When You Need Cash Now
A single justice’s order of a 60-day suspension for failure to protect the interests of an entity that had advanced cash to the client was affirmed by the Massachusetts Supreme Judicial Court.
In late February, 2013, the respondent received a “cash advance agreement” and other documents from Global Financial Credit, LLC (Global) indicating that, in consideration of a “cash advance of $1,025.00” the client assigned a security interest in the proceeds of the MBTA settlement to Global. The respondent signed and returned documents acknowledging that he would pay Global that amount, together with other fees described in the agreement, from the client’s portion of the MBTA settlement. On March 4, 2013, the respondent received a formal “notice of assignment” from Global…
The MBTA paid the $6,600 settlement in late June, 2013, and the respondent deposited the settlement funds into his client trust account. A settlement statement was prepared reflecting the $1,998.00 payoff amount for Global’s two cash advances to the client and accompanying fees; the respondent’s legal fees and costs of $2,569.30; and the balance, $2,032.70, due to the client. There was no payoff amount indicated for ELF. The respondent disbursed the amounts indicated on July 2 and 3, 2013.
The respondent did not notify ELF of receipt of the MBTA settlement funds. As of July 2, 2013, under the terms of the client’s agreement with ELF, approximately $1,265 would have been due. When ELF inquired about the MBTA settlement and learned that the respondent already had disbursed the settlement proceeds to the client, it demanded payment from the respondent. The respondent refused. It was ELF’s request that bar counsel investigate that gave rise to these proceedings.
After a hearing, at which the respondent and a witness from ELF testified, a majority of the hearing panel found that the respondent made intentionally false statements to Global and ELF concerning the absence of prior cash advances, in violation of Mass. R. Prof. C. 4.1 (a), 426 Mass. 1401 (1998), and Mass. R. Prof. C. 8.4 (c), 426 Mass. 1429 (1998). The hearing panel unanimously found that the respondent failed to comply with the client’s ELF letter of instructions by failing to contact ELF to determine what the client owed to ELF, in violation of Mass. R. Prof. C. 1.2 (a), 426 Mass. 1310 (1998), and Mass. R. Prof. C. 1.3, 426 Mass. 1313 (1998). It also found that the respondent failed to notify ELF that the settlement proceeds had been received, and failed to promptly deliver funds to ELF, in violation of Mass. R. Prof. C. 1.15 (c), as appearing in 440 Mass. 1338 (1998). A majority of the panel recommended a three-month term suspension. Both the respondent and bar counsel appealed.
Sanction
We agree with the single justice’s observation that the respondent’s misconduct was more serious than failure promptly to notify a third party and deliver funds to satisfy a lien, and that more than a public reprimand is required…
Finally, we note that the respondent filed a motion to dismiss in the county court. He contends that the motion should have been allowed, because bar counsel did not address in the county court the points he raised regarding the board’s findings. Although bar counsel did not respond expressly to the respondent’s motion, she did not concede that there was error.
The single justice independently reviewed the record and concluded that the board’s findings were supported by substantial evidence. See Matter of Barrett, 447 Mass. at 459-460; Matter of Segal, 430 Mass. 359, 364 (1999). Although a party risks much by failing to respond to an argument raised by an opponent, that failure does not equate necessarily with victory for the opponent.
(Mike Frisch)