Money rain. Photo: MVelishchuk/Shutterstock.com. David Efron, who has law offices in Coral Gables and Puerto Rico, had been hit with a $9.7 million arbitration award after failing to show up. Photo: MVelishchuk/Shutterstock.com.

A personal injury and medical malpractice attorney hit with a $9.7 million arbitration award has secured a reversal after Florida's Third District Court of Appeal found he should have been granted a postponement when his lawyer cited "irreconcilable differences" and withdrew from the case.

The dispute began in January 2017 when UBS Financial Services Inc. of Puerto Rico moved to arbitrate against attorney David Efron.

Efron operates the Law Offices of David Efron Law, which has attorneys in Coral Gables and Puerto Rico. He is licensed to practice in Puerto Rico, New York and the District of Columbia.

While Efron was in the midst of a long-running divorce proceeding, UBS released money to him that later became subject to a judgment for his ex-wife. After years of litigation and millions in attorney fees, UBS settled a lawsuit with Efron's ex-wife, then looked to him for indemnification.

Efron asked for a postponement 11 days before arbitration was scheduled, when his attorney Lloyd Schwed of Schwed Kahle & Kress in Palm Beach Gardens withdrew. Efron asked for 60 days to retain new counsel, but the arbitration panel denied his request without explanation. Efron failed to appear, and in his absence, the panel sided with UBS.

Miami-Dade Circuit Judge Pedro Echarte Jr. then denied Efron's request to vacate the award.

But the appellate court disagreed.

It's usual for an appeals court to overturn an arbitration award, as speed and finality are key. This leaves just four avenues for appeal: corruption, bias, misconduct or overstepping power. This case fell under the misconduct umbrella, as the arbitration panel refused to postpone a hearing without sufficient cause, depriving Efron of a fair hearing, the panel concluded.

Read more: Have Lawyers Ruined Arbitration?

Though the arbitration panel gave no explanation for denying Efron's motion, UBS argued the attorney had already been denied a postponement over a calendar mix-up. It alleged he tried to hamper proceedings by not paying legal fees to Schwed.

But the court found insufficient record evidence to support that.

Schwed said attorney-client privilege prevented him from saying why he had withdrawn, but he said he agrees with the ruling.

"Even though I had irreconcilable differences with Mr. Efron at that time, I think the panel really should have granted him a reasonable extension of time. Aand I think that was an abuse of their discretion," Schwed said. "I was very surprised that the Third DCA had the courage to do the right thing."

He described the underlying arbitration as bizarre, and said Efron told him the divorce proceeding was the most protracted in Puerto Rico's history.

"I guess bad divorces lead to strange events," Schwed said.

Efron's appellate lawyer, Leslie Rothenberg of the Ferraro Law Firm, said Efron had claimed Schwed demanded an advance of more than $100,000 to represent him at the hearing.

Rothenberg is a former chief Third DCA judge, and the case was her first oral argument before the appellate panel since transitioning back to private practice in 2019.

In her view, Efron's plight demonstrates a crucial difference between arbitration and litigation, where a court can deny an attorney's request to withdraw if it's too late.

"When it's an arbitration proceeding, the arbitrator has no authority over lawyers," Rothenberg said. "A lawyer just files a motion that he or she has withdrawn, and that's it. There's no control over that. It leaves the client completely unprotected."

Ironically, Rothenberg pointed out that granting the continuance would have saved the arbitration panel time.

"It would have been no big deal. If they didn't want to give him 60 days, they wanted to give him 30, then he would have had to comply with that. But they didn't give him any time," Rothenberg said. "And it was kind of amazing that UBS would have been arguing against a short delay like that, when they spent many years litigating with the ex-wife over whether or not they had to pay her for their own negligence."

Counsel to UBS, Alex Sabo of Bressler, Amery & Ross in Miami and Christopher Manning and Michael Fishman in Washington, D.C., did not respond to a request for comment by deadline.

Third DCA Judge Thomas Logue wrote the ruling with Judges Edwin A. Scales III and Monica Gordo.

 

Read the ruling:

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