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Commonwealth of Massachusetts

NO. BD-2004-096

IN RE: ANTHONY J. BILLE

S.J.C. Order of Term Suspension entered by Justice Cowin on March 4, 2005, with an effective date of April 3, 2005.1

MEMORANDUM OF DECISION

This matter comes before me on an information, 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 Anthony J. Bille (respondent) violated various disciplinary rules arising out of his mishandling of client funds. The special hearing officer (hearing officer) assigned to hear the disciplinary proceeding concluded that the respondent intentionally transferred client assets to himself without legal or actual authority, thus commingling personal and client funds. The hearing officer also concluded that the respondent used those assets for his own benefit without first obtaining the client's consent or suggesting that she obtain independent counsel to advise her on the propriety of the transfer. These acts, the hearing officer determined, constituted a conflict of interest as well as intentional misuse of the client's assets; they also temporarily deprived the client of the use of those assets.

The special hearing officer concluded that these actions constituted a violation of several ethical rules2 and warranted the sanction of a four-year suspension. While acknowledging that the standard discipline for an attorney who intentionally misuses client funds and temporarily deprives the client of the funds is disbarment or indefinite suspension, the special hearing officer determined that several mitigating factors justified a lesser punishment: the thirty-year long, close personal relationship between the respondent and the client, in which the respondent was largely responsible for the client's increase in net worth; the respondent's disclosure to the client and her business associates of the transfers approximately one year after they began; the lack of objection by the client to the respondent's conduct; the respondent's repayment of the transfers in full; and the respondent's suffering of adverse professional consequences due to negative publicity surrounding the case. Both bar counsel and the respondent appealed from the special hearing officer's report. After oral argument, an appeal panel of the board adopted the special hearing officer's report and recommendation of a four year suspension. Bar counsel objected to the appeal panel's report. After consideration, the board voted, with two dissenting votes, and two members recused from the vote, to adopt the appeal panel's report and recommendation, and suspend the respondent for four years. The board then filed an information with the county court pursuant to S.J.C. Rule 4:01, § 8 (4), as appearing in 425 Mass. 1309 (1997). Neither party contests that there were violations. Bar counsel now seeks an increased sanction of indefinite suspension. The respondent requests that the vote of the board be affirmed.

1. Facts. The special hearing officer made the following findings of fact, which were adopted by both the appeal panel and the board, and which are warranted by the evidence. While working at an accounting firm in 1961, the respondent began doing accounting work for Mr. and Mrs. J.P. McQueen, who owned an insurance agency. The respondent developed a close personal and professional relationship with the McQueens, extending through Mr. McQueen’ s death in 1969, to Mrs. McQueen's passing in 1995.3 After Mr. McQueen's death, the respondent's professional relationship with Mrs. McQueen consisted primarily of acting as a business advisor, as well as an intermediary between her and the insurance agency, first operated by her nephew, and then by the nephew's son and a family friend.

In 1987 or 1988, the respondent borrowed $120,000 from Shawmut Bank to create his own financial services company. Mrs. McQueen guaranteed the loan, refusing the respondent's offers of a mortgage or life insurance to secure her liability. Respondent did obtain life insurance to cover the outstanding debt. Between 1988 and 1993, the respondent acted as an attorney, in addition to being a business advisor, for Mrs. McQueen, drafting amendments to several trusts she had created over the years. Until either 1990 or 1991, Mrs. McQueen wrote her own checks. At some point, she turned over the responsibility of check writing to the respondent.

Without informing Mrs. McQueen, between January 1992 and December 1992 the respondent liquidated commercial paper that Mrs. McQueen had held as an investment at Shawmut Bank, transferring the proceeds ($392,725) to himself. He used these funds for his own benefit: $102,000 of the money to pay off his financial company's obligations to Shawmut Bank (even though a trust the respondent set up at Mrs. McQueen's request would have fulfilled the obligation at Mrs. McQueen's death), and the remaining $290,725 for his own purposes. In December 1992, without informing Mrs. McQueen or anyone else about his transfers, the respondent executed installment notes benefitting one of Mrs. McQueen's trusts to reflect the amount he had taken from her assets. These notes provided for higher interest rates than the Shawmut commercial paper had been earning. The respondent believed that he would have sufficient income to repay the notes at the higher rates, and could get a mortgage on his house (which held considerable equity) to repay them, if necessary. The respondent testified, and the hearing officer credited his testimony, that he transferred the money in order to enhance Mrs. McQueen's financial situation through the higher interest rates, and that, due to his relationship to her, he did not even think about any conflict of interest. The respondent did not commence making any payments on the notes until January 1993, one year after he began transferring assets to himself and using them for his own benefit. The respondent did make payments throughout 1993 and into 1994, even while a suit brought to recover the monies was pending.

In December 1992 or early 1993, the respondent informed Mrs. McQueen of the transfer or "loan" of her assets. Mrs.: McQueen responded, "I wish that you had told me first," but did not demand repayment or any action to provide security on the notes. There were no witnesses to the conversation, nor a written record of it. At Mrs. McQueen's request, in December 1993, the respondent informed Mrs. McQueen's nephew's son, and a family friend, who together were running the insurance agency, of the transfer. The nephew's son was appointed as guardian of Mrs. McQueen, and brought suit in 1994 for repayment of the monies. The suit was settled, and the respondent secured a mortgage on his house, which allowed him to repay the loans, plus interest. After Mrs. McQueen's death, a suit over a bequest to a hospital led to a negative media portrayal of the respondent due to his involvement in the transfer of funds, and resulted in a serious loss of business to the respondent.

2. The Appropriate Sanction. The recommendations of the board are entitled to substantial deference. See Matter of Foley, 439 Mass. 324, 333 (2003). Each case must be determined on its own facts and circumstances, but one of the primary aims in bar discipline cases "is to ensure that the disposition imposed should not be markedly disparate from the dispositions imposed on attorneys in similar cases." Matter of the Discipline of an Attorney, 392 Mass. 827, 834 (1984), citing Matter of Alter, 389 Mass. 153, 156 (1983).

Disbarment or indefinite suspension is the presumptive sanction where "an attorney intended to deprive the client of funds, permanently or temporarily, or if the client was deprived of funds (no matter what the attorney intended) ..." Matter of Schoepfer, 426 Mass. 183, 187 (1997), citing Matter of the Discipline of an Attorney, supra at 836. See also Matter of Luonqo, 416 Mass. 308, 309 (1993). "I look to the hearing committee's findings concerning the respondent's intent and whether the client was deprived of funds." Matter of Gonick, 15 Mass. Att'y Discipline Rep. 230, 234 (1999). In this case, the special hearing officer explicitly found that the respondent "intentionally misused his client's assets, and temporarily deprived her of the use of those assets." Based on this finding of intentional misuse which resulted in actual deprivation, which the respondent does not dispute, this case falls within Schoepfer. As between disbarment and indefinite suspension, suspension is proper where, as here, restitution has been made. See Matter of Brvan, 411 Mass. 288, 292 (1991) ("absence of restitution ... a factor in choosing between disbarment and indefinite suspension"); Matter of Gonick, supra at 235.

The special hearing officer cited several factors mitigating against the presumptive imposition of indefinite suspension in this case: the long-term personal and professional relationship between the respondent and Mrs. McQueen, the respondent's disclosure of the transfer to Mrs. McQueen and her failure to object to his conduct, his disclosure of the transfer to her nephew's son and his associate (the family friend), the respondent's repayment of the transfers in full, with interest and attorneys' fees,4 and the adverse professional consequences the respondent suffered as a result of the negative publicity concerning the controversies about the McQueen estate. The appeals panel agreed that a four-year suspension was appropriate, and generally cited the same mitigating factors as the special hearing officer. While Matter of the Discipline of an Attorney, supra at 837, states that sanctions in each case are to be determined on an individual basis, the case of Matter of Schoepfer clarified that a respondent "has a heavy burden" to demonstrate that in a case of this nature "special mitigating facts . . . justify less severe discipline" than the presumptive disbarment or indefinite suspension. Matter of Schoepfer, supra at 187.

I defer to the recommendation of the board, see Matter of Foley, supra at 333, in finding that the respondent has met his burden. The respondent had a personal and professional relationship with Mrs. McQueen for many years, and was largely responsible for her increase in net worth. The hearing officer found that the respondent's purpose in the transfer was to enhance Mrs. McQueen's financial position, and that a conflict of interest never occurred to him. No party disputes that finding. Although he used the money transferred to benefit himself, it is clear that the respondent never intended to steal from Mrs. McQueen or impoverish her, but intended to benefit her. He made payments on the notes he executed in exchange for the transfers, even after a suit over the money had been brought against him. When he told Mrs. McQueen of the transfer, she expressed regret that he had not informed her earlier, but did not object to his actions or ask that he repay her. Thus, it is reasonable to infer that she might have approved the transfers, if asked in advance. At Mrs. McQueen's request, the respondent informed her nephew's son and his associate of the transfers. The respondent also made full restitution.

In addition, the negative professional consequences which the respondent suffered due to the publicity to some extent weighs against the imposition of a harsher sanction than a four-year suspension. See Matter of Griffith, 440 Mass. 500, 510 (2003) ("Although it is a close point, some mitigation exists" due to suffering caused by negative publicity); Matter of Grossman, 3 Mass. Att'y Discipline Rep. 89, 93 (1983) ("the prospect of widespread publicity ... to some extent mitigates the need for a more severe sanction") (internal quotation ' omitted). These cases do not suggest a general proposition that negative publicity accorded to an attorney's conduct is mitigating; rather, they merely apply the general principle that "every 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, supra at 837. The fact that the respondent "lost almost all of his business" due to the negative publicity is a circumstance to be considered in this case.

I agree with the hearing officer and the board that the present case is far less serious than the actions of the respondent in Matter of Eisenhauer, 426 Mass. 448 (1998), a post-Schoepfer case in which the Supreme Judicial Court ordered an indefinite suspension. There, an attorney deprived the estate of an elderly client of nearly 80% of its value by charging excessive fees for the trust and administration of the estate. Id. at 457. The attorney used deceit and misrepresentation to conceal his actions, displayed a lack of candor before the hearing committee, and failed to make any restitution. Id. None of the mitigating factors of the present case existed in Eisenhauer. As "every offending attorney must receive the disposition most appropriate in the circumstances," Matter of the Discipline of an Attorney, supra at 837, it would be inappropriate to impose the same discipline on the present respondent when his actions were far less serious than those of the attorney in the Eisenhauer case, and were accompanied by significant mitigation.

Accordingly, I agree with the special hearing officer and the board that the appropriate disciplinary action in this case is a four-year suspension. A judgment shall enter suspending the respondent from the practice of law for four years.

By the Court

Judith A. Cowin
Associate Justice

Entered: March 4, 2005

FOOTNOTES:

1 Under S.J.C. Rule 4:01, § 5 (3) (d), as appearing' in 425 Mass. 1304 (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)(4) (dishonesty, fraud, deceit or misrepresentation), Canon 1, DR 1-102(A)(6) (conduct adversely reflecting on fitness to practice), Canon 5, DR 5-101(A) (not accepting employment if lawyer's professional judgment will be affected by his own interests). Canon 5, DR 5-104(A) (not entering into business transaction with client when , lawyer has differing interests from client). Canon 9, DR 9-102(A) (client funds to be held separately), Canon 9, DR 9-102(B) (failure to safeguard client funds, promptly notify client of receipt of funds, maintain records and promptly deliver client funds as requested).

3 The special hearing officer's findings of fact are unclear as to whether Mrs. McQueen died in 1994 or 1995, although the hearing transcript suggests the date was 1995. The specific date of death is unrelated to the outcome of this case.

4 The special hearing officer found that the respondent repaid the loans in full, with interest and attorneys' fees as a factor in mitigation, but does not mention attorneys' fees in the findings of fact. The hearing transcript suggests that the settlement did cover attorneys' fees.



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