First timers to this series can catch up by scrolling down the home page to “Collapse of an Evil Empire! Part I” and continuing on to Part VII.
In Part VI, “The Sentence,” you’ll find reactions to the recommendation of referee, Judge Dawn Denaro, that Scot Strems should receive only a two year suspension of his license to practice law and one year of supervised probation. This, in lieu of permanent disbarment which many, including the Florida Bar, thought he deserved.
Regardless of any alleged light sentence, I said Strems troubles were far from over.
For starters he still faces a contempt of court allegation from the Florida Bar for violating the terms of the emergency suspension of his license. (see Part IV ½-Update)
Worse, perhaps, are at least two other suits. One, a civil-RICO action by Citizens implicating Contender Claims Consultants (CCC), a public adjusting firm which allegedly “acted individually and in concert with Strems…” to create “false and fictitious invoices of services…” and much, much more (See Part II-paragraphs titled The Puppet Masters).
The other is Ortiz v The Strems Law Firm where, again, public adjusters and miscellaneous “feeders” solicit homeowners to sign iPad’s without explaining it’s for legal representation by the Strems firm. (see Part I)
Now comes the sequel.
On November 24, The Florida Bar filed additional charges against Strems alleging “A Pattern of Deceit and Solicitation” and stating that, for years, “Strems Consultants” pretended to be public adjusters “or some other manner of insurance professional…whose purpose it was to conscript business into his firm.” These “consultants” signed up homeowners using a “cell phone or electronic tablet” resulting in a “purported attorney-client relationship with counsel not of their own choosing.”
This latest allegation by the Bar arrives in time to be considered before the Supreme Court rules on whether to accept or amend the two-year license suspension, still pending from the original disbarment proceeding. Thus, it’s possible it could influence deliberations to accept or amend that so called light sentence. We’ll see.
More pertinent is that in addition to the two suits above (Citizens v. Strems and Ortiz v. Strems Law firm; see NOTE #1 below), the Bar’s latest action also references yet another action against Strems and Contender Claims, this one by the Department of Financial Services (DFS). It’s a petition to enforce a subpoena needed to investigate alleged violations of licensing and solicitation statutes by Contender Claims and other persons named: Guillermo Saavedra, Nicola Faride Grados and Miguel Angel Grados. (See NOTE #2 below)
Keeping score? That’s three separate actions, each with remarkably similar allegations, in addition to one pending contempt allegation–all involving one firm.
A mess for sure but instructive. (See NOTE #3 below)
Keep in mind, nobody is really certain how many firms and how many public adjusters and so called “loss consultants” are in cahoots and with whom. But, if just half of what’s reported here is true, and just one firm can usher nearly 10,000 suits simultaneously, then Florida’s property market could be the most corrupt insurance system in America, in my opinion.
There’s little reason to believe that the multiple players in Strems sphere were only engaged with Strems. Other trial lawyers have provided credible information of PA’s promising hundreds of claims in exchange for a piece of any global settlement reached with an insurer. This, in violation of the PA fee statute Fs. 626.854(10) and Bar rules regarding the sharing of attorney fee’s with non-attorneys . (See NOTE #4 below).
Take a look at the case of Geyer, Fuxa, Tyler vs. Zevuloni. Here a law firm was asking the court to compel a public adjuster to endorse a claim check made out to the firm so it can distribute funds from a Global Settlement to all the parties, including the public adjuster. But the PA refuses to sign the check citing various reasoning’s in support of his fee being calculated as a percentage of the Global Settlement check. The law firm argues that paying the PA out of its fees would violate Rule 4-5.4 of the Florida Bar which “prohibits attorneys from sharing legal fees with a non-lawyer.” (See NOTE #5 below)
Now back to Strems.
After telling the court who the participants are in Strems’ “scheme,” the Bar also tells us why it’s so successful…
“…respondent’s solicitation scheme ensnared a wide swath of disadvantaged persons, including the elderly, immigrants, and people of humble means and education… these individuals generally lack sophisticated knowledge of the law and insurance litigation. The solicitation scheme targets such disadvantaged individuals because they are unlikely to recognize the impropriety of the scheme…The totality of the facts and circumstances paints a clear picture of a law firm designed to keep clients blindfolded to the unethical conduct of … SLF.”
For another look at what Strems alleged victims experienced see the article by Ron Hurtibise for the Florida Sun Sentinel titled “How a ‘shady’ insurance lawyer sucked homeowners into his alleged ripoff scheme.”
Keep in mind we’re not talking civil complaints and ethical missteps here. If the Bar’s allegations are true, laws have been broken. Crimes have been committed. Solicitation of a claim by someone other than a licensed public adjuster is a felony. Submitting a false or misleading statement about a claim to an insurance company is also a felony. Paying someone to get someone to seek legal assistance or to file suit is also illegal. (See NOTE #6)
But, legal or not it’s all disgusting! Too much money. Too much greed. Too many advantage takers scheming for a piece of someone else’s pie.
And…too much reluctance by policymakers to put an end to it.
Stay tuned, as I’m sad to say there’s more to come.
##end##
NOTE #1: An end note in the Bar’s November 24th complaint states: “The quoted allegations from the Ortiz Lawsuit significantly overlap with those in Citizens Prop. Ins. Corp. v. The Strems Law Firm, P.A., et al., Case No. 2020-CA-001156 in the Circuit Court of the Second Judicial Circuit in and for Leon County, Florida (the “Citizens Lawsuit”). The Citizens Lawsuit alleges a RICO-style conspiracy between respondent, SLF, and certain Strems Consultants, which included the solicitation of clients as described in this Complaint. However, the Citizens Lawsuit was not yet filed at the time that the underlying reports were prepared for the grievance committee. Accordingly, the Citizens Lawsuit did not form a basis for the probable cause findings in this case. The Florida Bar nonetheless maintains that the Citizens Lawsuit is contextually relevant to these proceedings.”
NOTE #2: You can read the entire DFS petition here. It contains a general description of five attempts to visit Contender Claims, investigate potential code violations and/or serve subpoena’s. But, for a more street level view scroll down and read between the lines of Exhibit 7, an affidavit from investigator Christopher McGuire.
NOTE #3: For interesting details on the Strems “scheme” read beginning on page 5, paragraphs a. thru h. of the Bar’s November 24 allegation . Then, scroll to paragraph 32 under the title “Hirestremslaw.com” and learn how “various deceits were employed to secure the homeowner signatures, and in some cases those signatures were allegedly forged.”
NOTE #4: While not easily deciphered, at least not by this author, an opinion from the Florida Bar (39873) addresses the issue of “the propriety of a law firm accepting referrals from a public adjusting company and protecting the adjuster’s interest in the recovery” and found that a “number of ethical problems existed.” It was also stated that “Opinion 92-3 holds that such an arrangement constitutes improper fee splitting with a non-lawyer” and that the attorney “…could be aiding the Public adjuster in the unlicensed practice of law if the adjuster was settling claims with a tortfeasor’s insurance company.” See last page (p.21) paragraph 2 of Request for Ethics Opinion Regarding A Public Adjuster’s Fees in Homeowner Insurance Litigation Matters.
NOTE #5: Sources told me this case has settled and that no one wanted “…an opinion…that would make it abundantly clear public adjusters cannot charge a percentage on a global settlement.” I sent the case to DFS to inquire if such would be a code violation.
NOTE #6: It’s not likely that Scot Strems would be charged with a crime, but…it’s possible. Lesser known but no less applicable in matters such as these are the following two statutes: Fs. 877.01 and Fs. 877.02. I requested and received an analysis from Citizens legal department, of these two sections and also offer the following redacted analysis.
- “Whoever…offers…anyone…any valuable thing whatsoever…for the purpose of…influencing… others…to bring suit, or seek professional legal services or advice, shall be guilty…”
- “Whoever…receives or accepts…any valuable things whatsoever…with the intent or purpose of…influencing…others…to bring suit, or seek legal services…shall be guilty…”
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