Ignorance No Excuse

The Massachusetts Supreme Judicial Court affirmed the order of a single justice imposing a two-year suspension of an attorney

The respondent attorney, Judith C. Knight, appeals from an order of a single justice of this court suspending her from the practice of law for two years, based on findings that she intentionally misused unearned retainer funds and engaged in other misconduct. As discussed in more detail below, we affirm the order of suspension.

Misuse of retainers

The respondent also asserts that her misuse of client funds should not be deemed intentional because she was unaware that she could not prepay herself for work that she had not yet performed. As this court has long recognized, however, “[t]here have been, and will be, few cases of unethical conduct where we consider it relevant that an offending attorney was not aware of the disciplinary rules or their true import.” Matter of Hrones, 457 Mass. 844, 855 (2010), quoting Matter of the Discipline of an Attorney, 392 Mass. 827, 835 (1984). Nor could this be such a case, given the ample evidence to support the hearing committee’s finding that the respondent “knew precisely what she was doing, knew it was wrong, and proceeded nonetheless.”

As detailed above, the respondent repeatedly paid herself nearly all the funds from client retainers before earning those funds, across multiple client matters. She did so despite acknowledging to bar counsel that retainer funds are client funds “to the extent that . . . I haven’t earned [them] yet,” and that she would not deviate from her normal practice of depositing retainer funds in her IOLTA account unless she had “already done a lot of work and [had] earned” the funds. Indeed, she suggested that client C switch to a flat fee arrangement because, unlike a retainer fee arrangement, the “benefit to me is that . . . I am paid up sooner rather than later.” And finally, as the hearing committee observed, the respondent’s misconduct came only a few years after she had attended a trust account class as part of a diversion agreement for prior misconduct that discussed the proper handling of client funds. There was thus substantial evidence to support the hearing committee’s findings. See Matter of Mahlowitz, 37 Mass. Att’y Discipline Rep. 402, 412 (2021) (attorney need not operate with intent to deprive client of retainer funds to be found to have intentionally misused those funds).

Sanction

Although the presumptive sanction for intentional misuse of traditional client funds is disbarment or indefinite suspension, we do not apply the same presumption in cases involving the intentional misuse of retainer funds with deprivation.

But

Here, the respondent’s intentional misconduct was more egregious than the types of misconduct found in cases involving negligent misuse that have resulted in suspensions of no more than one year.

Bottom line

we agree with the hearing committee that there are no factors to be weighed in mitigation. Although the respondent provided medical records concerning a mental health diagnosis in 2019, she failed to demonstrate a causal connection between this diagnosis and the underlying misconduct, which continued well after she received effective treatment. See Matter of Haese, 468 Mass. 1002, 1007-1008 (2014) (“Although we do not discount the severity of the respondent’s medical conditions, it was his obligation to demonstrate a causal connection between the medical issues and the charged misconduct”). On balance, given the absence of mitigation, and in consideration of the factors weighed in aggravation discussed supra, the two-year term of suspension recommended by the board is appropriate.

(Mike Frisch)