Court Opinion

ID: 9896403
Source: CourtListenerOpinion
Date Created: 2023-11-10 15:07:37.724045+00
Date Added: 2024-06-11T09:14:51.983383
License: Public Domain

NOTICE: All slip opinions and orders are subject to formal
revision and are superseded by the advance sheets and bound
volumes of the Official Reports. If you find a typographical
error or other formal error, please notify the Reporter of
Decisions, Supreme Judicial Court, John Adams Courthouse, 1
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us

SJC-13388
                 IN THE MATTER OF JAMES HAYES.

                       November 10, 2023.

  Attorney at Law, Disciplinary proceeding, Disbarment.   Fraud.

     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

    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
                                                                   2

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

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).
                                                                   3

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

     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).

     11This 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).

     12This was alleged to be a violation of rule 1.15 (b)
(segregation of trust funds) and rule 8.4 (c).

     13This 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.
                                                                   4

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.

    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.
                                                                   5

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

    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.
                                                                   6

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
                                                                   7

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.

    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."
                                                                   8

     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, . . .
                                                                   9

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
                                                                  10

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
                                                               11

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.

    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.