GC Says Judges Are Being "Paid Off,
"Putting His Company on the Hot Seat

By Forrest Norman
New York Lawyer
Daily Business Review
April 20, 2007

United Automobile Insurance Co. has scrambled to distance itself from its general counsel's comment this week that judges in Miami-Dade County Court "are being paid off."

The insurer took out a full-page ad in the Daily Business Review in its public relations effort.

But at the same time, the insurer's lawyers are aggressively trying to remove one Miami-Dade County Court judge from all its cases, claiming she's biased against the carrier. In a new court filing to recuse Judge Jacqueline Schwartz, North Miami Beach-based United said it filed a complaint against her with the state Judicial Qualifications Commission.

While United general counsel Charles Grimsley also has been a public spokesman for the company, he said he knew nothing about the ad before a reporter told him about it during an interview Thursday. He did not deny making the comment.

"I was searching in my head for some explanation as to why there was this judicial hostility," he said. "It has to go beyond campaign contributions, which give the appearance that something like that is going on, but I don't think it's actually going on. I don't think there's any money changing hands."

Grimsley reiterated, however, that the state's 35-year-old PIP system -- whose fate currently is being decided by the Florida Legislature -- is rife with fraud. But he said, "I don't believe there is anything inappropriate going on between plaintiff attorneys and judges."

According to the most recent recusal motion submitted by Hialeah attorney Carlos Lidsky, the JQC complaint addresses Schwartz's conduct in a combative Jan. 12 hearing about attorney fees, in which Lidsky contends Schwartz showed bias against United. The filing asserts the JQC indicated privately that Schwartz's conduct was inappropriate.

No one from the JQC returned calls about the complaint. The commission is not allowed to comment on investigations that do not result in probable cause findings.

Miami-Dade Circuit Court spokeswoman Eunice Sigler said in a statement that Schwartz would not comment. "Judge Schwartz regrets that she is unable to provide comment at this time. The canons of judicial ethics prohibit judges from commenting on any pending case."

But Michael Tein, a Coconut Grove, Fla., attorney who has represented judges in JQC matters, said a motion to recuse based on a letter from the JQC was unusual and inappropriate.

"A litigant has no right to use the important shield of confidentiality the JQC affords complainants as a sword against a judge to get her recused, it's simply not appropriate," said Tein of Lewis & Tein. "The JQC does not disclose the identity of the complainant to the judge, at least not initially, so it's likely that this judge would never have known who had complained."

Lidsky, United's outside counsel, said he was "shocked" when he read critical comments by Grimsley about judges in a Daily Business Review cover story published Monday. That article described United's campaign to identify attorney billing fraud in Personal Injury Protection auto insurance claims filed by United policyholders and medical providers.

In the article, Grimsley contended that judges have not treated United fairly in the courtroom, and that he believed they were being "paid off," although he immediately admitted he could not prove it. At the same time, he acknowledged judges may be annoyed with his company because of its aggressive approach in challenging PIP claims and attorney fee requests, and because in the past United had too few lawyers handling too many cases.

The Dade County Bar Association has written a letter blasting Grimsley's comment about judges being paid off and criticizing the Review for publishing it. "The inclusion of an unsubstantiated quote directly attacking the integrity, independence and fairness of the trial judges of the Miami-Dade County Circuit and County Courts is reprehensible," bar association president Merrick L. Gross wrote.

Lidsky confirmed an attorney from his firm drove to the Coral Gables branch of the county court to hand-deliver a letter of apology to County Court Judge Lawrence King. The Review article identified King and Schwartz as two judges who handle a large number of PIP cases, including its attorney fee challenges.

"It was especially painful to see those comments in a story that featured Judge King," Lidsky said. "We greatly respect Judge King's fairness and intellect. And we don't condone any comments about any judges being paid off."

In addition, United purchased a full-page ad in Friday's Review repudiating Grimsley's comment. Without naming Grimsley, the ad said his statement "does not remotely reflect the opinion of United Automobile Insurance or any of its defense attorneys." It also said Grimsley's statement was not authorized by the company or any of its defense attorneys.

United chief executive Richard Parrillo Sr. did not return calls for comment.

Daily Business Review Editor in Chief David Lyons stood by the inclusion of Grimsley's quote in the Monday article.

"It is not the role of the news media to censor the comments of newsmakers, particularly those of individuals who are at the center of a controversy," Lyons said Thursday. "As general counsel of United Auto Insurance, Charles Grimsley is one of those individuals. His comments were highly newsworthy and placed in the context of his company's dispute with the judges and opponents in court."

United and other auto insurers are pressing lawmakers to let the PIP system sunset in October. But plaintiffs attorneys, medical providers and consumer advocates urge that some mandatory coverage system for auto accident victims be continued because a large percentage of Floridians have no other health insurance coverage.

United purchased 500 copies of the Monday edition of the Review containing the story about its campaign against attorney billing fraud. United spokesman Don Silver said the insurer planned to distribute the article to every member of the Legislature.

Earlier this year, United hired Lidsky's law firm, Lidsky Vaccarro & Montes, to investigate the fee requests of lawyers who represent PIP claimants and medical providers. These requests are submitted by lawyers after they successfully challenge a United denial of a PIP claim by a policyholder or medical providers.

United has filed thousands of cases over the past several years in Miami-Dade and Broward counties challenging PIP claims, incurring the anger of many judges, consumer advocates and policyholders.

In 2004, the state Office of Insurance Regulation fined United $75,000 for failing to report a high percentage of PIP claims United said were fraudulent. The office said that if the carrier really discovered that much fraud, it was negligent in not reporting it to the state.

The Lidsky firm has been trying to remove Judge Schwartz from all United cases since a Jan. 12 hearing regarding a fee request by Coral Gables attorney George David.

On Jan. 16, Lidsky filed a motion for recusal, citing Schwartz's behavior during the Jan. 12 hearing as evidence of "pre-disposition, prejudice and bias" against United.

Schwartz denied that motion. Lidsky then filed a petition for writ of prohibition, again asking to remove Schwartz from United's cases. That petition was referred by Circuit Judge Ronald Friedman, the administrative judge, to an appellate panel. The petition is pending.

On Monday, Lidsky filed an emergency second motion for recusal of Schwartz, this time with fresh ammunition. The motion quotes a purported letter from the JQC, which is not included in the filing. The motion states the JQC conducted a preliminary investigation into Lidsky's charges that Schwartz treated United's attorneys unfairly.

Lidsky argued in his new motion that the JQC complaint and the resulting "appropriate action" by the JQC make it impossible for Schwartz to give the company a fair hearing in her court.

According to court filings, Lidsky objected to Schwartz's behavior from the outset of the first hearing he had before her.

When Lidsky told Schwartz he might need longer than 15 minutes to conduct the hearing about a fee request, the filing stated, Schwartz told him: "I don't do longer hearings, I don't need longer hearings."

The contentious exchange continued, as Lidsky and his partner Juan Montes continually scrapped with the judge over the amount of time they were taking, the relevance of evidence, and whether or not they were acting in good faith.

Lidsky's emergency motion to recuse Schwartz mentions his JQC complaint against Schwartz filed "shortly following the [Jan. 12] hearing."

Lidsky declined to comment on the complaint. But here's what the motion said about the JQC's response to the complaint:

"Undersigned counsel and United Automobile Insurance Company have been, by correspondence dated April 10, 2007, officially informed and reassured that, while no probable cause finding resulted from the complaint (that is reserved for extremely egregious and not remediable conduct) the Judicial Qualifications Commission has (solely from the record and without the necessity for further investigation) taken 'appropriate action' which has clearly and permanently cast the Court in a negative light. Despite its confidentiality, it is clear and undeniable that the Judicial Qualification Commission's determination in this case was not favorable to this Honorable Court."

JQC executive director Brooke Kennerly said she couldn't comment on Lidsky's complaint. The JQC, she said, does occasionally contact judges about complaints, even complaints that don't merit an investigation, and sometimes speaks to the judges about the issues raised.

"Sometimes if a complaint doesn't rise to the level of probable cause, the commission will contact a judge to explain the canons to them or warn them about doing something," Kennerly said.

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