“Not Every Misstatement Warrants Discipline”

The Massachusetts Board of Bar Overseers dismissed a disciplinary charge

Bar counsel charged, and a hearing committee concluded, that the respondent misrepresented a fact to a court in the course of representing a personal injury plaintiff. The committee recommended that the respondent’s law license be suspended for six months and one day. Both parties have appealed. Bar counsel asserts that we should recommend a suspension of one year and one day. The respondent urges us to dismiss the case. Because we disagree with the factual premise of the case, we do not adopt the committee’s legal conclusions. We deny bar counsel’s appeal. We order that the matter be dismissed.

The client had been injured at his place of employment, Jerusalem Pita

For purposes of the bar discipline case, the ownership and control of the premises is the central issue. On the day in question, Jerusalem Pita was owned and operated by Baruch and Rada Roda. The Rodas did not own the real property where Jerusalem Pita was located; they leased it. When they opened the restaurant on April 1, 2008, their landlord was Gladys. Gladys sold the property to CHR on January 31, 2013. On the same day, Gladys assigned to CHR its lease with the Rodas. The lease renewed automatically on an annual basis. Thus, at the time of Baram’s incident, CHR owned the property.

In connection with the sale, Gladys and CHR entered into a Purchase and Sale Agreement and a Mortgage Agreement, by which CHR agreed to pay Gladys a total of $11 million in annual installments of $500,000 and a balloon payment of $7.7 million on December 31, 2020. Gladys retained a continuing security interest in the property as the mortgagor. It also retained the right, upon reasonable notice, to inspect the property.

In the complaint he filed on behalf of Baram, the respondent alleged that CHR was the owner of the property and that Gladys controlled the premises or retained the right to control, and that both entities failed to maintain the property in a safe condition.

A default was entered against Gladys

After this contretemps, the respondent filed a motion for trustee process attachment, which Gladys opposed. It argued – for the first time – that the respondent had misrepresented its ownership of the property at the assessment of damages hearing. Gladys argued that the execution had been procured by a misrepresentation.

…Ultimately, Gladys settled with Baram for $100,000.

Before the hearing committee

the committee agreed with bar counsel that the respondent violated Mass. R. Prof. C. 3.3(a)(1), 8.4(c), and 8.4(h) when he misrepresented at the hearing to assess damages that Gladys still owned the building and failed subsequently to correct the statement. From the audio of the hearing, the committee determined that the respondent answered the judge’s question about ownership in the present tense. It found that the respondent knew this statement was untrue at the time he made it, and he had a motive to misrepresent the fact. Based on the respondent’s evolving explanations for what transpired, the committee found that the misstatement was intentional.

The board

At the time of the misrepresentation, ownership of the property was immaterial. Gladys’ liability had been established by its default; the only live issue was the amount of damages. In concluding that the statement was material, the hearing committee reasoned that the respondent had to establish Gladys’ ownership as a predicate to an award of damages. (HCR ¶ 54). The reasoning is incorrect. The discussion about Gladys’ role was background information, because the default had established its liability. The fateful exchange was initiated by the judge, presumably for him to understand the context of the proceedings. But merely mentioning a fact in court does not make that fact “material.” The committee’s interpretation would stretch the word “material” beyond its ordinary meaning. Under its reasoning, virtually every statement a lawyer makes in court would be material.

Intent

we are hard-pressed to find a knowingly false statement or an intent to deceive. The respondent’s use of the present tense at the hearing was aberrant. Not every incorrect statement carries with it a sinister motive. People, even lawyers, misspeak at times. In the heat of the moment in court, the respondent apparently misspoke when he answered the judge that Gladys continued to own the building.

No violation

In sum, we do not adopt the finding that the respondent knowingly made a false statement of fact at the hearing on assessment of damages. We find that the respondent misspoke, likely as the result of carelessness. He also may have not understood the court’s question. We hesitate to impose a form of strict liability every time a lawyer says something inaccurate in court. While lawyers must be careful in their use of language, not every misstatement warrants discipline. “An isolated lapse in judgment does not necessarily constitute sanctionable conduct.” Matter of an Attorney, BBO No. C6-2007-21 (2009) (Board Decision). Furthermore, under the second prong of Rule 3.3(a)(1), we do not agree that the respondent failed to correct a material misstatement subsequent to the hearing. As to the latter, we find that the statement was not material, as that term is defined in our case law. In addition, the respondent did, in fact, correct the statement when he clarified at a subsequent hearing that Gladys did not presently own the property where the accident took place.

Dissent

Because we disagree with the majority on the fundamental question of the respondent’s state of mind, we dissent from the decision to dismiss the Petition for Discipline. For the reasons that follow, we would conclude that the respondent violated Mass. R. Prof. C. 3.3(a)(1) and 8.4(c) (but not Rule 8.4(h)). We would impose a public reprimand. 

(Mike Frisch)