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Commonwealth of Massachusetts

NO. BD-2006-069


S.J.C. Order of Term Suspension entered by Justice Spina on December 4, 2006, with an effective date of January 3, 2007.1

(S.J.C. Judgment of Reinstatement entered by Justice Spina on October 22, 2008.)


This matter came before me on an Information from the Board of Bar Overseers (board) recommending that the respondent, Attorney Alan R. Goodman, be suspended from the practice of law for a term of one year and one day, for professional misconduct consisting of providing false information to insurance companies in three personal injury cases, directing his staff to withhold material information from insurance companies, and altering a doctor's report to conceal the death of his client from an insurance company. Bar counsel recommends a term suspension of at least one year and one day, stressing that it is the minimum sanction whereby a reinstatement hearing is required. See S.J.C. Rule 4:01, § 18 (2)(c). The respondent argues that the appropriate sanction requires that he receive nothing more than a public reprimand.

I. Background. The hearing committee and the board made the following findings of fact and conclusions of law.

A. Palacio matter. The respondent represented Carlos Palacio in a claim for damages due to injuries arising out of a motor vehicle accident that occurred in October, 1996. Palacio claimed that the accident exacerbated a preexisting shoulder injury, Palacio had obtained four reports from his doctor. The first report failed to relate the injury to the accident, and one of the respondent's associates so advised the doctor. The doctor prepared a second report that stated the accident was the source of some exacerbation, but that there was no evidence the accident had produced any additional pathology. The associate advised Palacio that without a report that the accident had caused his injuries his claim would fail. Palacio spoke to his doctor, who wrote a third report stating that the accident had "clearly caused the shoulder symptoms to re emerge." A fourth report was even more supportive of the causal connection between the accident and Palacio's injuries. The respondent sent only the third and fourth reports to the insurer in the course of settlement negotiations.

In the meantime, Palacio's health insurer sent the respondent a notice of lien against the proceeds of any recovery. The respondent demanded release of the lien because Palacio's doctor had been unable to conclude that there was a causal connection between Palacio's injuries and the accident. He supported his demand with the first two reports written by the doctor, and the health insurer released its lien. Continued negotiations with the other driver's insurer ended with no payment to Palacio.

The hearing committee and the board concluded that, by sending one set of reports to the health insurer (supporting a claim that the injury had no causal relation to the automobile accident) while at the same time sending another set to the other driver's liability insurer (supporting a claim that the injury was related causally to the accident), and by making misrepresentations of material facts to the health insurer, the respondent had violated Mass. R. Prof. C. 4.1 (a) (lawyer shall not knowingly make a false statement of material fact or law to a third person in the course of representation, and 8.4(a) (lawyer shall not violate or attempt to violate the Rules of Professional Conduct through the acts of another), 8.4 (c) (prohibiting dishonesty, fraud, deceit, or misrepresentation), and 8.4 (h) (prohibiting other conduct adversely reflecting on fitness to practice).

B. Perkins matter. The respondent represented Robert Perkins in a claim for damages due to injuries arising out of a slip and fall that occurred on October 26, 1997. Perkins died from unrelated causes on June 2, 1998, before the claim was resolved. The respondent instructed his staff not to reveal Perkins's death to the insurer unless specifically asked. It was his practice and policy to reveal a client's death to an insurer only after reaching a tentative settlement, at which point he would seek appointment of an administrator of the estate to effect the settlement.

The respondent and his staff continued negotiating the claim with the insurer for more than ten months after Perkins had died, never disclosing the fact of death and always implying that Perkins was alive. In correspondence with the insurer Perkins was referred to as "our client," and a demand for settlement was made in part on the "apparent permanency" of Perkins's injuries. The respondent used medical authorization forms Perkins had signed, but were undated. He abandoned efforts to obtain medical reports from one provider who knew of Perkins's death and insisted on a release by the administrator of Perkins's estate before releasing any reports. The respondent justified nondisclosure of Perkins's death on the ground that knowledge of Perkins's death would "alter the dynamics of the negotiations" and would "create an uneven playing field," as the insurer would not value the case "fairly" if it knew Perkins had died. He said it was his policy to advise the insurer of the client's death only after reaching settlement and then give the insurer an opportunity to reevaluate the claim.

When settlement negotiations broke down because of differing versions of how the accident occurred, the respondent dropped the case. He later turned the file over to successor counsel.

The hearing committee and the board concluded that, by instructing his staff not to disclose Perkins's death, the respondent had violated Mass. R. Prof. C. 5.3 (a), (b), and (c) (lawyer responsible for nonlawyer employee's conduct if ordered or ratified by lawyer); and 8.4 (a), (c), and (h). The committee and the board also concluded that the respondent had violated Mass. R. Prof. C. 4.1 (a) and 8.4 (a), (c), and (h) by making false and misleading claims to the insurer, implying that Perkins was alive and that his injuries were permanent. Upon his client's death, the respondent's authority had ended and he had no client with authority to settle any claims unless the duly appointed administrator or executive of the estate had retained him. See Chandler v. Dunlop, 311 Mass. 1, 5 (1942).

C. Feldman matter. The respondent represented Sophie Feldman in a claim for injuries sustained in a fall in August, 1998, when a handrail attached to the front steps of her apartment gave out. Feldman died from unrelated causes about three months after the respondent notified the landlord's insurer of her claim. As with the Perkins matter, the respondent directed his staff not to disclose Feldman's death to the insurer unless specifically asked. In his correspondence with the insurer, the respondent referred to Feldman as "our client," implying that she was alive.

The respondent directed two staff members to alter a medical letter-report by deleting the second page, which contained a reference to Feldman's death, and to paste the doctor's signature onto the first page of the letter report. After the two staff members refused to comply with his instructions, the respondent altered the document himself, and he submitted it to the insurer in February, 1999, with a demand based on the "apparent permanency" of Feldman's injuries. At this time, no one had been appointed administrator of Feldman's estate.

On May 3, 1999, one of the respondent's associates filed a grievance with the Office of Bar Counsel about the respondent's failure to disclose the deaths of Perkins and Feldman in his demand letters to the insurers, the reference in his letters to the "apparent permanency" of the injuries of Perkins and Feldman, and the purposeful enclosure of an altered doctor's report in the Feldman case.

Ten days later, the respondent contacted the insurer in the Feldman case. The insurer minimally increased its counter-offer, but it still was well below the respondent's demand. The respondent accepted the insurer's counter-offer. The respondent advised the insurer that Feldman had died, and he asked whether the insurer would reevaluate its position regarding the settlement. The insurer's representative indicated that the insurer would stand by the settlement because it involved a closed period of disability. The settlement was consummated eventually, and releases were signed by Feldman's administrator and husband. Refusing to credit the respondent's testimony to the contrary, the hearing committee and the board found that the respondent's disclosure of Feldman's death was motivated by the recent filing of the disciplinary grievance.

The hearing committee and the board concluded that, by instructing his staff to alter the medical report to omit its reference to the client's death and to forward it to the insurer, the respondent had violated Mass. R. Prof. C. 3.4(a) (unlawful alteration of a document or other material having potential evidentiary value); 5.3(a),(b), and (c); and 8.4(a), (c), and (h). The committee and the board also ruled that, by submitting an altered doctor's report to the insurer, by making false claims to the insurer about his client's "condition" and the permanency of her injuries after her death, by implying that she was alive and by failing to inform the insurer of his client's death, the respondent had violated Mass. R. Prof. C. 3.4(a) and 8.4(a), (c), and (h).

D. Factors in Mitigation of Aggravation. There were no findings in mitigation. The hearing committee and the board found in aggravation that, at the time of his misconduct, the respondent had substantial experience in the practice of law. See Matter of Luongo, 416 Mass. 308 (1993). They also found in aggravation that, in 1995, the respondent received an admonition, conditioned on his attendance at a CLE program, for deceptive advertising in violation of Canon Two, Disciplinary Rule 2-101. AD-95-34, 11 Mass. Atty. Disc. R. 371 (1995).

II. Challenged Findings and Conclusions. The respondent challenges several findings and conclusions of the hearing committee and the board. One of his principal claims is that a lawyer has no duty to disclose a material fact to an adverse party in the course of pre-litigation negotiations. The respondent misunderstands the nature of the case against him. The gravamen of his conduct is not the failure to disclose a material fact, but rather his misrepresentation of material facts.

In the Palacio matter, he represented to Palacio's health insurer that the doctor "cannot relate the treatment of [Palacio's injury] to his accident" and he submitted the doctor's first two reports as support for his demand that it release its lien. In fact, the doctor did make the connection between Palacio's injury and the accident in his third and fourth reports, which the respondent submitted to the insurer of Palacio's landlord in his claim for damages. Where the respondent asserted as fact that which he knew was not true, he misrepresented the facts. He did not merely fail to disclose them. The health insurer relied on the respondent's misrepresentation in deciding to release its lien.

In the Perkins and Feldman matters, the respondent did not merely fail to disclose the death of his clients, he made misrepresentations that implied they were alive: he referred to each as "our client," and he based his demands on the "apparent permanency" of their injuries. He in fact had no client: Perkins and Feldman had died, and he was not representing the representative of the estate during his ongoing negotiations with the insurers. His assertions that death was not material is belied by his own testimony that he understood the dynamics of negotiations would change if the insurers knew his clients had died. The hearing committee and the board properly rejected the respondent's contention that his misrepresentations were mere "puffery," and a generally accepted convention in negotiations with insurers. Puffery generally is not favored in this context, see C.W. Wolfram, Modern Legal Ethics, § 13.5.7, at 721 (1986), citing W. Prosser & W. Keaton, Torts, 757 (5th ed. 1984), and the misrepresentations involved here do not even qualify as puffery. See Mass. R. Prof. C. 4.1, comment 2. The respondent's post-settlement disclosure of death in the Feldman matter did not cure his misconduct, but only aggravated it. It is evidence of his persistence in handling a claim for which his authority had ended with the death of his client.

The hearing committee and the board could reject the respondent's testimony that the assertions of the "apparent permanency" of his clients' injuries were not intentional, but were merely words on a routine form letter. They properly could conclude that he intentionally misrepresented the condition of his clients based on extensive testimony and other evidence that he personally reviewed these form letters, made changes, and adapted them to the particular facts of each case.

The respondent challenges the basis for the finding that he was motivated by the grievance his associate filed with the Office of Bar Counsel in his decision to apprise the insurer of Feldman's death. At the hearing, he tried to show that he was unaware of the grievance at the time he contacted the insurer, and that he was motivated to make contact because he recently had returned from vacation. He correctly argues that disbelief of his testimony does not prove the opposite proposition. However, there was other evidence that the hearing committee and the board could have relied on to draw the inference with respect to the respondent's motivation. He had returned from vacation about one month before he contacted the insurer, he had not been in touch with the insurer for approximately two and one-half months, and he contacted the insurer seven days after bar counsel mailed him notice of the grievance. In any event, the fact was not critical to the findings that he misrepresented the fact that Perkins and Feldman were clients when in fact they had died, that he had misrepresented the permanency of their injuries, or that he had altered a medical report.

The respondent contends that rule 3.4(a) creates no duty of disclosure, and he suggests that it does not apply to pre-litigation conduct. Again, the respondent misconstrues the case against him. This is not so much a case of failure to disclose as it is a case of misrepresentation. It was determined that the respondent intentionally altered a medical report to create the impression that Feldman was alive, and there is substantial evidence to support the findings of the hearing committee and the board on this point. In addition, there is nothing in the rule to support the argument that rule 3.4(a) applies only to conduct that occurs during litigation. The rule is worded broadly and includes pre-litigation conduct. There is ample record support for a finding that the respondent unlawfully2 altered a document for the purpose of defrauding or deceiving the insurer. Actual harm is not required under the rule.

I adopt the findings and conclusions of the board.

III. Disposition. The proper sanction must be determined by that imposed in comparable cases. See Matter of Alter, 389 Mass. 153, 156 (1983).

The respondent correctly distinguishes cases involving misrepresentations to a tribunal, where the presumptive sanction is a one-year suspension, from cases involving misrepresentations to others. Compare and contrast Matter of McCarthy, 416 Mass. 423, 428-429 (1993) (one-year suspension is norm for "active" misrepresentation to tribunal), and Matter of Neitlich, 413 Mass. 416,422-424 (1992) (one-year suspension for "active" misrepresentation to tribunal), with Matter of Connolly, 11 Mass. Att'y Disc. R. 43 (1995) (three-month suspension for misrepresentation to private party). There is no doubt that the respondent's misrepresentations were intentional, and material, and that a term suspension is in order. Contrast Matter of Tiberii, 12 Mass. Att'y Disc. R. 546 (1996) (public reprimand for negligent misrepresentation to tribunal).

This is not a case involving a single misrepresentation, see Matter of Neitlich, supra, but multiple misrepresentations in three discrete matters, including alteration of a document, all of which were part of the respondent's standard operating procedure. Each misrepresentation warrants a suspension. I must consider the cumulative effect of the respondent's misconduct. Matter of Saab, 406 Mass. 315, 326-327 (1989). I agree with the board, that the serious, repetitive, and brazen nature of the respondent's misconduct calls for a one-year suspension, together with a requirement that he petition for reinstatement. As for the requirement of reinstatement proceedings, I conclude that this is appropriate because of the respondent's apparent lack of appreciation for the wrongfulness of his conduct. It is troubling that he continued on a course of conduct, without reflection, that two of his non-lawyer staff members refused to follow.

IV. Mitigating and Aggravating Factors. The hearing committee and the board both found that no harm flowed to any insurer in these cases. The board concluded that the absence of harm should not be a factor in mitigation, and I agree. Harm is not an element of the misconduct found, and in any event, the respondent's misconduct constitutes harm to the profession in the dishonor it brings to all of us in the eyes of the public. See Matter of Foley, 439 Mass. 324, 337 (2003).

I also agree with the board that the respondent's experience and his prior discipline is a factor in aggravation. I do not weigh the prior discipline heavily, however, because it occurred more than ten years ago, and it involved a different disciplinary rule.

The respondent argues that I should consider the prejudice he has suffered from the lengthy delay in the prosecution of this matter. The respondent has failed to sustain his burden to show that the delay prejudiced his defense, as by loss of evidence or memory, see Matter of Kerlinsky, 406 Mass. 67, 75 (1989), cert, denied, 498 Mass. 1027 (1991), or that he was subjected to a "considerable period of public opprobrium while awaiting formal discipline," Matter of Gross, 435 Mass. 445, 451-452 (2001), or that he suffered substantial psychological distress as a result of any undue period of time awaiting formal discipline.

The respondent has indicated that it would not be unusual for a one-year period of suspension from the practice of law to nearly double as a result of the reinstatement process. Bar counsel contends that the process may be protracted if the attorney does not comply with customary requests in a timely fashion. I am concerned about the respondent's allegations, but agree that reinstatement is a process that should be imposed. Rather than a suspension for one year and one day, a suspension from the practice of law for one year can serve the same purpose. As part of his sanction, the respondent must apply for reinstatement pursuant to S.J.C. Rule 4:01, § 18 (2), but he may do so after he has served nine months of the period of his suspension, provided, however, that he shall not be reinstated until he shall have served the full term of his one-year suspension.

V. Conclusion. An order is to issue suspending .the respondent from the practice of law for a term of one year. He must take the Multi-State Professional Responsibility Examination during the period of suspension and receive a passing grade as established by the Board of Bar Examiners, and he must petition for reinstatement pursuant to S.J.C. Rule 4:01, § 18 (2), but he may file his petition for reinstatement after he has served nine months of his term of suspension. He may not be reinstated until he has served the full one year term of his suspension.


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

2 "Unlawful" is not limited to criminal conduct. It includes duress, fraud, or Undue influence, see Labonte v. Giordano, 426 Mass. 319, 321 n.4 (1997), and any other conduct disapproved under law. See also Commonwealth v. Ray, 3 Gray 441, 446 (1855) (common law forgery includes the alteration of any writing to the prejudice of the rights of another ); Gay v. Homer, 13 Pick. 535, 542 (1833) (same); Holden v. State, 2006 WL 540335 (Tex. App. 2006) (altered doctor's notes "writing" under forgery statute).

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