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Commonwealth of Massachusetts

Public Reprimand No. 2005-13



ALFRED T. LEPORE

Order (public reprimand) entered by the Board June 27, 2005.1

HEARING COMMITTEE REPORT


I. Statement of Proceedings

A Petition for Discipline against the Respondent, Alfred T. Lepore, was filed by Bar Counsel on May 15, 2001. The petition charged the Respondent with three offenses: (1) assisting Marlene Exume, his client/the employee, in pursuing a workers’ compensation claim when he knew that such conduct was criminal or fraudulent; (2) intentionally making false statements to Attorney Bernard Fabricant, attorney for the insurer, Reliance Insurance, regarding payments the Respondent made to Ms. Exume for secretarial work she performed for the Respondent and concealing the fact that she had been working as his secretary; and (3) filing with the Department of Industrial Accidents (“DIA”) Ms. Exume’s false claim for temporary, total disability benefits, providing to Attorney Fabricant Ms. Exume’s false earnings report, concealing from the DIA conciliator that Ms. Exume was employed by the Respondent, and then misrepresenting to the DIA that Ms. Exume had not been paid to work as the Respondent’s secretary.

On June 4, 2001, the Respondent, represented by counsel, filed his Answer to the Petition for Discipline. The Respondent denied the material allegations in the petition and asked to be heard in mitigation.

The matter was heard by a Hearing Committee composed of: Constance L. Rudnick, Esq., Chair, George Berman, Esq. and Pria Harmon, public member. Hearings were held on October 12, 2001, and October 21, 2001. Closing arguments were heard on July 1, 2002.

At the hearing, Bar Counsel called as witnesses Attorney Bernard Fabricant; Katherine Walsh, a DIA conciliator; Kathy Chagnot (nee Pompei), an adjuster with Reliance Insurance Company; and Kevin Bullock, the keeper of the records at the DIA. The Respondent testified in his own defense and called as a witness Marlene Exume. Bar Counsel introduced 25 exhibits in evidence. The Respondent introduced 5 exhibits in evidence.

II. Findings of Fact

Findings of Fact

1. The Respondent was duly admitted to the Bar of the Commonwealth of Massachusetts on May 23, 1962. (Ans. 2)2

2. Since his admission to the bar, the Respondent has had a solo practice, concentrating in personal injury, workers’ compensation, corporate and probate matters. (Vol. II, p. 138) Between 1988 and 1998, the Respondent handled a number of workers’ compensation claims and appeared before the DIA in at least 91 matters involving claims for workers’ compensation benefits, although that work constituted less than five percent of the Respondent’s practice (Vol. II, p. 185; Ex. 22)

3. In April 1998, Marlene Exume was employed as a nurse’s assistant at the Woodlawn Nursing and Rehabilitation Home in Everett, Massachusetts. (Vol. II, p.39; Exs. 1, 2, 4; Ans. 4)

4. On April 4, 1998, while working at Woodlawn, Ms. Exume injured her shoulder and her back when she prevented a patient from falling while moving the patient. (Vol. II, p. 39; Ans. 5; Ex. 1)

5. On or about April 27, 1998, Ms. Exume informed Woodlawn that she was unable to work due to her injury. (Vol. II, p. 40; Ans. 5)

6. On April 27, 1998, Woodlawn filed with the DIA Form 101, Employer’s First Report of Injury or Fatality (“Report”), that described Ms. Exume’s injury as a “sprain/strain upper left side of back.” (Ex. 1; Ans. 6) The report clearly indicated that Ms. Exume was out of work as a result of the incident. On the same day, Woodlawn notified Reliance National Insurance Company (“Reliance”), its workers’ compensation insurance carrier, of Ms. Exume’s injury. (Ex. 1)

7. On its report, Woodlawn estimated Ms. Exume’s average weekly wage to be $288.00. (Ex. 1) Pursuant to G.L. c. 152, § 34, Ms. Exume was therefore entitled to a weekly disability benefit of $172.80 for temporary, total incapacity, an amount equal to 60% of her average weekly wage. The Respondent was aware of the provisions of G.L. c. 152, § 34. (Vol. II, p. 285; Ex. 22)

8. In late April 1998, Reliance received Woodlawn’s report of injury to Ms. Exume. (Vol. I, p. 145) Reliance erroneously assigned this matter to an account specialist who reviewed claims for medical treatment only, and did not review claims for disability/lost time. (Vol. I, p. 145)

9. On May 22, 1998, Ms. Exume contacted Woodlawn to find out if she could collect workers’ compensation benefits while out of work. (Vol. II, p. 40) Ms. Exume was given Reliance’s telephone number and told to speak with someone at Reliance. (Vol. II, p. 40) On or about May 25, 1998, Ms. Exume contacted Reliance, and was told that Reliance had no record of her disability claim. (Vol. II, p. 41) In 1991, the Respondent had represented Ms. Exume in a personal injury matter. (Vol. II, p. 42) On May 28, 1998, Ms. Exume met with the Respondent at his office. (Vol. II, p. 42) Ms. Exume told the Respondent about the accident at Woodlawn and told him the name of the person at Reliance she had spoken with about her workers’ compensation claim. (Vol. II, p. 42) At the conclusion of the meeting, Ms. Exume retained the Respondent to pursue her claim for workers’ compensation benefits. (Vol. II, pp. 42, 141; Ans. 17)

10. At the time of her injury in April, 1998, Ms. Exume had two children at home, ages 6 and 9 years, and shortly thereafter she separated from her husband, who moved out. (Vol. II, p. 43) She had no health insurance at that time. (Vol. II, pp. 115– 117)

11. Reliance wrongfully failed to pay Ms. Exume’s claim within 14 days after the first report of injury from the employer. (Vol. I, pp. 144-147, 153-155) Reliance was required by statute to pay Ms. Exume a penalty of $200.00, yet it intentionally failed to pay her the penalty. (Vol. I, pp. 153-155)

12. During Ms. Exume’s first visit with the Respondent on May 28, 1998, she informed the Respondent that she was considering a career change. She told him that she had some typing skills and asked if she could use his computer to practice on from time to time to sharpen her skills. The Respondent granted her request and allowed her to come in and practice on his computer in his office. (Vol. II, pp. 43-46, 142-143) In the beginning, as part of Ms. Exume’s practice on the Respondent’s computer, she only practiced on her own workers’ compensation case. On May 29, 1998, the Respondent dictated a letter to Reliance concerning her claim.3 (Ex. 7) Ms. Exume took the Respondent’s dictation in longhand and typed the letter a couple of times before she got it right. The Respondent instructed her to put his initials and her initials (“me”) at the bottom of the letter so that she would receive credit for it. (Vol. II, pp. 45-47, 76-78, 144-145)

13. Ms. Exume was not compensated by the Respondent for any services she performed for him between May 29, 1998 and June 19, 1998. (Vol. II, p. 50, 144-145)

14. Reliance failed to make any payment to Ms. Exume until June 9, 1998, at which time it sent a check for $2000.00 to the Respondent, made out to Ms. Exume, which constituted ten weeks of temporary, total disability benefits from the date of injury. (Vol. II, pp. 153, 205; Exs. 2, 3) The Notification of Payment, dated the same date as the check and also sent to the Respondent’s office, indicated that Ms. Exume’s average weekly wage was estimated at $346.15, generating a § 34 weekly compensation rate of $207.69. (Ex. 2) This payment was “paid without prejudice” by the insurer, as opposed to “accept[ing]” liability. (Ex. 2)

15. The Respondent deposited the check into his client funds account and wrote a check to Ms. Exume, which she negotiated through an account at a credit union which she accessed by ATM. (Vol. II, pp. 80-81, 205-206)

16. Ms. Exume continued to come into the Respondent’s office to practice her computer/typing skills a couple of times a week during the month of June, 1998. She typed a letter from the Respondent to Reliance on June 17, 1998, requesting a lump sum settlement of her worker’s compensation claim in the amount of $22,000. (Vol. II, pp. 49-50, 152; Ex. 8) Reliance never responded to the settlement letter. (Vol. II, p. 153)

17. On June 21, 1998, Eleanor Rich, the Respondent’s secretary and bookkeeper of 15-17 years, resigned suddenly, without notice. (Vol. II, pp. 51, 149, 261-263; Ex. 27)

18. The Respondent attempted to locate and hire a new secretary, but was unsuccessful. (Vol. II, pp. 51, 152)

19. The Respondent had a full schedule and needed someone to help with computer work, typing and answering the phone. Ms. Exume offered to help the Respondent out; she began coming in more often than she had earlier in June, working a few hours a week, for which she was paid $10.00 per hour. (Vol. II, pp. 51, 57, 152)

20. Ms. Rich’s departure, with virtually no notice, was a significant loss to the Respondent. He was a busy sole practitioner who had relied upon his secretary/ bookkeeper to perform many tasks in the office, and the transition from an experienced secretary to one who was inexperienced adversely affected the Respondent’s work and handling of cases during this time. (Vol. II, pp. 269-273)

21. The Respondent paid Ms. Exume in money orders. We find that Bar Counsel did not prove by a preponderance of the evidence that this method of payment was intentionally chosen to hide the payments in order to perpetrate a fraud on the DIA. In so finding, we credit the testimony of both the Respondent and Ms. Exume on this issue (see Vol. II, pp. 52-53, 57-59, 174-175, 179-180), and we note the following:

(a) The Respondent did not pay Ms. Exume in cash, which he could have, and he retained copies of all the money orders. (Vol. II, pp. 175, 179; Ex. 9)

(b) The Respondent made no effort to hide Ms. Exume’s employment from the public. She was seated at the secretarial station in full view of clients and other visitors, including the private investigator secretly sent in by Reliance to conduct surveillance on Ms. Exume in the Respondent’s office (see below). (Vol. II, pp. 276-77)

(c) The method of payment may have been influenced by Ms. Exume’s volatile marital situation. (Vol. II, pp. 123-124)

22. The first money order, dated June 5, 1998, was not for wages related to services performed for the Respondent. It was a loan from the Respondent to Ms. Exume to pay for a birthday present for her son, which she needed because she had not yet received payment from Reliance and was receiving no child support. (Vol. II, pp. 52, 79, 179) This was paid back by Ms. Exume when she received the June 9th payment from Reliance. (Vol. 2, pp. 54, 133)

23. The second money order in the amount of $100.00, dated June 19, 1998, was not for Ms. Exume’s secretarial services but was for her work as an interpreter on one occasion. (Vol. II, pp. 54-55, 260; Ex. 9)

24. The first payment to Ms. Exume that represented wages for secretarial services rendered was money order # 2282080 in the amount of $300.00. (Vol. II, p. 83) Although the date on the document is unclear, it was issued sometime between June 21, 1998, the date of Ms. Rich’s resignation, and July 2, 1998, the date of the next money order. (Ex. 9)

25. Between July 2, 1998 and August 14, 1998, the Respondent paid Ms. Exume approximately $2,380.00 for secretarial services, at an average weekly wage equal to or more than what she was making at the nursing home when she was injured. (Ex. 9)

26. Between sometime after June 21, 1998 and before October 31, 1998, the Respondent paid Ms. Exume approximately $6,795.00 for secretarial and interpreter services, at an average weekly wage equal to or more than what she was making at the nursing home when she was injured. (Vol. II, p. 178; Ex. 9)

27. Ms. Exume became a full-time salaried employee of the Respondent sometime around November, 1998. (Vol. II, p. 226)

28. Between June 13, 1998 and August 15, 1998, Ms. Exume continued to receive disability checks from Reliance, totaling $2,220.00, which were mailed directly to her residence. We credit Ms. Exume’s testimony that she did not know prior to October, 1998 that she should report any earnings she received from employment while receiving workers’ compensation. (Vol. II, pp. 105-106).

29. On or about August 7, 1998, Reliance, through Kathy Chagnot, sent a notice to the Respondent’s office that it was terminating Ms. Exume’s benefits as of August 15, 1998. (Ex. 6) Attached to the termination notice, and presumably serving as a reason for the termination, was a document from Dr. Henning indicating that Ms. Exume was fit to return to work as a nurse’s assistant. (Ex. 6) The Respondent admitted that he first learned that Ms. Exume had received additional payments from Reliance after the first June check for $2,000 only when the Notice of Termination of Benefits was received shortly after August 7, 1998. (Vol. II, p. 154, 266-268; Ex. 6)4

30. Meanwhile, unbeknownst to the Respondent and Ms. Exume, Kathy Chagnot, on behalf of Reliance Insurance, and in conjunction with Attorney Fabricant, authorized surveillance of Ms. Exume.5 (Vol. I, pp. 148, 201-205) The Committee does not credit either the testimony of Ms. Chagnot or Attorney Fabricant that the surveillance was instituted as a result of her noticing the initials “me” in the lower left hand corner of Exhibit 7, the letter of May 29, 1998 from the Respondent to the insurance company. (Vol. I, pp. 79-89, 167-8, 172, 174). The Committee bases this finding on its assessment of credibility as well as the following:

(a) Ms. Chagnot had a case load of 150 files open at any given time, and got 3-4 new claims every day. (Vol. I, p. 181) That she would have noticed such a small, inconsequential item as the typist’s initials is highly improbable.

(b) The letters containing the typist’s initials “me,” which allegedly triggered Ms. Chagnot’s curiosity, were dated May 29, 1998 and June 17, 1998. (Exs. 7, 8) Notwithstanding Ms. Chagnot’s professed suspicions, she did not request surveillance until just before August 10, 1998. (See Ex. 18) If she had been that suspicious of Ms. Exume’s claim, it is unlikely she would have waited a minimum of 6 weeks to commence an investigation.

(c) Attorney Fabricant testified that benefits were terminated by a letter dated August 7, 1998; that at that time he and Ms. Chagnot knew both that Ms. Exume was working for the Respondent and that she had been given a release to return to work by Dr. Henning. (Vol. I, pp. 261-262; Ex. 6) However, the earliest evidence of surveillance is not until August 10, 1998. (Ex. 18)

(d) A letter from Attorney Robert Powers, Managing Partner of Melick & Porter, Attorney Fabricant’s firm, to Bar Counsel, indicates that the initials were noticed AFTER the surveillance commenced, not before. (Ex. 13) This letter to Bar Counsel was written at least in part by Attorney Fabricant, and was based wholly on information given to Attorney Powers by Attorney Fabricant, perhaps in the form of a memo (which was not introduced in evidence). (Vol. I, pp. 225-229, 232, 253, 254)

31. On or about September 18, 1998, Ms. Exume was still experiencing symptoms from her injury, so she sought treatment from Dr. Brian Fingado at New England Baptist Hospital. We credit the testimony of Ms. Exume that the Respondent did not refer her to Dr. Fingado; she went on her own accord. (Vol. II, pp. 61-62, 154- 156, Ex. 28)

32. Dr. Fingado prescribed a course of continued physical therapy for Ms. Exume, but, because Reliance had terminated her benefits, the treatment would not be covered and Ms. Exume had no other means of paying for the therapy. (Vol. II, pp. 62, 153-157; Ex. 28)

33. Ms. Exume informed the Respondent of Dr. Fingado’s conclusions. (Vol. II, pp. 155-156) As a result, on September 22, 1998, the Respondent filed with the DIA, on her behalf, Form 110, requesting benefits under Section 34 for temporary, total incapacity from “4/4/98 to present,” special compensation for loss of function under Section 36, and medical benefits under Sections 13 and 30. (Vol. II, pp. 59, 159-160; Ex. 4) We credit the Respondent’s testimony that he sought benefits from the date of the accident in order to cover any gaps in payment and to avoid being pinned down by specific dates. We also credit his testimony that it was his practice, and he understood it was the practice of other attorneys before the DIA, to be general in their statements of dates and claims for benefits when filing a Form 110. (Vol. II, p. 170) In addition, we credit the Respondent’s testimony that it was an oversight that he did not check off Section 35 on Form 110 to seek partial incapacity benefits for Ms. Exume. (Vol. II, pp. 245-246)

34. Filing Form 110 with the DIA was necessary to obtain any further workers’ compensation benefits for Ms. Exume, including medical benefits. (Vol. II, pp. 159-160) We credit the Respondent’s testimony that obtaining medical benefits for Ms. Exume was the primary reason he submitted the request for benefits. (Vol. II, p. 268) Because the insurer paid initially “without prejudice” and had not accepted liability (see Ex. 2), without this claim, the insurer would not have had any on-going obligation to cover her subsequent treatment. See G.L. c. 152, §8; M.P.S. Vol. 26, §417; Guilfoyle’s Case, 44 Mass.App.Ct. 344 (1998); McHugh’s Case, 1 Mass.App.Ct. 803 (1973).

35. Form 110, which was signed by both the Respondent and Ms. Exume, had an “x” typed in the box labeled “No” in answer to the question “Has Employee Returned to Work”. (Ex. 4) The sequence of events by which this document was prepared in unclear. t Ms. Exume testified that the Respondent originally filled out Form 110 (Ex. 4) in pencil, and that she then typed it. (Vol. II, p. 91) She recalled that the Respondent initially indicated the amount of workers’ compensation received in box 22 as “$2000,” she informed the Respondent of the correct amount, $4200, and the form was then changed. (Vol. II, pp. 91, 94; Ex. 4) The Respondent testified only that he filed the form to get Ms. Exume benefits, that he supplied the information and she typed out the form. (Vol. II, pp. 159, 242) Neither was asked, nor specifically addressed how box 22 was filled out and by whom. We find that both witnesses were being as candid as possible and that any ambiguities in who filled out what portion of the document or what changes were made and when, were caused by genuine limits in memory five years after the fact on a detail which, while important at the hearing, appears to have received limited attention at the time. In any event, the ambiguity needs to be resolved against the party with the burden of proof, Bar Counsel. We find that Bar Counsel has failed to prove by a preponderance of the evidence that the misstatement was intentional as opposed to negligent.

36. Therefore, based on the evidence presented, we find that Bar Counsel has failed to prove by a preponderance of the evidence that the Respondent knowingly submitted a document to a tribunal containing a false statement, to wit, that Ms. Exume was not working. Given the professional circumstances in which the Respondent found himself at this time, that is, having lost his only support staff and obtained a willing but inexperienced replacement, the evidence sustains the conclusion that the Respondent was lax in paying attention to details of his practice. We therefore find it at least equally probable that the “x” in the box labeled “No” was typed in by Ms. Exume, without the Respondent noticing. In so finding, we note that we previously credited Ms. Exume’s testimony that she did not know prior to the conciliation in October 1998 that she should report any earnings she received while receiving workers’ compensation (Vol. II, pp. 105-106), and we also, below, credit Ms. Exume’s testimony that she believed the request concerning her earnings on the Earnings Report referred to whether she received earnings from the nursing home. (Vol. II, pp. 102-104) We find it also likely that Ms. Exume, in good faith, misinterpreted the question on Form 110 to refer to whether she had “returned to work” at the nursing home, and not other employment in general. However, because the Respondent’s signature, as well as Ms. Exume’s, appears on Form 110, we find that this constituted a negligent misrepresentation.

37. We credit the Respondent’s testimony that he asked for benefits for Ms. Exume’s temporary, total incapacity in order to obtain medical benefits and to cover any gaps in payment during the period of time she was entitled to payments for temporary, total disability but had not been so compensated. (Vol. II, pp. 169, 283) Additionally, we credit his testimony that he was concerned that if Ms. Exume were unable to perform her job as a nurse’s aide due to her shoulder injuries, and later became unable to perform secretarial work due to that injury, that she not lose the designation of “total, temporary disability.” (Vol. II, pp. 283-284) The Committee finds that the Respondent had a good faith basis for concluding that Ms. Exume was entitled to some workers’ compensation benefits, particularly medical benefits, on account of her injury and her inability to perform her original employment as a nurse’s assistant. The Respondent testified and we credit his testimony that it was his understanding that if the claimant could work at some other, non-trivial, employment, then the amount earned would at least off-set the disability payments. (Vol. II, p. 290) In other words, the fact that Ms. Exume had been paid for secretarial work did not affect her possible eligibility for workers’ compensation benefits, such as medical benefits. The only effect of her subsequent secretarial employment was whether the weekly disability benefits were to be reduced by the earnings she received at any non-trivial, substitute employment.

38. We find that Bar Counsel has failed to prove by a preponderance of the evidence that the request for Section 34 benefits on the Form 110 constituted an intent to defraud the DIA. The mere fact that the box claiming total, temporary incapacity compensation on the form was checked does not support a finding of fraud. We find that the Respondent did not submit the form with the intent of collecting benefits for the full period of time set forth in 25(a) of Form 110, that is, “4/4/98 to present.” (Ex. 4; Vol. II, pp. 243-245) It is uncontroverted that Exume had been paid at least $2000, which represented payment for an early segment of the time period set forth in the document, and the Respondent knew that. We find that the Respondent did not believe that she was entitled to collect again for the period of time covered by that payment, and therefore, his filing of this claim was not a representation that Ms. Exume was disabled or entitled to benefits for this entire period – his purpose was to cover any gaps in payment and to obtain medical benefits. The Respondent acknowledged that he always understood that if a person receiving disability payments was being paid a salary or wage of equal or greater amount at the same time he or she was receiving benefits, that some or all of the benefits would have to be returned. (Vol. II, pp. 245, 246, 283-288; Ex. 12 [Respondent’s initial response to Bar Counsel dated November 1998]). He admitted that by pursuing the claim for medical benefits, he knew it was likely that Ms. Exume would have to pay back some benefits. (Vol. II, pp. 288-289)

39. At some time prior to the conciliation on October 16, 1998, the Respondent realized that he had been paying Ms. Exume wages in an amount equal to or greater than the disability payments she had been receiving at the same time. Nonetheless, the Respondent did not bring the overpayment to the attention of any authority, e.g., the insurer or the DIA, until October 16, 1998, when Attorney Fabricant, attorney for the insurer, raised the issue at conciliation.6 (See Vol. II, pp. 242-243)

40. The Committee credits the Respondent’s testimony that returning the overpayment to the insurance company did not cross his mind at the time he learned Ms. Exume had been paid more than she was entitled to, “because of the situation he was in,” namely, that he was overwhelmed at having suddenly lost his secretary/bookkeeper of 15 years, and having replaced her with an individual, who, though intelligent, had no experience. (Vol. II, pp. 271-273)

41. On or about September 24, 1998, Reliance, by Kathy Chagnot, sent the Respondent DIA Form 104 denying Ms. Exume’s claim for further workers’ compensation benefits. (Ex. 5) The basis for the denial was that Ms. Exume “had [a] full duty release effective 8/5/98.” (Ex. 5) On the same date, Attorney Fabricant, on behalf of Reliance, sent by fax and by mail, requests for information relating to Ms. Exume’s work-related injury. (Ex. 15) The packet included a DIA Form 126, Employee’s Earnings Report, already made out to “Exume, Marlene” at a mailing address of “289 Elm St., Everett, MA 02150.” (Ex. 15) Ms. Exume did not reside at 289 Elm St., Everett, MA -- that was the address of the nursing home at which she had been employed when she was injured. (Vol. II, p. 102) Attorney Fabricant’s cover letter did not make reference to the Earnings Report contained in the packet of material. (Ex. 15) Although Attorney Fabricant’s letter was addressed to the Respondent, Ms. Exume responded to it and collected the requested documentation. (Vol. II, pp. 96-99)

42. After explaining generally how to respond to correspondence, the Respondent had given Ms. Exume responsibility for answering requests such as this, unless she “did not understand [the request].” (Vol. II, pp. 102-4, 125-127, 273-5) On or about September 25, 1998, a reply to Attorney Fabricant’s request was sent from the Respondent’s office, by sending a packet of documents, including the Employee’s Earnings Report, signed by Marlene Exume, and an “x”, handwritten, in the box indicating that she had not received earnings for any period of time that she was entitled to receive workers’ compensation benefits. (Ex. 16) Ms. Exume typed the cover letter from the Respondent, who admits he may have dictated it. The cover letter did not mention an Employee’s Earnings Report. (Vol. II, pp. 104-105, 233; Ex. 16) The Respondent did not sign the Employee’s Earnings Report. Ms. Exume did sign the Employee’s Earnings Report, but did not understand the form. We credit her testimony that she believed that, because the form was addressed to her at the nursing home’s address, the request was for income she was receiving from the nursing home while she was receiving compensation from the insurance company for her injury. (Vol. II, pp. 102-104) The Respondent testified he read the cover letter to Attorney Fabricant and looked at the accompanying documents before he signed the letter, but that the Employee’s Earnings Report was not among those documents he observed, and we credit his testimony. (Vol. II, pp. 232-234; Ex. 16)

43. We credit the Respondent’s testimony that if he and Ms. Exume had any conversation concerning a request for wage information, the Respondent did not understand that Ms. Exume’s question or comment concerned the Employee’s Earnings Report or information covered by such a report. (Vol. II, pp. 235, 237)

44. The Committee credits Ms. Exume’s testimony that she, not the Respondent, prepared Exhibit 16, including the Employee’s Earnings Report, and finds that if the Respondent read the cover letter and looked at the accompanying documents, it was obviously without any care, since not only is there a glaring spelling error in the cover letter (“tretment”), but also one of the documents, a report from Harvard Pilgrim, does not pertain to Ms. Exume at all, but rather to someone named Cindy Casaletto. (Ex. 16)

45. We find that Bar Counsel has not sustained his burden of proving that the Respondent knew the package sent to Attorney Fabricant contained a false Employee’s Earnings Report. (Vol. II, pp. 102-4, 125-127, 234-5, 273-5)

46. On September 29, 1998, a conciliation was scheduled for October 16, 1998, at the Boston office of the DIA, to address Ms. Exume’s claim for benefits. (Vol. I, p. 121; Ex. 17) Notice of the conciliation was sent to Attorney Fabricant and the Respondent. (Ex. 17)

47. On October 16, 1998, a conciliation was held on Ms. Exume’s claim. (Vol. I, p. 123, Vol. II, pp. 16, 63-64, 161) Present at the conciliation were the Respondent, Ms. Exume, Attorney Fabricant, and Ms. Chagnot. (Vol. I, p. 123, Vol. II, pp. 161-163) Katherine Walsh was the conciliator. (Vol. II, p. 16) In the course of the Respondent’s presentation of Ms. Exume’s injury and medical reports, Attorney Fabricant stated that there was a “section 14” or fraud problem, and the conciliator asked the parties to step outside to discuss the matter. (Vol. II, pp. 163-164)

48. We find that Bar Counsel has not sustained his burden of proving that during the conciliation, the Respondent falsely denied that Ms. Exume had worked, or was employed by him at any time when she was also collecting workers’ compensation benefits. The Committee does not credit the testimony of Ms. Chagnot or Attorney Fabricant in this regard. In addition to the reasons set forth in 30, the Committee finds:

(a) That the letter from Robert Powers, Managing Partner of Melick & Porter, Attorney Fabricant’s firm, to Bar Counsel (Ex. 13) contains misstatements, omissions and material inconsistencies with the testimony of Attorney Fabricant at the disciplinary hearing, who, by his own admission, was the only factual source for the contents of the letter, and may have drafted parts of it himself. These include: i) that the insurance company began paying Ms. Exume immediately upon receipt of the Employer’s First Report of Injury, which is not true; ii) that no mention is made of the video surveillance conducted inside the Respondent’s office or of the telephone conversations between the investigator and Ms. Exume, who was represented by counsel, the Respondent, at the time; and iii) that no mention is made of the Respondent’s later-alleged categorical denial, during the conciliation, that Ms. Exume was employed.

(b) No notes or recordings of the conciliation were taken or produced at the hearing. (Vol. I, p. 157, Vol. II, p. 19)

(c) Conciliator Walsh recalled not that the Respondent denied Ms. Exume was employed by him, although that question was asked, but that he denied she was being paid “a salary” or “money” for working for him. (Vol. II, pp. 17, 29) This discrepancy is significant since the question of whether work was for compensation would not be relevant if the Respondent had denied Ms. Exume was working. Additionally, Ms. Walsh could not recall whether the Respondent denied he was paying Ms. Exume at any time, or only at the time when the letters, Exhibits 7 and 8 (dated May 29, 1998 and June 17, 1998, respectively), were typed, which latter statement was true. (Vol. II, p. 24)

(d) In contrast, Attorney Fabricant claimed that the question was generally whether Ms. Exume was working. (Vol. I, pp. 125-126)

(e) Attorney Fabricant’s testimony that the Respondent said he “was working off [Ms. Exume’s] legal fee” and that he stated, “Do you mean we’re supposed to go through all this work and make presentations to the board and there’s a chance we might not get paid?” (Vol. I, pp. 132-133) is not credible, in part because it is well-known that, by statute, G.L. c. 152, § 13A, an employee’s attorney’s fee in a DIA case is paid by the insurer, not the client-employee, and only if benefits are received by the employee. (See Vol. II, p. 251-253) We credit the Respondent’s testimony that he never made that statement. (Vol. II, p. 251-253)

49. The Respondent and Ms. Exume both denied that the former stated during the conciliation that Ms. Exume was not working. (Vol. II, pp. 67-68, 184, 248-252) With respect to the Respondent’s compensation of Ms. Exume, he believed that he was not paying Ms. Exume “a salary” or “wages” because she was being paid as an independent contractor, and was not subject to withholding. Whether or not the Respondent is legally correct, this position, articulated at the hearing (Vol. II, pp. 218-219, 222-223, 225), coupled with Ms. Walsh’s recollection of the conversation concerning the possible use of the term “salary” (see 48(c) above), raises serious doubt as to whether whatever was said at the conciliation constituted any misstatement of fact by the Respondent. We reject as not credible the testimony of Attorney Fabricant and Ms. Chagnot as to what was said at the conciliation. We therefore find that Bar Counsel failed to prove by a preponderance of the evidence that the Respondent engaged in any misrepresentations at the conciliation.

50. Attorney Fabricant and the Respondent subsequently drafted an agreement for repayment of the overpayment by Ms. Exume, which Ms. Exume executed. (Vol. II, pp. 68-70, 253-255; Exs. 11, 20)7 Ms. Exume agreed to repay more than the overpayment she received because she was afraid that the insurer’s accusation of fraud, although groundless, could jeopardize her pending application for citizenship. (Vol. II, pp. 110-113, 166-168)

III. Conclusions of Law

51. Bar Counsel charges that the Respondent’s conduct in counseling or assisting Ms. Exume in pursuing workers’ compensation benefits for temporary, total disability while employing her, knowing such conduct was criminal or fraudulent, violated Mass.R.Prof.C. 1.2(d) (lawyer shall not assist client in conduct that the lawyer knows is fraudulent). We disagree. Although we have found that the Respondent negligently submitted a Form 110 to the DIA containing a false representation of fact (that Ms. Exume was not working), which constituted misconduct (see below), we have rejected the thrust of Bar Counsel’s case that the Respondent and Ms. Exume engaged in a scheme to defraud the insurer. There is no evidence that Ms. Exume knew she could not receive workers’ compensation if she received earnings in excess of the amount of compensation. Additionally, the Respondent’s claim that Ms. Exume was entitled to medical benefits for additional treatment of her injuries was warranted under the workers’ compensation statute, and he recognized that repayment of the overpayment might well be necessary. (Vol. II, 285-290) Furthermore, the Respondent made no effort to hide Ms. Exume’s employment or his payments to her. In addition, the claim for temporary, total incapacity on Form 110 was part of a number of claims and did not constitute a fraudulent act. Consequently, we do not conclude that the Respondent was assisting his client in a fraudulent or criminal act.

52. Bar Counsel charges that the Respondent’s conduct in making intentionally false statements to Attorney Fabricant that Ms. Exume had not been employed since April 4, 1998, and that he had not paid her, violated Mass.R.Prof.C. 4.1(a) (lawyer shall not knowingly make a false statement of material fact to a third person). We also reject this charge. We have found that Attorney Fabricant’s and Ms. Chagnot’s testimony regarding the Respondent’s statements at the conciliation were not credible. Therefore, we find that Bar Counsel failed to prove by a preponderance of the evidence that the Respondent made the charged false statements.

53. Bar Counsel charges that the Respondent’s concealing from Attorney Fabricant the fact that Ms. Exume had been working in his office as a secretary for wages since May 29, 1998, constituted a violation of Mass.R.Prof.C. 4.1(b) (lawyer shall not fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless prohibited by Rule 1.6) and 8.4 (c) (lawyer shall not engage in conduct involving dishonesty, fraud, deceit or misrepresentation) and (h) (lawyer shall not engage in any other conduct adversely reflecting on fitness to practice). See discussion above in 51 and 52. We have rejected Bar Counsel’s contention that the Respondent assisted Ms. Exume in a scheme to conceal her employment in his office or to defraud the insurer or the DIA. We have also rejected Bar Counsel’s allegation that the Respondent made misrepresentations in the course of the conciliation. While the Respondent had a duty to inform the DIA or insurer’s counsel when he realized that Ms. Exume had been overpaid, we have found that his delay was attributable to the overwhelming professional circumstances in which Respondent found himself in the summer of 1998, when his secretary and office administrator of at least fifteen years left with no notice, and he was unable to secure adequate replacement. Ms. Exume was a convenient and capable substitute, but inexperienced. He was overwhelmed and unable to handle his practice. As a result, we conclude that the Respondent did not engage in the charged misconduct.

54. Bar Counsel charges that the Respondent’s filing with the DIA a false claim for temporary, total disability benefits; his filing with Reliance of a false earnings report; his misrepresentation to the DIA conciliator of the terms of Ms. Exume’s employment with him; and his failure to disclose to the DIA that Ms. Exume had been paid to work as his secretary, constituted violations of Mass.R.Prof.C. 1.2(d) (lawyer shall not assist client in conduct that the lawyer knows is fraudulent), 3.3(a)(1) (lawyer shall not knowingly make a false statement of material fact to a tribunal), (2) (lawyer shall not knowingly fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a fraudulent act by his client), and (4) (lawyer shall not offer evidence that the lawyer knows to be false), and 8.4 (c) (lawyer shall not engage in conduct involving dishonesty, fraud, deceit or misrepresentation), (d) (lawyer shall not knowingly engage in conduct that is prejudicial to the administration of justice) and (h) (lawyer shall not engaged in any other conduct adversely reflecting on fitness to practice). We have found that the Respondent negligently filed a document with the DIA stating that Ms. Exume had not returned to work, and we conclude that this conduct violated Mass.R.Prof.C. 8.4(d) and (h). Because Bar Counsel failed to prove that this misrepresentation was intentional, we do not find that this conduct violated Mass.R.Prof.C. 3.3(a)(1) or 8.4(c). We also find that his failure to notify the insurer or the DIA prior to the conciliation that Ms. Exume was gainfully employed to be a violation of Mass.R.Prof.C. 8.4(d) and (h). We have rejected Bar Counsel’s allegations that the Respondent intentionally filed a false earnings report with Reliance, and made misrepresentations to the DIA conciliator regarding the terms of Ms. Exume’s employment with him. As a result, we find no violations based on those charges.

IV. Factors in Aggravation and Mitigation

Mitigation

55. As set forth above, we find that the severe disruption to his practice that the Respondent experienced when his long-term, highly experienced secretary suddenly quit in late June 1998, was a significant cause of the Respondent’s misconduct.

56. The Respondent’s misconduct was essentially an isolated incident, and not part of an overall pattern or fraudulent scheme.

57. The Respondent was motivated not by personal gain, but sincere concern for a client and personal friend and a desire to obtain for her the medical benefits to which she was legitimately entitled and for which she had a substantial need.

58. Reliance was the instigating force in this matter by virtue of its inappropriate treatment of Ms. Exume. Reliance failed to respond to Ms. Exume’s initial claim until she was forced to retain an attorney (9) and, when finally forced into tardy recognition of the claim, Reliance, without excuse, failed to pay the statutory penalty. (11) With the complicity of its attorney, Reliance thereafter authorized surveillance of Ms. Exume, including videotaping her at her attorney’s office and making telephone calls under false pretenses. (30) At the mediation, Reliance and its attorney used threats of deportation proceedings to intimidate Ms. Exume into not only returning more than the amount of the overpayment, but also into abandoning her claim for medical coverage to which she was entitled. (50) Days after negotiating the unfair settlement on the basis that it would be the end of the matter, Reliance’s attorney submitted a letter of complaint to the Board with a selective recitation of events which was misleading at best. ( 48(a)) At the hearing, Reliance and its attorney provided testimony which was not credible on numerous points and which we find lacked candor. ( 30, 48, 49) At the hearing, the Committee noted the clear discomfort of Ms. Exume. Ms. Exume is a hard-working, single mother who has obviously struggled through considerable adversity to support her children and who clearly felt gratitude and loyalty to the Respondent. Ms. Exume seemed genuinely puzzled by the contrast between the forces which had been deployed to penalize someone who had assisted her and the lack of any apparent concern about the ethical conduct of the insurer and its attorney.

Aggravation

59. We make no findings in aggravation.

V. Recommendation for Discipline

Based on all of the misconduct charged in the petition, Bar Counsel seeks, as discipline, a three-year suspension. The Respondent, in contrast, denies that he engaged in any misconduct. We have rejected the gravamen of Bar Counsel’s charges, namely that the Respondent, for a period of five months, assisted his client in a fraudulent scheme to collect disability benefits to which she was not entitled and then lied to cover up her employment in his office. We have found that the Respondent and his client did not intend to fraudulently obtain workers’ compensation benefits – that their purpose was to obtain the benefits to which Ms. Exume was entitled by virtue of her job-related injury. We further found that Bar Counsel failed to prove that the Respondent made any misrepresentations at the conciliation hearing. The Respondent’s only misconduct was the submission of Form 110 with a negligent misrepresentation, in which the box “No” was checked in answer to whether or not Ms. Exume had “returned to work,” and the Respondent’s failure, for about two months, to disclose Ms. Exume’s receipt of earned income while also receiving workers’ compensation benefits. Both of these acts were rectified at the conciliation hearing. In our view, the Respondent’s misconduct is thus far less egregious than that in Matter of McCarthy, 416 Mass. 423, 9 Mass. Att'y Disc. R. 225 (1993) and Matter of Neitlich, 413 Mass. 416, 8 Mass. Att'y Disc. R. 167 (1992), both of which resulted in one-year suspensions, since the Respondent did not engage, through hearing before a tribunal, in intentional, material misrepresentations. It is also less serious than Shuman’s intentional misrepresentations to the court and opposing counsel regarding the identity and expected testimony of an expert he never contacted or retained. Matter of Shuman, S.J.C. No. BD-2001-006 (June 21, 2002) (six-month suspension).

In our view, the Respondent’s misconduct is most analogous to that in Matter of Wilson, S.J.C. No. BD-2001-080 (Ireland, J.) and Matter of Tiberii, 12 Mass. Att'y Disc. R. 546 (1996), both of which resulted in a public reprimand. In both cases, the attorneys engaged in negligent misrepresentation coupled with other misconduct; in Wilson, an ex parte communication and in Tiberii, failure to rectify the error resulting in harm. Based on the nature of the Respondent’s misconduct here, as well as the mitigation, we believe a public reprimand would be the appropriate sanction. For the foregoing reasons, we recommend that the Respondent receive a public reprimand.

Respectfully submitted,
By the Hearing Committee

___________________________
Constance L. Rudnick

___________________________
George A. Berman

__________________________
Pria E. Harmon

Filed: _______________

FOOTNOTES

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

2 References to the Petition for Discipline shall be (Pet. ); references to the Respondent’s Answer shall be (Ans. ); references to the transcript of the hearing on the Petition for Discipline shall be (Vol. p. ); and references to the exhibits at the hearing on the Petition for Discipline shall be (Ex. ).

3 Also referred to as “Sterling Administrative Services.” (Exs. 2-7)

4 We credit Ms. Exume’s testimony that she had not reported to the Respondent her continued receipt of benefits after the initial June check (see Vol. 2, pp. 91-94), and we also credit the Respondent’s testimony that he relied on his clients to tell him if they were still receiving benefits. (See Vol. II, pp. 266-268)

5 We wish to express our concerns regarding the propriety of the surveillance conducted by Reliance with the knowledge of Reliance’s attorney. (See Ex. 18) Despite the uniqueness of the circumstances – the insurer suspected the claimant of being employed by her attorney – no effort was made to caution the investigator about the issues of videotaping the interior of the attorney’s office or communicating with a person represented by counsel. (See Vol. I, pp. 201-205)

6 The Respondent knew a conciliation was the next step in the process after the filing of Form 110 and one would be scheduled by the DIA. (Vol. II, p. 161) Accordingly, there would be additional opportunities to address my issues regarding entitlement to benefits.

7 The insurer agreed that workers’ compensation benefits were due Ms. Exume for the period from 4/4/98 through 5/29/98 in the amount of $1,634.49. (Ex. 20) The overpayment agreement then stated that between April 4, 1998 through August 15, 1998, benefits had been paid totaling $4,009.10 (minus the compensation of $1,634.39 for the initial month and a half), resulting in an overpayment of $2,374.61, which the claimant agreed to repay to the insurer. (Ex. 20) Thus, Ms. Exume agreed to repay benefits during the period from 5/29/98 through late June 1998, despite the fact that she had not received earnings from her secretarial employment during that period. It appears that the insurer selected the date of 5/29/98 because that was the date of the first letter to the insurer from the Respondent which bore Ms. Exume’s initials. (See Ex. 7; Vol. I, pp. 135, Vol. II, p. 254-255) Under the circumstances, including the insurer’s accusation of fraud and Ms. Exume’s concerns about citizenship, we are not persuaded that the Respondent’s conduct was a factor in causing Ms. Exume to agree to pay the insurer more than the actual overpayment.



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