asked the Supreme Court to protect the public, the clients of Scot Stems, the adverse parties, the insurers he sued, and the court system by filing a Petition for Emergency Suspension of Scot Strems license to practice law.  The State Bar alleged, in part:

  • Despite the professional veneer of the firm’s website, dockets across Florida are replete with orders sanctioning Mr. Strems and his subordinates for the delay, misrepresentation, and bad faith that have become the hallmarks of their firm’s litigation practice.
  • This pattern of conduct by Mr. Strems and his firm has resulted in clear and unquestionable harm to the public and warrants the imposition of an emergency suspension order. Numerous parties have been and continue to be injured by the respondent’s bad faith, including: the insurers and their counsel who must litigate these cases; the courts, which expend tremendous time and resources resolving these disputes; the public, which relies heavily upon the judicial resources consumed by SLF’s case load; Florida homeowners, whose insurance premiums ultimately fund both sides of SLF’s cases; and, of course, respondent’s own clients who are sometimes conscripted (unwittingly or otherwise) into the firm’s conduct, and whose claims are frequently rendered worthless due to court sanctions.
  • The petition listed multiple cases where the court sanctioned the lawyers for failure to comply with court orders, deliberate disregard of orders issued by the court, neglect, failure to respond to discovery, egregious bad faith conduct, caused cases to be dismissed for refuse to respect the courts authority.
  • More than 30 orders and other filings of case dismissals with prejudice because of “willful violations” of a court’s orders or purposeful delays, as well as sanctions against the firm, involving 18 cases against eight different insurance companies.
  • A class action lawsuit by claimants who say they were illegally solicited and profited off of by the firm and other third parties.
  • Affidavits by two Thirteenth Judicial Circuit Court judges who have handled hundreds of cases brought by Strems.
  • A deposition of the firm’s former litigation manager who testified that the firm has handled as many as 10,000 suits at once, that Strems attorney’s for the firm didn’t keep track of their time and fee sheets stating time spent on cases were falsified.

NOTE #3: According to the Supreme Court Ruling, Scot Strems is ordered:

  1. to accept no new clients from the date of this Court’s order and to cease representing any clients after thirty days of this Court’s order. In addition, Respondent shall cease acting as personal representative for any estate, as guardian for any ward, and as trustee for any trust and will seek to withdraw from said representation within thirty days from the date of this Court’s order and will immediately turn over to any successor the complete financial records of any estate, guardianship or trust upon the successor’s appointment;
  2. to immediately furnish a copy of Respondent’s suspension order to all clients, opposing counsel and courts before which Respondent is counsel of record and to furnish Staff Counsel of The Florida Bar with the requisite affidavit listing all clients, opposing counsel and courts so informed within thirty days of this Court’s order;
  3. to stop disbursing or withdrawing any monies from any trust account related to Respondent’s law practice without approval of the Florida Supreme Court or a referee appointed by the Florida Supreme Court or by order of the circuit court in which an inventory attorney has been appointed. In addition, Respondent shall deposit any fees or other sums received in connection with the practice of law or in connection with the Respondent’s employment as a personal representative, guardian or trustee, paid to the Respondent within thirty days of this Court’s order from which withdrawal may only be made in accordance with restrictions imposed by this Court, and to advise Bar Counsel of the receipt and location of said funds within thirty days of this Court’s order;
  4. to stop withdrawing any monies from any trust account or other financial institution account related to Respondent’s law practice or transfer any ownership of real or personal property purchased in whole or part with funds properly belonging to clients, probate estates for which Respondent served as personal to immediately furnish a copy of Respondent’s suspension order to all clients, opposing counsel and courts before which Respondent is counsel of record and to furnish Staff Counsel of The Florida Bar with the requisite affidavit listing all clients, opposing counsel and courts so informed within thirty days of this Court’s order;
  5. to immediately notify in writing all banks and financial institutions in which Respondent maintains an account related to the practice of law, or related to services rendered as a personal representative of an estate, or related to services rendered as a guardian, or related to services rendered as a trustee, or where Respondent maintains an account that contains funds that originated from a probate estate for which Respondent was personal representative, guardianship estate for which Respondent was guardian, or trust for which Respondent was trustee, of the provisions of respondent’s suspension and to provide said financial institutions with a copy of this Court’s order, and furthermore, to provide Bar Counsel with a copy of the notice sent to each bank or financial institution; and
  6. to immediately comply with and provide all documents and testimony responsive to a subpoena from The Florida Bar for trust account records and any related documents necessary for completion of a trust account audit to be conducted by The Florida Bar.

NOTE #4:  The allegation–In December of 2016 Sonia Ortiz contacted a purported Public Adjusting Firm, Contender Claims Consultants, (CCC) to request it inspect her property for damage. CCC reportedly found two losses.  She had no intention of seeking legal representation and signed electronic agreements for both losses that she did not know contained agreements with SLF. In 2017 she identified another potential loss and contacted CCC specifically stating that she did not want to be with SLF.  CCC’s representative stated he would not turn the claim in to Strems. On December 14, 2017 Ortiz received payment for this claim that was minus a contingency fee paid to SLF.  According to the complaint, paragraph 40:  “The Strems Law Firm and various third parties work together to unethically and illegally solicit, engage and profit off of unwilling and unsuspecting consumers throughout the State of Florida.”

 IMPORTANT: If you enjoyed this post you’re invited to subscribe for automatic notifications by going to: www.johnsonstrategiesllc.com.  Enter your email address where indicated.  If you’re already on the website at Johnson Strategies, LLC, go to the home page and enter your email address on the right-hand side.  Remember, you’ll receive an email confirming your acceptance, so…check and clear your spam filter for notifications from Johnson Strategies,

 

 

 

 

Comments

  1. Gorav114 says:

    While I always enjoy your articles and opinions on the Insurance industry in general, this piece made me especially happy this morning. SLF is the worst attorney firm I have ever had to deal with as a 1099 adjuster in the field. Them being halted is a good thing for the insurance consumer. They use loss consultant FGF Claims and it on average takes at least 30 days just to get an inspection scheduled. Then it takes another 30 days to the inspection date. They often cancel the scheduled inspection day last minute and I spend a lot of administrative hours just trying to get inspections coordinated. Forget ever getting estimates or documentation from them. They often use the same plumber and evidently he often drives 150-200 miles to replace a hose. The attorney often has multiple claims, I have seen 6 on one risk. All turned in around same time with different dates of loss. In reviewing with the homeowner they often appear unaware of companion claims. The companion claims often don’t even appear to be actual losses such as crack in the PVC drain line beneath vanity sink replaced by plumber which requires complete rebuild of the master bathroom. They rarely ever have interest in settling a claim either.
    Please note, my comment is based on my experience with the attorney firm and does not reflect other adjusters or insurance company’s interactions with the attorney, I can only comment on my experiences with them.

    I was stoked this morning to see another article so soon after the last one, please keep them coming. I have 15 plus years in the field experience and can probably provide lots of topics though you seem to have a good pulse on what is happening out there.

    • Thanks for the kind words about my blog. I would say that SLF (the entity) is not the subject of the various petitions and allegations. It’s Scot Strems personally and therefore, the result will not be anything that halts SLF or the firm that it spawns in the wake of these allegations. That, I’m told, is part of the problem. Even if Strems were to lose his license to practice law, he can move to the firm he’s already formed (a simple name change) and work there in some capacity and still receive compensation. Contrast that with the insurance industry where, when you’re convicted of an act of insurance fraud, you can be barred for life from working in the industry. Regardless of the outcome of the charges (and that’s all they are at this point) against Scot Strems, this needs to be fixed. It’s a good question I’m being asked all the time: Why aren’t law firms regulated?

Speak Your Mind