Kourouvacilis v. Afscme

• Decision Date: 09 February 2006
• Docket Number: No. 04-P-1747.,04-P-1747.
• Citation: 65 Mass. App. Ct. 521,841 N.E.2d 1273
• Court: Appeals Court of Massachusetts
• Parties: Diane KOUROUVACILIS v. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES & another.<SMALL><SUP>1</SUP></SMALL>

Page 1273

841 N.E.2d 1273

65 Mass. App. Ct. 521

Diane KOUROUVACILIS v. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES & another.¹

No. 04-P-1747.

Appeals Court of Massachusetts, Hampden.

Argued September 13, 2005.

Decided February 9, 2006.

Norma Kerlinsky, Longmeadow, for Louis Kerlinsky, P.C.

Dawn D. McDonald, Springfield, for Cooley, Shrair, P.C.

Present: LAURENCE, KAFKER, & TRAINOR, JJ.

LAURENCE, J.

This case involves a novel issue: whether an attorney forfeits his right to his charging lien (under G.L. c. 221, § 50) by virtue of being suspended from the practice of law by the Supreme Judicial Court for unethical conduct in a separate litigation when that misconduct was related to, and arguably caused harm to, his client's interests in the case in which the lien is sought to be enforced. We affirm a Superior Court judge's summary judgment ruling that, in the circumstances presented, the attorney cannot enforce the lien, although we do so on different grounds from those relied on by the judge.

Background. In November, 1985, Diane Kourouvacilis retained attorney Louis Kerlinsky² on a contingent fee basis to represent her in an action against General Motors (GM) and Avis Rent-A-Car (Avis) for personal injuries she allegedly sustained when a GM automobile she had purchased from Avis caught fire while she was driving. See Kourouvacilis v. General Motors Corp., 410 Mass. 706, 707, 575 N.E.2d 734 (1991); Matter of Kerlinsky, 428 Mass. 656, 660, 704 N.E.2d 503, cert. denied, 526 U.S. 1160, 119 S.Ct. 2052, 144 L.Ed.2d 218 (1999) (Kerlinsky II). Kourouvacilis subsequently retained Kerlinsky in November, 1987, for the litigation that underlies this appeal (again on a contingent fee basis³) to represent her in a wrongful termination action against the Commonwealth of Massachusetts and Monson State Hospital (Monson) (collectively, the Commonwealth)⁴ in which she also alleged breach of the duty of fair representation against her union, American Federation of State, County and Municipal Employees (AFSCME).⁵

On December 3, 1997, Kerlinsky was suspended from the practice of law by the Board of Bar Overseers (board) for two years.⁶ Kerlinsky II, 428 Mass. at 659, 704 N.E.2d 503. Although the suspension arose out of his conduct in the automobile fire action, his unethical conduct was found to be related to, and to have had an adverse impact upon, Kourouvacilis's wrongful discharge case. In his handling of the automobile fire case, Kerlinsky was determined to have performed a perfunctory and inadequate investigation of the automobile fire, to have failed to have the car inspected by an expert (before it was sold for salvage), and to have failed to investigate Kourouvacilis's claims of personal injury. Id. at 660-661, 704 N.E.2d 503. He failed to counsel his client to correct misstatements she made in her deposition. Id. at 661, 704 N.E.2d 503. He prepared an affidavit and answers to interrogatories that falsely represented that expert witnesses were available to testify in support of Kourouvacilis's claims. Id. at 661-662, 704 N.E.2d 503.

Most pertinently, Kerlinsky made deliberate misstatements regarding Kourouvacilis's employment and lost wages allegedly resulting from the automobile fire, which constituted the unethical conduct directly related to the unlawful termination case. In answers to interrogatories propounded by GM, he allowed his client to claim that she only lost two weeks of wages, while in answers to Avis's interrogatories, he advanced the client's claim that she was not employed for two years after the automobile fire because of resulting emotional problems, and that she had a lost earning capacity of $36,000. Id. at 662, 704 N.E.2d 503.

The Supreme Judicial Court (SJC) specifically found that these inconsistent interrogatory answers were detrimental to the unlawful termination suit:

"These statements were not only inconsistent as between GM and Avis, but they contradicted and jeopardized the theory of Kourouvacilis's Monson suit. In that case, Kourouvacilis claimed that she was ready and able to work after her 1984 termination, but had been unable to find work until June, 1986. [Kerlinsky] advanced these misstatements of his client, and did not counsel her to correct either the misstatements or the inconsistencies." (Emphasis added.)

Ibid. The SJC found "more than adequate evidence to support" all of the charges of Kerlinsky's intentional and knowing ethical violations, which represented "fraudulent, dishonest conduct ... prejudicial to the administration of justice, and reflected adversely upon [his] fitness to practice ...." Id. at 662, 664, 704 N.E.2d 503. In sum, Kerlinsky "neglected his client's case. He prosecuted a frivolous claim, needlessly consuming the resources of the judicial system for several years. He filed false and misleading affidavits and interrogatory answers." Id. at 664, 704 N.E.2d 503. In increasing Kerlinsky's suspension from two to three years, the SJC relied not merely on the large number of ethical violations he had committed in the GM-Avis case but also on his record of past misconduct. The court found it significant that Kerlinsky "continued to engage in the unethical behavior at issue in this case during the pendency of and subsequent to... earlier disciplinary proceedings."⁷,⁸ Id. at 665, 704 N.E.2d 503.

As a result of the suspension, Kerlinsky was required to withdraw from all of his cases, including the wrongful discharge action. See S.J.C. Rule 4:01, § 17(1)(a), as amended, 426 Mass. 1301 (1997). Kourouvacilis retained Cooley, Shrair, P.C. (Cooley, Shrair), as successor counsel. Louis Kerlinsky, P.C. (Kerlinsky, P.C.), along with Kerlinsky individually and his wife, Norma Kerlinsky, thereafter served and filed a notice of attorney's lien against Kourouvacilis; Cooley, Shrair; and the named defendants in the unlawful termination suit.⁹ Cooley, Shrair, ultimately settled that case for $50,000, receiving $20,000 for its efforts (whether on the basis of a contingent fee agreement or reasonable time spent being unclear from the record). The action was then dismissed pursuant to a stipulation.

In October, 1999, Kerlinsky, P.C., filed a "motion to determine and enforce" its claimed attorney's lien against the proceeds of the settlement. A judge of the Superior Court (not the motion judge here) denied the motion after concluding that "no statutory basis exists to enforce any lien." On Kerlinsky, P.C.'s, appeal, this court vacated the order on the authority of Craft v. Kane, 51 Mass.App.Ct. 648, 652-653, 747 N.E.2d 748 (2001), and remanded the case because the judge erred in failing to recognize that a stipulation of dismissal constitutes a judgment within the meaning of the attorney's lien statute. Kourouvacilis v. AFSCME, 53 Mass.App. Ct. 1116, 761 N.E.2d 1013 (2002).¹⁰

Following the remand, Cooley, Shrair, and Kerlinsky, P.C., cross-moved for summary judgment on the latter's attorney's lien motion. A judge of the Superior Court denied Kerlinsky, P.C.'s, motion but allowed Cooley, Shrair's. The judge determined that Kerlinsky (and through him Kerlinsky, P.C.) had waived the right to any attorney's lien because Kerlinsky's withdrawal from Kourouvacilis's case had not been for "good cause."¹¹ This appeal followed.

Discussion. Whether an attorney forfeits, or waives, his right to an attorney's lien by engaging in unethical conduct harmful to his client's case that compels his withdrawal from the representation before the case is concluded is a question our appellate courts have not before addressed. It has been judicially determined that an attorney does not waive his right to the lien by voluntarily withdrawing from the representation in certain circumstances. See Phelps Steel, Inc. v. Von Deak, 24 Mass.App.Ct. 592, 593-594, 511 N.E.2d 42 (1987), and cases cited. "[I]f, for example, withdrawal occurs because of a breakdown in the lawyer-client relationship, illness of the lawyer, or development of an unforeseen, and reasonably not foreseeable, conflict of interest the attorney's lien remains intact." Id. at 594, 511 N.E.2d 42. In determining whether the circumstances of withdrawal were sufficiently justified to preserve the lien, the critical issue is whether the attorney had "good cause to withdraw." Ibid. See Eliot v. Lawton, 89 Mass. 274, 7 Allen 274, 276 (1863); Powers v. Manning, 154 Mass. 370, 377, 28 N.E. 290 (1891). It is this "good cause" analysis that the lower court judge relied on in finding that Kerlinsky, P.C.—charged with responsibility for Kerlinsky's actions under ordinary agency principles—was not entitled to an attorney's lien, because Kerlinsky's withdrawal due to suspension from practice for unethical conduct did not constitute good cause.

We are unpersuaded by the judge's stated basis for allowing summary judgment. As an objective matter, Kerlinsky's withdrawal from further representation of Kourouvacilis plainly rested on "good," i.e., proper, cause: it was required by law. Massachusetts Rules of Professional Conduct 1.16(a)(1), 426 Mass. 1369 (1988), mandates withdrawal "if ... the representation will result in violation of the rules of professional conduct or other law." The SJC's disciplinary decision suspending Kerlinsky from the practice of law for three years was a legal command that Kerlinsky's continued representation of Kourouvacilis—i.e., his failure to withdraw—would have violated. Such representation in the face of the temporary disbarment resulting from the three-year suspension also would have violated G.L. c. 221, § 41, penalizing the unauthorized practice of law. Additionally, S.J.C. Rule 4:01, § 17(1)(a), explicitly requires such withdrawal. Kerlinsky's withdrawal, was, therefore, actuated by the most compelling of good causes—the law itself, as pronounced by the Commonwealth's highest court.

The judge's ultimate conclusion—that Kerlinsky, P.C., had no right to enforce the attorney's lien because of...