Issue Preclusion In Bar Discipline

The Massachusetts Board of Bar Overseers granted and denied in part a motion for issue preclusion in in bar discipline matter based on findings in related civil litigation

The bar discipline matter arises out of a long and complicated civil litigation. In 2008, the respondent, Attorney Philip M. Eliopoulos, represented Lawrence and Patricia DiBenedetto in a lawsuit against Navin Patel and the company he owned, The Prime Group, Inc. The lawsuit arose out of a home built by Patel and The Prime Group for the DiBenedettos. The purchasers alleged that the home and surrounding landscaping was deficient, and their lawsuit sought damages. When the defendants failed to appear, the DiBenedettos (represented by Eliopoulos) moved for entry of a default judgment and assessment of damages. In addition to compensatory damages, the judge found that Patel and The Prime Group had violated Mass. G.L. c. 93A and had failed to respond to a pre-suit demand letter sent pursuant to that statute. Accordingly, damages were multiplied and attorney’s fees were awarded. Judgment entered for $399,783.48. Upon learning of the judgment, Patel and The Prime Group unsuccessfully moved to set it aside. Eventually, the case was settled for a payment of $200,000 by the defendants to the DiBenedettos.

After the settlement, Patel and The Prime Group brought a separate litigation against the DiBenedettos, seeking generally to set aside the judgment and for damages arising out of the alleged fraud on the court. In 2019, a different judge than the judge who had entered judgment in the 2008 case issued a decision in which she found that that the DiBenedettos and the respondent had misled the judge in the 2008 case. The respondent had not been a party to either case. He had represented the DiBenedettos in both. In her 2019 decision, the Superior Court judge found that the DiBenedettos and Eliopoulos had committed two distinct acts of fraud on the court in the 2008 assessment of damages proceeding: (1) false testimony that gave rise to treble damages under G.L. c. 93A; and (2) improper and duplicative damages submissions and the withholding of information from the judge. She vacated the earlier judgment and ordered a new damages hearing.2 At a subsequent hearing, a different judge awarded the DiBenedettos damages of $10,538.01, which she offset by the $200,000 Patel and The Prime Group had paid in the earlier settlement.

In 2021, Patel and The Prime Group filed a motion for sanctions against the respondent individually, his law firm, and his clients. Eliopoulos continued to represent his clients, but he retained separate counsel to represent his independent interests. In 2022, the judge found, among other things, as follows: substantially all of the damages asserted in the original case were frivolous and not advanced in good faith; the original judgment was based on false and misleading information; the respondent had submitted false, duplicative, and misleading damages amounts; the judge was misled by the respondent’s submission; the respondent’s submission was not supported by the facts and applicable law; the respondent proffered false and misleading testimony from his client at the damages hearing; the respondent’s argument that the defendants’ response to the c. 93A demand letters was “meaningless” was frivolous; and the respondent’s conduct warranted sanctions. The judge awarded sanctions jointly and severally against Eliopoulos and the DiBenedettos in the amount of $243,770.00 in attorneys’ fees and $7,955.84 in costs.

The DiBenedettos appealed the Fraud Case Findings and Rulings. Both the DiBenedettos and Eliopoulos appealed the Sanctions Findings and Rulings. While the appeals were pending, the parties entered into a global settlement, and the appeals were dismissed.

Bar Counsel’s motion

In a Motion for Issue Preclusion, bar counsel asks the board to preclude Eliopoulos from contesting the “findings, rulings, and conclusions of law in the Fraud Findings and Rulings, 2020 Damages Findings and Rulings, and the Sanctions Findings and Rulings.” In addition, bar counsel specifically requests that the respondent be precluded from contesting the following paragraphs in the Petition for Discipline: paragraphs 100, 109-110, 112-115, 117-118, 126, 151154; and 163-164.

Respondent’s objection

I agree with the respondent that, because he was not a party to the Fraud Case and the 2020 Damages Case, he should not be precluded from contesting those findings and rulings. In those matters, the only issue concerned the damages incurred by his clients. Although the judge in the Fraud Case found that the DiBenedettos had submitted false evidence and that Eliopoulos “participated in the presentation of that evidence,” she made no specific findings as to Eliopoulos. (Fraud Case, BC Ex. II, p. 21).

The same reasoning does not apply to the Sanctions Case. Although not a named party, Eliopoulos was the subject of a motion for sanctions filed by Patel and The Prime Group. He retained independent counsel. He was the only witness to testify at the three-day evidentiary hearing, and had a full and fair opportunity to dispute the accusations against him. In her findings, the judge referred to clear evidence that he had misled the tribunal. “When an issue is properly raised, by the pleadings or otherwise, and is submitted for determination, and is determined, the issue is actually litigated. . . .” Restatement (2d) Judgments, § 27, comment d (1982).

Ruling

The key concern here is fairness. Matter of Cohen, supra; Bar Counsel v. Board of Bar Overseers, supra. I find nothing unfair about giving collateral estoppel effect to those facts in the Petition for Discipline that were either explicitly determined by Judge Kazanjian in the Sanctions Case, or essential to her judgment. These are to be found at paragraphs 151, 152, 153, 154, 163 and 164. The respondent had every incentive to contest the facts underlying these findings, and in fact did so strenuously, over the course of a three-day evidentiary hearing. There is no unfairness in giving them preclusive effect. Contrast Matter of Dillon, 20 Mass. Att’y Disc. R. 575, 578 (2004) (upholding refusal to apply issue preclusion against prosecutor in bar discipline matter based on trial court’s allowance of criminal defendant’s motion for new trial, allegedly allowed because of prosecutorial misconduct; “[a]lthough issue preclusion may be invoked in bar discipline cases . . . the use of offensive issue preclusion against someone who was not a party to the earlier proceedings must be carefully considered, focusing primarily on whether it would be fair to the person against whom preclusion is now being sought”).