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IN THE CIRCUIT COURT OF THE
FIFTEENTH JUDICIAL CIRCUIT, IN
AND FOR PALM BEACH COUNTY,
FLORIDA.
CASE NO. 502009CA040800XXXXMB
JEFFREY EPSTEIN,
JUDGE: HAFELE
Plaintiff/Counter-
Defendant,
v.
SCOTT ROTHSTEIN, individually and
BRADLEY J. EDWARDS, individually,
Defendant/Counter-
Plaintiffs.
PLAINTIFF/COUNTER-DEFENDANT JEFFREY EPSTEIN'S MEMORANDUM
OF LAW REGARDING ETHICAL ISSUES RAISED BY
DEFENDANT/COUNTER-PLAINTIFF BRADLEY EDWARDS REGARDING
ACCEPTANCE OF EPSTEIN'S PROPOSAL FOR SETTLEMENT
Plaintiff/Counter-Defendant Jeffrey Epstein (hereinafter "Epstein"), by and
through his undersigned counsel and pursuant to this Court's request on December 6,
2014, hereby files this Memorandum of Law regarding Defendant/Counter-Plaintiff
Bradley Edwards's (hereinafter "Edwards") Opposition to Epstein's Motion for
Attorneys' Fees and Costs on the issue of "Ethical grounds" and states:
INTRODUCTION
On June 2, 2014, Epstein filed his Motion for Attorneys' Fees and Costs pursuant
to §768.79 of the Florida Statutes and Rule 1.442 of the Florida Rules of Civil Procedure
(hereinafter "Epstein's Motion"). On June 26, 2014, Edwards filed his Response in
Opposition to Epstein's Motion for Attorneys' Fees and Costs, incorrectly asserting
therein that Epstein's Proposal for Settlement (hereinafter the "Proposal") failed to
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comply with the requisites delineated in both §768.79 of the Florida Statutes and Rule
1.442 of the Florida Rules of Civil Procedure. (hereinafter "Edwards's Opposition")
Specifically, in Edwards's Opposition, Edwards posed two arguments to support his
assertion that Epstein's Proposal was invalid; to wit: "[t]he Proposal is invalid because
Epstein failed to explain material terms of the confidentiality clause, and its
implications;" and that Epstein "cannot prove he has beaten or even equaled his
Proposal." See Edwards's Response in Opposition to Plaintiff/Counter-Defendant's
Motion for Fees and Costs (hereinafter "Edwards's Opposition"), pp. 5- 6. Epstein
addressed both arguments in his written reply, aptly demonstrating that the Proposal fully
complied with all requirements of the Florida Statues, the Florida Rules of Civil
Procedure and applicable case law, mandating that the Court grant Epstein's Motion for
attorney's fees and costs. See Plaintiff/Counter-Defendant Jeffrey Epstein's Reply to
Defendant/Counter-Plaintiff Bradley Edwards's Response in Opposition to
Plaintiff/Counter-Defendant's Motion for Attorney's Fees and Costs (hereinafter
"Epstein's Reply").
At the hearing on this matter on December 6, 2014, for the first time, Edwards
attempted to persuade the Court that "the circumstances under which this proposal for
settlement were made made it absolutely unethical for Brad Edwards to have accepted
this proposal for settlement." See Transcript of Hearing on Epstein's Motion for Fees
and Costs, p. 14; line 24-p. 15; line 2 (hereinafter "Transcriptil. Edwards argued that he
Edwards also raised the issue of Edwards's pending appeal of the summary judgment ordered in the
instant case, which is premised on Wolfe v. Foreman. 128 So. 3d 67 (Fla. 3d DCA 2013). However, as the
Court noted, Edwards has made no motion to stay this matter pending his appeal. Moreover, on October
28, 2014, the First District Court of Appeal in the case of Steinberg v. Steinberg, in a decision also
premised upon Wolfe v. Foreman, affirmed the trial court's decision that the litigation privilege precludes a
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ethically could not sign the Settlement Agreement and Release attached to the Proposal
thereinafter the "Release") because it contained a confidentiality provision, which,
according to Edwards, "would have been imposing an unethical restriction upon his legal
obligations to existing clients." Transcript, p. 17; lines 7-10.
Edwards's ethical argument is entirely without merit. Edwards rejected the
Proposal, not because of some ethical conundrum, but because he felt that the $300,000
offered was unacceptable. Indeed, as confirmed by Mr. Scarola at the December 6, 2014
hearing, Edwards characterized this offer of hundreds of thousands of dollars as
"nominal" and refused to settle for that amount because "this case was proceeding on the
basis of both compensatory and punitive damages against a billionaire . . ." Transcript, p.
24, lines 18-23. As more fully explained below, Edwards's eleventh hour assertion of an
ethical issue (I) is contrary to the clear ethical guidance from the Florida Bar, (2)
provides no legal basis for his opposition to Epstein's motion, and (3) is simply a last
ditch effort by Edwards to invalidate the Proposal after he gambled and lost, causing the
needless waste of judicial resources, fees and costs in the process, which he continues to
this day even after the decision directly on point was handed down in Wolfe v. Foreman,
128 So. 3d 67 (Fla. 3d DCA 2013), and recently again in Steinberg v. Steinberg, 2014 WL
5460437 (Ha. la DCA 2014)
MEMORANDUM OF LAW
The clients to whom Edwards purports to owe the ethical obligations claimed in
the instant case are two plaintiffs in the matter of Doe v. United States, 08-80736-CIV-
civil claim for malicious prosecution, 2014 WL 5460437, rendering the merits of Edwards's appeal
questionable at best.
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MARRA (hereinafter the "CVRA case"). At the hearing on December 6, 2014, Edwards
asserted that Edwards could not accept the Proposal because it required him to sign and
comply with the Release containing a confidentiality provision, which would create
conflicts of interest in his representation of these clients. This is simply untrue.
As more fully explained below, express guidance from the Florida Bar establishes
that accepting the Proposal would have created no such conflicts of interest. If anything,
accepting the Proposal would have eliminated any such ethical concerns by ending the
instant lawsuit and any purported impact it might have had on Edwards's representation
of his clients, as Edwards moved forward in the CVRA case. To the extent that Edwards
believed that any conflict of interest existed, it would have been created by Edwards,
himself, over a year and half prior to the date of the Proposal, when Edwards commenced
his lawsuit against Epstein. At the time of filing his lawsuit, Edwards had the
opportunity to make full disclosure to his clients regarding the same, including the
possibility of his receiving substantial compensation in settlement of the lawsuit. Had
such disclosure been made, subsequent disclosure after acceptance of the Proposal of the
fact of the settlement, which disclosure was permitted by the Release, would have been
more than sufficient to dispel any concerns Edwards claims to have had. Finally, by the
very terms of the confidentiality provision, Edwards could always have received
authority to make disclosures "by valid order of a Court of competent jurisdiction" at
any time he felt it necessary to avoid a conflict of interest. Under the circumstances
Edwards's purported conflict of interest is a fiction and provides no basis for him to
invalidate the Proposal.
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I. An Ethical Issue Does not Exist With Regard to the Confidentiality
Agreement
Edwards first claims that he could not ethically accept the Proposal because the
Release contained a confidentiality provision compliance with which, according to
Edwards, would violate his ethical duty to disclose this settlement to his clients in the
CVRA case. See Transcript, p.19; line 19-p.20; line 2. While there is no case directly on
point, there is an ethics opinion from the Florida State Bar Association Committee on
Professional Ethics that clearly rejects any such purported ethical violation. In FL. Em.
OP. 04-2, 2005 WL 4692972 (Jan. 21, 2005), a member of The Florida Bar requested an
advisory opinion regarding a provision that the opposing party in a securities litigation
wanted to include in a settlement agreement. The relevant portion of the provision at
issue in the ethics opinion provided:
Other than discussions between the parties, their immediate families,
their respective attorneys, accountants, government officials, and self-
regulatory bodies such as the NASD, all parties and their attorneys and
agents agree, acknowledge and consent that they shall not in any
method or manner discuss, publish, or disseminate any information
concerning the settlement or the terms of this Release with any other
party not specifically authorized by this Release to receive such
information.
Id. at *I (emphasis added). The inquiring attorney asked for "a formal opinion as to
whether he may ethically enter into an agreement containing this provision." Id. at *2. 2
The Florida Bar stated that Rule 4-5.6 of the Rules Regulating the Florida Bar
was applicable. That Rule states in pertinent part that "[a] lawyer shall not participate in
offering or making: (b) an agreement in which a restriction on the lawyer's right to
2 If Edwards desired to accept the Proposal, but had genuine ethical concerns, like the attorney in this ethics
opinion, Edwards also could have sought an advisory opinion within the time permitted to accept or reject
the Proposal.
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practice is part of the settlement of a client controversy." R.REG. FLA. BAR 4-5.6. The
Bar stated: "[t]o the extent this clause is merely a confidentiality agreement as to the
terms of the settlement it does not pose an ethical problem, provide[d] there is no
legal prohibition against confidentiality of a particular settlement. The clause at issue
makes only the terms of the settlement and release itself confidential. Such
confidentiality clauses have typically been determined not to violate ethics rules."
Id. at *6 (emphasis added). See also Lee v. Florida Dept of Ins. & Treasurer, 586 So. 2d
1185 (Fla. 1st DCA 1991) (stating that to use this Rule for the purpose of invalidating a
private contractual provision is beyond its scope and purpose and constitutes error). 3
Similarly, in the case at hand, Epstein's confidentiality clause provided that
Edwards "agree[s] not to disclose the details of this release in settlement of all claims,
including the nature or the amount paid and the reasons for the payment, to any
person other than my lawyer, accountant, income tax preparer, or by valid order of a
Court with competent jurisdiction whether directly or indirectly." See Plaintiff/Counter-
Defendant Jeffrey Epstein's Proposal for Settlement to Defendant/Counter-Plaintiff
Bradley J. Edwards, Individually, attached to Epstein's Motion as Exhibit A (emphasis
added). Just as the confidentiality clause in FL. ETH. OP. 04-2, 2005 WL 4692972 (Jan.
21, 2005), Epstein's confidentiality clause was "merely a confidentiality agreement as
to the terms of the settlement" and made "only the terms of the settlement . . .
confidential." Id. at *6. Accordingly, the confidentiality provision in the Release "does
not pose an ethical problem" as established under the Rules Regulating the Florida Bar.
Id. at *6.
3 Regarding the reference in this quotation to a legal prohibition against confidentiality, see, e.g.; Fla. Stat.
69.081 (Sunshine in Litigation Act which prohibits judgments, agreements and contracts that have the
effect of concealing a public hazard).
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Upon examination of Edwards's claimed conflict of interest in the instant case,
the wisdom of The Florida Bar's opinion is apparent. Under the relevant provisions of
Rule 4-1.7(a) of the Rules Regulating the Florida Bar, a conflict of interest exists in the
representation of a client "if there is a substantial risk the representation will be
'materially limited' by the lawyer's own personal interests." The Florida Bar v.
Roberto, 59 So. 3d 1101, 1104 (Fla. 2011) (quoting R.REG. FLA. BAR 4-1.7(a)(2))
(emphasis added). Where such a substantial risk of material limitation exists, as provided
in Rule 4-1.7(b), under certain circumstances that conflict can be cured by written
consent from the lawyer's clients after full disclosure of the conflict. R.REG. FLA. BAR 4-
1.7(b)(4). However, where no conflict exists to begin with, neither disclosure nor
consent is required.
In the instant case, Edwards claims that a conflict of interest would have been
created by the Release's prohibition against Edwards disclosing the amount of the
settlement payment or the "reasons for payment" to his clients and the international press.
See Transcript, p.19, line 14-p. 20; line 2; and p. 23; lines 10-24. Edwards's assertion
cannot withstand analysis.
As stated above, under Rule 4-1.7 disclosure to a client is merely a corrective
remedy in the event a conflict of interest existed. In the instant case, disclosure to
Edwards's clients would only be required if the settlement payment itself or any duties
imposed on Edwards by accepting it created a substantial risk that Edwards's
representation of his clients would be materially limited, and this clearly was not the case.
First, from the onset of the CVRA case, Edwards has served and continues to
serve as co-counsel with attorney Paul Cassell, a former judge and law professor, who
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has no interest whatsoever, either as lawyer or client, in the instant case. Professor
Cassell's judgment would be unimpaired by any settlement in the instant case, thereby
eliminating any risk that Epstein's proposed settlement with his co-counsel, Edward's,
could somehow materially limit the representation of the clients in the CVRA case.
Second, it cannot be said that the settlement payment by Epstein in the Proposal
would have created a substantial risk of materially limiting Edwards's representation in
the CVRA case [NOTE — DO WE INCLUDE THE FOLLOWING - , a case by
Edwards's clients against the U.S. Government where Epstein was not a party, but
only intervened for a limited purpose'. The proposed payment was in full settlement
of Edwards's lawsuit against Epstein and Epstein's lawsuit against Edwards in the instant
proceedings. See Plaintiff/Counter-Defendant Jeffrey Epstein's Proposal for Settlement
to Defendant/Counter-Plaintiff Bradley J. Edwards, Individually, attached to Epstein's
Motion as Exhibit A. The payment would have ended these proceedings finally, thereby
eliminating any possibility that the instant proceedings might somehow impact Edwards's
representation in the CVRA case. Thus, the payment did not create a substantial risk of
material limitation of that representation. To the contrary, it eliminated any such risk
altogether.
Nor can it be said that under the terms of the Release acceptance of the settlement
payment imposed on Edwards any duties or obligations that created a substantial risk of
materially limiting Edwards's representation, and Edwards's attempts to establish that it
did fall short under analysis. Edwards claims that the prohibition against disclosure of
the "reasons for payment" in the Release should be read expansively to have precluded
Edwards from discussing with his clients and the international press the facts pertaining
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to the civil cases underlying the malicious prosecution claims in the instant case, and how
those facts would have related to Epstein's settlement payment. See Transcript, p.19;
line 14-p.20; line 2 and p.22; line 3-p.23; line 24. However, A careful reading of the very
narrow and specific non-disclosure provisions in the Release belies such an expansive
construction.
The Release provides that Edwards will "not to disclose the details of this release
in settlement of all claims, including the nature or the amount and the reasons for the
payment." See Plaintill7Counter-Defendant Jeffrey Epstein's Proposalfor Settlement to
Defendant/Counter-Plaintiff Bradley J. Edwards, Individually, attached to Epstein's
Motion as Exhibit A (emphasis added). The "reasons for the payment" as "detailed" in
the Release are expressly contained in the following provision of the Release: "I
understand that this settlement is the compromise of a doubtful and disputed claim,
and that payment made is not to be construed as an admission of liability on the part of
the party or parties hereby released, and that Releasees deny liability therefor and
intend merely to avoid litigation and to buy peace." Id. (emphasis added).
Accordingly, the "reasons for payment" that Edwards claims he would have been
prohibited from discussing with his clients and the international press were simply that
Epstein settled this case as a "compromise of a doubtful and disputed claim," and made a
payment "that is not to be construed as an admission of liability," under circumstances
where Epstein denied any liability and settled to "avoid litigation and buy peace". This
very narrow prohibition against disclosing to his clients in the CVRA case these "reasons
for payment" in the instant case would have created no material limitation on Edwards's
representation of those clients in the CVRA case; nor would the prohibition against
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Edwards's disclosure of the same to the international press, as disclosing Epstein's denial
of liability for and payment to compromise a disputed and unrelated malicious
prosecution claim would do little to advance Edwards's clients interests in the CVRA
case. Under the circumstances, the narrow non-disclosure obligation in the Release
provided little, if any, risk of any material limitation on Edwards's representation in the
CVRA case, and did not create a conflict of interest that would require disclosure to
Edwards's clients as a corrective measure under Rule 4-1.7(b).
Furthermore, to the extent that Edwards claims a conflict of interest prevented
him from accepting the Proposal, if it existed at all, a conflict of interest was not created
by the valid confidentiality clause contained in the Release. Rather, it was created by
Edwards, himself, more than a year and a half earlier, when Edwards sued Epstein and
created his own personal interest while still representing his clients in the CVRA case.
If Edwards had any ethical concerns regarding his lawsuit against Epstein, he
could have waited to sue Epstein until the conclusion of his representation in the CVRA
case. If Edwards wished to proceed against Epstein, he could have dispelled any such
ethical concerns under the Rules Regulating the Florida Bar by explaining to his clients at
the outset any potential conflict issues that could be caused thereby, including disclosing
the possibility of Edwards receiving substantial consideration from Epstein in the
settlement of his lawsuit. See R.REG. FLA. BAR. 4-1.7(b). Had Edwards done so, a
subsequent general disclosure of the fact that the case settled, which was permissible
under the provisions of the Release, would have been be sufficient to address any ethical
considerations Edwards might claim to have. As stated previously, the confidentiality
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provisions in the Release preclude disclosure of the "details" the Release, but not a
general disclosure of the fact that the settlement occurred.
In addition, even if Edwards believed he had any ethical duties of disclosure in
conflict with the terms and conditions of the Release, the clear language of the
confidentiality provisions in the Release gave Edwards the option of seeking permission
from the Court to make any necessary disclosure. The unambiguous and plain language
of the Release remedied Edwards's purported issue altogether by authorizing Edwards to
make disclosures permitted "by valid order of a Court of competent jurisdiction." See
Plaintiff/Counter-Defendant Jeffrey Epstein's Proposal for Settlement to
Defendant/Counter-Plaintiff Bradley J. Edwards, Individually, attached to Epstein's
Motion as Exhibit A (emphasis added).
The purported ethical considerations asserted by Edwards provide no legal
justification for Edwards to avoid the consequences of his imprudent decision to ignore
the Proposal, and he should not now be permitted to use them in this manner. As stated
in the preamble to Rule 4-5.6 of the Rules Regulating the Florida Bar, "[t]he purpose of
the rules can be subverted when they are invoked by opposing parties as procedural
weapons." Lee v. Florida Dep't of Ins. & Treasurer, 586 So. 2d 1185, 1188 (Fla. 1st
DCA 1991). The rules are designed to provide guidance to lawyers and may not be
invoked by parties as procedural weapons. Id. (citing R.REG. FLA. BAR 4-5.6 preamble).
As such, Edwards cannot now use the Rules Regulating the Florida Bar as a procedural
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weapon to protect him from having to pay the costs and fees associated with his own
failure to accept Epstein's valid Proposal for Settlement.4
II. Edwards's Alleged Ethical Conflict Provision Does Not Render the Proposal
for Settlement Invalid
As fully explained in Epstein's Motion for Attorney's Fees and Costs and
Epstein's Reply, the Proposal was valid on its face and complied with the particularity
requisites as delineated in Rule 1.442(B) of the Florida Rules of Civil Procedure. The
confidentiality clause was clear and unambiguous and satisfied both Rule 1.442 and the
case law applicable to it. See State Farm Mut. Auto Ins. Co. v. Nichols, 932 So. 2d 1067
(Fla. 2006). Two Florida cases have discussed the validity of confidentiality provisions
contained in proposals for settlement and denied attorneys' fees and costs because of
them. Each case, however, is factually distinguishable and inapposite to the instant case.
As previously cited by both parties, in Swartsel v. Public Super Markets, Inc., 882 So. 2d
449 (Fla. 4th DCA 2004), the court affirmed the denial of a motion for attorney's fees not
because the proposal contained a confidentiality clause, but because the offeror failed to
either include the terms of the settlement agreement in the proposal or attach a copy
of the agreement to the proposal, violating the particularity requirement of Rule 1.442
of the Florida Rules of Civil Procedure. Id. The second case is Jamieson v. Kurland, 819
So. 2d 267 (Fla. 2d DCA 2002), in which the court reversed an order granting fees based
Within the time for Edwards to accept or reject the Proposal, he certainly could have raised his ethical
concerns with Epstein's counsel to negotiate an acceptable confidentiality provision. He chose not too, and
should not now be permitted to use them as a weapon to invalidate the Proposal.
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on a proposal requiring the plaintiff to execute a confidentiality agreement. The court was
not troubled by the inclusion of a confidentiality requirement, but rather by the lack of
particularity with which it was stated. The proposal in Jamieson contained an obvious
ambiguity in violation of Rule 1.442(B) of the Florida Rules of Civil Procedure.
Paragraph three of the proposal in Jamieson listed certain conditions to the proposal,
including that the plaintiff execute a general release and that a confidentiality agreement
be part of the release. However, the proposal also stated in the very next paragraph that
"[t]here are no non-monetary [sic! terms of the Proposal for Settlement." Id. (emphasis
added). Undeniably, neither situation is present in the instant case.
Epstein's Proposal for Settlement, and all of its terms and conditions, were in
compliance with Rule 1.442(B) of the Florida Rules of Civil Procedure, §768.79 of the
Florida Statutes, and prevailing case law. The fact that Edwards now for the first time
asserts, incorrectly, that his acceptance of the Proposal would have been "absolutely
unethical" has no bearing on the fact that Epstein properly served Edwards with a
Proposal for Settlement that met all of the requisites, and that Epstein is entitled to
recovery of his attorney's fees and costs as a matter of law.
CONCLUSION
In sum, Edwards's asserted ethical violations and conflicts of interest as grounds
for invalidating the Proposal are fictions constructed in the final hour to avoid paying the
price for a gamble that he lost when he rejected a reasonable and valid offer of settlement
from Epstein. Clear guidance from the Florida Bar and the Rules Regulating the Florida
Bar establishes that there were no potential ethical violations or conflicts of interest
created by Epstein's Proposal and the accompanying confidentiality clause contained in
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the Release. In fact, had Edwards accepted the Proposal it would have eliminated the
potential for any such ethical concerns in connection with his representation in the CVRA
case. At all times that the Proposal remained open for acceptance by Edwards and, had it
been accepted, even after acceptance, Edwards had and would have had ample means to
make disclosure to his clients in order to dispel any claimed ethical concerns. Edwards
has not until now, more than three years after receiving the Proposal, asserted any
purported ethical justifications for his rejection of the Proposal. Edwards may not now,
at the 11'" hour, attempt to "invoke the rules as [a] procedural weapon" because he is
faced with the consequences of his imprudent gamble. Lee v. Florida Dep't of Ins. &
Treasurer, 586 So. 2d 1185, 1188 (Fla. 1st DCA 1991) (citing R.REG. FLA. BAR 4-5.6
preamble). For these reasons, and in reliance upon the law cited herein, Epstein
respectfully requests that this Court grant his Motion for Attorneys' Fees and Costs.
I HEREBY CERTIFY that a true copy of the foregoing was furnished to all
counsel on the attached service list, via electronic service, this December 22, 2014.
/s/ Tonja Haddad Coleman
Tonja Haddad Coleman, Esq.
Fla. Bar No.: 0176737
TONJA HADDAD, PA
315 SE 71h Street
Suite 301
Fort Lauderdale, Florida 33301
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SERVICE LIST - CASE NO. 502009CA040800XXXXMBAG
Jack Scarola, Esq.
Searcy Denney Scarola et al.
2139 Palm Beach Lakes Blvd.
West Palm Beach, FL 33409
Jack Goldberger, Esq.
Atterbury, Goldberger, & Weiss, PA
250 Australian Ave. South, Suite 1400
West Palm Beach, FL 33401
Marc Nurik, Esq.
1 East Broward Blvd., Suite 700
Fort Lauderdale, FL 33301
Bradley J. Edwards, Esq.
Farmer Jaffe Weissing Edwards Fistos Lehrman
425 N Andrews Avenue, Suite 2
Fort Lauderdale, Florida 33301
Fred Haddad, Esq.
Fred Haddad, PA
1 Financial Plaza, Suite 2612
Fort Lauderdale, FL 33301
Tonja Haddad Coleman, Esquire
Law Offices of Tonja Haddad, P.A.
315 SE 7th Street, Suite 301
Fort Lauderdale, FL 33301
Attorneys for Jeffrey Epstein
William B. King, Esq.
Searcy Denney Scarola et al.
2139 Palm Beach Lakes Blvd.
West Palm Beach, FL 33409
Burlington & Rockenbach, P.A.
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Courthouse Commons/Suite 350
444 West Railroad Avenue
West Palm Beach, FL 33401
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