Title: In the Matter of Gannett
Citation: N/A
Docket Number: SJC-13038
State: Massachusetts
Issuer: Massachusetts Supreme Court
Date: March 16, 2022

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SJC-13038 
 
IN THE MATTER OF RICHARD W. GANNETT. 
 
 
March 16, 2022. 
 
 
Attorney at Law, Disciplinary proceeding, Disbarment, 
Commingling of funds, Duty to nonclient, Indorsement of 
check. 
 
 
 
The respondent attorney, Richard William Gannett, appeals 
from the judgment of a single justice of this court disbarring 
him from the practice of law.1  The matter came before the single 
justice on the information and record of proceedings filed by 
the Board of Bar Overseers (board).  The board determined that 
the respondent intentionally misused trust funds and engaged in 
other misconduct.  The board recommended, and the single justice 
ordered, that the respondent be disbarred.  We affirm. 
 
 
1.  Prior proceedings.  On March 23, 2018, bar counsel 
filed a petition for discipline against the respondent.  As 
amended, the petition alleged that the respondent wrongfully 
deposited into his interest on lawyers' trust account (IOLTA) 
trust funds in the form of a check in which a third party, Lee 
Bank, claimed an interest, and that he intentionally misused the 
funds, in violation of multiple rules of professional conduct.  
Through counsel, the respondent answered the petition, denied 
any misconduct, and raised affirmative defenses. 
 
 
The matter was referred to a hearing committee of the 
board.  After an evidentiary hearing at which the respondent was 
 
1 This bar discipline appeal is subject to the court's 
standing order governing such appeals.  See S.J.C. Rule 2:23, 
471 Mass. 1303 (2015).  Pursuant to our standing order, we 
dispense with oral argument. 
2 
 
 
 
represented by counsel, the committee filed a report of its 
findings of fact, conclusions of law, and recommendation that 
the respondent be disbarred.  The board thereafter considered 
the respondent's appeal and issued a report generally adopting 
the hearing committee's findings of fact, legal conclusions, and 
recommendation; an information was filed in the county court.  A 
single justice of this court reviewed the record and accepted 
the board's recommendation, and a judgment of disbarment 
entered.  The respondent appealed. 
 
 
On appeal to this court, the respondent asserted that the 
proceedings before the board had violated his right to due 
process.  He claimed, for the first time, that his counsel at 
the hearing had had an unwaivable conflict of interest stemming 
from alleged malpractice in an unrelated case.2  We remanded the 
matter to the single justice for her consideration of the issue 
in the first instance, including whether the claim had been 
waived, as bar counsel argued.  On remand, she determined that 
the claim had not been properly raised, declined to exercise her 
discretion to consider it nonetheless, and denied as moot the 
respondent's motion to expand the record.  The respondent again 
appealed, and both appeals are now before us. 
 
 
2.  Factual background.  We summarize the facts found by 
the hearing committee that, with the exception of one factor in 
aggravation of sanction, were adopted by the board.3  See note 7, 
infra.  We agree with the single justice that the facts are 
supported by substantial evidence.  See S.J.C. Rule 4:01, 
§ 8 (6), as appearing in 453 Mass. 1310 (2009).  The respondent 
does not challenge on appeal her determination in that regard. 
 
 
On October 31, 2012, Lee Bank lent $115,000 to Amaral 
Enterprises, LLC (Amaral), pursuant to a promissory note and a 
mortgage on certain commercial property owned by Amaral.  That 
same day, Lee Bank lent $70,000 to Bearbones, Inc. (Bearbones), 
which operated a bakery on that property; that loan was secured 
by a second mortgage on the property, and it was guaranteed by 
 
2 In essence, the respondent alleged that his counsel at the 
hearing, who also had represented the respondent in an unrelated 
civil matter, engaged in malpractice by failing to oppose a 
motion for summary judgment in that civil matter. 
 
3 We therefore treat and reference the hearing committee's 
factual findings as those of the board.  See Matter of 
Eisenhauer, 426 Mass. 448, 449 n.1, cert. denied, 524 U.S. 919 
(1998). 
3 
 
 
 
Amaral.  The property was insured by Peerless Indemnity 
Insurance Company (Peerless).  Although the lender, Lee Bank, 
was not listed on the declarations page of the insurance policy, 
and the policy listed the mortgage holder as "none," Peerless 
was aware that Lee Bank was a mortgage holder.  On February 19, 
2013, the property sustained water damage.  The bakery business 
ceased operations, and soon thereafter, Lee Bank alleged that 
the loans were in default. 
 
 
Beginning in April 2013, the respondent represented Amaral 
and Bearbones in connection with their water damage insurance 
claim.  In the summer of 2013, Lee Bank and Bearbones entered 
into a forbearance agreement for the period September 1, 2013, 
to December 31, 2013.  The respondent drafted, or participated 
in drafting, the agreement.  The forbearance period was extended 
multiple times; both Bearbones and Amaral were included as 
parties in the forbearance extension agreements.  The last 
agreement extended the forbearance period to September 30, 2016; 
the respondent was aware of the agreement.  Retaining language 
from prior agreements, the last agreement stated: 
 
"Borrower shall immediately deliver to Lender future 
insurance proceeds relative to the Insurance Claim.  Until 
the loans are re-paid to Lender's satisfaction, the Lender 
in its sole and absolute discretion shall determine how the 
money received from the Insurance Claim is distributed." 
 
No later than May 10, 2013, the respondent was aware that Lee 
Bank was a mortgagee of the property, and that any insurance 
proceeds were to be held in trust for Lee Bank.  By July 2013, 
the respondent was aware that the forbearance agreement gave Lee 
Bank sole discretion over how funds received from his clients' 
insurance claim would be allocated and distributed. 
 
 
On August 4, 2015, an attorney for Peerless mailed a check 
to the respondent in the amount of $42,227.28, representing 
proceeds of the insurance claim.  The check was made payable to 
the respondent's firm, Amaral and Bearbones, and Lee Bank.  On 
August 6, 2015, an attorney for Lee Bank sent a letter to the 
respondent stating both that the bank was aware of the check and 
that the respondent was not authorized to negotiate the check on 
the bank's behalf, including by depositing it into his escrow 
account.  The respondent received the letter.  The bank's 
attorney also sent an electronic mail message to the respondent 
on August 7, 2015, repeating that the respondent was not 
authorized to deposit the check into his IOLTA account.  The 
message further stated that the forbearance agreement required 
4 
 
 
 
that the insurance proceeds be paid to Lee Bank and that Lee 
Bank had decisional authority over any disbursements.  The 
respondent received the message. 
 
 
Notwithstanding Lee Bank's communications, on August 8, 
2015, the respondent deposited the $42,227.28 check into his 
IOLTA account.  Lee Bank did not authorize the deposit, and the 
check did not contain an endorsement by Lee Bank.  Between 
August 10, 2015, and June 1, 2016, the respondent wrote nine 
checks from his IOLTA account debited from the check proceeds.  
Each of the checks was made payable to the respondent, and the 
checks totaled the precise amount of the deposit.  The 
respondent claimed that the disbursements were for legal fees 
and expenses authorized by his client. 
 
 
3.  Discussion.  In bar discipline cases, "subsidiary facts 
found by the [b]oard and contained in its report filed with the 
[i]nformation shall be upheld if supported by substantial 
evidence, upon consideration of the record."  S.J.C. Rule 4:01, 
§ 8 (6).  Claims that were not raised before the hearing 
committee or the board have been deemed waived.  See Matter of 
Balliro, 453 Mass. 75, 85 n.9 (2009); Matter of Firstenberger, 
450 Mass. 1018, 1019 (2007), cert. denied, 553 U.S. 1069 (2008) 
(due process claims); Matter of Cobb, 445 Mass. 452, 477 (2005), 
citing Sugarman v. Board of Registration in Med., 422 Mass. 338, 
347 (1996) (due process).  "We do not consider issues, 
arguments, or claims for relief raised for the first time on 
appeal."  Cariglia v. Bar Counsel, 442 Mass. 372, 379 (2004). 
 
 
a.  Due process.  Before the board, the single justice, and 
this court, the respondent asserted that his right to due 
process was violated during the disciplinary proceedings, albeit 
for different reasons.  Attorneys facing bar discipline 
proceedings are entitled to due process of law, the hallmarks of 
which are fair notice of the charged misconduct and the right to 
be heard.  See Matter of Eisenhauer, 426 Mass. 448, 454, cert. 
denied, 524 U.S. 919 (1998); Matter of Kenney, 399 Mass. 431, 
436 (1987).  See also Matter of Abbott, 437 Mass. 384, 391 
(2002); Matter of Ellis, 425 Mass. 332, 339 (1997).  Because bar 
discipline proceedings are civil in nature, however, a 
respondent attorney is not entitled to the full panoply of due 
process protections that criminal defendants receive.  See 
Matter of Eisenhauer, supra.  In this case, the respondent was 
given adequate notice of the charged misconduct, an opportunity 
to present and challenge evidence, and to appeal.  See id.  He 
has not demonstrated that more was required. 
 
5 
 
 
 
 
While the underpinnings of the respondent's due process 
claim have evolved and shifted over time, they each rest on the 
premise that he was denied due process by the actions and 
inactions of his counsel.  In his appeal to the board, the 
respondent asserted that his counsel failed to advise him of the 
possible consequences of proceeding to a hearing rather than 
accepting bar counsel's proposed stipulation and joint 
recommendation as to sanction.  He also claimed that his counsel 
agreed to proposed exhibits without consulting the respondent 
and inadequately prepared the respondent's client to testify.  
In addition, the respondent asserted that, when he was unable to 
pay counsel fees after the hearing, his counsel "abandoned him" 
by failing to prepare proposed findings and recommendations and 
by failing to file an appeal from the findings and 
recommendation of the hearing committee by the extended date.4 
 
 
The board correctly rejected the claims.  As the single 
justice also observed, we have not recognized either a right to 
counsel in bar discipline proceedings or a claim of ineffective 
assistance of counsel in that regard.  See Matter of Eisenhauer, 
426 Mass. at 454; Matter of Jones, 425 Mass. 1005, 1007 (1997).  
See also Matter of Haese, 468 Mass. 1002, 1006 (2014).  Before 
the single justice, the respondent repackaged his due process 
argument as a denial of the opportunity "to be heard at a 
meaningful time and in a meaningful manner."  Matter of Kenney, 
399 Mass. at 435.  The gist of the argument, however, remained 
rooted in the "actions and inaction of counsel."  The single 
justice correctly rejected the claim.5  See Matter of Eisenhauer, 
supra. 
 
4 As the single justice noted, the claim that the respondent 
was not warned of the consequences of missing the deadline for 
appealing from the decision of the board is moot, since he 
subsequently was permitted to file an appeal. 
 
5 Because they had not been raised before the board, the 
single justice declined to consider on appeal certain new 
arguments that the respondent claimed demonstrated the denial of 
his due process right to be heard in a meaningful time and in a 
meaningful manner.  See Matter of Cobb, 445 Mass. at 477.  The 
respondent claimed that the inaction of his counsel led the 
board to assume incorrectly that the respondent was self-
represented, and that it was improperly influenced by that 
assumption; that his counsel failed properly to prepare the 
respondent for the hearing; and that, by the time the respondent 
filed his appeal, the board already had made its decision.  
There was no error in the single justice's decision in that 
6 
 
 
 
 
 
On appeal to this court, the respondent again rewrapped his 
due process claim, this time raising the new argument that he 
was denied due process at the hearing because his counsel had an 
"unwaivable conflict of interest" stemming from that attorney's 
alleged malpractice in an unrelated case.  On remand, the single 
justice determined that the respondent became aware of the facts 
underlying the alleged conflict before the hearing committee 
issued its report, but he failed to petition to reopen the 
hearing committee proceedings or to raise the argument before 
the board or the single justice prior to the entry of judgment.6  
See Rule 3.59(a) of the Rules of the Board of Bar Overseers 
(2017) (reopening of record).  In the circumstances, there was 
no error in her decision not to reach the issue on its merits.  
Like the single justice, we decline to consider it.  See 
Cariglia, 442 Mass. at 379.  See also Matter of Jones, 425 Mass. 
at 1007. 
 
 
b.  Sufficiency of the evidence.  As stated, the respondent 
does not challenge on appeal the evidence of misconduct.  In 
summary, the single justice concluded there was ample evidence 
to support the hearing committee's finding, adopted by the 
board, that the respondent intentionally misused trust funds 
when he negotiated a $42,227.28 check made payable to Lee Bank 
and others.  He did so without Lee Bank's consent and over its 
express objection, and then he disbursed the funds to himself 
with knowledge that loan documents and forbearance agreements 
gave the bank a right to the funds.  Regardless of the reason 
the respondent withdrew the funds, the testimony, the IOLTA 
records, and the respondent's answer to the petition for 
discipline support the hearing committee's findings. 
 
 
As the board determined and the single justice agreed, the 
evidence established that the respondent violated Mass. R. Prof. 
C. 1.15 (b) (2) (ii), as appearing in 471 Mass. 1380 (2015), by 
withdrawing trust funds knowing his right to the funds was 
 
regard. 
 
 
6 The respondent concedes that he did not claim before the 
board or the single justice that his counsel had had an 
"unwaivable conflict" of interest.  Although he argues that the 
affidavit submitted in support of the claim that counsel had 
rendered ineffective assistance was sufficient to preserve the 
argument, the single justice properly rejected the claim.  A 
bald recitation of facts is not sufficient to preserve any 
particular argument on appeal. 
7 
 
 
 
disputed and failing to restore the funds until the dispute was 
resolved; Mass. R. Prof. C. 1.15 (c), by failing to notify 
promptly a third party, Lee Bank, upon receipt of funds in which 
the bank had an interest, and failing to promptly deliver the 
funds it was entitled to receive; and Mass. R. Prof. C. 8.4 (c) 
and (h), as appearing in 471 Mass. 1483 (2015), by engaging in 
conduct that involves dishonesty, fraud, deceit, or 
misrepresentation, and other conduct that adversely reflects on 
fitness to practice. 
 
 
c.  Sanction.  In bar discipline matters, the board's 
recommendation as to sanction is given substantial deference.  
See Matter of Griffith, 440 Mass. 500, 507 (2003).  Here, the 
single justice accepted the board's recommendation that 
disbarment was appropriate.  On appeal, we consider whether that 
sanction "is markedly disparate from judgments in comparable 
cases."  Matter of Finn, 433 Mass. 418, 423 (2001). 
 
 
From a sanction perspective, the most serious misconduct 
involved intentional misuse of trust funds with deprivation 
resulting.  The usual sanction for misconduct of that type is 
disbarment or indefinite suspension.  See Matter of Hilson, 448 
Mass. 603, 618 (2007) (indefinite suspension for misuse of 
third-party funds); Matter of Schoepfer, 426 Mass. 183, 187 
(1997) (client funds).  While the respondent argued below that 
the misconduct was neither intentional nor dishonest, and that 
it did not fall within the scope of Matter of Schoepfer, supra, 
the board's contrary conclusion is supported by substantial 
evidence.  See Matter of Lupo, 447 Mass. 345, 356 (2006) 
(declining to provide "a point-by-point rebuttal to the 
respondent's arguments" [citation omitted]). 
 
 
Both the hearing committee and the board considered whether 
there were factors in mitigation or aggravation of sanction.  
Although the hearing committee found no matters in mitigation, 
there were several factors it weighed in aggravation.  The board 
considered the aggravating evidence as "plentiful."  The 
respondent was an experienced lawyer in general, and he was 
experienced in insurance work in particular.  The hearing 
committee concluded, and the board accepted, that the respondent 
lacked candor in his testimony before it, that he was motivated 
by greed and self-interest, and that he failed to appreciate the 
wrongfulness of his conduct.7  The single justice rejected the 
 
7 The board disagreed with the hearing committee on one 
aggravating factor.  Although the committee found that the 
respondent charged and collected an excessive fee, the board 
8 
 
 
 
respondent's claim that those findings were not supported by 
substantial evidence, and he does not claim error on appeal. 
 
 
4.  Conclusion.  Considering the misconduct, as well as the 
aggravating factors, the choice between disbarment and 
indefinite suspension is plain.  We agree with the single 
justice that the respondent must be disbarred. 
 
 
 
 
 
 
 
 
Judgment affirmed. 
 
 
 
The case was submitted on the record, accompanied by a 
memorandum of law. 
 
Richard W. Gannett, pro se. 
 
declined to weigh that factor in aggravation.