FLORIDA SUPREME COURT

Judicial Ethics Advisory Committee

Opinion Number: 2006-31
Date of Issue: December 13, 2006

ISSUE

May a judge and the judge’s former law partner continue to maintain a partnership account after the judge assumes office, for purposes of receiving fees due the partnership for work done before the judge’s election?

ANSWER:Yes, so long as the partnership has been formally dissolved, maintenance of the account is solely for purposes of winding up partnership business, the account is closed within a reasonable time, and the two former partners perform no professional services after the judge assumes office.

FACTS

The inquiring judge-elect will soon assume office.  Prior to election the judge was in a two-person partnership that accepted many court-appointed (indigency) cases.  Compensation for services in such cases is the responsibility of the Justice Administrative Commission (JAC), an agency established by § 43.16, Fla. Stat.  Apparently JAC has exhausted its funding for 2006, and has announced it will pay no more outstanding bills this year.  The inquiring judge’s partnership currently has “significant billing outstanding with the JAC” which is not likely to be paid until “early 2007,” that is, after the judge assumes office. 1 The judge anticipates the partnership will also have been dissolved by this date.  The judge understandably wants the compensation but does not want to run afoul of any ethical restrictions arising from the post-investiture handling of these moneys.

DISCUSSION

Subtending the judge’s inquiry is the mandate that sitting 2 judges cannot practice law.  Art. V, § 13, Fla. Const. (incorporated into the Florida Code of Judicial Conduct at Canon 5G).  What the inquiring judge wants to do is not, in and of itself, practicing law.  Even after assuming office a judge is entitled to collect compensation for past services rendered as an attorney.  Fla. JEAC Op. 89-1.  It may even be necessary in some cases, and is acceptable, to testify at a fee hearing.  Fla. JEAC Op. 90-4.  Rather, the judge’s ethical concerns revolve around how the money should be handled once JAC gets around to paying it because the checks will be made out to the partnership.  The judge is correct to question the propriety of keeping open a partnership account even if done solely to process these fees.  For example, in Fla. JEAC Op. 05-08, this Committee expressed the belief that a new judge should not leave a client trust (IOTA) account open even if the account handles only funds deriving from work performed before assuming office. 

Opinion 05-08 invokes several separate ethical considerations.  For purposes of this discussion the primary concern is that keeping the trust account open would require the judge to maintain a separate business identity, giving at least the appearance of continuing a law practice.  As this implies, and Fla. JEAC Op. 05-19 flatly states, the term “practice law” is interpreted broadly. 3  Even so, this Committee concludes that the present case is distinguishable from opinion 05-08.  Our opinion is based on both the nature of the judge-elect’s business relationship and of the account used for that relationship.

A sole practitioner would not face the dilemma our inquiring judge confronts, nor would a law firm in which the attorney is an employee rather than a shareholder.  Rather, this ethical quandary should occur only when the judge-elect holds an interest in a partnership, professional service corporation, or similar entity.  We acknowledge that not even a sitting judge is absolutely prohibited from private business dealings. 4  Instead, Canon 5D cautions against financial activities which may be perceived as exploiting the judicial position, or which will involve the judge with lawyers and other persons who might come before the court on which the judge serves. 5  Where the judge-designate has enjoyed the benefits of a professional services corporation whose stated purpose is providing legal services, such ownership must not continue after assuming office.  However, as Fla. JEAC Op. 06-01 notes, § 621.13(4), Fla. Stat., allows such a corporation to “change its business purpose from the rendering of professional service to provide for any other lawful purpose by amending its certificate of incorporation,” in that particular instance to permit a judge to continue owning and operating the building in which the judge practiced law.  A new account, albeit in the same corporate name, should accompany this change.  Id. 

Partnerships, which are governed by Chapter 620 rather than Chapter 621, are also distinct legal entities but with a twist.  According to § 620.8802(1), Fla. Stat., the demise of a partnership does not necessarily occur instantaneously because the partnership “continues after dissolution only for the purpose of winding up its business” and, technically, is “terminated [only] when the winding up of its business is completed.”  Thus the inquiring judge and the judge’s partner should formally dissolve their partnership prior to inception of the judge’s term, then allow it to die a natural death – during which the money from JAC may be received and distributed with no active “practice” by the judge.

REFERENCES

Cases: Matter of Scott, 386 N.E.2d 218 (Mass. 1979).

Florida Constitution:  Art. V, § 13.

Florida Statutes: Chapters 620 & 621,  and sections 43.16, 620.8802(1) & 621.13(4).

Florida Code of Judicial Conduct: Canons 5D,  5D(3) & 5G.

Florida Judicial Ethics Advisory Committee Opinions: 06-01, 05-19, 05-08, 04-06, 00-39, 93-19, 90-04, 89-01.

_____________

The Judicial Ethics Advisory Committee is expressly charged with rendering advisory opinions interpreting the application of the Code of Judicial Conduct to specific circumstances confronting or affecting the judge or judicial candidate. Its opinions are advisory to the inquiring party, to the Judicial Qualifications Commission and the judiciary at large. Conduct that is consistent with an advisory opinion issued by the Committee may be evidence of good faith on the part of the judge, but the Judicial Qualifications Commission is not bound by the interpretive opinions by the Committee. Petition of the Committee on Standards of Conduct Governing Judges, 698 So. 2d 834 (Fla. 1997). However, in reviewing the recommendations of the Judicial Qualifications Commission for discipline, the Florida Supreme Court will consider conduct in accordance with a Committee opinion as evidence of good faith. Id.

 

For further information, contact Robert T. Benton, II, Chair, Judicial Ethics Advisory Committee, 301  S. MLK Jr. Blvd. Tallahassee, FL 32399.

Participating Members:
Judge Robert T. Benton, II, Judge Michael Raiden, Judge Lisa Davidson, Judge McFerrin Smith, Judge Leslie B. Rothenberg, Judge Emerson R. Thompson, Jr., Judge Richard R. Townsend, Judge Dorothy Vaccaro, Judge Jose Rodriguez, Judge T. Michael Jones, Marjorie Gadarian Graham, Esquire & Patricia E. Lowry, Esquire.


Copies furnished to:
Justice Peggy Quince
Thomas D. Hall, Clerk of Supreme Court
All Committee Members
Executive Director of the J.Q.C.
Office of the State Courts Administrator
Inquiring Judge (Name of inquiring judge deleted from this copy)

1. The standard contract used by JAC clearly provides that payment is made to the business entity (firm, partnership, etc.) and not the individual attorney (unless, of course, a solo practitioner) who handles a given case.  The contract further states that it terminates automatically upon an attorney’s “change of affiliation.”  Once JAC has paid, the proceeds presumably will be allotted privately using whatever formula the entity employs for individual compensation.  For further information the interested reader is referred to the JAC’s web address, www.justiceadmin.org.

2. Obviously a judge-elect or appointee may need gainful work until the judicial term actually commences.  Accordingly, judges-designate may keep practicing, but are strongly encouraged to devote most of their energy to winding up pending matters.  Fla. JEAC Op. 00-39

3. For an extreme example, see Matter of Scott, 386 N.E.2d 218 (Mass. 1979), in which a judge was reprimanded for allowing her name to remain listed in the “white pages” as an attorney, even though she had ceased active practice. 

4. Canon 5D(3) does prevent a judge from serving as a corporate officer, employee or partner of any business entity that is not a closely-held family business or one primarily engaged in investing the judge’s money.  In the view of this Committee the inquiring judge will not violate this section because the business arrangement is intended to expire as soon as possible and is intended to do nothing more than distribute money already earned – arguably a form of “investment of financial resources.”

5. The latter proviso seeks to avoid frequent disqualifications of the judge and the judge’s colleagues.  This is not likely to pose a problem in the present case because, for a reasonable period of time, the inquiring judge will, in any event and unrelated to the fee issue, be disqualified from hearing the former partner’s cases.  As Fla. JEAC Op. 04-06 notes, the duration of such automatic disqualification is based on circumstances rather than a fixed date, though apparently a one-year period has been viewed by some authorities as customary.  See also Fla. JEAC Op. 93-19.  If JAC compensates the inquiring judge in 2007, that custom will have been honored.  Certainly the period of disqualification for the inquiring judge should not terminate until after the JAC moneys have been disbursed to the respective former partners.