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Firm Hit in ‘Windfall’ Settlement

Posted Aug 9, 2007 6:54 AM CDT
By Debra Cassens Weiss

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Updated: A Florida appeals court affirmed a ruling vacating a $7 million "windfall" settlement and disgorging attorney fees in an opinion that chastised the law firm that represented the plaintiffs.

The law firm, Adorno & Yoss of Coral Gables, obtained the settlement for seven plaintiffs who challenged the constitutionality of a fee for fire services in a suit against the city of Miami. The appeals court said the plaintiffs and the firm breached their fiduciary duty to an implied class of other Miami residents whose suit was foreclosed by the statute of limitations, the Daily Business Review reports.

The law firm had argued no class had been certified at the time of the settlement, and so the plaintiffs could settle their claims without a fairness hearing or judicial approval.

The appeals court disagreed, noting that the firm had previously stated it intended to pursue the case as a class action. Failure to certify a class "cannot be used to circumvent or undermine a fiduciary relationship," the panel wrote in the Aug. 8 opinion. "It defies any bounds of ethical decency to view class counsel’s actions as anything but a flagrant breach of fiduciary duty."

Managing partner George Yoss told the Business Review the firm did not act improperly. "This is the first time that a court has found an implied duty to an uncertified class," he said.

The Miami Herald (reg. req.) also has a story on the ruling, "Judges: Miami fire-fee attorney acted reprehensibly."

(Originally posted at 6:54 a.m., central time.)

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