The law firm defending Boca Raton real estate mogul James Batmasian in several lawsuits filed by his ex-employees just emailed a letter to clients and friends, endorsing Batmasian’s business and urging clients to lease Batmasian’s commercial and residential properties.
The firm’s letter raised eyebrows among lawyers who are experts in legal ethics.
“Wholly inappropriate,” said Gerald Richman, a West Palm Beach lawyer who previously served as president of the Florida Bar and chair of the Bar’s professional ethics committee.
“Slimy and stupid,” added D. Culver “Skip” Smith, a West Palm Beach lawyer, former Florida Bar board member and expert in representing attorneys in ethical matters. “I’m pretty sure the Florida Bar and the (state) Supreme Court could find one or more rules to hang a violation on.”
Both lawyers say they’ve never heard of a law firm endorsing and marketing a client to others.
In the Aug. 25 emailed letter, partner George Sigalos urged his clients to lease from Batmasian’s “huge inventory” of commercial and residential properties in Palm Beach and Broward counties.
“I have personally known the owners, Jim and Marta Batmasian, for many years. I would highly recommend them and their company to all clients and friends,” Sigalos wrote.
The Batmasians own Investments Limited in Boca Raton. They are the largest private owners of downtown commercial property in Boca and own the Royal Palm Place shopping center.
James Batmasian is a felon who pleaded guilty and went to federal prison in 2008 for failing to pay $253,513 in withholding income tax for employees.
Simon & Sigalos represents the Batmasians in several pending cases filed by former employees. Sigalos is the main lawyer handing the cases.
One case is a whistleblower case by a former comptroller who alleges the Batmasian real estate empire is a “financial crimes enterprise,” replete with bank, mortgage and tax fraud, and inflated tenant charges for common area maintenance, or CAM.
Another lawsuit is by a former agent alleging sexual harassment by Batmasian, whom she claims indicated he was romantically interested in her and also directed her to lease commercial space to people involved in the sex trade, so Batmasian could demand sexual favors from the tenants for him and his friends.
The third is a federal court case alleging unpaid overtime by an ex-employee who claims he received gift cards to Batmasian’s tenants instead of overtime pay.
The Batmasians have denied all the allegations. They say these ex-employees are trying to shake them down for money because they are rich.
The Sigalos letter prompted a blunt response from Sigalos’ longtime partner, Michael Simon, who said he was not consulted about the letter prior to it being sent.
“It’s not good. He shouldn’t have done it,” Simon said. “We’re not a marketing firm. Jim is a client.”
Simon added: “We’re defending Jim in all these lawsuits and this letter endorses the client and (seems to) take a personal interest in his business practices…” Simon said, his voice trailing off.
In fact, Simon & Sigalos represents lots of other property owners, not just Batmasian, Simon said.
Understandably, other clients were pretty steamed about seeing their law firm advocating for one particular client, Simon said. “It makes the clients look at us and think, ‘Whose side are you on?’ ”
Richman said the letter was a violation of the privacy of other Simon & Sigalos clients, whom he doubt gave their consent to be marketed to in this way.
Smith said the letter also lacks disclosure of Batmasian’s litigation history and felony conviction. He cited Florida Bar 4-8.4 (c), which prohibits a lawyer from “engag(ing) in conduct involving dishonesty, fraud, deceit or misrepresentation.”
Silence that misleads can fall within this category, Smith said.
“If someone relies on the recommendation and is harmed as a result of that reliance, a civil action for damages probably would be sustainable,” Smith said.
Making matters worse, the letter includes what sounds like a referral arrangement.
Sigalos wrote that anyone interested in commercial or leasing property can call Jim directly and “tell them that you were referred by George L. Sigalos, Esq. of Simon & Sigalos, LLP.”
Lawyers are allowed to receive real estate commissions, but Simon said he doesn’t permit the practice to take place at his firm.
So he’s not sure what Sigalos had in mind.
“I’ve got to ask George about that, if he’s getting a commission. On my letterhead,” Simon said unhappily.
Sigalos did not return a phone call and emails seeking comment.