In the Matter of Deragon

495 N.E.2d 831, 398 Mass. 127, 1986 Mass. LEXIS 1414
CourtMassachusetts Supreme Judicial Court
DecidedJuly 23, 1986
StatusPublished
Cited by10 cases

This text of 495 N.E.2d 831 (In the Matter of Deragon) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In the Matter of Deragon, 495 N.E.2d 831, 398 Mass. 127, 1986 Mass. LEXIS 1414 (Mass. 1986).

Opinions

Nolan, J.

This is an appeal from a judgment entered by order of a single justice of this court on July 25,1985, imposing a public censure on Attorney Paul H. Deragon (respondent). The relevant facts and the procedural history of this case are summarized as follows.

On March 1, 1984, Bar Counsel filed and served upon the respondent a petition for discipline containing three counts of alleged professional misconduct.

In count one it was alleged that on or about June 18, 1981, the respondent opened a clients’ fund account at the Arlington [128]*128Five Cents Savings Bank.1 Into this account, the respondent made a single deposit of $154,755.67, which amount represented the proceeds from the sale of a client’s marital home. The respondent was to have held these funds in escrow until a final property settlement was reached in the client’s pending divorce.

It was further alleged that, between June 22 and November 18, 1981, the respondent transferred $83,000 of his client’s money from the Arlington account into his “regular clients’ account.” This account was maintained at the Depositors Trust Company in Lexington. The respondent then, without his client’s knowledge or consent, used the transferred funds to pay money due other clients and to meet his office operating expenses.

In count two of the petition, it was alleged that the respondent did not pay the share of money that was ultimately due to this client ($80,000) until one year after the client and her former husband had signed a separation agreement. It was further claimed that the respondent used funds belonging to other clients to satisfy the $80,000 payment.

Count three of the petition alleged that on December 3, 1982, the respondent came into possession of a deposit in the amount of $7,000 which was to be held in escrow for two clients pending the sale of real estate owned by them in Arlington. The closing date for the sale was January 17, 1983. The respondent attended the closing on behalf of his clients and received a check, payable to the clients, in the amount of $6,903.39. The respondent indorsed the check without the express consent of the clients and made a deposit of more than $13,000 into his regular clients’ account. Prior to this deposit, the account was overdrawn by $9,750.74. On January 27, 1983, after numerous requests by the clients, the respondent issued them a check for $13,183.39. The check was returned by the bank for insufficient funds on February 1, 1983. The respondent did not repay the clients until February 14, 1983.

[129]*129On June 26, 1984, and July 10, 1984, a hearing committee of the Board of Bar Overseers (committee) heard testimony concerning the above described allegations from the respondent and the two clients he represented in the sale of the Arlington property. The committee made findings of fact with respect to each count in the petition. These findings were consistent with the allegations in the petition. With respect to the indorsement of the check for $6,903.39, the committee found that “[although there was no express authority to endorse the check Respondent could reasonably have inferred that he had implied authority.” Based on its factual findings, the committee determined that the respondent had violated the following Disciplinary Rules: S.J.C. Rule 3:07, Canon 1, DR 1-102 (A) (4), as appearing in 382 Mass. 769 (1981) (conduct involving misrepresentation); DR 1-102 (6) as appearing in 382 Mass. 770 (1981) (conduct adversely reflecting on fitness to practice law); S.J.C. Rule 3:07, Canon 9, DR 9-102 (B) (3), as appearing in 382 Mass. 796 (1981) (maintenance of records and accounting to clients); and DR 9-102 (B) (4), as appearing in 382 Mass. 796 (1981) (prompt payment to a client of funds to which the client is entitled).

The committee also ruled that “[although there was no commingling in the strict sense of the word because Respondent kept the funds in separate accounts, there was in fact commingling because Respondent used the funds as though they were his own to pay personal expenses. However, there was no conversion because all the funds were repaid and there was no intent to permanently deprive the clientjs].” The committee, after recognizing certain mitigating factors, issued a report and recommended a public censure.

Bar Counsel appealed the committee’s recommendation to a hearing panel of the Board of Bar Overseers (panel). Bar Counsel requested that an indefinite suspension be imposed on the respondent. The panel determined that the committee’s ruling with respect to the conversion issue was based on an error of law. See Matter of Coughlin, 1 Mass. Att’y Discipline Rep. 79, 81 (1978). The panel issued its own report and recommended that the respondent be suspended from the practice of law for a period of two years.

[130]*130On June 10, 1985, the Board of Bar Overseers voted to accept the panel’s report as its own and to accept the panel’s recommendation for discipline. The Board also voted to file an information with this court consistent with the panel’s recommendation. On July 25, 1985, a single justice of this court imposed a public censure on the respondent. The Board and Bar Counsel each appealed the,decision of the single justice to the full court. We now address the issues presented.

1. Commingling. In Matter of Alter, 389 Mass. 153 (1983), we enunciated the standard to be applied in reviewing a single justice’s judgment in a bar discipline case. We stated that “in reviewing any disciplinary decision, [we shall] inquire whether the judgment is markedly disparate from those ordinarily entered by the various single justices in similar cases.” Id. at 156.

Unquestionably, commingling offenses are serious in nature. Imposing a public discipline helps to restore the public confidence which has been eroded by those practices. The degree of public discipline depends on a consideration of the nature of the offenses and the circumstances as well as factors in mitigation.

In the appendix to his brief, Bar Counsel has provided us with a list of approximately seventy bar discipline cases, and argues that discipline consisting of either disbarment, indefinite suspension, or a term of suspension is “very much the norm” for attorneys who intentionally misuse clients’ funds. It would not be productive for us to attempt to distinguish each of these cases. However, we note that the facts in many of the cases cited by Bar Counsel present situations more egregious than the instant case. See, e.g., Matter of Bellucci, 2 Mass. Att’y Discipline Rep. 13 (1980). Moreover, in the majority of the cases cited, Bar Counsel’s brief indicates that full restitution was not made to the clients whose funds were misused. See Matter of Sarapas, 3 Mass. Att’y Discipline Rep. 178 (1982).

In this case, the most important factor is the absence of any wrongful intent. The allegation is made that the respondent made use of clients’ funds and delayed distributing them to the clients, in one case for over a year. The inference is that the delay was designed in order to benefit the respondent. That [131]*131is not accurate. The monies were received in the divorce case and partially distributed shortly after a settlement agreement had been executed. The balance was held in escrow during the course of further litigation (motion to vacate and amend agreement) and distributed to the respondent’s client when the divorce became absolute.

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In the Matter of Deragon
495 N.E.2d 831 (Massachusetts Supreme Judicial Court, 1986)

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Bluebook (online)
495 N.E.2d 831, 398 Mass. 127, 1986 Mass. LEXIS 1414, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-the-matter-of-deragon-mass-1986.