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Commonwealth of Massachusetts

NO. BD-2002-075

IN RE: ERIC LEVINE

S.J.C. Order of Contempt with no reinstatement allowed for four years entered by Justice Sosman on April 15, 2004. 1

FINDINGS OF FACT, RULINGS OF LAW, AND ORDER ON BAR COUNSEL'S PETITION FOR CONTEMPT

Bar Counsel has petitioned for an order of contempt on the ground that respondent, Eric Levine, has engaged in the practice of law subsequent to the imposition of his two-year suspension. Because the allegations contained in Bar Counsel's petition rested on facts which were disputed by Levine, an evidentiary hearing was held on March 24, 2004. Based on the evidence presented at hearing, and on documents previously presented in support of and in opposition to the petition for contempt, I make the following findings of fact and rulings of law:

On July 17, 2003, respondent Eric Levine was ordered suspended from the practice of law for a period of two years.1 At Levine's request, the effective date of the suspension was extended to August 21.

Prior to his suspension, Levine's legal practice had included real estate matters, including representation of buyers, sellers, and lenders on many real estate transactions. In the course of that work, he had observed that much of the preparation for closing such transactions involved obtaining records and documents from various public sources, and then furnishing copies of those records to the parties to the planned transaction. Locating, copying, organizing, and distributing those items did not require the application of any legal knowledge or expertise, or the rendering of any legal advice or opinion, but merely the knowledge of where such records could be found and how to get them properly certified, plus the administrative tasks associated with copying, organizing and distributing them. One of his own clients, a mortgage lender, had formed a wholly-owned subsidiary to provide these services in preparing for closings, and charged the borrower fees for those services. However, an attorney had been involved with that subsidiary, and, when that attorney became a judge in another jurisdiction, Levine's client approached Levine about providing a similar service.

As a result, in February 2002 (a year and a half prior to his suspension), Levine formed a limited liability company named "Closing Tek." Closing Tek was staffed by Levine and two office workers, neither of whom is an attorney. As set forth in its Certificate of Organization, Closing Tek was originally formed with the intention of providing both legal and non-legal services to lenders: "The general character of the business of [Closing Tek] is to provide real estate title examinations for residential and commercial mortgage lenders and related services and products . . . ." Of course, at that time, to the extent that Levine provided legal services (such as title examinations) through Closing Tek, the provision of such services was authorized by his then valid license to practice law.

After his suspension became effective in August 2003, Levine decided to use Closing Tek as a means to maintain business relations with his clients so that they would still be there once he had served his suspension and been readmitted to practice. He contacted attorney Michael Levin, whom he had known for many years and whose practice also involved real estate, and asked for his help.2 Specifically, Levine asked Michael Levin to attend closings on behalf of Closing Tek, with the understanding that Closing Tek would provide him with the "closing package" and that all Michael Levin would do would be to physically attend the closing itself. Michael Levin agreed to this arrangement, and attended approximately sixty closings for Levine and Closing Tek. Michael Levin did none of the work (legal or non-legal) in preparing the "closing package," but instead would find all the necessary materials in the package -- he did no title examinations, and he did not prepare the HUD-1 Settlement Statements.3 A secretary at Closing Tek would contact Michael Levin to inform him that a closing was coming up, and he would then get the completed closing package from Closing Tek and attend the closing. The closings were normally scheduled in the late afternoon or early evening in order not to interfere with Michael Levin's "regular practice." He did not play any role in the subsequent recording of deeds or the disbursement of funds, both of those tasks being taken care of by Closing Tek.4 Although Michael Levin did none of the underlying work or document preparation, and had no role in the disbursement of funds, he did (on at least two occasions) sign the HUD-1 Settlement on the signature line indicating: "The HUD-1 settlement statement which I have prepared is a true and accurate account of this transaction. I have caused or will cause funds to be disbursed in accordance with this statement." Fees to Closing Tek were paid out of the closing funds (and reflected on the HUD-1 Settlement Statements), including an entry for "Attorney's Fees" to Closing Tek and an entry for "Abstract/Title Search" to Closing Tek. Closing Tek would in turn pay Michael Levin for each closing he attended.

Respondent Levine insists that the closings would be arranged, the closing packages prepared, deeds recorded, and funds disbursed by Closing Tek without his performing any legal services whatsoever. He claims that the HUD-1 Settlement Statements were all prepared by the lenders (a practice contrary to what Michael Levin understood was the norm in the industry), and that he would have title examinations performed by others. He thus claims that Closing Tek could and did deliver complete closing packages to Michael Levin for each of the sixty closings without engaging in the practice of law. These assertions are not credible. I recognize that, in preparation for a closing, there is indeed a great deal of work that is not itself the delivery of legal services, and that the concept of a company to provide the administrative tasks of locating and organizing the documents is, at least in theory, a valid one. It remains the case, however, that those administrative tasks are undertaken to provide the support for what will ultimately comprise the delivery of legal services to the parties - those documents form the basis for the various legal opinions and advice that ultimately allow the transaction to go forward. Michael Levin was not providing those opinions or advice on any of the sixty transactions he closed, and I do not find credible the suggestion that none of those transactions required any form of legal services whatsoever other than the physical appearance of an attorney at closing. Closing Tek's customers had been Levine's clients prior to his suspension, and were accustomed to having Levine provide those services. The logical inference (supported by the specific example of the Nguyen and Kelly transactions, described below) is that, after his suspension, Levine continued to provide his former clients with legal services as needed, using Michael Levin to attend closings as a mere straw.5

While the evidence concerning the general operation of Closing Tek supports the inference that Levine was, at least on occasion, providing legal services to clients, Bar Counsel introduced evidence of two specific transactions for which Levine provided legal services. I will first address the services rendered in connection with a proposed transaction involving one of Levine's former clients, Kim Nguyen. Nguyen was attempting to purchase some commercial buildings, then used as medical offices, and convert them to retail space. The seller was represented by several attorneys at Sullivan & Worcester, and the lender was represented by attorney Jesse Geller at Gilmartin, Magence, Camiel & Ross. As of January, 2004, Nguyen had already signed a purchase and sale agreement and had a loan commitment from Emigrant Funding Corporation. Based on information from his client, attorney Geller understood that Lcvinc was representing the buyer/borrower, and Gellcr spoke with Levine on a few occasions that January.6 Nothing in those conversations alerted Geller that Levine was to have any other or non-legal role in the transaction.

On January 26, 2004, in a letter to Geller, Levine stated that Nguyen was "my former client who requested my services" in connection with the transaction, but that, at the time the purchase and sale agreement was executed, he (Levine) "was unavailable." He had therefore asked his "colleague," identified as Richard Pareles, "to step in." The letter then states: "In fact, Mr. Pareles and I will represent Mr. Nguyen at closing." Levine proceeded to list various items that remained open. One of them involved the title for two additional properties that were being mortgaged (which were owned by Nguyen's sons). Levine advised: "If a change in title is required for either parcel, please advise and I will prepare the instruments prior to closing." Levine articulated his understanding that the matter was "close to a final closing date," and that "all title, survey, Zoning Opinion and current lease issues are resolved."

The next day, Geller sent Levine a letter with a proposed "Closing Agenda." Throughout, Geller’s letter and Closing Agenda made it apparent that Geller thought that Levine was Nguyen's attorney: 1) the telefax cover sheet identified the recipient as "Eric L. Levine, Esq."; 2) the letter was addressed to "Eric L. Levine, Esquire"; 3) the letter referred to items that Geller needed from "borrower's counsel"; 4) the letter referred to Nguyen as "your client"; 5) the first page of the Closing Agenda identified the various participants in the transaction, conspicuously identifying Levine as "Borrower's Counsel" (with no reference to any other attorney representing the borrower); 6) the list of tasks to be accomplished by the respective participants identified multiple items to be performed by "Borrower's Counsel," including a "Zoning Opinion" for each of the parcels involved;7 7) the letter and Closing Agenda also referenced that "Borrower's Counsel" was to provide a government records certification, and attached a form for that certification stating (at the very top) "LEGAL COUNSEL LETTERHEAD"; and 8) the contents of the form certification letter referenced that the signer was "representing" the borrowers, that it set forth certifications the signer was making "as legal counsel for the Borrowers," and that the signer had reviewed the listed government records and found "no existing violation (or facts which after the passage of time would imminently result in a violation) of any applicable governmental law, statute, by-law, code, regulation, rule or order, or outstanding orders." Levine did not take any action in response to that letter to clarify that he and Closing Tek were merely providing administrative support for Nguyen, that someone else would be acting as "Borrower's Counsel," or that someone else would be providing the Zoning Opinion and certifications that were to be signed by an attorney.

On February 17, Levine transmitted another letter to Geller, indicating that, in his view, the transaction was ready for closing. He listed the various items on the agenda, reporting on their precise status, including the need for a Zoning Opinion: "I will provide a Zoning Opinion letter consistent with my conversations with Attorney Geller under separate cover. The zoning opinion will address the current use that includes medical/clinic and the intent of the Borrowers to change the occupancy to retail/office after closing." He also indicated that he would provide the government records certification "under separate cover." In fact, the government records certification was provided on the same day, using the precise form that Geller had previously supplied (with its various references to "representing" the borrowers and acting "as legal counsel for the Borrowers"). The certification was on Closing Tek letterhead (where Geller's form had indicated "LEGAL COUNSEL LETTERHEAD"), and the signature block indicated that it was signed by Levine.

Levine contends that his use of such terminology, in his two letters and in the government records certification, were all the product of inadvertent error and poor choice of words. I do not find that explanation credible. The repeated, explicit references to Levine's ostensible status as counsel for the borrowers, with tasks assigned to him that clearly called for the delivery of legal services, are too numerous and too blatant to accept as mere inadvertent error. Levine was aware, from discussions with his own lawyer back in the fall of 2003, that he needed to be "careful" about his work at Closing Tek lest it be construed as the practice of law. Yet, throughout these preparations for closing, Levine had done nothing to disabuse Geller of the notion that he (Levine) was counsel for the borrower. Instead, he repeatedly reinforced the impression that he was indeed Nguyen's counsel. Moreover, the February 17 letter and government records certification were sent after Levine's counsel in this matter had already been served with the present Petition for Contempt.8 If ever there were a time that Levine would wish to be "careful" that his operations at Closing Tek did not stray over the line into the practice of law, it would be the time period immediately after being advised that Bar Counsel was pursuing this petition. However, not even the pendency of this petition prompted Levine to clarify his status with parties to pending transactions. Instead, he continued to use language suggesting -and at times expressly stating - that he was acting as counsel for Nguyen.

Meanwhile, by fortuitous circumstance during a lunchtime conversation with colleagues and friends, Geller had learned that Levine had been suspended. Geller was dismayed by this news, as the lack of counsel for the borrower who could render the requisite opinions and certifications would be a significant impediment to the transaction. After confirming with Bar Counsel that Levine was indeed under suspension, Geller contacted attorney David Guadagnoli at Sullivan & Worcester, who represented the seller of the property, and advised Guadagnoli that Levine was suspended. Guadagnoli in turn contacted Nguyen, and asked Nguyen whether he was aware of Levine's suspension. Nguyen said that he was not aware of that, whereupon Guadagnoli gave Nguyen the website and telephone number for Bar Counsel. Both Guadagnoli and Geller spoke with Levine, advising him that they had become aware of the suspension of his license. At that time (sometime in late February), Levine informed Geller that attorney Pareles would be handling the matter. Geller and Guadagnoli expressed some doubt as to whether there was any such person as attorney Pareles, at which point Levine gave either or both of them Pareles' phone number. Geller and Guadagnoli spoke with attorney Pareles on February 27, at which point he told them (for the first time) that he would be representing Nguyen.

I do not credit Levine's testimony that the plan all along had been for Pareles to act as borrower's counsel. Pareles was mentioned once in Levine's January 26 letter, but in a context suggesting that Pareles had simply covered the matter temporarily when he, Levine, had been unavailable. At no time prior to being confronted with Geller's awareness concerning his suspension had Levine advised that Pareles would perform the legal services that were to be provided by "borrower's counsel." Pareles was not copied on any of Levine's correspondence with Geller (and had not seen any of it prior to the date of the evidentiary hearing). While Levine now insists that Pareles was to prepare the Zoning Opinion, Levine's February 17 letter promises that "I will provide a Zoning Opinion letter consistent with my conversations with Attorney Geller," and makes no reference whatsoever to attorney Pareles. I infer that, like Michael Levin, the planned use of attorney Pareles was as a "straw" in this transaction, and that Levine himself would actually do the legal work necessary.9

The second transaction as to which Bar Counsel presented specific evidence concerns the sale of property located on Minden Street in Jamaica Plain. Levine had represented the seller of the property, Daniel Kelly, in a proposed sale back in January, 2003, that had not gone forward. Litigation ensued when Kelly refused to sell, but, when the judge denied the buyer's motion for a lis pendcns, the suit was dismissed. Some months later, a partner of the same buyer offered to purchase at a higher price, and Kelly agreed. Where the buyer and lender were the same as in the earlier failed transaction, and represented by the same counsel, buyer's and lender's counsel assumed that Kelly would still be represented by Levine, but Kelly (who was made aware of Levine's suspension) did not wish to use an attorney to prepare for closing. As the time of closing approached, however, it appeared that Levine was representing Kelly. Draft deeds for the transaction were telefaxed from Closing Tek to lender's counsel (attorney Steven Murphy), updated from the earlier transaction to reflect the new terms, and attorney Murphy spoke with Levine about the draft deed. Fortuitously, attorney Murphy learned of Levine's suspension shortly prior to the closing, and contacted Bar Counsel. Assistant Bar Counsel advised that Murphy could proceed with the closing, asking only that he report back with any observations made as to Levine's conduct at the closing.

When the closing did go forward on January 15, 2004, Levine attended with Kelly. While Levine insists that his presence at the closing was solely for the purpose of picking up a check (to compensate him for prior services that he had rendered to Kelly on another matter), his conduct at the closing did not comport with such a limited role. Immediately after arriving at the closing, Kelly asked to speak privately with Levine. After that private conversation, the participants went into the conference room where the closing was to take place. Attorney Murphy, as lender's counsel, sat at the head of the table, with Levine immediately to his right and Kelly sitting to Levine's right. This seating arrangement, by longstanding custom and tradition, placed Levine in the position usually occupied by the seller's attorney. Attorney Murphy, in charge of orchestrating the closing, would hand documents that needed the seller's signature to Levine, who would in turn hand them to Kelly for his signature (as is again the traditional method of handling documents when the seller is represented by an attorney). I credit attorney Murphy's testimony that, for an unrepresented seller, his practice is to have the seller sit immediately next to him, and that he offers to explain the documents to a seller who is unrepresented at the closing. Attorney Murphy did not do so at this particular closing, because every external indication was that Levine was representing Kelly. From time to time, Levine would converse with Kelly upon receiving a document from attorney Murphy. While no one heard the precise contents of those conversations, and thus cannot confirm whether they entailed actual legal advice,10 the holding of such conversations is inconsistent with Levine's claim that he was just there to pick up his check.11

Moreover, at the time of this closing, there emerged an issue with respect to the status of the title that was similar, but not identical to, a title problem that had been at issue in the earlier aborted sale. When Levine arrived at the closing, attorney Murphy advised him of this development, and they spoke about the mysterious appearance of an old tax lien when the title was checked, whereas the title had been clean when it had been checked in connection with the earlier attempted purchase. While Kelly may have been willing to proceed without counsel when it looked as if the transaction could be completed by merely updating the documents from the prior closing, the re-emergence of a variant of a title problem that Kelly had thought was long since solved, combined with a prior history of litigation between the parties, appears to have made him reluctant to go forward without some assistance from Levine on at least this issue. Kelly requested the private conference with Levine, prior to the start of the closing, in order to review this title problem with him. Kelly asked Levine for an explanation as to why this tax lien would be showing up when it had not come up during the prior attempted sale, and asked for Levine's assessment of what impact the lien would have on the impending transaction. During the closing, Levine expressed the opinion (both to Kelly and to the others present) that the appearance of an old tax lien on the title was an error, and reassured everyone that he (Levine) could get it straightened out by going to city hall. The point was resolved by way of holding back some $20,000 of the closing funds, with Levine reviewing how that hold back was entered on the settlement statement and advising Kelly that the title and the hold back provisions were in order. It may be, of course, that Levine's own desire to see the transaction close (so that he could get his own check) tempted him to step over the line and provide advice on the subject of this tax lien and hold back of funds so that the closing would not be postponed.12 Whatever his motivation, I find that he did provide advice and assistance at the closing, and thus rendered legal services in connection with that transaction as well.

I therefore conclude that Levine has "engaged in legal work" while under suspension. Rule 4:01, § 17 (8). He has provided legal services to Nguyen, Kelley, and other unidentified clients of Closing Tek, and he has held himself out to others as an attorney. See G. L. c. 221, § 41. For purposes of this ruling, it is not necessary to define the precise boundary between the provision of essentially administrative services preparatory to real estate transactions and the provision of legal services in connection with such transactions, as Levine has rendered what are clearly legal services and has deliberately (and successfully) led others to believe that he is an attorney representing parties in real estate transactions.13

ORDER

I therefore ALLOW the Petition for Contempt and ORDER that Eric Levine may not be reinstated until the expiration of four years from the date of this Order pursuant to Supreme Judicial Court Rule 4:01, § 17 (8).

Martha B. Sosman Associate Justice
ENTERED: April 15, 2004

ENDNOTES

1 The basis for that suspension order, and Levine's prior discipline, are a matter of record and will not be repeated here. I have considered that disciplinary history as part of my assessment of Levine's credibility.

2 Michael Levin is presently under investigation in connection with his role in assisting Levine. Michael Levin testified at the evidentiary hearing, with his own counsel present. Of necessity, my findings concerning respondent Levine must include findings concerning Michael Levin's involvement with Levine and Closing Tek. However, it should be clear that Michael Levin did not participate as a party in these proceedings; his counsel did not have an opportunity to present any evidence or to cross-examine any witnesses; and therefore any findings made herein should not be used against Michael Levin in the pending investigation or in any subsequent disciplinary proceedings against him.

3 Michael Levin does not know who did prepare these items. From his own real estate experience, however, the customary practice is that the HUD-1 Settlement Statement is prepared by the lender's counsel and then reviewed and revised by the lender.

4 Levine was the only person with signatory authority over Closing Tek's accounts.

5 The operation of Closing Tek is also contrary to representations made to Bar Counsel in the fall of 2003. In an attempt to get Bar Counsel's advance approval of the type of work Levine was doing, Levine's counsel wrote to Assistant Bar Counsel explaining that Levine's business would be working for "a title company or companies as a coordinator for closings, appraisals, titles, and other similar tasks." The letter assured that title examinations would be done "by the closing attorneys or their contractors," that "[t]he closing attorneys will certify the titles," that Levine himself "will not be dealing directly with the closing attorneys or any other attorneys," would "not be the contact person with the attorneys [and] do no work for the attorneys," and would only "assist the lenders in the selection of attorneys," with his fees paid "entirely from the lender(s)." In fact, closing attorneys were not examining or certifying titles, Levine dealt directly with the closing attorneys and was their only "contact person," and the attorneys were selected and paid by Levine and Closing Tek (not by "the lenders").

6 The attorneys at Sullivan & Worcester who were representing the seller also understood that Levine was the buyer's counsel.

7 Levine acknowledges that rendering such a "Zoning Opinion" would constitute legal services.

8 The Petition is dated February 4, 2004, with a certificate of service indicating it was mailed to Levine's counsel that same day.

9 I do not credit the testimony of attorney Pareles as to the existence of a genuine attorney-client relationship with Nguyen, nor do I credit Pareles' testimony to the effect that he was going to draft the Zoning Opinion the very day that his ostensible relationship with Nguyen ended (which was sometime after his February 27 conversation with Geller and Guadagnoli). According to Levine's own correspondence, the transaction was "close to a final closing date" in late January, with the Zoning Opinion issues already "resolved," and was "ready to be scheduled for closing" as of February 17. Levine's February 17 commitment to provide a Zoning Opinion letter (which he had been discussing with attorney Geller) "under separate cover" does not suggest that it would be drafted by anyone else, nor is it consistent with Pareles' testimony that he was only about to write it some ten or more days later. Levine had done some investigation of the zoning earlier that summer when Nguyen was first considering the purchase, and I infer that it was Levine who had prepared a Zoning Opinion, presumably for Pareles' signature. Pareles (who is a long-standing friend of Levine's) produced no documentation whatsoever to bolster his assertion that he had undertaken to represent Nguyen in this matter. It strikes me as too much of a coincidence that the alleged attorney-client relationship with Nguyen was severed at the precise time that the seller's and lender's attorneys questioned Pareles about his status and Pareles became aware of Bar Counsel's investigation of Levine. There was an attempt by Levine to get Nguyen to sign an affidavit on the subject of his relationship with Levine and Pareles, but Nguyen ultimately did not sign it and he did not testify at the hearing.

10 That the conversations were not audible to others is itself consistent with the inference that Levine was providing legal advice or opinions to the seller. The use of hushed tones to keep the discussions confidential, and the avoidance of listening in by others to respect that confidentiality, suggests that everyone was treating Levine as if he were in fact representing Kelly.

11 Attorney Murphy's belief that Levine was acting as counsel for Kelly was shared by counsel for the buyer, attorney Patrick O'Malley. Indeed, after the closing was over, they realized that there was some problem with the deed, and needed Kelly to return to sign another deed. They did not call Kelly directly, but instead called Levine. I find that their belief that Levine was acting as Kelly's lawyer in connection with this transaction was both sincere and well-founded.

12 Even that interpretation would be generous to Levine. Levine's own version of the private conversation he had with Kelly prior to the start of the closing included Kelly warning him that the buyer and both counsel were aware of his suspension. If, as Levine now claims, he was only at the closing to pick up his check, that warning from Kelly would surely have led him to reassure the other attorneys that that was all he was there for. He did not do so, but instead proceeded into the conference room, sat in the place reserved for the seller's counsel, and proceeded to act as if he were Kelly's counsel.

13 Although not directly raised by the petition for contempt, and therefore not briefed, I also note that, even on Levine's own description, Closing Tek is performing what would normally be viewed as paralegal work. Under Rule 4:01, § 17 (7), an attorney under suspension is prohibited from engaging in "paralegal work." See Rule 4:01, § 18 (3) (at completion of period of suspension, attorney may seek court approval to be employed as paralegal). While § 17 (7) goes on to prohibit lawyers and law firms from employing suspended attorneys as paralegals, the suspended attorney himself may not perform "paralegal work." This prohibition appears directed at preventing precisely what happened here, i.e., a suspended attorney performing work that is closely connected to the provision of legal services, where the suspended attorney would be tempted to go ahead and perform the legal services portion of the work as well. While we customarily think of "paralegals" as persons employed by other attorneys, the rule may also apply to free-standing, independent paralegal companies as well. That is, in substance, how Levine describes Closing Tek - a company that is available to provide parties (and ostensibly their attorneys) with the paralegal support necessary to prepare for real estate closings. Indeed, that is precisely what Levine and Closing Tek were admittedly providing to Michael Levin. Because I conclude that Levine has engaged in "legal work" during the period of his suspension, Rule 4:01, § 17 (8), it is not necessary for me to determine whether he has also violated § 17 (7) by engaging in prohibited "paralegal work."



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