Resumed Romantic Relationship No Basis For Interlocutory Suspension

The Upper Canada Law Society Tribunal denied the Law Society’s motion for an interlocutory suspension to replace interim conditions imposed on the attorney by an earlier order.

The Law Society brings this motion for an order varying the Order of the Law Society Tribunal – Hearing Division (“the first hearing panel”) dated June 1, 2015. The Law Society asks for a full interlocutory suspension of the licence of the Respondent Lawyer, Maria Marusic, to replace the interlocutory licence restrictions imposed by the June 1, 2015 Order. 

The alleged changed circumstances involve the attorney’s conduct in relation to a longtime romantic partner who was suspended 

The Respondent was a partner with the Windsor firm Shulgan Martini Marusic LLP (“SMM”) until it dissolved in early January 2015. Claudio Martini was a partner of SMM. After SMM dissolved the Respondent continued practising law under Marusic Law LLP, in the same premises previously occupied by SMM. 

Mr. Martini was found to have engaged in professional misconduct in failing to serve two clients. It was found that Mr. Martini deceived two clients regarding steps taken in their legal proceedings. The October 8, 2014 reasons describe the deceit as it pertains to one of the clients as “sophisticated and elaborate”, involving a “conscious and deliberate attempt by the Lawyer to lead the client to believe that certain steps had taken place”. Mr. Martini was suspended for seven months.

Then, there were new allegations about Martini

The  Law Society’s investigation into the alleged misappropriation of trust funds held by the now-defunct law firm of SMM are described in the first hearing panel’s reasons of May 6, 2015. The investigation started in December 2014 when Mr. Martini admitted that he used $50,000 of trust funds held for one client, Company B, to pay another client pursuant to a fake settlement. The investigation then revealed that over a two-year period from November 2012 to December 2014, monies were withdrawn from trust funds held for Company B on 12 occasions, contrary to unfulfilled trust conditions. Most of the withdrawals went to SMM as fees.

The Respondent and Mr. Martini were involved in a romantic relationship from 2001 until March 2015.

The Respondent co-signed three trust cheques with Mr. Martini through which SMM paid itself fees totaling $1,264,108.87 when the conditions for release of the funds had not been met. The Respondent admitted to co-signing the trust cheques but said that she assumed that the trust conditions for the release of the settlement funds had been met. In describing her evidence, the first hearing panel indicated (at para. 37):

The Respondent says that she, like many others, was a victim of Mr. Martini’s deceitful ways. She described him as being able to win and maintain the trust of many intelligent and otherwise highly careful and perceptive people. She makes the point that the misconduct established in Mr. Martini’s previous discipline proceeding did not include any suggestion that he had misused trust funds. She deposed that she is “shocked and appalled” that she may have been asked to sign cheques transferring amounts from trust when there remained unfulfilled trust conditions, and that her personal relationship with Mr. Martini has ended.

 After that

  In December 2015 the Law Society filed a Notice of Motion for an order varying the June 1, 2015 Order. The grounds for the motion are that there is fresh evidence or a material change in circumstances that warrants the requested variation. In particular, Law Society alleges that the Respondent has associated with and/or facilitated the practice of law by Mr. Martini, whose licence is suspended.

The fresh evidence involves allegations that the attorney facilitated Martini’s unauthorized representation of one Client X.

In cross-examination the Respondent answered questions about her relationship with Mr. Martini.  At the time of the hearing in May, she had recently ended her romantic involvement with him. That relationship resumed on August 20, 2015.

Her practice is located in premises that Mr. Martini helped her find. He works in the same building with an office one floor above her. She testified that she had experienced difficulties in securing a new office given the impending Law Society investigation and that this was the only practical alternative for her.

She received many, if not all, of Mr. Martini’s files when his licence was suspended. All of those files have been fully transferred.

We learned that the Respondent is the lawyer for the company Mr. Martini works for, although this was not part of the evidence given under oath.

The majority

The first issue to consider is whether or not there has been a material change in circumstances since the first Order. We find that the fact that the Respondent has resumed her romantic relationship with Mr. Martini, which is not in dispute, is a material change in circumstances. It is material because the fact that they were not in a romantic relationship was specifically noted in the reasons on the first interlocutory motion. 

The Applicant submits that this resumption of relationship has resulted in the Respondent facilitating the practice of law by Mr. Martini whose licence is suspended.  The Applicant submits that this provides reasonable grounds to believe that there is a significant risk of harm to members of the public and to the public interest in the administration of justice if her licence is not suspended pending the outcome of her discipline matters…

We find that hearing from the respondent reduces our concerns about the effect of the resumption of her relationship with Mr. Martini. We do not believe, based on the evidence presented, that the Respondent presents a significant risk to the public or public confidence in the legal profession which cannot be addressed through the restrictions on her practice already in place and the one further restriction we will impose.

The evidence is that the Respondent is a competent and capable lawyer. Although she maintains she was tricked by him into improperly co-signing the trust cheques in the original matter, there was no evidence presented that she is a psychological pawn of Mr. Martini.

A significant factor in considering whether or not a full suspension is appropriate is that the new investigation is at a very early stage and the estimate of when it will be completed is unknown. Ms. Marusic’s many clients are also members of the public.

We do have a concern arising out of the location of the Respondent’s new offices.  The Rules specify that a lawyer shall not occupy or share office space with a suspended lawyer or paralegal. Mr. Martini should not be in the office of Marusic Law under any circumstances, whether professional or social. This promotes public confidence. Any meetings in his role as a client should not be held in the offices of Marusic Law.

Chair Sophie Martel dissented

I am satisfied that had the first hearing panel been aware of the new allegations – involving not just the Respondent’s integrity regarding trust monies but her integrity in respect of a suspended lawyer she acknowledged was a “liar and a fraudster” – it would have ordered a full interlocutory suspension rather than an Order imposing restrictions on the Respondent’s trust and general accounts. I agree with the Law Society’s submissions that the integrity concerns are so significant that additional restrictions on the Respondent’s practice, such as the one imposed by the Majority, will not address the risk to the public and the public administration of justice. The integrity concerns are now multi-fold. They include the integrity concerns raised before the first hearing panel where there were reasonable grounds to believe that the Respondent was directly involved in the misuse of trust funds totaling well over one million dollars. They also include the new integrity concerns related to Mr. Martini’s involvement in the Client X matter.  An interlocutory suspension is the only order likely to reduce the risk to members of the public.

The Windsor Star had this report.

Update: Law Times had a story today with some information about Client X

The current proceedings arise with regards to “Client X,” a self-described “very successful lawyer” and “vulture,” whom Martini represented since 2010 in litigation dating back to 1984.

After Martini was suspended, Marusic took carriage of the file, which they discussed on several occasions.

A multi-week trial was scheduled to start in May 2015 in Ottawa, but a settlement was reached in July.

Martini met with Client X and Marusic at an Ottawa condominium building where both she and Client X rented units.

At a meeting in Client X’s unit, Martini hand-wrote an authorization to settle the lawsuit, including the fees Marusic’s law firm would receive. The fees amounted to 54 per cent of the settlement.

Client X subsequently hired new lawyers and is disputing the fees.

Law Society prosecutors submitted the Client X case provides compelling evidence Marusic has been facilitating the practice of law by Martini, in contravention of Law Society regulations.

 I never have seen the phrase “took carriage” of a client file. (Mike Frisch)