Case Title: In the Matter of Strauss

Citation: 

Docket Number: SJC-12148

State: massachusetts

Court: Massachusetts Supreme Court

Date: 2018-04-12T00:00:00Z

Document:
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SJC-12148 
 
IN THE MATTER OF ARIEL J. STRAUSS. 
 
 
 
Suffolk.     January 24, 2018. - April 12, 2018. 
 
Present:  Gants, C.J., Lowy, Cypher, & Kafker, JJ. 
 
 
Attorney at Law, Disciplinary proceeding, Misuse of client 
funds, Suspension. 
 
 
 
 
Information filed in the Supreme Judicial Court for the 
county of Suffolk on January 20, 2016. 
 
 
The case was heard by Duffly, J. 
 
 
 
Terrence D. Pricher, Assistant Bar Counsel. 
 
Jeffrey D. Woolf for Board of Bar Overseers. 
 
Thomas F. Maffei for the respondent. 
 
 
 
LOWY, J.  We consider in this case the information filed by 
the Board of Bar Overseers (board) that an attorney 
intentionally misused a client's funds with temporary 
deprivation resulting, and its recommendation as to the 
appropriate level of discipline to be imposed.  A single justice 
of this court suspended Ariel J. Strauss (respondent) from the 
2 
 
 
practice of law for six months, and the board and bar counsel 
appealed.1  For the reasons that follow, we reverse the order of 
term suspension and, accepting the board's recommendation, order 
an indefinite suspension.2 
 
Background.  On August 25, 2014, bar counsel filed a two-
count petition for discipline against the respondent.  Count one 
alleged that between June 1, 2012, and September 30, 2013, the 
respondent failed to properly maintain a check register for his 
client trust account, and failed to perform a reconciliation of 
the account periodically.  The respondent did not dispute the 
underlying facts as to count one, and a hearing committee of the 
board (committee) agreed that the conduct violated Mass. R. 
Prof. C. 1.15 (f) (1) (B) and (E), as appearing in 440 Mass. 
1338 (2004). 
 
The second count involved the respondent's conduct in 
connection with the settlement of a client's personal injury 
claim.  The committee found that the respondent (1) failed to 
safeguard the client's funds in a trust account, in violation of 
                                                          
 
 
1 This bar discipline appeal is subject to S.J.C. Rule 
2:23 (b), 471 Mass. 1303 (2015).  After review of the 
preliminary memoranda and record appendix filed pursuant to the 
rule, we directed the appeal to proceed in the regular course. 
 
 
2 We deny the motion to dismiss the appeal that was filed by 
Ariel J. Strauss (respondent).  We allow his motion to 
supplement the record appendix to include additional materials 
before the single justice. 
3 
 
 
Mass. R. Prof. C. 1.15 (b) (1), as appearing in 440 Mass. 1338 
(2004); (2) failed to pay the client the proceeds of her 
settlement promptly, in violation of Mass. R. Prof. C. 1.15 (c), 
as appearing in 440 Mass. 1338 (2004); (3) failed to provide the 
client with notice of withdrawal of his fee, the amount of the 
fee, an itemized bill for services rendered, and a balance of 
the client's funds left in the account, in violation of Mass. R. 
Prof. C. 1.15 (d), as appearing in 440 Mass. 1338 (2004); (4) 
authorized distributions that caused a negative balance in his 
client trust account, in violation of Mass. R. Prof. C. 1.15 (f) 
(1) (C), as appearing in 440 Mass. 1338 (2004); and (5) engaged 
in conduct involving dishonesty, fraud, deceit, or 
misrepresentation, in violation of Mass. R. Prof. C. 8.4 (c) and 
(h), 426 Mass. 1429 (1998). 
 
The committee determined that the respondent's misconduct 
included a "[k]nowing misuse of one client's funds for the 
benefit of another," and recommended the respondent be 
indefinitely suspended from the practice of law.  The board 
adopted the committee's findings and recommendation, and an 
information and record of proceedings was filed in the county 
court.  After a hearing, the single justice issued an order 
imposing a six-month suspension. 
 
Discussion.  There is no dispute that the respondent 
violated multiple rules of professional conduct relating to the 
4 
 
 
appropriate use and maintenance of client trust accounts.  The 
disciplinary proceedings therefore focused on the allegation 
that was in dispute and carried the most substantial sanction:  
whether the respondent intentionally misused client funds, with 
temporary deprivation resulting.  Our review of the factual 
findings concerning this allegation is limited.  We uphold the 
subsidiary facts found by the committee and adopted by the board 
"if supported by substantial evidence, upon consideration of the 
record, or such portions as may be cited by the parties."  
S.J.C. Rule 4:01, § 8 (6), as appearing in 453 Mass. 1310 
(2009).  "While we review the entire record and consider 
whatever detracts from the weight of the board's conclusion, as 
long as there is substantial evidence, we do not disturb the 
board's finding, even if we would have come to a different 
conclusion if considering the matter do novo."  Matter of Segal, 
430 Mass. 359, 364 (1999).  See id., quoting G. L. c. 30A, § 1 
("'Substantial evidence' means such evidence as a reasonable 
mind might accept as adequate to support a conclusion'").  See 
Matter of Slavitt, 449 Mass. 25, 30 (2007).  We give no special 
deference to the determination of the single justice.  See 
Matter of Tobin, 417 Mass. 81, 88 (1994).  See also Matter of 
Karahalis, 429 Mass. 121, 123 (1999). 
 
1.  Facts as found by the committee and adopted by the 
board.  According to the committee's findings, the respondent 
5 
 
 
represented a client on a contingency fee basis in connection 
with a personal injury claim.  With the client's authorization, 
the respondent settled the claim for $5,000, and the client 
signed a release in early December, 2012.  At the time, the 
client asked the respondent for her share of the settlement in 
cash because she would be traveling internationally, and 
believed cashing a check would be difficult at her destination.  
The respondent agreed.  It was not until about December 20, 
2012, after the client had left on her trip, that the respondent 
received two settlement checks from the defendant's insurer in 
the personal injury claim:  one in the amount of $558.51, 
representing the amount of a claimed lien for medical expenses, 
payable to the lien claimant; and the other for the lien-free 
balance of $4,441.49.  The respondent deposited the lien-free 
settlement check into his client trust account and, the next 
day, withdrew his fee of $ 1,666.67.  Before the deposit, the 
respondent had a zero balance in that account, thus the entire 
balance was due to the client.  The respondent failed to notify 
the client that he had withdrawn his fee.  He also failed to 
provide her a statement of the amount of the withdrawal or the 
balance of her funds in the account, any explanatory statement, 
or the amount due to her. 
 
Unrelated to the client, on December 28, 2012, the 
respondent deposited an additional $800 in cash into his client 
6 
 
 
trust account, raising its balance to $3,574.82.  On January 13, 
2013, the respondent wrote a $3,400 check on the account for the 
benefit of his father.  According to the respondent's bank 
records, the balance of the account fell to $175.82 at a time 
when the respondent was required to hold $2,774.82, for his 
client.  After a check drawn on the account was dishonored for 
insufficient funds, bar counsel was notified.  See Mass. R. 
Prof. C. 1.15 (h), as appearing in 440 Mass. 1338 (2004). 
 
After approximately two weeks abroad, the client returned 
to the United States in January, 2013.  The committee found 
that, on her return, she "wanted as much of her money as the 
respondent could give her lien-free as soon as he could give it; 
she did not insist on payment in cash and she did not authorize 
the respondent to hold the lien-free portion of the settlement 
until the lien was resolved."  The committee did not credit the 
respondent's testimony that, after her return, the client wanted 
to delay receipt of the settlement funds until issues associated 
with the $558.51 were resolved.3  On March 6, 2013, the 
                                                          
 
 
3 We recognize that the single justice took a different view 
of the evidence.  Neither the single justice nor this court, 
however, considers the findings of the Board of Bar Overseers 
(board) de novo.  See Matter of Segal, 430 Mass. 359, 364 
(1999).  The scope of our review is limited to ascertaining 
whether there is substantial evidence to support the board's 
findings.  Id.  The hearing committee (committee) found, and the 
board accepted, that when the client returned to Massachusetts 
after her trip, she wanted the proceeds of her settlement.  She 
 
7 
 
 
respondent paid the client the entire $2,774.82 due to her in 
cash, as well as the $558.51 medical expense lien, also in cash, 
and she signed a receipt.4 
 
The respondent claimed that he neither misused his client's 
funds nor deprived her of their use.  Despite the client trust 
account bank records to the contrary, he asserted that when he 
deposited the settlement check in his trust account in December, 
2012, he was holding cash in excess of that amount for the 
benefit of another client, his father.5  He testified that, after 
depositing the settlement check, he reserved an equivalent 
amount in cash in an envelope on his desk that he "earmarked" 
for his client based on her pre-trip request that she be paid in 
                                                                                                                                                                                           
did not insist on cash, which she previously requested because 
of her impending trip, and she did not authorize the respondent 
to retain all of the settlement funds until the medical lien was 
resolved.  The client testified that she did not know why she 
had had to wait so long for the funds, and that she was 
impatient.  Although the respondent testified otherwise, the 
committee was not required to credit his testimony. 
 
 
4 The respondent advised the client of his belief that the 
lien was improper.  He paid the client the amount of the lien, 
$558.51, from his own funds, and the receipt signed by the 
client indicated that the respondent was authorized to retain 
any of the lien amount he thereafter recovered. 
 
 
5 The respondent claimed that the funds were part of a total 
of $20,000 in cash that he had received from his father.  
However, he deposited only $16,000 of that amount into his 
client trust account, and the deposits were listed differently 
on two separate sets of records he provided to bar counsel.  
Neither of those records was consistent with bank records for 
the same account. 
8 
 
 
cash.  He explained that he then held the funds in the trust 
account for his father's benefit.6  In addition, he claimed that 
the client instructed him not to pay her any of the settlement 
proceeds, until the question whether the lien was proper had 
been resolved.  Not only did the committee decline to credit the 
respondent's explanation, it also found that the respondent 
provided bar counsel with "reconstructed records" to conceal his 
misuse of the client's money for his father's benefit.  There 
were also documents and other evidence that undermined the 
respondent's version. 
 
The committee is "the sole judge of the credibility of the 
testimony presented at the hearing."  Matter of Saab, 406 Mass. 
315, 328 (1989), quoting S.J.C. Rule 4:01, § 8 (3), as appearing 
in 381 Mass. 784 (1990).  It may decline to credit a witness's 
testimony, provided it explains its reasoning and those reasons 
are supported by the record.  See Herridge v. Board of 
Registration in Med., 420 Mass. 154, 164-165 (1995), S.C., 424 
Mass. 201 (1997).  The committee was not required to credit the 
                                                          
 
 
6 In support of his explanation, the respondent offered 
records of cash receipts and disbursements from his client trust 
account, his father's testimony, the testimony of his client 
concerning her desire to be paid in cash, and the fact that she 
ultimately was paid in cash.  The committee, however, found that 
the respondent fabricated certain of the records to support his 
claim.  In one example, the committee noted that one record 
ostensibly created in September, 2013, included transactions 
from November, 2013. 
9 
 
 
respondent's assertion that he held thousands of dollars in cash 
for the client's benefit for several months.7  "[A]rguments 
hinging on [credibility] determinations generally fall outside 
the proper scope of our review," Matter of McBride, 449 Mass. 
154, 161-162 (2007), and they 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), Matter of Murray, 455 Mass. 872, 880 (2010).  This is 
not such a case.  On the contrary, bank records established that 
the respondent deposited the settlement check into the trust 
account, and then promptly drew a check on those funds for the 
benefit of his father. 
 
Even apart from the committee's credibility determinations, 
there is substantial evidence to support the hearing committee's 
findings that the respondent deposited settlement funds 
belonging to the client into his client trust account, and then 
                                                          
 
 
7 The committee expressly did not credit the respondent's 
testimony that he held cash for the client in an envelope in his 
office.  We do not therefore consider whether a contrary finding 
would have warranted a different result.  See Matter of Murray, 
455 Mass. 872, 873 (2010) (adopting rebuttable presumption of 
intentional misuse with permanent deprivation, where respondent 
received cash belonging to client, failed to deposit in client 
trust account, and could not account for portion of it); Matter 
of Gonick, 15 Mass. Att'y Discipline Rep. 230, 237, 239 (1999) 
(misuse of client funds occurred when funds removed from trust 
account and deposited into personal account).  See also Matter 
of Levy, Supreme Judicial Court, No. BD-2016-42, 5-6 (Aug. 26, 
2016) (misuse of client funds found even though lawyer had 
substantial funds in other accounts at same bank). 
10 
 
 
intentionally misused them by writing a check on those funds for 
the benefit of his father.  The delay in paying the client her 
settlement funds, at least after the client returned from her 
trip, supports the conclusion that she was temporarily deprived 
of her funds. 
 
2.  Conduct of the hearing.  Before the single justice, the 
respondent claimed that the committee improperly considered 
evidence of uncharged misconduct without according him a fair 
opportunity to defend against it.  After reviewing the record, 
we reject the claim.  Proceedings before the board and its 
hearing committee need not comply rigidly with the rules of 
evidence and procedure that are applicable in court.  See Matter 
of Dasent, 446 Mass. 1010, 1012 (2016).  Evidence introduced by 
bar counsel for the purpose of impeaching the credibility of the 
respondent and the respondent's witness, his father, and 
evidence of his father's business practices -- including his 
alleged reliance on cash transactions -- was relevant to the 
credibility of the respondent's claim that he substituted cash 
that he had held for his father for funds deposited in his 
client trust account.8  The committee properly could consider 
                                                          
 
 
8 Among other things, the respondent testified that he 
received approximately $20,000 in cash from his father, which he 
deposited in increments of $4,000 or $8,000 into his client 
trust account.  As the committee observed, his trust account 
 
11 
 
 
this evidence in making credibility determinations and in 
concluding that the respondent's explanation was not credible.9  
See Matter of Barrett, 447 Mass. 453, 460 (2006). 
 
The respondent also claimed that bar counsel impermissibly 
shifted the burden of proof to the respondent.  Although bar 
counsel argued that the respondent and his father were not 
testifying truthfully, there is nothing to the respondent's 
claim that the assertions effectively shifted the burden to the 
respondent to disprove bar counsel's allegations of professional 
misconduct.  See Matter of London, 427 Mass. 477, 482 (1998).  
Nor did the respondent object to bar counsel's opening 
statement, which directly addressed the respondent's defense.  
During closing argument, the respondent repeatedly pointed to 
bar counsel's burden of proof, and emphasized that mere 
disbelief of the respondent's testimony does not equate to 
evidence of misconduct.  There was substantial and substantive 
                                                                                                                                                                                           
records did not list the cash deposits in a manner consistent 
with the bank records. 
 
9 With respect to the respondent's claim that his due 
process rights were violated by the committee's consideration of 
certain misconduct not charged in the petition for discipline, 
as the board's findings indicate, those matters could be "put to 
one side" because "[t]he committee did not mention these matters 
until it had announced its amply supported and articulated 
findings and conclusions, and after it had determined that it 
felt 'constrained' to apply the presumptions under [Matter of 
Schoepfer, 426 Mass. 183, 187 (1997)]."  In any event, we have 
permitted uncharged misconduct to be considered in aggravation 
of sanction.  See Matter of the Discipline of an Attorney, 448 
Mass. 819, 825 n.6 (2007). 
12 
 
 
evidence to support the board's conclusions as to each element 
of the charged misconduct.  See Matter of Balliro, 453 Mass. 75, 
84 (2009). 
 
3.  Sanction.  Having concluded there was substantial 
evidence of the charged misconduct, we turn to the question of 
sanction.  As to that, we give deference to the board's 
recommendation, and review the discipline imposed by the single 
justice de novo, to determine whether it "is markedly disparate 
from judgments in comparable cases."  Matter of Slavitt, 449 
Mass. at 30, quoting Matter of Finn, 433 Mass. 418, 423 (2001).  
See Matter of Greene, 476 Mass. 1006, 1008 (2016).  
"Fundamentally, however, '[e]ach case must be decided on its own 
merits and every offending attorney must receive the disposition 
most appropriate in the circumstances.'"  Matter of Foley, 439 
Mass. 324, 333 (2003), quoting Matter of the Discipline of an 
Attorney, 392 Mass. 827, 837 (1984). 
 
Where, as here, an attorney has intentionally misused 
client funds with the intent to deprive the client of those 
funds, or where the client actually was deprived of the funds, 
regardless of the attorney's intent, the presumptive sanction is 
indefinite suspension or disbarment.  Matter of Schoepfer, 426 
Mass. 183, 187 (1997).  We apply that presumption because "there 
is minimal risk that an attorney's misuse of those funds will 
arise from any confusion, misunderstanding, or ambiguity as to 
13 
 
 
whether the funds belong to the client or the attorney."  Matter 
of Sharif, 459 Mass. 558, 567-568 (2011). 
 
We have no difficulty concluding that the respondent 
intentionally misused his client's funds:  the funds were 
properly deposited into his client trust account, and then 
improperly withdrawn for the benefit of another.  The committee 
simply was not required to credit the respondent's assertion 
that he kept thousands of dollars in cash in an envelope for 
several months.  Although the respondent eventually delivered 
the funds to the client, there is also no doubt that she was 
temporarily deprived of their use. 
 
We agree with the single justice's observation that there 
may be circumstances where there are "clear and convincing 
reasons" to depart from the presumptive sanction.  See Matter of 
Sharif, 459 Mass. at 566-567.  This is not, however, such a 
case.  The board's findings establish that the respondent 
intentionally -- not negligently -- misused client funds.  They 
also establish that the client was deprived of the use of the 
funds for a relatively short period.  But this is precisely the 
circumstance for which Matter of Schoepfer, 426 Mass. at 187, 
adopted a presumptive sanction of disbarment or indefinite 
suspension.  Although the evidence consisted of misuse of a 
single client's funds, and those funds were delivered to the 
client within weeks or months of the settlement, attorneys are 
14 
 
 
obliged to safeguard client funds regardless of the amount.  
They may not treat client funds as fungible commodities, using 
funds belonging to one client for the benefit of another, or 
even for their own purposes.  We view the circumstances 
presented as more egregious than those presented in Matter of 
Sharif, 459 Mass. at 571 (three-year suspension for intentional 
misuse of funds advanced for fees).  Compare Matter of Pudlo, 
460 Mass. 400, 407-408 (2011) (one-year suspension for negligent 
expenditure of unearned legal fees owed to client to pay his own 
expenses, and related improprieties in record-keeping and 
notification); Matter of Murray, 455 Mass. 872, 888 (2010) (six-
month suspension for misuse of client funds);10 Matter of Ryan, 
24 Mass. Att'y Discipline Rep. 621, 631 (2008) (nine month 
suspension for misconduct including charging excessive fee and 
commingling and negligent misuse of client funds). 
                                                          
 
 
10 We recognize that bar counsel and respondents have 
sometimes submitted stipulations concerning misconduct and 
disciplinary recommendations.  Those stipulations have sometimes 
led to entry of lesser sanctions, generally in deference to the 
board's recommendation.  See, e.g., Matter of Cedrone, 30 Mass. 
Att'y Discipline Rep. 55, 58 (2014) (suspension for term of one 
year and one day for depositing client trust funds into 
attorney's operating account, intentionally spending portion of 
funds on matters unrelated to client, misconduct in three client 
matters, and inadequate record-keeping).  The fact that a 
departure was made from the presumptive sanction in the 
circumstances of those cases, however, does not require 
imposition of a lesser sanction in this case. 
15 
 
 
 
We also view as significant the presence of aggravating 
factors, and the absence of special factors in mitigation.  The 
committee and the board weighed in aggravation that the 
respondent engaged in multiple violations of the rules of 
professional conduct, and that he used the disciplinary 
violations concerning record-keeping to "conceal" his misuse of 
client funds.  See Matter of Saab, 406 Mass. at 326-327.  There 
also was evidence on which the board could conclude that the 
respondent reconstructed records to hide his misuse of client 
funds to benefit his father.  See Matter of Rickles, 30 Mass. 
Att'y Discipline Rep. 340, 345 (2014) (disbarment where billing 
records determined to have been altered to include additional 
time entries).  Not only do we accept these factors in 
aggravation, but we consider as well that the respondent 
provided bar counsel with "falsified evidence," and displayed a 
lack of candor by presenting false testimony and fabricated 
account documents.  See Matter of Hoicka, 442 Mass. 1004, 1006 
(2004).  Finally, we agree with the board that there were no 
special factors to be considered in mitigation of sanction.11  
See Matter of Alter, 389 Mass. 153, 157-158 (1983). 
                                                          
 
 
11 Although the respondent made a reference to a broken 
ankle in his testimony, he neither raised the ankle as a 
mitigating factor in his answer to the petition for discipline, 
see Rules of the Board of Bar Overseers § 3.15, nor claimed that 
it caused his delay in paying the settlement funds to the 
 
16 
 
 
 
Conclusion.  Considering all of the factors together, we 
conclude that the board's recommendation that the respondent be 
indefinitely suspended from the practice of law is consistent 
with the disposition in similar cases.  Accordingly, we reverse 
the order of term suspension and remand the matter to the county 
court for entry of an order of indefinite suspension.  The 
judgment of reinstatement shall be vacated as of the effective 
date of the order of indefinite suspension.  Recognizing that 
the respondent already has been suspended from the practice of 
law for almost seven months pursuant to the order of term 
suspension, the order of indefinite suspension shall permit the 
respondent to petition for reinstatement no earlier than three 
months prior to four years and five months from the effective 
date of the order of indefinite suspension.  See S.J.C. Rule 
4:01, § 18 (2) (b), as appearing in 453 Mass. 1315 (2009). 
So ordered. 
 
                                                                                                                                                                                           
client.  He also failed to provide any medical records to 
support the claim.  See Matter of Patch, 466 Mass. 1016, 1018 
(2013).  The board properly declined to consider the injury in 
mitigation of sanction.  Likewise, the respondent's apparent 
focus on his work in a yogurt shop is not properly weighed in 
mitigation.