The respondent attorney, James Hayes,
appeals from an order of a single justice of this court disbarring him from the
practice of law. We affirm.
1.
Background. On June 30, 2020, bar
counsel filed a four-count petition for discipline with the Board of Bar
Overseers (board) against the respondent, alleging violations of the rules of
professional conduct then in effect.[1]
Count one alleged that the respondent advised and assisted a client in
using improper, meritless, and fraudulent strategies to conceal lottery
winnings from the Probate and Family Court (probate court) and the mother of
the client's children,[2] including by filing a frivolous bankruptcy petition,[3]
and making knowing misrepresentations in court proceedings.[4] Count one also alleged that the respondent
failed to adequately explain the matter so as to permit the client to make
informed decisions about representation, failed to communicate in writing the
scope of his representation and the basis of the fees to be charged,[5] and
improperly required the client to waive enforcement of ethical rules in signing
the fee agreement.[6]
Count two alleged that the respondent
assisted his client in engaging in fraudulent conduct, unlawfully obstructed
another party's access to evidence and information, and knowingly disobeyed
court orders.[7]
Count three alleged that the respondent
failed to maintain accounting records for three trust accounts,[8] failed to
provide the client with itemized billing or notice of withdrawals,[9] made
misrepresentations to the client's successor counsel that he had provided an
accounting to the client and to bar counsel,[10] and failed to provide the
client with his file upon request or promptly render a full accounting of trust
funds upon final distribution.[11]
Additionally, count three alleged that the respondent intentionally
misused client funds with intent to deprive and resulting deprivation,[12] or,
in the alternative, charged and collected clearly excessive fees;[13] and that
the respondent knowingly charged the client for unnecessary and meritless work
for the sole purpose of extracting money.[14]
Finally, count four alleged that the
respondent engaged in additional dishonest conduct by causing the client to
withdraw his first bar complaint in exchange for a small refund and by drafting
the withdrawal letter to bar counsel.[15]
After a five-day evidentiary hearing, at
which the respondent was represented by counsel, the hearing committee issued a
report finding that bar counsel had proved all of the charged violations and
recommending that the respondent be disbarred.
The board voted to adopt the hearing committee's factual findings and
legal conclusions, as well as its recommendation of disbarment.[16] Two members of the board wrote a separate
concurring opinion to express disagreement with the majority's reasoning, but
they agreed that disbarment was appropriate.[17]
The board thereafter filed an information
in the county court pursuant to S.J.C. Rule 4:01, § 8 (6), as
appearing in 453 Mass. 1310 (2009), recommending that the respondent be
disbarred. After a hearing, a single
justice of this court concluded that the board's factual findings, with one
minor exception, were "amply" supported by the record and agreed that
the allegations of misconduct had been proved as charged. The single justice imposed the recommended
sanction of disbarment, and the respondent appealed, pursuant to S.J.C. Rule
2:23 (b), 471 Mass. 1303 (2015).[18]
2.
Discussion. On appeal, the
respondent does not raise challenges to most of the detailed factual findings
made by the hearing committee or to the violations of the rules of professional
conduct stemming therefrom. See notes
2-15, supra. He instead focuses on one
specific finding, which he believes undergirds the board's recommendation of
disbarment, concerning whether he advised the client to engage in a fraudulent
scheme. He also takes issue with the
determinations of misconduct related to his filing of a bankruptcy petition,
and a petition for interlocutory relief filed in the Appeals Court.
In assessing the sufficiency of the
evidence, "[t]he subsidiary findings of the hearing committee, as adopted
by the board, shall be upheld if supported by substantial evidence"
(quotations and citations omitted).
Matter of Diviacchi, 475 Mass. 1013, 1019 (2016). Within this context, "[t]he hearing
committee . . . is the sole judge of credibility, and arguments
hinging on such determinations generally fall outside our proper scope of
review." Id. at 1018-1019, quoting
Matter of McBride, 449 Mass. 154, 161-162 (2007). After carefully reviewing the record, we
agree with the single justice that the hearing committee's findings of
misconduct are supported by substantial evidence.
The misconduct at issue arises from the
respondent's representation of a client who won the Massachusetts lottery in
August 2013. Shortly after the client
received his winnings in a lump-sum payment, the client's ex-girlfriend filed a
complaint in the probate court, seeking an increase in child support. The probate court subsequently entered
temporary orders prohibiting the client from spending or transferring his
winnings (and later, certain automobiles), and appointed a receiver to hold the
funds. After the first such order
issued, the client began consulting with the respondent about the probate court
matter and his lottery winnings. The
hearing committee found, and the board accepted, that the respondent advised
him on an (improper) strategy to conceal these assets from the probate court
and the client's ex-girlfriend by falsely claiming that a prior verbal
agreement existed between the client and his brother to split the lottery winnings
on a fifty-fifty basis.
The respondent contests this finding,
intimating that such an agreement between the brothers did exist, or that, at
the very least, the respondent believed as much.[19] In so doing, he challenges testimony from the
client that was explicitly credited by the hearing committee. That credibility determination, however, was
not inconsistent with other findings or the over-all chronology of events. See Matter of Murray, 455 Mass. 872, 880
(2010) ("The hearing committee's credibility determinations will not be
rejected unless it can be said with certainty that [a] finding was wholly
inconsistent with another implicit finding" [quotations and citation
omitted]). The client first consulted
with the respondent on or about September 3, 2013, before any assertions were
made that a portion of the lottery winnings belonged to the client's
brother. While the respondent argues
that other portions of the client's testimony were not adopted by the hearing
committee, the hearing committee was not required to take an all-or-nothing
approach in assessing witness credibility.
See Matter of Saab, 406 Mass. 315, 328 (1989). Accordingly, there was no error in the single
justice's determination that the respondent advised the client to engage in a
fraudulent scheme.
In furtherance of the goal of improperly
concealing the client's lottery winnings, the respondent advised and assisted
the client in pursuing a series of activities that the respondent knew to be
fraudulent or in violation of court orders.
These activities included setting up trust accounts for the sole purpose
of secreting the lottery funds in the respondent's interest on lawyers' trust
account (and periodically disbursing portions those funds to himself) in violation
of orders of the probate court, making intentional misrepresentations about the
client's assets in court proceedings, and obstructing and filing a frivolous
bankruptcy petition of behalf of the client for the sole purpose of staying
enforcement of the probate court orders.
See Mass. R. Prof. C. 1.2 (d), as appearing in 471 Mass. 1313 (2015)
(assisting or counselling client to engage in conduct known to be fraudulent);
Mass. R. Prof. C. 3.4 (a), as appearing in 471 Mass. 1425 (2015) (unlawfully
obstructing another party's access to evidence or unlawfully alter, destroy or
conceal a document having potential evidentiary value); rule 3.4 (c) (knowingly
disobeying obligation under rules of tribunal); Mass. R. Prof. C. 8.4 (a), as
appearing in 471 Mass. 1483 (2015) (violation of rules of professional
conduct); rule 8.4 (c) (dishonesty, fraud, deceit, or misrepresentation); rule
8.4 (d) (conduct prejudicial to administration of justice); and rule 8.4 (h)
(fitness to practice law).
Of the many activities that the hearing
committee found to be in furtherance of this scheme, the respondent takes issue
with only two. Specifically, he disputes
that his filing of the bankruptcy petition was improper, asserting that the
filing of such petitions is recognized as "an ordinary and appropriate
means of protecting property,"[20] and similarly defends his subsequent
filing of a petition for interlocutory relief in the Appeals Court relating to
the probate court orders. As an initial
matter, "from a disciplinary perspective, [these arguments] are . . .
largely beside the point because of the other very serious misconduct charged
and found by the board." Matter of
Moran, 479 Mass. 1016, 1018 (2018).
Regardless, they fail on the merits as well because, as the hearing
committee found, the respondent did not have a nonfrivolous basis in law and
fact for the bankruptcy petition. See
Mass. R. Prof. C. 3.1, as appearing in 471 Mass. 1414 (2015). The bankruptcy petition was
"skeletal" by the respondent's own description, and it contained
numerous falsehoods about the client's financial assets. As the hearing committee found, it was filed
for the sole, improper purpose of evading the client's child support
obligations and preventing the client's ex-girlfriend and a court-appointed
receiver from discovering and obtaining the client's assets, in contravention
of court orders. The single justice thus
did not err in concluding that the bankruptcy petition was frivolous and filed
in bad faith, as part of an improper strategy to conceal the lottery
winnings. See Matter of Laroche-St.
Fleur, 490 Mass. 1020, 1020 & n.4, 1022-1023 (2022) (untimely motion and
subsequent appeals, which did not raise any issue that was not or could not
have been raised previously, were frivolous and intended merely to delay). Indeed, according to the respondent's own
testimony, even he did not believe he had an adequate legal basis for the
bankruptcy petition when he filed it on October 9, 2013, and later sought
interlocutory relief in the Appeals Court for that reason; that interlocutory
petition was thus similarly improper because, as the single justice correctly
noted, it was "[i]n furtherance of this scheme" to conceal the
lottery winnings.
In the course of representing the client,
the respondent also directed the client to sign an "oppressive and
predatory" fee agreement, without explaining its terms, and a durable
power of attorney that gave the respondent "sole discretion" to
decide what work to perform and what fees to charge, without notice to the
client or authorization. See Mass. R.
Prof. C. 1.15 (d) (2), as appearing in 471 Mass. 1380 (2015) (trust account
documentation). Pursuant to this fee
agreement, the respondent withdrew over $78,000 of the client's lottery winnings
as purported legal fees, without providing the client notice of the withdrawals
or generating appropriate billing statements, time records, or contemporaneous
accountings of any kind. See rule 1.15
(f) (1) (trust account documentation).
The billing records that were introduced in evidence at the hearing were
ones that the respondent prepared in response to bar counsel's
investigation. See Matter of Zankowski,
487 Mass. 140, 147, 149 (2021) (fraudulent billing supported by substantial
evidence where, inter alia, attorney testified as to purported basis for adding
hours to client bills, but failed to produce any contemporaneous records or
notes to support her version of events); Matter of Strauss, 479 Mass. 294, 298
(2018) (declining to credit testimony where respondent "provided bar
counsel with 'reconstructed records' to conceal his misuse of the client's
money").
Even taken at face value, and as the
hearing committee found, those records reflect clearly excessive fees, charges
for fees to which the respondent was not entitled, as well as double billing
for the same legal work. Apart from one
specific instance of double billing, the respondent does not raise challenges
to these findings on appeal and instead contends that imposing the sanction of
disbarment is disproportionate for such misconduct. Like the respondent's other claims, this
claim lacks merit as discussed infra.
In sum, we agree with the single justice
that the board's findings of misconduct are supported by substantial evidence.
3.
Appropriate sanction. On appeal,
"[w]e review de novo the disciplinary sanction imposed by the single
justice to determine whether it is markedly disparate from judgments in
comparable cases" (quotations and citation omitted). Matter of Williams, 491 Mass. 1021, 1026
(2023). In considering the appropriate
sanction, "the board's recommendation is entitled to substantial
deference." Matter of Tobin, 417
Mass. 81, 88 (1994). "Our primary
concern in bar discipline cases is the effect upon, and perception of, the
public and the bar, . . . and we must therefore consider, in reviewing the
board's recommended sanction, what measure of discipline is necessary to
protect the public and deter other attorneys from the same behavior"
(citation omitted). Matter of
Laroche-St. Fleur, 490 Mass. at 1023–1024.
The respondent contends that the sanction
of disbarment is disproportionate because the findings of fraud were not
supported by substantial evidence, an argument that lacks merit for the reasons
discussed supra. The respondent also
argues that it was improper to conclude that his misconduct amounted to
intentional misuse of client funds with deprivation resulting, so as to warrant
indefinite suspension or disbarment, without precisely quantifying the amount
of unearned fees collected.
As an initial matter, it is worth noting
that we do not view this as an excessive fee case. Rather, "[t]he entire engagement
[between the respondent and the client] was imbued with fraud and
greed." The respondent
"prey[ed] on his client's lack of education, mental health issues, and the
stress induced by the [p]robate [c]ourt proceedings" to draft and have the
client sign a "predatory" fee agreement and durable power of
attorney. That fee agreement gave the
respondent sole discretion over what matters to pursue, how much to charge for
each matter, and even how to define a "matter" for billing purposes
-- all without need to inform the client.
All told, of $203,500 in client funds that the respondent held in trust,
the respondent paid close to one-half of that amount to himself. For nearly all of these withdrawals, the
client had no notice and thus no ability to understand or dispute the purported
basis for the withdrawal. Indeed, even
the explanations that the respondent supplied to the hearing committee for the
basis of his withdrawals reflect charges for fees to which the respondent was
not entitled.
The "[k]nowing submission of false or
fraudulent bills . . . is not equivalent to charging an excessive
fee." Matter of Zankowski, 487
Mass. at 151 (dishonest nature of respondent's intentional overbilling
differentiated her misconduct from cases involving charges of excessive
fees). See Matter of Goldstone, 445
Mass. 551, 566 (2005) ("Where an attorney lacks a good faith belief that
he has earned and is entitled to the monies, such conduct constitutes
conversion and misappropriation of client funds"). As noted in Matter of Zankowski, supra, other
cases involving intentional overbilling have resulted in terms of
suspension. See id. (listing cases of
such misconduct that have resulted in one- to four-year suspensions). In Matter of Goldstone, supra, however, an
attorney who intentionally overbilled a corporate client was disbarred because
of the particularly egregious nature of his misconduct -- he not only
overbilled in the amount of hundreds of thousands of dollars, but his
misconduct was aggravated by threats to retain additional client funds unless
he was paid and by his payment of only partial restitution, made after the
initiation of disciplinary proceedings.
Here, the respondent's misconduct relating
to client funds was accompanied by independently egregious misconduct -- namely,
a fraudulent scheme, across multiple courts, to improperly hide the client's
assets, in violation of court orders. As
the board observed, this involved "advancing a blatant falsehood"
that the client's brother was entitled to one-half of the lottery winnings, and
"extended to filing fraudulent documents in the [p]robate [c]ourt and
[b]ankruptcy [c]ourt such as [a] sham list of expenses,"
"intentionally misl[eading] the courts, the receiver, and [the client's
ex-girlfriend]," and preventing the latter from "obtaining the true
facts concerning the amount of funds available for child support." Individual acts of misconduct contained
within this scheme would, standing alone, warrant a term of suspension. See, e.g., Matter of Moran, 479 Mass. at 1021
("An intentional misrepresentation to a court typically warrants a
suspension of at least one year").
When considered in its entirety, however, the cumulative effect of the
respondent's fraudulent scheme warrants a more severe sanction. See Matter of Crossen, 450 Mass. 533, 581
(2008) (disbarring attorney who orchestrated elaborate and dishonest scheme to
extract damaging information from former judicial law clerk in effort to
discredit judge presiding over client's case); Matter of Zadworny, 26 Mass.
Att'y Discipline Rep. 722 (2010) (accepting joint recommendation of indefinite
suspension where attorney filed false statements in probate court, charged
excessive fee, and intentionally misused funds held in trust). See generally Matter of Saab, 406 Mass. at
326-327 (consideration of cumulative effect of multiple violations is proper).
As the board observed, there are also
multiple factors to be weighed in aggravation of the respondent's misconduct,
and none to be weighed in mitigation.
The respondent not only orchestrated a fraudulent scheme in which he
intentionally misled the courts, the receiver, and the mother of his client's
children, but took advantage of an unsophisticated and vulnerable client with a
limited education and mental health issues.
See Matter of Zak, 476 Mass. 1034, 1041 (2017) (taking advantage of
vulnerable clients serves as aggravating factor). This misconduct was further aggravated by the
respondent's complete inability to recognize the wrongfulness of his conduct,
see Matter of Bailey, 439 Mass. 134, 152 (2003), and cases cited, and his lack
of candor before the hearing committee, see Matter of Eisenhauer, 426 Mass.
448, 455-456 (1998).[21] In these
circumstances, disbarment is appropriate.
See Matter of Zak, supra; Matter of Crossen, 450 Mass. at 581.
Judgment
affirmed.
The case was submitted on the record,
accompanied by a memorandum of law.
Edward R. Wiest for the respondent.
footnotes
[1] In instances
where the current versions of the rules of professional conduct contain
substantially the same language as those in effect during the events at issue,
we cite to the current versions for the sake of simplicity. See Matter of Ablitt, 486 Mass. 1011, 1013
n.5 (2021).
[2] This was alleged to involve violations of Mass. R. Prof. C. 1.2 (a), as
appearing in 471 Mass. 1313 (2015) (failing to accomplish lawful objectives by
reasonably available means); rule 1.2 (d) (assisting or counselling client to
engage in conduct known to be fraudulent); Mass. R. Prof. C. 3.4 (a), as
appearing in 471 Mass. 1425 (2015) (unlawfully obstructing another party's
access to evidence or unlawfully altering, destroying, or concealing document
having potential evidentiary value); rule 3.4 (c) (knowingly disobeying obligation
under rules of tribunal); Mass. R. Prof. C. 8.4 (a), as appearing in 471 Mass.
1483 (2015) (violation of rules of professional conduct); rule 8.4 (c)
(dishonesty, fraud, deceit, or misrepresentation); rule 8.4 (d) (conduct
prejudicial to administration of justice); and rule 8.4 (h) (fitness to
practice law).
[3] This was
alleged to be a violation of Mass. R. Prof. C. 3.1, as appearing in 471 Mass.
1414 (2015) (meritorious claims and contentions), and rule 8.4 (a), (c), (d),
and (h).
[4] This was
alleged to be a violation of Mass. R. Prof. C. 3.3 (a) (1) and (2), as
appearing in 471 Mass. 1416 (2015) (candor toward tribunal); and rule 8.4 (c)
and (d).
[5] This was
alleged to be a violation of Mass. R. Prof. C. 1.4 (b), as appearing in 471
Mass. 1319 (2015) (communication with clients) and Mass. R. Prof. C. 1.5 (b)
(1), as appearing in 463 Mass. 1302 (2012) (communication about fees).
[6] This was
alleged to be a violation of rule 1.2(a), rule 1.4(b), and rule 8.4(c), (d),
and (h).
[7] Count two
alleges violations of rule 1.2 (d); rule 3.4 (a) and (c); and rule 8.4(a), (c),
(d), and (h).
[8] This was
alleged to be a violation of Mass. R. Prof. C. 1.15 (f) (1), as appearing in
471 Mass. 1380 (2015) (trust account documentation).
[9] This was
alleged to be a violation of rule 1.15 (d) (2) (accounting).
[10] This was
alleged to be a violation of rule 8.4 (c).
[11] This was alleged
to be a violation of rule 1.15 (d) (1) (accounting) and Mass. R. Prof. C. 1.16
(e), as appearing in 471 Mass. 1395 (2015) (terminating representation).
[12] This was
alleged to be a violation of rule 1.15 (b) (segregation of trust funds) and
rule 8.4 (c).
[13] This was
alleged to be a violation of Mass. R. Prof. C. 1.5 (a), as amended, 480 Mass.
1315 (2018) (clearly excessive fees).
[14] This was
alleged to be a violation of rule 1.5 (a) and rule 8.4 (c).
[15] Count four
alleged violations of S.J.C. Rule 4:01, § 10, as appearing in 425 Mass.
1313 (1997), and rule 8.4(c) and (h).
[16] One member
of the board recused herself.
[17]
Specifically, the concurrence took issue with the majority's conclusion that
the respondent's charging of clearly excessive fees constituted intentional
misuse of client funds with deprivation.
[18] The
respondent has filed a motion to supplement the record with (1) reformatted
copies of the transcripts of the evidentiary hearing; and (2) additional
materials outside the record below. We
grant the motion insofar as it concerns the hearing transcripts, but otherwise
deny the motion. The additional
materials consist principally of documents that the respondent failed to offer
as evidence at the hearing, as well as documents that were deemed irrelevant by
the hearing committee. See Matter of
Diviacchi, 491 Mass. 1003, 1007 n.8 (2022); Matter of Dragon, 440 Mass. 1023,
1024 (2003). A portion of these
materials was already the subject of a pro se filing seeking to expand the
record before the single justice. Like
the single justice, we decline to consider them. See Matter of Gannett, 489 Mass. 1007, 1010
(2022). Moreover, we note that many of
the omitted materials are "cumulative of argument and evidence" that
was considered by the hearing committee, and do not "detract[] from the
conclusion that a sanction less than disbarment is not warranted." See Matter of Dragon, supra.
[19] It is worth
noting the internal inconsistency of this particular argument. As described infra, the respondent disbursed
a substantial portion of the lottery winnings to himself as purported legal
fees for services performed on behalf of the client. If, as the respondent suggests, he genuinely
believed these funds corresponded to a "share" owned by the client's
brother, he intentionally misused the brother's funds to pay himself for
services rendered to the client.
[20] Notably,
this assertion is contrary to the respondent's own testimony at the
hearing. In reference to his
negotiations with the receiver over the joint stipulation filed in the
bankruptcy court, the respondent testified that he would not agree to the
inclusion of language indicating that the client had filed the bankruptcy
petition for the purpose of evading child support obligations. He characterized this language as a
"poison pill" because it would require the client to "basically
. . . admit [to] bankruptcy irregularities."
[21] The hearing
committee found that the respondent gave testimony that was intentionally
false, including, inter alia, claiming he had minimal involvement in drafting
the fee agreement, claiming he withdrew trust account funds at one point
because someone was trying to levy on his interest on lawyers' trust account,
claiming his records were lost in a computer backup failure, and claiming the
bankruptcy petition was not frivolous or intended solely to delay the probate
court proceedings.