Very Little Actual Work
A reciprocal year and a day suspension has been imposed by the Rhode Island Supreme Court for sanctions imposed in Massachusetts for misconduct found there and described in the Massachusetts order
Rule violations. i. Fee agreement and fees (rules 1.5 [a], 8.4 [a], [c], and [h]). Rule 12 1.5 (a) provides that “a lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee or collect an unreasonable amount for expense.” Rule 8.4 (a) provides that a lawyer shall not “violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another,” and rule 8.4 (c) prohibits an attorney from “engag[ing] in conduct involving dishonesty, fraud, deceit or misrepresentation.” Rule 8.4 (h) prohibits lawyers from “engag[ing] in any other conduct that adversely reflects on his or her fitness to practice law.”
The record supports the hearing committee’s conclusion that the respondent violated each of these rules. As an initial matter, the fee agreement represented that the respondent would negotiate personally with lenders. There is substantial evidence in the record that this promise was “illusory and false.” Similarly, substantial evidence supported the committee’s conclusion that the representation that nonlegal services “may be provided by outside servicing Agents, all of whom shall be engaged, compensated, and supervised by Daniel Ruggiero, Esq. and Associates” was false. The nonlawyer agents all were hired and paid by NVA or ND. To the extent that the respondent occasionally may have supervised agents, the record supports the committee’s finding that there were no “Associates.” Indeed, the respondent conceded as much. See Mass. R. Prof. C. 8.4 (c), (h).
The record supports the hearing committee’s conclusion that the nonrefundable advance fee, as provided for in the fee agreement, violated the Massachusetts Rules of Professional Conduct as well as corresponding Rhode Island rules. See, e.g., In re Sharif, 459 Mass. 558, 564 (2011) (advanced fees “belong to the client until earned by the attorney”); Smith v. Binder, 20 Mass. App. Ct. 21, 23-24 (1985), citing ABA Comm. on Ethics & Professional Resp., Informal Op. 998 (1967) (unethical to require agreement that retainer be nonrefundable because of chilling effect on client’s right to change attorneys); Mass. R. Prof. C. 1.5 (a); Rhode Island R. Prof. C. 1.5, comment 4 (“a lawyer may require advance payment of a fee but is obliged to return any unearned portion”).
The record also supports the hearing committee’s conclusion that the respondent’s fees were excessive in violation of rule 1.5 (a). The record supports a finding that the respondent “performed very little actual work” on client matters to justify his legal fees. In McConaghy’s case, the respondent’s first conversation with McConaghy occurred after her loan modification had been rejected, and several months after she retained the respondent. Indeed, the respondent failed to notice an obvious error on McConaghy’s application – “$7,400” reported in gross monthly wages rather than the correct amount, $4,700 – supporting the finding that he neither reviewed nor worked on McConaghy’s file. The respondent’s approach to McConaghy’s case supports the hearing committee’s conclusion that the respondent regularly charged fees well above what he earned. (inferences drawn by fact finder “need not be ‘necessary or inescapable,’ but instead need only be ‘reasonable and possible'” [citation omitted]).
Finally, the record supports the hearing committee’s determination that the respondent’s fees violated Federal and State consumer protection regulations and rules 1.5 (a) and 8.4 (h). See Matter of Zak, 476 Mass. 1034, 1037, 33 Mass. Att’y Discipline Rep. 522 (2017) (“Fees collected in violation of Federal or [S]tate statutes or regulations are prohibited under rule 1.5 [a]”)
(mike Frisch)