IN RE: WILLIAM SPALLINA
ORDER OF TERM SUSPENSION
This matter came before the Court, Ireland, J., on an Information and Record of Proceedings filed by Bar Counsel on January 11, 1999. Upon consideration thereof, it is ORDERED that:
1. William Spallina is hereby suspended from the practice of law in the Commonwealth of Massachusetts for a period of two years. In accordance with S.J.C. Rule 4:01, sec. 17(3), the suspension shall be effective thirty days after the date of the entry of this Order. The lawyer, after the entry of this order, shall not accept any new retainer or engage as lawyer for another in any new case or legal matter of any nature. During the period between the entry date of this order and its effective date, however, the lawyer may wind up and complete, on behalf of any client, all matters which were pending on the entry date.
It is FURTHER ORDERED that:
2. Within fourteen (14) days of the date of entry of this Order, the lawyer shall:
a) file a notice of withdrawal as of the effective date of the suspension with every court, agency, or tribunal before which a matter is pending, together with a copy of the notices sent pursuant to paragraphs 2(c) and 2(d) of this Order, the client's or clients' place of residence, and the case caption and docket number of the client's or clients’ proceedings;
b) resign as of the effective date of the suspension all appointments as guardian, executor, administrator, trustee, attorney-in-fact, or other fiduciary, attaching to the resignation a copy of the notices sent to the wards, heirs, or beneficiaries pursuant to paragraphs 2(c) and 2(d) of this Order, the place of residence of the wards, heirs, or beneficiaries, and the case caption and docket number of the proceedings, if any;
c) provide notice to all clients and to all wards, heirs, and beneficiaries that the lawyer has been suspended; that he is disqualified from acting as a lawyer after the effective date of the suspension; and that, if not represented by co-counsel, the client, ward, heir, or beneficiary should act promptly to substitute another lawyer or fiduciary or to seek legal advice elsewhere, calling attention to any urgency arising from the circumstances of the case;
d) provide notice to counsel for all parties (or, in the absence of counsel, the parties) in pending matters that the lawyer has been suspended and, as a consequence, is disqualified from acting as a lawyer after the effective date of the suspension;
e) make available to all clients being represented in pending matters any papers or other property to which they are entitled, calling attention to any urgency for obtaining the papers or other property;
f) refund any part of any fees paid in advance that have not been earned; and
g) close every IOLTA, client, trust or other fiduciary account and properly disburse or otherwise transfer all client and fiduciary funds in his possession, custody or control.
All notices required by this paragraph shall be served by certified mail, return receipt requested, in a form approved by the Board.
3. Within twenty-one (21) days after the date of entry of this Order, the lawyer shall file with the Office of the Bar Counsel an affidavit certifying that the lawyer has fully complied with the provisions of this order and with bar disciplinary rules. Appended to the affidavit of compliance shall be:
a) a copy of each form of notice, the names and addresses of the clients, wards, heirs, beneficiaries, attorneys, courts and agencies to which notices were sent, and all return receipts or returned mail received up to the date of the affidavit. Supplemental affidavits shall be filed covering subsequent return receipts and returned mail. Such names and addresses of clients shall remain confidential unless otherwise requested in writing by the lawyer or ordered by the court;
b) a schedule showing the location, title and account number of every bank account designated as an IOLTA, client, trust or other fiduciary account and of every account in which the lawyer holds or held as of the entry date of this Order any client, trust or fiduciary funds;
c) a schedule describing the lawyer's disposition of all client and fiduciary funds in the lawyer's possession, custody or control as of the entry date of this order or thereafter;
d) such proof of the proper distribution of such funds and the closing of such accounts as has been requested by the bar counsel, including copies of checks and other instruments;
e) a list of all other state, federal and administrative jurisdictions to which the lawyer is admitted to practice; and
f) the residence or other street address where communications to the lawyer may thereafter be directed. The lawyer shall retain copies of all notices sent and shall maintain complete records of the steps taken to comply with the notice requirements of S.J.C. Rule 4:01, Section 17.
4. Within twenty-one (21) days after the entry date of this Order, the lawyer shall file with the Clerk of the Supreme Judicial Court for Suffolk County:
a) a copy of the affidavit of compliance required by paragraph 3 of this order;
b) a list of all other state, federal and administrative jurisdictions to which the lawyer is admitted to practice; and
c) the residence or other street address where communications to the lawyer may thereafter be directed.
Entered: January 22, 1999
REPORT OF THE HEARING COMMITTEE
On December 29, 1997, Bar Counsel filed a Petition for Discipline alleging that the respondent, William F. Spallina, improperly instituted two actions in district court attaching, and in one case, levying on, funds which had been allocated in a divorce judgment, with intent to circumvent that judgment; made false, deceptive or misleading misrepresentations, some under oath, to the district courts and the probate court; wrongfully induced his clients' participation in the district court actions; continued to advise his client after disqualification; continued to represent his client while suing his client for fees; simultaneously represented clients with differing interests; and damaged or prejudiced the interests of his clients.
The respondent filed his answer on January 30, 1998 and an amended answer on March 11, 1998. Prior to the hearing, the parties stipulated to a number of facts. There were three days of hearings: April 29, 30, and June 3, 1998. Bar Counsel presented the testimony of the respondent and his client's former wife. The respondent testified on his own behalf and presented the testimony of opposing counsel in the divorce case and an attorney who appeared as an expert witness. In addition, the parties introduced into evidence thirty-three exhibits.
I. Findings of Fact
1. The respondent, William F. Spallina, was admitted to the bar of the Commonwealth on January 7, 1981 (Stip. ¶ 4; Tr. 1: 52). He is a sole practitioner with an office at 76 Chestnut Street, Newton, MA (Stip. ¶ 4).
2. Commencing in July 1992, the respondent represented the husband in a contested divorce action in Middlesex Probate and Family Court, brought by the wife who was also represented (Stip. ¶ 5; Tr. 1:53; 2:5, 134). From December 1992 through October 1993, the respondent also represented the husband in a civil action in Middlesex Superior Court, brought by the wife's mother to determine ownership of certain bank funds held in the wife's name, which the wife claimed she was holding for her parents (Stip. ¶ 5; Tr. 1:74-75).
3. Throughout 1992 and 1993, the wife lived in Cambridge, and the husband lived in Arlington (Stip. ¶ 36). Throughout that period, the was employed by Digital Equipment Corporation in Waltham (Stip. ¶ 36).
4. During the divorce proceedings, the parties disputed, among other issues, entitlement to funds, valued at approximately $44,000 held jointly in a certificate of deposit at BayBank, account no. 6068703 ("BayBank CD") (Stip. ¶ 6). In the course of those proceedings, financial statements, dated January and February 1993 and signed by the husband and the respondent, were filed with the probate court, disclosing the following other funds in financial institutions solely in the husband's name: approximately $2,000 in an individual retirement account (IRA) at BayBank approximately $190 in a checking account at BayBank; approximately $3,200 in an IRA account at Dean Witter; and approximately $1,200 in an account at the Digital Equipment Corporation Credit Union (Ex. 6, 10, 11, 12, pp. 73-74; Tr. 1:63-67; Stip. ¶ 37). In addition, the husband owned some Digital stock (Ex. 10, 11; Tr. 1: 62).
5. In February 1993, the divorce action was tried before the Honorable Eliot K. Cohen in the Middlesex Probate Court (Stip. ¶ 7). In the course of the trial, the husband testified regarding the assets he owned (see Ex. 12, pp. 73-74, Ex. 20). Through his representation of the husband, the respondent was aware of his income and assets (Tr. 1:59-68).
6. In late March 1993, the respondent filed a notice of lien for attorneys fees in the probate court, pursuant to G.L. c. 221, § 50, and served a copy of the notice on his client, and on the wife's counsel (Stip. ¶ 8; Ex. Ia).
7. On April 21, 1993, the probate court issued findings of fact and conclusions of law (Ex. 1b), and entered a judgment of divorce nisi (Stip. ¶ 9; Ex. 1c). The divorce judgment, inter alia, apportioned the principal funds of approximately $44,000 in the BayBank CD, granting the wife $11,125 outright (Ex. 1c). The court also granted the wife an allowance of $25,135.17 for her counsel fees and costs to be paid to her from the husband's interest in the remaining funds (Stip. 9; Ex. 1c). The divorce judgment thus awarded the wife a total of $36,260.17 from the BayBank CD and ordered distribution of that sum to her when the CD matured, leaving the remaining balance of $7,739.83 plus any accumulated interest to be paid to the husband at that time (Stip. ¶ 9; Ex. 1c). The court entered no judgment regarding the respondent's notice of lien for attorneys fees (Ex. 1c). The judgment specifically stated that the husband was "not entitled to an allowance for attorneys fees and costs." (Ex. 1c)
8. The respondent received copies of the probate court's findings of fact, conclusions of law (Ex. 1b) and judgment (Ex. 1c) in late April 1993 (Stip. ¶ 9). The husband then owed him approximately $18,000 in attorneys fees for the divorce action and another $900 for the superior court case (Ex. 5a, Ex. 5b; Tr. 1:74-75). The respondent informed his client that he had to make financial arrangements if he wished the respondent to pursue an appeal on his behalf (Ex. 18). The respondent knew at that time that his client had insufficient income and assets to pay the fees he owed or fund an appeal (Tr. 1:75).
9. On or about April 30, 1993, having learned that the CD's maturity date was May 1994, not June 1993, and that the balance on that date had increased to approximately $46,000 due to interest, counsel for the wife filed and served a motion to amend the divorce judgment in order to permit immediate redemption and distribution of the funds in the BayBank CD (Stip. ¶ 10; Ex. Id; A ¶ 8).
10. In late April or early May 1993, the respondent and the husband discussed the outstanding fees and the financing of the appeal, and his client told him he did not know how he was going to pay him (Tr. 1:75-76, 80-82). The respondent advised his client that he "had" to sue him for his unpaid attorneys fees and that he planned to attach his funds in BayBank (Tr. 1:82-85, 2:39-40). The respondent made no disclosures to his client concerning the conflict of interest involved in his suing his client while continuing to represent him, nor did he advise him of the possible harm or liability to his client which could result from attaching the BayBank funds (Tr. 1:84-87, 116-119). The respondent did not advise his client to consult another attorney about the fee lawsuit or attachment nor did he seek leave to withdraw (A ¶16; Tr. 1:84-87).
11. On May 19, 1993, on the husband's behalf, the respondent filed a notice of appeal of the divorce judgment, which was served on counsel for the wife (Stip. ¶ 11; Ex. 1e). The respondent believed the appeal stayed the judgment and as a consequence precluded either party from redeeming the CD (Tr. 3:3-4). At all times thereafter through December 1993, the respondent represented the husband in the appeal of the divorce as well as in ongoing post-trial proceedings in the probate court (Stip. ¶ 11).
12. On May 21, 1993, the respondent commenced an action in the Newton District Court against his client ("fee action"), seeking approximately $18,750 in unpaid legal fees and expenses in connection with the divorce and the related superior court proceeding (Stip. ¶ 12, Ex. 2a, 2b).
13. In late May 1993, the respondent received notice that the wife's motion to amend the divorce judgment had been marked for hearing in the probate court on June 30, 1993 (Stip.¶ 13; Tr. 1:79-80).
14. In the Newton District Court fee action, on May 25, 1993, the husband was served with a copy of the summons and complaint, but he did not answer or appear (Stip. ¶ 12; Ex. 2a, 2c). On the twenty-first day after service, June 15, 1993, the respondent requested entry of default and a default judgment against his client (Ex. 2a, 2d, 2e).
15. On June 22, 1993, in the fee action, the respondent filed an ex parte motion and supporting affidavit seeking a $20,000 attachment by trustee process of all bank deposits in accounts standing in his client's name, including but not limited to personal accounts in his name at BayBank (Stip. ¶ 14; Ex. 2f). In his affidavit, signed under the pains and penalties of perjury, the respondent represented that the husband "currently has several bank accounts with more than enough money to satisfy this judgment" and that the husband "may very well withdraw or secret those funds if he is given notice of this motion." (Ex. 2f).
16. The respondent appeared for hearing in Newton District Court on his motion that same day (Stip. ¶ 14; Ex. 15a). At the hearing the respondent provided no additional information to the court other than that set forth in his affidavit (Ex. 15a, Ex. 2f; Tr. 1:113-116). He did not inform the court that he continued to represent the husband, that he had already informed the husband of the fee action and his intent to seek an attachment, or that at least a portion of the funds he sought to attach had been awarded to the wife by the probate court judgment (Ex. 15a, Tr. 1: 113-116, 2:46). At the conclusion of the hearing on June 22, 1993, the Newton District Court (Bletzer, J.) allowed an attachment for $18,000 (Ex. 2g), and that same day the respondent had a trustee summons to BayBank issued (Ex. 2i) and served (Stip. ¶ 15). On June 30, 1993, pursuant to the Newton District Court trustee process, BayBank debited $18,000, plus a $20 administrative fee, from the BayBank CD funds, and placed them in a separate trustee account (Stip. ¶8; Ex. 7a).
17. The respondent made two knowing and intentional misrepresentations under oath to the Newton District Court in his affidavit in support of the ex parte trustee process. In addition, the respondent intentionally sought to attach the funds in the CD, knowing such attachment would be in excess of that awarded to the husband outright, and thus, he intentionally sought to evade the divorce judgment and obtain at least partial payment of his fees from the wife's interest. These findings are based on our evaluation of the credibility of the witnesses and the evidence presented, including the following:
(a) The respondent represented to the court that his client would secret funds if notified of the attachment, when in fact, the respondent had previously advised his client of the fee action and the attachment. The respondent could not and, we find did not, in good faith, believe that the husband would remove the funds if notified in advance of the attachment. In addition, the respondent understood at the time, that, under the divorce judgment, neither the husband nor the wife was entitled to withdraw any funds from the CD until maturity and the respondent also believed that the appeal in effect put a freeze on these funds (Tr. 2:44-45, 3:3-4).
(b) The respondent represented to the court that his client had sufficient funds deposited at BayBank to satisfy a judgment of approximately $18,750 in the fee action (Ex. 2f), when the only accounts he knew of at BayBank in his client's name were the checking account with approximately $190, the IRA with approximately $2,200 (see Ex. 2h, Ex. I 0, Ex. I 1, Ex. 17; Tr. 1: I 00- 1 02), and the CD, of which only approximately $7,739.83 plus accumulated interest had been awarded to the husband upon maturity by the probate court (Ex. I c; Tr. 1:92, 2:44-45). The respondent admitted that he intended to attach the funds in the CD in excess of that awarded to the husband and that he made no effort to exclude the portion of the CD awarded to the wife directly or through the husband from that attachment (Tr. 1:102, 104, 107-108; 2:121; Ex. 30(b), p. 2).
(c) Belying any claim to good faith is the fact that the respondent, who was aware of other assets belonging to his client (see findings above and Ex. 10, 11, 17), including the Dean Witter IR.A, the Digital Credit Union funds, and the Digital Equipment Corporation stock, made no effort to attach any or all of those other funds or assets.
18. On June 30, 1993, the respondent and counsel for the wife appeared before Judge Cohen in the probate court at a hearing on the wife's motion to amend the divorce judgment to provide for immediate redemption of the BayBank CD (Stip. ¶ 16; Ex. 15b). The respondent argued in opposition to the motion (Stip. ¶ 16), in the course of which he stated:
this entire case is now on appeal. If this judgment were to be amended at this time pursuant to the motion filed by the plaintiff, the money would still be there pursuant to the fact that the judgment would not be final until after the Appeals Court made a decision in the case, which in all probability would be after the time when this Certificate of Deposit matures anyway in 1994.
(Ex. 15b, p. 4). At the conclusion of the hearing, Judge Cohen denied the motion (Stip. ¶ 17).
19. The respondent's statement to Judge Cohen that "the money would still be there" constituted an intentional and knowing misrepresentation of fact made to conceal his own surreptitious scheme to avail himself of the CD funds to pay his fees. The respondent had already attached approximately $18,000 of the funds in the CD for his own purposes, and intended to levy on the attachment. We reject the respondent's assertions that he was under the misapprehension that an appeal stayed the judgment in a divorce action and therefore, he simply misstated the law (Tr. 1:45, 3-4, 51-52). Regardless of his asserted belief as to the legal effect of the appeal of the judgment, at the time he made the statement to Judge Cohen, the respondent knew, as a matter of fact, and was working diligently to ensure that the money would not "still be there."
20. At some point in the late spring or early summer of 1993, the respondent learned from the husband that the husband's cousin, who resided in Canada, was seeking payment of a $13,000 loan he made to the husband (Tr. 2:61-64, 67). The husband told the respondent that he owed his cousin the money, but could not repay it (Tr. 2:63-64, 6768). The respondent advised the husband to file for bankruptcy, but the husband did not want to discharge the debt to his cousin in bankruptcy (Tr. 2:65-68, 86-88). The respondent told his client to have the cousin call him (Tr. 2:67-68). The cousin then called the respondent at a time when the husband had an appointment with the respondent (Tr. 2:61-62). The respondent, in the husband's presence, discussed with the cousin filing a lawsuit against the husband for $13,000 (2:61-62). The respondent sent the cousin a written hourly fee agreement, which the cousin signed and returned in July 1993 (2:60, 68-69, 71).
2 1. At no time did the respondent make any disclosures to the husband or the cousin concerning their differing interests, nor did he advise the husband of the possible harm or liability to the husband which could result from further attaching and withdrawing of the BayBank funds (Tr. 2:85-87, 89-95). The respondent did not advise either the husband or the cousin that his pending fee suit against the husband also created a conflict of interest (2:85-87, 89-92). The respondent did not advise the husband or the cousin to consult another attorney about the collection lawsuit or attachment (Tr. 2:84-87, 96).
22. Pursuant to the respondent's request, default entered in his fee action against the husband on July 26, 1993 (Ex. 2d-e, k; Tr. 2:47-48).
23. On August 6, 1993, the respondent, acting as attorney for the cousin, commenced an action against the husband in the Cambridge District Court, to collect the husband's debt to his cousin in the amount of $13,000 (Stip. ¶ 20; Ex. 3a, 3b). The husband was served with copies of the summons and complaint in this action, but he did not answer or appear and was later defaulted (Stip. ¶ 20; Ex. 3e, 3g, 3h, 3i).
24. That same day, August 6, 1993, the respondent filed a motion in the fee action to charge the trustee, BayBank, and for issuance of a trustee process execution in the amount of $18,000 (Stip. ¶ 19; Ex. 21). The respondent appeared in the Newton District Court for hearing on the motion on August 13, 1993 (Ex. 15c), and the motion was granted that same day (Stip. ¶ 19; Ex. 2n). The respondent did not disclose to the court in his motion or at the hearing that he continued to represent the husband, nor did he disclose anything regarding the divorce judgment and its award to the wife, directly and through the husband, of all but $7,739.83 plus interest in the CD which he was seeking to reach (Tr. 2:47-48; Ex. 15c (transcript of hearing)). That same day, prior to obtaining an execution from the Newton District Court, the respondent wrote to BayBank enclosing a copy of the motion and order allowing it, and requesting payment of the $18,000 (Tr. 2:48, 50-51).
25. On August 20, 1993, the respondent received a check for $18,000 from BayBank, which was from funds taken from the CD pursuant to the Newton District Court trustee process (Ex. 7a; Tr. 4849; Stip. ¶ 37). The respondent promptly deposited the check into his operating account (Ex. 7a, 8a; Tr. 2:52-54).
26. On September 7, 1993, the respondent filed a motion in the action in Cambridge District Court for a $13,000 attachment by trustee process of bank deposits in accounts standing in the husband's name, including funds in accounts in his name at BayBank (Stip. ¶ 22; Ex. 3c), and notice of the motion was served on the husband (Ex. 3c).
27. On September 13, 1993, twenty days after service of the complaint on the husband, the respondent appeared in the Cambridge District Court for hearing on the motion for trustee process (Stip. ¶ 23; Ex. 15d). At the hearing, the respondent represented to the court:
And it is our understanding, there are funds at BayBank which [the husband] has. And, therefore, we are seeking a trustee process attachment in the amount of the loan. And that the motion specifically includes a reference to BayBank.
(Ex. 15d, pp. 1-2).'The respondent provided no additional information to the court other than that set forth in the motion, in the cousin's affidavit and in the transcript (Ex. 3c, 3d, 15d; Tr. 2:82-84). The respondent did not inform the court that he continued to represent the husband or that the funds he sought to attach had been awarded to the wife by the probate court judgment or that he had recently received $18,000 from the CD based on his own action against the husband (Ex. 3c, 3d, 15d; Tr. 2:82-84). Following the hearing, the court allowed the respondent's motion (Ex. 3f), and that same day the respondent had a trustee summons for $13,000 issued to BayBank (Ex. 3j) and subsequently served (Stip. ¶ 24).
28. The respondent made a knowing and intentional misrepresentation to the Cambridge District Court at the hearing on the motion for trustee process, essentially representing that the husband had funds a BayBank to satisfy the attachment, when he knew such attachment would reach funds awarded to the wife under the probate court judgment. Thus, he also intentionally sought to evade the divorce judgment and obtain payment of the husband's debt to his cousin from the wife's interest. These findings are based on our evaluation of the credibility of the witnesses and the evidence presented, including the following:
(a) The respondent represented to the court that there were sufficient funds deposited at BayBank belonging to the husband to satisfy a judgment of $13,000 in this collection action (Ex. 3c, 15d), when the only accounts he knew of at BayBank in the husband's name, other than the joint CD previously allocated by the probate court, were insufficient to satisfy the judgment (Tr. 2:73-74, 78; see ¶ 17 above).
(b) The respondent sought only to attach funds at BayBank (Ex. 15d) and admitted that he intended to attach the funds in the CD (Tr. 2:74, 85). Indeed, he informed the husband, prior to filing suit, that he intended to attach funds in the BayBank CD (Tr. 2:85).
(c) The respondent knew that he had already attached and levied upon $18,000 in the CD (Tr. 2:74, 77) and that therefore any additional withdrawal from the CD could come only from the wife's share under the divorce judgment.
29. On September 20, 1993, pursuant to the Cambridge District Court trustee process, BayBank debited another $13,000, plus another $20 administrative fee from the BayBank CD, and placed the funds in a trustee account at the bank (Stip. ¶ 25; Ex. 7b).
30. On Saturday, September 25, 1993, the wife called BayBank customer service to find out the current balance in the CD, which she expected to be about $47,000 with interest (Tr. 2:8-1 0). She was told by the BayBank representative that the balance was about $16,000 (Tr. 2: 1 0-11). Since the bank was closed, the wife could obtain no further information until the following Monday (Tr. 2:11-13). The wife immediately called her attorney (Tr. 2:11-12). He advised her to remove the remaining funds to a separate account when the bank opened the following Monday (Tr. 2:13-14).
31. On Monday, September 27, 1993, the wife learned from BayBank that two creditors, who were not identified at that time, had attached a total of $31,000 from the CD (Tr. 2:14-17, 3:45-46). The wife, in accordance with her attorney’s instructions, placed the remaining CD funds in a separate account (Tr. 2:19-20). That same day, the wife's attorney wrote to the respondent informing him that the wife had learned of some attachments on the CD and advising him of the transfer of the remaining funds (Ex. 14; Tr. 161-162). The respondent did not reply to this letter (Tr. 3:23). The wife's attorney pursued the identity of the attaching creditors with BayBank and found out that the respondent and the husband's cousin had obtained the attachments through the district court actions (Tr. 2:162-163).
32. On September 27, 1993, the Cambridge District Court in the cousin's collection action entered a default judgment against the husband (Ex. 31).
33. On October 6, 1993, in the Cambridge District Court action, on behalf of the wife, her attorney filed and served motions to intervene in that matter, to stay issuance of trustee execution. and to dissolve the BayBank $13,000 trustee process attachment (Ex. 3a, 3k, 22a, 22b).
34. On October 8, 1993, the wife's attorney sent a demand letter pursuant to G.L. c. 93A, requesting that the respondent return the $18,000 in funds taken from the CD in the Newton District Court action and dissolve the $13,000 trustee process attachment and dismiss the Cambridge District Court action (Ex. 21). The respondent did not respond to this letter (Tr. 2:161).
35. On October 13, 1993, the respondent, the husband, and the wife's attorney appeared in the Cambridge District Court for hearing on the motions previously filed by the wife's attorney in that action (Stip. ¶ 26; Ex. 15e). The respondent requested a postponement of the hearing (Stip. ¶ 26). In the course of the hearing, in response to questions from the judge, the respondent admitted that he continued to represent the husband in the divorce action and that he was also representing the husband's cousin in this suit against the husband (Ex. 15e). He further admitted that he was aware of the divorce judgment, that he was "encumbering [the CD] having knowledge of the fact that there's a judgment on it," and that he had previously taken $18,000 from the CD for himself pursuant to trustee process in the fee action (Ex. 15e). The Court (Bletzer, J.), finding "a serious ethical problem" in the respondent's actions, ordered the assets under attachment frozen and continued the matter for one week (Stip. ¶ 26; Ex. 15e).
36. On October 20, 1993, the wife's attorney and the husband appeared in the Cambridge District Court for further hearing on the motions in that action (Stip. ¶ 27). The respondent did not attend the hearing (Stip. ¶ 27). The respondent requested another attorney appear at the hearing as the cousin's successor counsel, which he did (Stip. ¶ 27; Tr. 2:108- 109). However, the husband, the defendant in the action, delivered the respondent's notice of withdrawal at the hearing (Stip ¶ 27; Ex. 30). The wife's motion to intervene was allowed and the district court judge requested that the wife's attorney bring the issue of the attached BayBank CD funds before the probate court, and continued the hearing again as to the remaining motions (Stip. ¶ 27).
37. Subsequently, on October 29, 1993, the attorney for the wife filed with the probate court a motion for reconsideration of the prior denial of the motion to amend the divorce judgment and for instructions as to disposition of the funds remaining from the BayBank CD (Ex. lh), and a motion for disqualification of the respondent as the husband's counsel (Stip. ¶ 28; Ex. 11). As an apparent counter-stroke to the moves against him in the Cambridge District Court and the Middlesex Probate Court, the respondent, in late October and early November, filed three motions for contempt against the wife alleging that her withdrawal of the remaining funds in the CD violated the divorce judgment (Ex. 26a, 26b, 26c). While a notice of attorneys fee lien, pursuant to G.L. c. 221, § 50, had previously been filed (see Findings of Fact ¶ 6, above), on October 29, 1993, the respondent sought to enforce the lien for attorneys fees on behalf of the husband and himself (Ex. Ij), but his effort fell short due to his failure to mark the motion for hearing; as a result, no action was ever taken on it.
38. On November 1, 1993, the wife's attorney, on her behalf, filed a grievance against the respondent with Bar Counsel (Ex. 30a), a copy of which was forwarded to the respondent on November 8, 1993 (Ex. 30a).
39. On November 5, 1993, the respondent and the wife's attorney appeared before Judge Cohen in the Middlesex Probate Court on the wife's motions for reconsideration, instructions, and disqualification (Stip. ¶ 29; Ex. 15f). The respondent opposed the motions (Stip. ¶ 29). After hearing, Judge Cohen instructed the wife's attorney to seek leave from the Appeals Court (which technically had jurisdiction at the time) for him to rule on the motions (Stip. ¶ 29; Ex. Ik). The wife's attorney obtained such leave, over the written objection of the respondent (Ex. 4a), by order of the Appeals Court entered on November 19, 1993 (Stip. ¶ 29), and the motions were subsequently scheduled for further hearing in the probate court on December 21, 1993 (Stip. ¶ 30).
40. The respondent did not attend the Middlesex Probate Court hearing on December 21, 1993 (Stip. ¶ 31;.Ex. 11). At the conclusion of the hearing, Judge Cohen ordered that the wife be paid the full amount awarded her by the judgment, namely the $16,000 remaining from the CD, the $13,000 attached in the Cambridge District Court action, and $7,260.17 by the husband (Ex. 11). The Court disqualified the respondent from representing the husband in any action related to the divorce in the Middlesex Probate Court and the Appeals Court, finding that the respondent's conduct "reflect[ed] an intent to disregard the Judgment of the Court and to so dissipate an asset of the marital estate so as to thwart and frustrate a Judgment of the Court." (Stip. ¶ 31; Ex. 11). The Court further ordered that the wife was entitled to attorneys fees and costs relating to these matters since the entry of the judgment nisi (Ex. 11). The respondent did not appeal the order. (Tr. 2:123).
41. On or about December 27, 1993, the respondent sent $7,620.17 to the wife's attorney, representing the payment due the wife from the husband pursuant to the probate court's instructions (Stip.¶ 32). The respondent issued checks to the husband for the balance of the funds he had collected from the BayBank CD, amounting to $10,739.83 (Stip. ¶ 32). The husband endorsed those checks back to the respondent, who then retained for himself the balance of the BayBank funds (Stip. ¶ 32). The wife's attorney returned $360.00, which was an overpayment, to the respondent (Stip. ¶ 2).
42. On or about December 31, 1993, the respondent filed a notice of withdrawal of his appearance as the husband's counsel in the Appeals Court (Ex. 4d), which was allowed by the Court on or about January 6, 1994 (Stip. ¶ 33).
43. On December 22, 1993, Judge Cohen filed a grievance against the respondent with Bar Counsel (Ex. 31a), a copy of which was forwarded to the respondent on January 13, 1994 (Ex. 31a).
44. In the action in Cambridge District Court, the wife's motion to dissolve the $13,000 attachment on the BayBank CD was allowed and the funds were released to the wife on February 16, 1994 (Stip. ¶ 34).
45. As a result of the respondent's actions, the wife incurred substantial attorneys fees in the amount of approximately $13,000, for her attorney’s filing of pleadings and appearances in the various courts to obtain recovery of the money in the CD which had been awarded to her (Tr. 2:169-170).
46. Throughout 1994, despite the probate court order of disqualification, the respondent provided legal assistance and advice to the husband with respect to postdivorce and appeal matters (Tr. 2:124-127, 132; Ex. 5a, Ex. 28, 29a, 29b, 29d, 29e, 29g, 29j, 29k). The respondent's billing records show that he continued to consult regularly with the husband and that he drafted pleadings for him, including post-judgment motions, complaints and other pleadings in the Middlesex Probate Court, and a reply brief in the Appeals Court, all of which were then filed in court by the husband pro se (Ex. 5a, 28, 29a, 29b, 29e, 29g, 29j; Tr. 2:124-127). One of the pleadings, a pre-trial memorandum, has a "footer" at the bottom of the first page which the respondent stipulated showed that this document was produced on the respondent's computer on December 5, 1994 (Ex. 29k; Tr. 2:132). During this period, the respondent also wrote letters on the husband's behalf, describing himself as his attorney (Ex. 29f, 29h). The respondent additionally maintained files for the post-divorce and appellate proceedings and billed the husband regularly, through 1995 (Ex. 5a). We find that the respondent willfully and intentionally violated the Middlesex Probate Court's order of disqualification by continuing to represent the husband in the post-judgment proceedings in that court and in the Appeals Court.
47. On December 20, l994, the Appeals Court affirmed the divorce judgment in its entirety on summary disposition (Stip. ¶ 35; Ex. 29c).
II. Conclusions of Law
The respondent claims that because the probate court judgment was not binding on his fee claim or on the cousin's collection claim, his actions, in suing his client to collect his unpaid fees and in representing the cousin in his suit against the husband, were not improper. He argues that both he and the cousin had the same rights as any creditors of the husband, not only to sue him, but also to trustee process and levy on the funds in the joint CD. Indeed, the respondent claims that these actions were necessary to obtain and preserve his and the cousin's priority as lien creditors.
The respondent's argument intentionally, or through total lack of awareness of a lawyer's ethical duties, ignores several key factors and is thus groundless. While the divorce judgment was not binding on either the respondent or the cousin as to their claims, the respondent was not simply a creditor: he was the husband's attorney in the divorce action which resulted in a judgment apportioning ownership of the funds in the CD between the parties, and he continued to represent the husband. As such, he was subject to ethical considerations, not incumbent on other creditors:
As a lawyer he is bound by professional standards of conduct and duties of loyalty and confidentiality that need not trouble a merchant. [The attorney] has every right to collect his bills, but he must do so in compliance with the ethics of the profession which command that he not sink entirely to that level of ruthlessness which may pass unnoticed in the ruck of the marketplace.
PR-94-2, 10 Mass. Att'y Disc. R. 309, 315. Indeed, the respondent's defense evidences his utter lack of understanding of his ethical obligations as an attorney. The respondent engaged in a calculated and active scheme to evade the judgment of the probate court, primarily for his own personal benefit. In executing the scheme, he engaged in two blatant conflicts of interest and misrepresentations before three courts, some of which were under oath. It was clearly a conflict of interest for the respondent to sue for his fees while continuing to represent his client. Similarly, it was a conflict of interest for the respondent to represent the cousin in a suit against his client. The respondent's claim that the husband admitted he owed both debts does not in anyway obviate the conflict of interest. See Matter of Discipline of Two Attorneys, 421 Mass. 619 (1996); PR-93-30 and PR-93-31, 9 Mass. Att'y Disc. R. 407 (1993).
The respondent's testimony that he was only reaching assets which had been awarded to the husband, namely $32,875 in the CD -- ignoring the award of $25,000 to the wife for attorneys fees and costs -- and that he had a priority right to trustee process the joint funds, as the allocation was deferred until maturity, are sophistry. The judgment is clear on its face: $36,260.17 was awarded to the wife and $7,739,83 plus interest to the husband, to be paid on maturity. As an officer of the court, the respondent's efforts to obtain payment for himself and for the cousin and "frustrate" the award of funds in the CD which had been awarded to the wife was improper, see Feldman v. Feldman, 20 Mass. App. Ct. 309,313 (1985), and his misrepresentations to the different courts in furtherance of that scheme constitute additional misconduct.
We conclude that by instituting the district court proceedings with the intent to circumvent the divorce judgment for his own and his client's benefit; by wrongfully attaching and levying on the CD; by knowingly and intentionally making false and deceptive representations to the Middlesex Probate Court and the Cambridge District Court, and false and deceptive representations under oath to the Newton District Court; and by intentionally continuing to advise and represent his client after his disqualification, the respondent violated Canon One, DR 1-102(A)(4) (conduct involving dishonesty, fraud, deceit or misrepresentation), (5) (conduct prejudicial to the administration of justice), and (6) (conduct adversely reflecting on fitness to practice law), Canon Five, DR 5-103(A) (acquisition of a proprietary interest in the subject matter of litigation), and Canon Seven, DR 7-102(A)(1) (filing of suit merely to harass or maliciously injure another), and (5) (knowingly making a false statement of law or fact).
We further conclude that by pursuing the district court actions against the husband while continuing to represent him, and by representing the differing interests of himself, the husband and the cousin in the district court actions, under circumstances where it was evident that the respondent could not adequately represent the interests of each, the respondent violated Canon Two, DR 2-110(B)(2) (lawyer is required to withdraw if he knows or it is obvious that his continued employment will result in violation of a Disciplinary Rule) and Canon Five, DR 5-101(A) (lawyer shall not accept employment if exercise of professional judgment may be affected by own interests) and 5-105(A)-(C) (lawyer shall decline or withdraw from employment if the exercise of professional judgment is likely to be adversely affected or if it would be likely to involve him in representing differing interests, and can only represent multiple clients if it is obvious he can adequately represent the interests of each and if each consents after full disclosure).
We conclude that the respondent's conduct prejudiced and endangered the husband's interests in violation of Canon Seven, DR 7-101 (A)(3) (lawyer prohibited from intentionally prejudicing or damaging client). There can be no dispute that the respondent's intentional conduct resulted in the probate court order of December 24, 1993, in which the husband was found liable to the wife for the money improperly levied by the respondent; in addition, the Court found that the wife was entitled to her legal fees and costs for the proceedings post-entry of the judgment nisi (see Ex. 21). We conclude that the respondent did not violate this disciplinary rule with respect to the cousin, as there was no evidence of any damage or prejudice resulting.
On the evidence presented, we conclude that the respondent did not violate Canon Seven, DR 7-102(A)(7), which provides that a lawyer shall not counsel or assist his client in conduct that the lawyer knows to be illegal or fraudulent. We find that the respondent was the primary actor here, and there was insufficient evidence to warrant a finding that his clients' involvement was anything more than passive.
III. Factors in Mitigation or Aggravation
The hearing committee finds that there are no factors constituting "special," as opposed to "typical," mitigation. The sole evidence presented, a letter thanking the respondent for pro bono representation on a case (Ex. 32) does not constitute mitigation warranting a change in discipline.
The hearing committee finds the following factors in aggravation:
(a) The respondent's misconduct was undertaken for selfish motives and personal gain. Matter of Pike, 408 Mass. 740 (1990); ABA Standards for Imposing Lawyer Sanctions § 9.22(b) (as amended, 1990), reprinted in Professional Responsibility Standards, Rules And Statutes (West, 1995) ("Standards").
(b) The respondent engaged in multiple disciplinary offenses. Matter of Saab, 406 Mass. 315 (1990); Standards § 9.22(d).
(c) The respondent engaged in disciplinary violations after Bar Counsel' s investigation was commenced; specifically, the respondent, during Bar Counsel's investigation, which commenced in November 1993 (Ex. 30A), continued to provide legal advice and assistance to the husband, throughout 1994, despite the Middlesex Probate Court's December 1993 order of disqualification (Ex. II). Matter of Sondej, 3 Mass. Att'y Disc. R. 183, 184 (1982).
(d) The respondent has demonstrated an utter lack of understanding or acknowledgment of the requirements of the ethical rules and the nature of his misconduct. Matter of Clooney, 403 Mass. 654, 657 (1988); Standards § 9.22(g).
IV. Recommendation for Discipline
The respondent engaged in a scheme to evade and frustrate the Probate Court judgment primarily for his own personal benefit. In furtherance of that scheme, he intentionally concealed and affirmatively misrepresented material facts. In the Newton District Court action, the respondent made two knowing and intentional false statements under oath. He engaged in an intentional misrepresentation of fact to the Middlesex Probate Court, for his own personal benefit, when, in opposition to the motion to redeem the CD early, he argued that the funds would still be intact after the appeal, knowing that he had already attached those funds and intended to levy on that attachment. The respondent engaged in another intentional misrepresentation in court, when, in the cousin's collection action, he claimed that there were sufficient funds of the husband's in BayBank to satisfy the attachment, knowing that he had already levied on the CD and withdrawn funds in excess of those awarded the husband under of the divorce judgment. His misconduct did not end there: he engaged in multiple conflicts of interest and defied the court order disqualifying him from continued representation of his client. The respondent's activities undermined the judicial process and caused harm to his client and to the opposing party, who was forced to incur substantial costs to recover funds awarded to her by the probate court judgment. Like the attorney in Matter of Shaw, 427 Mass. 764, 769 (1998), "The whole picture depicts the respondent as an attorney who, when it serves his advantage, is willing to violate clear norms of professional responsibility and to engage in purposeful deceit which harms others."
This case is distinguishable from Matter of Neitlich, 413 Mass. 416 (1992), and Matter of McCarthy, 416 Mass. 423 (1993), in that his misrepresentations were not made in the overly zealous representation of a client, but rather for personal gain. See Matter of Pike, 408 Mass. 740, 745 (1990). In addition, some of the misrepresentations were made under oath, a distinction warranting more serious discipline. See Matter of Shaw, 427 Mass. 764, 769 (1998) (two-year suspension for false testimony in affidavit and court, with additional misrepresentations to third party); Matter of Kelly, BD-98-005 (August 11, 1998) (two-year suspension for false testimony at deposition, with misrepresentations in closing documents).
Taking into consideration the multiple instances of serious misconduct presented here, together with the numerous factors in aggravation, it is evident that a period of suspension is warranted. We note that in both Neitlich and McCarthy, where the attorneys engaged in intentional misrepresentations before tribunals, a one-year suspension was considered appropriate. However, the respondent's conduct here was more serious, involving not only misrepresentations, some of which were under oath, but also a scheme to thwart a court judgment, conflicts of interest, intentional disregard of a court order of disqualification, and harm to others.
The appropriate discipline depends on the facts of each case, but we are guided by the sanctions imposed in similar situations. See Matter of Concemi, supra at 329; Matter of Hurley, 418 Mass. 649, 655 (1994), cert. denied, 514 U.S. 1036 (1995). In selecting a sanction, we should consider its effect on, and the perception by, the public and its deterrent effect on other lawyers contemplating similar conduct. See Matter of Concemi, supra at 329; Matter of Alter, 389 Mass. 153, 156 (1983).
Matter of Kennedy, 428 Mass. 156, 158 (1998). We conclude that the respondent's misconduct is analogous to that involved in Shaw and Kelly, and we therefore recommend a suspension of two years.
by the Hearing Committee,
Clarence V. LaBonte, Jr.
Patricia S. Nelson
© 2001. Board of Bar Overseers. Office of Bar Counsel. All rights reserved.