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Commonwealth of Massachusetts

No. BD-2001-024

IN RE: ROBERT S. LEO

MEMORANDUM OF DECISION1

SUMMARY2

This matter is before me on an information and record of proceedings and the vote and memorandum of the Board of Bar Overseers (board). The matter was initiated by bar counsel's petition for discipline brought before a hearing committee of the board. The petition alleged, among other things, that Robert S. Leo (respondent) violated S.J.C. Rule 3:07, Canon 1, DR 1-102(A)(4) and (6), as appearing in 382 Mass. 769 (1981), by refusing to return, attempting to hide, and ultimately spending certain monies paid to him in error by a bank. The hearing committee concluded that the respondent had violated DR 1-102(A)(6), but not DR 1-102(A)(4), and recommended that he be suspended from the practice of law for a period of thirteen months, execution of which would be suspended on condition that he: (1) pass the bar examination; (2) pass a professional responsibility course selected by Bar Counsel; and (3) be evaluated by Lawyers Concerned for Lawyers and complete any recommended counseling. The respondent and bar counsel appealed to an appeal panel of the board (panel).

After oral argument, the panel adopted the hearing committee's findings of fact, modified its conclusions of law by finding that the respondent had violated DR 1-102(A)(4) as well as (6), and recommended an "outright suspension" for a term of thirteen months. The respondent objected to the panel's report. Bar counsel opposed the respondent's objections and appealed the panel's recommended sanction, arguing in favor of an indefinite suspension.

The board adopted the panel's report and filed an information with the county court pursuant to S.J.C. Rule 4:01, § 8(4), as appearing in 425 Mass. 1309 (1997), recommending that the respondent be suspended from the practice of law for thirteen months. Bar Counsel now seeks imposition of, at a minimum, the thirteen-month suspension recommended by the board, and argues in favor of an indefinite suspension. The respondent seeks dismissal of the petition for discipline.

I. FACTS

A. The CD Proceeds

In December, 1994, the respondent separated from his wife, Janet Leo. The couple had one son, Jonathan. At the time, Citizens Bank held a certificate of deposit (CD) in Jonathan's name.

On the morning of January 6, 1995, Janet and Jonathan Leo redeemed the CD. Jonathan signed the withdrawal slip and Citizens Bank issued a cashier's check to him for $11,742.14, which he endorsed and delivered to his mother.

Later that afternoon, the respondent went to a different branch of Citizens Bank to redeem the same CD. At the time, he was unaware that his wife and son already had redeemed the CD. Because of a computer problem, the branch bank was also unaware that the CD already had been redeemed. The bank mistakenly issued a treasurer's check to the respondent made payable to Jonathan Leo in the amount of $11,742.14.

On January 9, 1995, the respondent had Jonathan endorse the treasurer's check to him. On January 10, 1995, the respondent deposited the check in his attorney-at-law account at Bank of Boston.

On January 9, or 10, 1995, after discovering its error, the bank telephoned the respondent and asked him to contact the bank. When the respondent returned the telephone call, a bank employee informed him of the error and asked that he return the check, but he did not do so. Instead, on January 11, 1995, the respondent withdrew $11,399.50 from his Bank of Boston account. He then purchased the following items, spending a total of $11,650: a cashier's check in the amount of $2,850 payable to himself; four money orders, each in the amount of $1,500 and payable to himself; and $2,800 in traveler's checks. The respondent placed these items in a safe deposit box. By purchasing the checks and money orders and placing them in a safe deposit box, the respondent intended to prevent Citizens Bank and his wife from attaching the funds or otherwise interfering with his possession of the funds. He considered the bank's right to the funds to be "superior" to his, but he also considered his right to the funds to be "superior" to that of his wife because he had earned the money used to purchase the CD.

Citizens Bank made several unsuccessful attempts to obtain the CD proceeds from the respondent. Eventually, the bank reported the matter to the Barnstable Police Department. The respondent was charged in the Barnstable District Court with larceny over $250 in violation of G. L. c. 266, § 30. To resolve the matter, the respondent agreed to pay the bank $4,000 in cash and sign a three-year note for the remaining balance of the CD proceeds. The district court approved the agreement and continued the matter for three years for further review and dismissal upon a showing that the note was paid in full.

While the respondent made the initial $4,000 cash payment, he did not make any payments on the note. He was later tried on. the larceny charge. After a jury trial, he was acquitted.

The disposition of the CD proceeds was also an issue in the respondent's divorce trial. The respondent requested that the Probate and Family Court issue a temporary order ruling that the CD proceeds were his property. The Probate Court denied the motion for a temporary order. However, it eventually determined that the proceeds the respondent's wife received from the CD had been spent on necessities for the family during the pendency of the divorce proceeding, while the proceeds the respondent received were not marital assets subject to division, but rather belonged to the bank. Although the respondent originally requested that the Probate Court resolve the question of ownership, he did not repay the proceeds to the bank because no court order required him to do so. Instead, after receiving the Probate Court's order, he spent the money on personal and business needs.

B. Prior Discipline

The respondent has been disciplined twice before. In 1991, he received an informal admonition for violating S.J.C. Rule 3:07, Canon 7, DR 7-102(A)(2), as appearing in 382 Mass. 784 (1981), by filing a complaint in Federal Court that improperly alleged personal jurisdiction and included an excessive claim for damages. In 1996, he received an admonition and was required to attend a Continuing Legal Education (CLE) course for, among other things, ignoring a court order and removing funds from a spendthrift trust to pay himself legal fees incurred as trustee.

II. DISCUSSION

A. Ethical Violations

The record amply establishes that the respondent violated DR 1-102(A)(4) and (6), by engaging in conduct "involving dishonesty, fraud, deceit or misrepresentation," that adversely reflected on his fitness to practice law. As the hearing committee and the panel found, he took deliberate steps to disguise and hide the CD proceeds mistakenly issued to him by Citizens Bank to prevent the bank and his wife "from attaching the funds or otherwise interfering with his possession of the funds." For example, after the bank informed him of its mistake, he withdrew the CD proceeds from his attorney-at-law account and purchased checks and money orders made out in his name. He then hid those checks and money orders in a safe deposit box. Eventually, he spent the money. Such intentionally dishonest and deceitful conduct violates DR 1-102(A)(4)and (6). See, e.g., Lawyers' Mortg. Inv. Corp. of Boston v. Paramount Laundries, Inc., 287 Mass. 357 (1934) (company liable for conversion as result of exercising "wrongful claim of dominion" over property); Matter of Fairbanks, 8 Mass. Att’y Discipline Rep. 83 (1992) (attorney's failure to report and deliver fees earned while employed at firm constituted violation of DR 1-102(A)(4) and (6)); J.R. Nolan & L.J. Sartorio, Tort Law § 55 (2d ed. 1989 & Supp. 2001) (individual is liable for conversion when he "intentionally and wrongfully exercises acts of ownership, control or dominion over personal property over which he has no right of possession at the time").

It is irrelevant that the respondent may have originally obtained the funds properly, without misrepresentation or fraud as to the bank. Once he learned that the bank had made a mistake, he intentionally and wrongfully took steps to disguise the funds as his own, hide them from the bank and spend them. Moreover, while the initial withdrawal may have been legal, the inference is warranted that the respondent's purpose in making it was to gain an advantage, perhaps fraudulently, in his upcoming divorce case.

The record also establishes, at the very least, the respondent's lack of judgment and insight in this matter. Convinced that his right to the-CD proceeds was "superior" to that of his wife, he ignored the Probate Court's conclusion that she properly spent the proceeds on family necessities, while the proceeds he received belonged to the bank.

Moreover, when faced with a larceny charge stemming from his failure to return the funds to the bank, the respondent entered into an agreement to repay the bank over a period of three years. Aside from an initial payment of $4,000, the respondent has never made a single additional payment on this obligation.

The respondent now acknowledges that the bank should be repaid in full. Nonetheless, he insists that he did nothing wrong in hiding and spending the funds. This refusal to accept responsibility for his actions, in combination with his decision to ignore the findings of the Probate Court and his refusal to satisfy his obligation to the bank, demonstrates a significant lack of judgment and adversely reflects on his fitness to practice law. This conduct, in combination with the violations of DR 1-102(A)(4) and (6) found by the board and discussed above, establishes that the respondent is not entitled to the dismissal he seeks.

B. The Appropriate Sanction

I now turn to the question of the appropriate sanction. To determine whether the thirteen-month suspension recommended by the board is appropriate, I must decide whether it "is ‘markedly disparate’ from the sanction imposed in other similar cases." Matter of Brown, 12 Mass. Att’y Discipline Rep. 23, 27 (1996), quoting Matter of Alter, 389 Mass. 153, 156 (1983). However, each case must be decided "on its own merits and . . . every offending attorney must receive the disposition most appropriate in the circumstances." Matter of the Discipline of an Attorney, 392 Mass. 827, 837 (1984).

If the respondent had knowingly converted client or fiduciary funds, he would be facing possible disbarment. Matter of Schoepfer, 426 Mass. 183, 187 (1997) (standard sanction for intentional use of client funds, with intent to deprive, is disbarment or indefinite suspension). Here, the respondent knowingly converted funds belonging to a non-client, Citizens Bank. Both the hearing committee and the panel distinguished between the misappropriation of client and non-client funds, concluding that the respondent's “misconduct warranted a lesser sanction because it did not involve the practice of law.” See Matter of Gleason, 10 Mass. Att’y Discipline Rep. 141 (1994) (while attorney engaged in fraud and conversion, lesser sanction was warranted because the misconduct "occurred outside the practice of law").

The panel recommended a thirteen-month suspension, citing two cases, Matter of Fairbanks, 8 Mass. Att'y Discipline Rep. 83 (1992) (attorney received public censure for diverting fees from his law firm) and Matter of Gleason, supra at 141 (attorney suspended for two years for his role in fraudulent real estate scheme). The panel reasoned that the appropriate sanction in the present action lay somewhere between those imposed in the two cases.

I disagree with the distinction between misappropriating client and non-client funds. I recognize that, because of the fiduciary relationship, stealing from a client has ethical ramifications not present when an attorney steals from a nonclient. Nevertheless, for purposes of evaluating the character of the act, I do not see a meaningful difference. Stealing is stealing and deserves a significant level of opprobrium regardless of who the victim is. The respondent here violated his "fundamental duty" to "be honest and abide by the law." ABA Standards for Imposing Lawyer Sanctions, § 5.0. See also id. at § 5.10 ("The most fundamental duty which a lawyer owes the public is the duty to maintain the standards of personal integrity upon which the community relies"). Such conduct demonstrates serious character flaws and undermines the respondent's moral fitness to practice law.

Moreover, the respondent's misconduct is aggravated by his history of prior discipline. See Matter of Garabedian, 416 Mass. 20, 24-25 (1993) (prior misconduct supports more severe sanction, otherwise, misconduct "would count for nothing"); Matter of Dawkins, 412 Mass. 90, 96 (1992) (existence of prior discipline, even if unrelated, is "substantial factor in selecting the level of discipline"). The respondent has received admonitions for unethical conduct twice before. The second of those admonitions related to his misuse of fiduciary funds. In addition, his misconduct in that case overlapped with his dissipation of the CD proceeds in this case. See n.8, supra. Overlapping misconduct is an additional matter in aggravation. See Matter of Oates, 3 Mass. Att’y Discipline Rep. 166, 167 (1983) ("most disturbing" that attorney continued to mislead client concerning the status of her case even after the board had censured him for similar misconduct in another case).

Despite my disagreement with the panel concerning the distinction between misappropriation of client and nonclient funds, I nonetheless conclude that the thirteen-month suspension recommended by the board is the appropriate sanction for the respondent's misconduct. After reviewing the range of discipline imposed in these types of cases, I believe that a thirteen-month suspension, while lenient, is not “markedly disparate” from the sanctions imposed in other similar cases. Matter of Alter, supra at 156. Moreover, the recommendation of the board "is entitled to substantial deference." Matter of Doyle, 429 Mass. 1013, 1014 (1999), quoting Matter of Tobin, 417 Mass. 81, 88 (1994).

A judgment shall enter suspending the respondent from the practice of law for a period of thirteen months.

_____________________
Judith A. Cowin
Associate Justice

Entered: September 12 , 2001

1 The complete Order of the Court is available by contacting the Clerk of the Supreme Judicial Court for Suffolk County.

2 Compiled by the Board of Bar Overseers based on the record before the Court.



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