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Commonwealth of Massachusetts

S.J.C. No. BD-2005-022

IN RE: SUSAN B. NISSENBAUM

S.J.C. Judgment of Disbarment entered by Justice Cordy on August 25, 2005.1

MEMORANDUM OF DECISION

This bar disciplinary matter is before the court pursuant to a recommendation of the Board of Bar Overseers (board) that the respondent attorney, Susan B. Nissenbaum, be disbarred for misconduct in violation of several provisions of the then-applicable Canons of Ethics and Disciplinary Rules. Most notably, the board concluded, based on facts found by a hearing committee, that Nissenbaum had intentionally misappropriated and converted client funds over which she was the trustee to her own use with the intent to deprive the client, John O'Sullivan, of the use of those funds and with actual deprivation resulting. The board also concluded that Nissenbaum attempted to mislead bar counsel in its investigation of this misappropriation by misrepresenting the time she spent performing legal and fiduciary work for the client and by submitting a false time schedule with knowledge or reckless disregard for its inaccuracy. Finally, with respect to another client, Nancy Weissinger, the board concluded that Nissenbaum had inadequately investigated the client's needs before giving faulty Medicaid planning advice.2

The matter came before me for hearings on May 20 and August 10, 2005. I have carefully considered the parties' arguments and reviewed the respondent's and the board's memoranda, the voluminous exhibits and record of proceedings before the hearing committee and the board. I conclude that the record provides ample bases for the hearing committee and the board to find that the respondent converted client funds. Consequently, I order the respondent's disbarment, as recommended by the board.

1. Background. The hearing committee found the following facts. The respondent was admitted to practice law in 1977 and maintains a law office in Grafton. The respondent began representing O'Sullivan in 1988 in connection with the drafting of his will and the preparation of his tax returns. An elderly widower with no children, O'Sullivan lived alone in Somerville.

In 1992, the respondent drafted and O'Sullivan executed instruments to create the O'Sullivan Family Trust and to grant a durable power of attorney to herself and O'Sullivan's niece, Mary Mulkerrins. In 1993 and 1994, at O'Sullivan's request, the respondent redrafted the trust to name herself the sole successor trustee. During this time, the respondent charged O'Sullivan a fee of $150 per hour for her services, which included the drafting of the documents described above and other miscellaneous legal work in connection with O'Sullivan's ownership of his home. O'Sullivan promptly paid each of the respondent's bills, which ranged from $150 to $875 between 1988 and 1994.

In December 1994, after a precipitous decline in O'Sullivan's physical and mental health, O'Sullivan entered a nursing home in Maiden. Mulkerrins and the respondent exercised his power of attorney to manage his affairs. In late December 1994. the respondent and Mulkerrins agreed to the implementation of a Medicaid spend-down plan for O'Sullivan's assets, which involved the monthly transfer of $4,275 from 0'Sullivan's savings account to Mulkerrins. In January 1995, the respondent notified financial institutions holding .O'Sullivan's assets that she was the successor trustee of the O'Sullivan Family Trust. During 1995, she proceeded to fund the trust by depositing these assets and the proceeds of the sale of 0'Sullivan's Somerville home, which she initiated, into an interest-bearing sub-account of her master client funds account at Bank of Boston. From these funds, the respondent paid O'Sullivan's bills.

Meanwhile, the respondent and her husband went into default on a mortgage on a motel property in Vermont they owned. In April 1995, they entered into a restructuring agreement with the bank holding the note, which required them to make a $76,000 balloon payment by September 15, 1995. On August 22, 1995, the respondent wrote two bills for her fiduciary and legal work for O'Sullivan, one for 1994 legal services ($12,225) and the other for 1994 trustee services ($16,228). These bills did not break down the services by date, description, or time. The respondent paid these bills to herself by transferring the funds from the sub-account to the master client funds account. On September 13, 1995, the respondent made out two additional bills in summary format, charging the 0'Sullivan family trust for her work during the first six months of 1995, one for legal services ($12,000) and one for trustee services ($18,525). The respondent again paid these bills by transferring the funds from the sub-account to the master client funds account. The bills, which totaled $58,978, represented about twenty-five percent of O'Sullivan's estate's total value. On September 13, 1995, the respondent wired $76,000 to the bank holding the mortgage on the motel from the client funds account.

On January 6, 1996, O'Sullivan died without becoming eligible for Medicaid. The respondent met with Mulkerrins after O'Sullivan's death, and requested that she return the funds transferred to her under the spend-down plan to the trust. Mulkerrins refused, asserting she had claims against the trust for the care she performed for O'Sullivan and for an assault against her by O'Sullivan. The respondent agreed to settle the claims for $25,000 (in addition to Mulkerrins distribution as a beneficiary of the trust). The day of the agreement, Mulkerrins apparently repaid $10,000 of the $60,000 that had been transferred to her under the plan, but retained the remainder (in addition to six unexplained withdrawals on the spent-down savings account while Mulkerrins was exercising O'Sullivan's power of attorney). As a result of these withdrawals and the settlement agreement, the other 0'Sullivan trust beneficiaries received approximately $35,000 less than they otherwise would have.

In November of 1998, bar counsel notified the respondent that he was investigating the O'Sullivan trust, and requested documentation of her legal and fiduciary services to O'Sullivan. The respondent responded with a statement of services rendered, which included 420 hours of legal and fiduciary services from 1994 to 1998 and a breakdown describing the specific services, which she later conceded was prepared by a paralegal in her office.

The matter was heard over the course of six days before a hearing committee of the board in November and December of 2002. The parties filed proposed findings, conclusions of law, and recommendations, and the hearing committee held a closing argument in March 2003. In July 2004, the hearing committee filed its unanimous report,3 concluding that the respondent had violated the disciplinary rules as set out above and recommending disbarment. The hearing committee found, in relevant part, that the respondent converted O'Sullivan trust funds to her own use, in violation of Canon One, DR 1-102(A)(4) (dishonesty, fraud, deceit or misrepresentation) and DR 1-102(A)(6) (conduct adversely reflecting on fitness to practice), Canon Seven, DR 7-101(A)(1) (intentional failure to seek lawful objectives of client), DR 7-101(A)(2) (intentional failure to carry out contract of employment), and DR 7-101(A)(3) (prejudice or damage to client), and Canon Nine, DR 9-102(A) and (B) (lawyer shall keep client funds separate from lawyer's funds, safeguard client funds, and keep records of the maintenance of client funds); and that the respondent provided bar counsel with a false time schedule with reckless disregard for its accuracy, failing to correct the time schedule when the errors were apparent, and misrepresenting the time spent on legal and fiduciary work for O'Sullivan to bar counsel, in violation of Canon One, DR 1-102(A)(4) (dishonesty, fraud, deceit or misrepresentation), DR 1-102(A)(5) (conduct prejudicial to the administration of justice), and DR 1-102(A)(6) (conduct adversely reflecting on fitness to practice). The respondent has made no restitution for this conduct.

The board conducted oral argument on the respondent's appeal of the hearing committee's report on November 8, 2004. On February 14, 2005, the board voted to recommend disbarment and approved a memorandum articulating its reasons.

2. Discussion. Whether disbarment is the appropriate sanction depends, in my view, on whether the first two allegations (misappropriation and misrepresentation) have been proven. These are the only matters pressed by the respondent, who contends that the court should modify the conclusions of the board on each point, and impose a lesser sanction. In this regard the respondent vigorously argues that the findings of the hearing committee were clearly erroneous and internally inconsistent such that they should be set aside or substantially revised. Rather than misappropriation, respondent asserts that the evidence, at best, supports a conclusion that she was culpable of failure to keep adequate time records regarding her work for the client, thereby resulting in her negligently charging excessive legal and fiduciary fees to the client's trust fund. She further argues that the time schedule submitted to the bar counsel was prepared more than three years after the services and bills in question were rendered, in good faith, by a paralegal in her office, working from whatever scraps of information could then be found in the client files and attorney's diaries.4

The crux of the case is the respondent's intent. Intent is a question of fact that largely turns on the credibility of witnesses before the hearing committee. The hearing committee heard the testimony of the respondent, two of her employees, two employees of the nursing home where her client (who suffered from dementia) resided, and, on various points, attorney experts called on the respondent's behalf. The committee also had the benefit of thousands of pages of documents including nursing home and hospital records, the respondent's diaries and calendars, and the respondent's client files. On the basis of the testimonial and documentary evidence, the hearing committee made meticulous findings of fact as well as specific credibility findings. In important measure, the committee found the respondent and her employees not credible regarding the extent of the services provided the client, with whom there was an agreement to pay for services at an hourly rate. Rather, the committee found that when the respondent billed and wrote checks on the client's funds for nearly $59,000 in legal and fiduciary fees on August 22 and September 13, 1995, she knew that she was not entitled to a substantial amount of those fees but took them in order to pay off her own personal obligation -- a balloon note on a restructured mortgage that was due by September 15, 1995. On the basis of these subsidiary findings, the hearing committee concluded that the respondent had converted client funds with actual deprivation resulting. The hearing committee also found that the time summary submitted during bar counsel's investigation was grossly inflated and rife with false entries, that respondent knew as much, and that it had been submitted by the respondent in an effort to persuade bar counsel that she had in fact earned the funds.

In deciding respondent's appeal from the report of the hearing committee, the board concluded that "the record evidence amply supports the committee's findings. Those findings are buttressed by a number of considerations that, viewed cumulatively, leave no doubt that the respondent deliberately set out to misappropriate fiduciary funds without believing them all to be earned fees." Those considerations among others included: the respondent's powerful personal need for the funds and the timing of transfers; her failure to keep contemporaneous time records and admitted failure to make any effort to establish the time she spent on the client's work in order to compute what was actually due at the time she billed and collected her fees; the substantial disparity between the records of services actually performed and the hours that would have had to be expended to support the fees; and the woefully deficient time schedule prepared for bar counsel, that respondent failed to correct even after its deficiencies became apparent. Those same considerations led to the board affirming the hearing committee's findings regarding misrepresentation.

The principal question to be decided by this court is whether the findings of the hearing committee, adopted by the board, are demonstrably inconsistent or clearly erroneous, so as to undermine the board's conclusion that respondent's conduct constituted conversion and misrepresentation. In this task I am constrained by a limited scope and deferential standard of review, particularly with respect to factual findings and credibility determinations. The hearing committee is the "sole judge of the credibility of the testimony presented at the hearing." Matter of Saab, 406 Mass. 315, 328 (1989), quoting S.J.C. Rule 4:01, §8(3) as appearing in 381 Mass. 784 (1980). The court will not disturb credibility determinations absent clear error, or unless it can be said with certainty that they are "wholly inconsistent" with other findings. Matter of Harkey, 11 Mass. Atty. Disc. R. 102, 103 (1995). See also Matter of Provanzano, 5 Mass. Att'y Disc. R. 300, 304 (1987) ("The findings [of the hearing committee] resulted essentially from determinations of credibility .... Its findings will not be disturbed absent some clear error"). Pursuant to S.J.C. Rule 4:01, § 8, the subsidiary facts found by the board and filed with the information "shall be upheld if supported by substantial evidence upon review of the entire record."

After reviewing the entire record, and giving the necessary deference to the' fact finder on the matter of witness credibility, I conclude that there is substantial evidence contained therein supporting the findings of the hearing committee, as adopted by the board. Consequently, I affirm those findings and the conclusions drawn therefrom, particularly with respect to the respondent's conversion of client funds with deprivation resulting and respondent's effort to mislead bar counsel through misrepresenting the extent of her services, both legal and fiduciary.

Having so concluded, the sanction of disbarment imposed by the board and recommended to this court, must be considered. The presumptive sanction in conversion cases is indefinite suspension or disbarment. Matter of Schoepfer, 426 Mass. 183, 188 (1997), quoting Matter of the Discipline of an Attorney, 392 Mass. 827, 836 (1984). In support of its recommendation of disbarment, the board points out that restitution has not been made and that the misconduct of conversion is compounded by the efforts to mislead bar counsel. See Matter of Brvan, 411 Mass. 288, 292 (1992) (disbarment appropriate sanction where respondent has made no restitution for misconduct). While not bound by its recommendation, the court gives substantial deference to it. See, e.g., Matter of Kersey, 432 Mass. 1020, 1020 (2000); Matter of Doyle, 429 Mass. 1013, 1013 (1999); Matter of Tobin. 417 Mass. 81, 88 (1994). In the difficult circumstances of this case I cannot say that disbarment is a markedly disparate sanction or otherwise inappropriate, and therefore I impose it. An order of disbarment shall enter.

Robert J. Cordy, Associate Justice

August 25, 2005

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

1 I need not discuss this misconduct because it has no effect on the ultimate sanction and the respondent has made no material challenge to the hearing committee's and the board's conclusions with respect to it.

1 One member of the committee dissented from the report's findings regarding the Weissinger matter.

1 Bar counsel was fully aware that the time schedule was an attempt to reconstruct the sequence, nature, and duration of services for which no contemporaneous time records had been kept.



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