Lawyer Who Abused System to Profit From Insurers Suspended from Practice
Lawyers, by definition, and their licensure, are required to act ethically to their clients, adverse parties, adverse counsel and to the courts where they practice. Some, however, act contumaciously, disrespect the court, disrespect their opposing counsel, disrespect the insurers who they sued, and disrespected their clients in search of unearned profit. As a result they breach the duty to act fairly and in good faith.
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, an attorney from practicing law in Florida. 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.
Strems’ firm was effectively accused by the Florida State Bar of engaging in “mendacious, bad-faith conduct” and making dishonest or even fraudulent statements to other parties involved in suits, including the court. The bar also accused Strems of illegally filing multiple lawsuits on an individual policy claim, delaying and ignoring court deadlines, and violating court orders.
A former associate of the Strem’s firm even testified it had filed more than 10,000 suits against Florida property insurance companies. Most were either ignored by the Strem’s firm or effectively used in attempts to defraud the insurance industry and the insurance buying public.
As a result of the contumacious conduct of the law firm and its lawyers as established by the emergency Petition, the Supreme Court of Florida, on Tuesday, June 9, 2020, CASE NO.: SC20-806, Lower Tribunal No(s)., 2018-70,119 (11C-MES); 2019-70,311 (11C-MES); 2020-70,440 (11C-MES); 2020-70,444 (11C-MES) issued the emergency suspension of the firm and ruled, as follows:
The Petition for Emergency Suspension filed pursuant to Rule 3-5.2 of the Rules Regulating the Florida Bar is approved and it is hereby ordered that Respondent is suspended from the practice of law until further order of this Court,and Respondent 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 al lclients, 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
8. 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.
The Court hereby authorizes any Referee appointed in these proceedings to determine entitlement to funds in any trust account(s) frozen as a result of an Order entered in this matter.
In the almost 53 years I have been involved in the business of insurance I have run into many unethical and some crooked lawyers. State Bar’s have done little to deal with these lawyers unless they were actually convicted of crimes of moral turpitude. Many, after being disbarred were allowed to return to the practice of law claiming they had been rehabilitated.
This action by the State Bar of Florida is extraordinary. It revealed a pattern of conduct by Mr. Strems and his firm causing numerous parties to be, and continue to be, injured by the his 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 Strems Law Firm’s (SLF) case load; Florida homeowners, whose insurance premiums ultimately fund both sides of SLF’s cases; and, of course, his 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. This may end up to be a case where an insurer can effectively sue an attorney for the tort of insurance bad faith.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and email@example.com.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts
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