In re Lupo
| Decision Date | 28 July 2006 |
| Citation | 851 N.E.2d 404,447 Mass. 345 |
| Parties | In the Matter of Robert N. LUPO. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
John W. Marshall, Assistant Bar Counsel.
Edward Foye (Heidi A. Nadel with him) & Brian J. Kelly, Boston, for the respondent.
Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, SOSMAN, & CORDY, JJ.
The principal issue in this case is whether a two-year suspension from the practice of law recommended by a divided Board of Bar Overseers (board) is the appropriate sanction for the conduct of an attorney that the hearing committee of the board (hearing committee) characterized as "clear, personal conflicts of interest with elderly, unsophisticated and vulnerable clients." For the reasons we shall explain, we agree with four members of the board who voted against the motion to adopt the report of the appeal panel of the board (appeal panel) and its recommendation of a two-year suspension, and conclude that a more severe sanction is warranted. An indefinite suspension from the practice of law is the appropriate sanction in this case. The respondent shall also make restitution, as we explain below, before petitioning for reinstatement. Finally, we consider and reject the respondent's claim that he was deprived of his right to due process in the disciplinary proceedings.
1. Background. In August, 2001, bar counsel filed a two-count petition for discipline against the respondent in connection with his representation of five elderly sisters1 (count one) and his transactions with his elderly aunt (count two), seeking an indefinite suspension. After extensive hearings, at which almost 200 exhibits were admitted in evidence, bar counsel and the respondent each filed proposed findings. Because resolution of this case turns on specific facts, we summarize the facts in some detail before turning to the disciplinary proceedings against the respondent.2 We begin with the respondent's professional experience, then turn to the facts underlying the two counts charged by bar counsel.
The respondent, a solo practitioner concentrating in the practice of real estate law, has been a member of the Massachusetts bar since December, 1974. He became a licensed real estate broker in January, 1975, and owns a number of rental properties. He operates both businesses from his office in Waltham.
a. Count one. The first count concerns the respondent's representation as both lawyer and real estate broker of five elderly sisters, the termination of that relationship, and the respondent's subsequent lawsuit against the sisters and their new attorney. Central for our purposes is the conflict of interest arising from the respondent's dual role. Briefly stated, the sisters sought to sell an undeveloped parcel of land they had jointly inherited. The parcel presented complex street access problems for potential buyers who might wish to develop the parcel. The eldest sister first retained the respondent to provide legal representation to the sisters in the matter,3 while the sisters engaged a real estate broker, Martin Coleman, to broker the sale of their property nonexclusively for a commission of five per cent.
After receiving and rejecting several offers, the sisters, through Coleman, contacted Mark Rogers, a prospective buyer-developer who had previously expressed interest in the property, requesting a higher figure than he had offered. Rogers responded to Coleman with an offer of the requested amount. As found by the hearing committee, on March 25, 1998, at the request of the husband of one sister, Coleman communicated the Rogers offer to the respondent (but not the sisters), although Coleman had received it from Rogers sometime before the first week of March.
In the meantime, the respondent sought to become the broker for the sisters. On March 11, 1998, he met with three of the sisters to discuss listing their property on the multiple listing service (MLS) and to discuss executing a listing agreement with him to enable him to list the property.4 The respondent asked the sisters to sign a standard form listing agreement providing for an exclusive right to sell the property. As found by the hearing committee, the sisters had difficulty filling in the forms, and the respondent asked them to sign the forms with some of the information, including his fee, not yet specified. The hearing committee found that there was "no meeting of the minds as to the amount of the commission."
Following the March 11 meeting, the respondent listed the property on MLS, while he attempted to obtain the signatures of the other two sisters on the listing agreement. On March 25, 1998, Coleman communicated the Rogers offer to the respondent. On May 5, 1998, after the property had been listed on MLS, the respondent received a second offer from a different prospective purchaser. The respondent did not inform his clients of either offer until a meeting with two of the sisters on May 21, 1998, at which he described the offers generally, informing the sisters falsely that both offers had come through the MLS listing. He also told the two sisters that he could not "move forward" with the offers until the listing agreement was signed by all five sisters, one of whom had not yet signed it.
On June 3, 1998, the respondent met with the sisters, Randall Jacobs,5 and attorney Kathleen Pendergast, the daughter of one of the sisters. The parties discussed the legal services agreement and the listing agreement. They amended the former to reflect the respondent's prior oral agreement to defer charging for his services until the property was sold, see note 3, supra.6 At Pendergast's request, the respondent provided the sisters with the listing agreement signed on March 11, 1998. The sisters then noted that a commission fee in the amount of ten per cent had been written into the space that had previously been blank, and a dispute ensued.7 In the course of the meeting, Pendergast and Jacobs asked to see the two offers that had been made for the property. As the hearing committee found, the respondent showed the offers to Pendergast but not to Jacobs or the sisters, and refused to discuss them until the listing agreement had been signed.8 The parties then agreed to a broker's fee of eight per cent of the sale price of the land up to $1.5 million and six per cent for any amount over $1.5 million.9 After they signed the agreement, the respondent then discussed the two offers he had received. The sisters agreed to pursue the Rogers offer, which ultimately was not successful. As of October, 2002, the property had not been sold.
The sisters subsequently learned that the Rogers offer presented to them by the respondent in June was the same offer that Coleman had received earlier. They then retained Pendergast as their lawyer and in July, 1998, Pendergast terminated the respondent's services as the sisters' lawyer and broker. She also filed a grievance concerning the respondent with the Office of Bar Counsel.
The respondent then commenced a lawsuit against Coleman, Pendergast, and the sisters, seeking compensation for his legal and brokerage services, and damages for breach of the brokerage agreement. He also filed a claim against Pendergast seeking damages for her filing of the grievance against him. The latter claim was dismissed on Pendergast's motion; the remaining claims and counterclaims were dismissed when the sisters and the respondent executed a settlement agreement.
b. Count two. This count concerns claims of self-dealing by the respondent in connection with his providing legal services, including estate planning services, for his elderly aunt, Eleanor L. Lupo.10,11 In late 1999 and early 2000, the respondent's aunt sought his advice concerning payment of her living expenses from assets she held, including her house in Newton. The respondent discussed with his aunt her eligibility for Medicaid assistance in the event that she should enter a nursing home, and advised her, as the hearing committee found, that she would have to "spend-down" her funds if she sold her house in order to qualify for such assistance.
The respondent's aunt entered a nursing home in January, 2000. In March, 2000, the respondent purchased his aunt's house from her for $170,000. In connection with this transaction, the respondent obtained and shared with his aunt an appraisal characterized by the hearing committee as a "drive-by" in which the appraiser viewed the outside of the house and "relied on the [r]espondent's description as to the inside,"12 which valued the property at $170,000. The hearing committee found that, at the time of the purchase, the respondent knew that the fair market value of his aunt's property was "substantially" more than his purchase price, and was at least $240,000.13 He failed to inform his aunt of this fact. The hearing committee concluded that the respondent "knowingly misrepresented" the value of the property to his aunt in order to purchase it from her for substantially less than its fair market value.
The hearing committee also found that the respondent did not advise his aunt to obtain the advice of independent counsel regarding Medicaid eligibility and the advisability of selling her house to the respondent. Despite the respondent's claim to the contrary, the hearing committee found that the respondent was not "simply acting as a nephew" in advising his aunt, but was "providing his aunt with legal services." The hearing committee noted that the respondent had a fiduciary obligation to his aunt under the power of attorney,14 and a "personal business interest," as one who owned and rented residential properties, in acquiring his aunt's house for himself.
In 2000, another nephew of the respondent's aunt, Thomas Gallinelli, learned of the house transaction between the respondent and his aunt. He retained an attorney to ascertain the facts. At his aunt's request,...
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