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Florida Judge under Investigation for Allegedly Cutting Former Co-Counsel Out of $14.5 Million Deal

Broward County judge Laura Marie Watson is currently under investigation by Florida’s Judicial Qualifications Commission (JQC) over her involvement as an attorney in a $14.5 million settlement with Progressive Insurance in 2004. After years of disputes over the settlement, the Florida Bar began investigating the matter last year but the investigation into whether Watson violated Bar rules was stalled when she became a judge. The Bar investigation found probable cause that rules were broken, but the Bar lost jurisdiction to handle the case once Watson officially started her term as a judge.

In addition to the JQC investigation, Watson is also fighting a claim from her former co-counsel that they were purposely cut out of the deal. In addition to Judge Watson, attorneys Gary H. Marks, Amir Fleischer, Charles J. Kane, Harley N. Kane, Darin J. Lentner and the firms Marks & Fleischer PA and Kane & Kane, are listed as defendants in the suit. In an amended complaint filed in September, the plaintiffs allege that Watson and the attorneys who worked with her made a secret settlement in 2004 with Progressive Insurance over personal injury protection and bad faith claims. The deal was made without consulting the plaintiffs and cut them out of any attorney’s fees, according to the suit.

The plaintiffs are claiming breach of fiduciary duty, constructive fraud, constructive trust, fraudulent inducement and unjust enrichment and are requesting an unspecified amount of damages. The case from which the disputed settlement arose originated when Watson’s firm, Watson and Lenter, and two other firms, collectively solicited health care providers for PIP suits against Progressive Insurance. By 2002, the firms represented 440 health care providers with about 2,500 PIP claims for unpaid bills and associated attorneys’ fees against Progressive. That year, the firms collectively decided to pursue bad faith claims against Progressive as well and hired Stewart Tilghman Foz & Bianchi, William C. Hearon PA and Todd Stewart PA to handle these claims. According to the JQC investigation, a contract was entered into between the firms and which stipulated that clients would receive 60 percent of recovered funds and the attorneys’ fees would make up the other 40 percent. The bad-faith attorneys would receive 60 percent of the attorneys’ fees.

Over the next two years the bad-faith attorneys obtained favorable rulings against progressive, including a ruling requiring Progressive to disclose damaging internal billing records. In January 2004, the bad-faith attorneys started settlement negotiations with Progressive. Despite this, the JQC investigation uncovered that in May 2004 the PIP attorneys decided to secretly meet with Progressive and agreed upon a $14.5 million settlement. The settlement covered all PIP and current and future bad faith claims, even though the agreement was reached without notifying the bad faith attorneys or obtaining informed consent from their clients. The JQC also said that the settlement did not initially allocate any funds to the bad faith attorneys but they were later compensated in the amount of $1.75 million. Still, no funds were ever allocated to about 400 bad faith claim clients who were supposed to be covered in the settlement.

The Judicial Qualifications Commission will be tasked with determining whether Watson’s alleged conduct was serious enough to warrant removing her from the bench. In the event that she is removed, the Bar will be able to pick up its investigation where it left off.

The attorneys at Sibley Dolman Gipe Accident Injury Lawyers, PA are experienced in handling both PIP and insurance carrier bad faith claims. If you believe that your insurance company has wrongfully denied your claim for benefits or if you’re a medical provider having difficulty collecting PIP benefits contact the Sibley Dolman Gipe Accident Injury Lawyers, PA today at 727-451-6900.