Mass.Gov home  home get things done agencies Search Mass.Gov

Commonwealth of Massachusetts

NO: SJC-BD-2002-032


S.J.C. Order of Disbarment entered by Justice Cowin on August 23, 2002


This matter is before me on an information and record of proceedings and a vote of the Board of Bar Overseers (board). The matter was initiated by bar counsel's petition for discipline brought before a special hearing officer.1 The petition alleged that James C. Dragon (respondent) violated various disciplinary rules arising out of his mishandling of client funds. The special hearing officer assigned to hear the disciplinary proceeding concluded that the respondent intentionally commingled personal and business funds with client funds in an IOLTA account; misused client funds in the IOLTA account to pay expenses for clients for whom he was not holding funds; failed to pay his clients promptly their share of settlement proceeds which the respondent received on their behalf; intentionally used the funds of clients to pay his own business and personal expenses with the intent to deprive the clients of their funds at least temporarily and with actual deprivation resulting; and intentionally converted the funds of a business partner to his own use and repaid the funds with client funds in the IOLTA account.

The special hearing officer concluded that these actions constituted the violation of several ethical rules2 and warranted the sanction of disbarment. The respondent appealed from the report of the special hearing officer. After oral argument, an appeal panel of the board rejected the respondent's appeal and recommended disbarment. The respondent appealed to the board, which unanimously voted to disbar the respondent 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). The respondent now seeks a reduced sanction

1. Facts. The special hearing officer made the following findings of fact, which were adopted by both the appeal panel and the board. The respondent maintained two separate bank accounts in connection with his business dealings: an IOLTA account and a separate account used primarily to hold business and personal funds. He engaged in multiple instances of misconduct related to these accounts.

On numerous occasions, the respondent intentionally deposited his own personal and business funds into the IOLTA account; some of his personal funds were placed in the IOLTA account to shield them from the claims of creditors.

The respondent misused the IOLTA funds of at least thirteen clients by depositing clients' settlement funds into the IOLTA account and then using these funds for the benefit of other clients and for his own personal and business use. The special hearing officer rejected the respondent's testimony that any delay in turning over the proceeds of settlements to his clients was due to a policy of waiting thirty days to ensure that "the funds were available" and that any outstanding medical bills were paid; none of the clients received their money thirty days after the funds were received. He concluded that the respondent “engaged in a consistent, systematic pattern of intentionally failing to disburse to his client's [sic] their share of settlement proceeds in a timely or reasonable manner.”

The respondent deposited into the IOLTA account $10,000 he received from a business partner to purchase a note and mortgage for a joint business venture. The same day that the funds were deposited, the respondent withdrew $4,000 against his partner's funds and deposited it in his business account. The respondent intentionally spent the balance of the business partner's funds in the IOLTA account to pay his own expenses and obligations to clients. When the note and mortgage were sold to another investment group, the respondent drew on client funds to repay his business partner.

While representing a landlord in an eviction action, the respondent intentionally placed into the IOLTA account settlement funds that were, according to the settlement agreement, to be placed in escrow. The respondent then withdrew money from the IOLTA account to pay his personal and business expenses. Over a month later, the respondent turned over the funds as required by drawing from his own personal funds and those of other clients.

2. Substantial evidence. The respondent concedes that he intentionally commingled his own funds with client funds and admits that, on many occasions, the funds in the IOLTA account fell short of the amount that should have been in the account. However, the respondent disputes the board's conclusion that any deprivation to his clients was intentional, and argues that his actions were merely the product of negligence or mistake.

The special hearing officer discounted the respondent's testimony as to the purported reasons for the delays in disbursement of settlement proceeds, and found the respondent's repeated instances of misuse of client funds intentional. We will not disturb these findings of fact unless they are not supported by substantial evidence. In re Wise, 433 Mass 80, 87 (2000). In this case, the board based its conclusion on ample evidence. The respondent's egregious conduct was repeated, clearly intentional, and involved numerous clients . It was well within the board's discretion to reject the respondent's often far-fetched explanations for the deficiencies in the IOLTA account.

3. The Appropriate Sanction. The discipline recommendation of the board is entitled to "substantial deference." Matter of Kersey, 432 Mass. 1020, 1020 (2000). When considering the appropriate sanction to be applied in a particular case, the primary factor is the effect on, and perception of, the public and the bar. Matter of Alter, 389 Mass. 153, 156 (1983). In deciding whether the sanction imposed by the board is appropriate, I must determine whether the Board's recommendation “is 'markedly disparate' from the sanction imposed in other similar cases.” Id. I also recognize that we must decide each case “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). I therefore examine the nature of the respondent's conduct, the sanction recommended by the board compared to the sanction imposed in analogous cases, and any mitigating factors with respect to the respondent's conduct.

The court set forth the relevant principles for the discipline of attorneys who have mishandled client funds in Matter of Schoepfer, 426 Mass. 183, 185-187 (1997). Disbarment or indefinite suspension is the usual remedy when an attorney uses a client's funds with intent to deprive or with actual deprivation. Id. at 187. A lawyer who has engaged in such conduct bears the heavy burden of demonstrating that this sanction should not be applied, although “there may be special mitigating facts that justify less severe discipline.” Id.

The respondent argues that Schoepfer's presumptive sanction of indefinite suspension or disbarment should not apply to his case because his misconduct occurred before the decision was issued. This argument is without merit. Schoepfer merely reaffirmed the holding in Matter of an attorney, 392 Mass. 827 (1984), and the Schoepfer court itself applied the presumptive sanction to misconduct that occurred between 1986 and 1989.

The respondent further contends that he has met the heavy burden of demonstrating that disbarment should not be applied in his case due to a number of mitigating factors, including a bout with pneumonia, an office flood, his performance of pro bono work for bar counsel, and his reliance on an accountant to manage his finances. The special hearing officer found no causal relationship between either the flood or the respondent's illness and the misconduct. He found that the extra time invested by the respondent in connection with his pro bono work had a “negligible impact on his workload,” and that the accountant did not undertake any task with respect to the respondent's IOLTA account. The special hearing officer also identified a number of aggravating circumstances, including the fact that many of the clients whose funds were misappropriated were unsophisticated immigrants, the respondent demonstrated a lack of appreciation of the ethical rules, the respondent engaged in a “pattern of misconduct” and the respondent was less than candid with bar counsel. Given these findings, the board was within its discretion to conclude that disbarment is warranted. Matter of Kersey, supra at 1020.

A judgment shall enter disbarring the respondent from the practice of law.

By the Court

Judith A. Cowin
Associate Justice

Entered: August 23, 2002


1 Under S.J.C. Rule 4:01, § 5 (3) (d) , as appearing in 425 Mass. 1302 (1997), the board "may appoint a special hearing officer, who shall be a lawyer, to hear charges of misconduct when, in view of the anticipated length of the hearing or for other reasons, the board determines that a speedy and just disposition would be better accomplished by such appointment than by referring the matter to a hearing committee or panel of the Board."

2 Specifically, the special hearing officer found that the respondent violated Canon 1, DR 1-102(A) (6) (conduct adversely reflecting on fitness to practice), Canon 1 DR 1-102 (A) (4) (dishonesty, fraud, deceit or misrepresentation), Canon 7, DR 7- 101(A) (1) (intentional conduct resulting in failure to seek lawful objectives of client), Canon 7, DR 7-101(A) (2) (intentional conduct resulting in failure to carry out contract of employment), Canon 7, DR 7-101(A) (3) (intentional conduct resulting in prejudice or damage to client), Canon 9, DR 9-102(A) (client funds to be held separately in trust), Canon 9, DR 9-102(B) (failure to safeguard client funds, maintain records and promptly deliver as requested client funds).

BBO/OBC Privacy Policy. Please direct all questions to
© 2001. Board of Bar Overseers. Office of Bar Counsel. All rights reserved.