August 2006
Featured Disciplinary Case
Topic
A lawyer charged with misconduct cannot assert an advice of counsel defense in light of the plain language of court rules.
Summary
In the Matter of Robert N. Lupo, 447 Mass. 345, 851 N.E.2d 404 (July 28, 2006). Lupo, who was admitted in Massachusetts in 1974, was suspended indefinitely. He was a sole practitioner who practiced in the real estate area, was a licensed real estate broker, and owned a number of rental properties. Bar Counsel filed a two-count complaint against him alleging misconduct in regards to his representation of a number of elderly female clients. As to the first count, he served as both a lawyer and broker of five elderly sisters who were selling an undeveloped parcel of land that they had jointly inherited. The oldest sister hired Lupo to represent the siblings as their lawyer. A broker had initially been hired to help in the sale at a five percent commission. That brokerage agreement was nonexclusive. Lupo received an offer from the broker that was consistent with the desires of the sister. He did not forward the offer to his clients. Instead, he convinced several of them to hire him as a broker to list the parcel on the Multiple Listing Service (MLS). He neither advised the women that he had a potential conflict if he served in the dual role of broker and lawyer nor did he tell them that they should consult with independent counsel about the situation. Lupo listed the property on the MLS, and another offer came in. Lupo then informed his clients that he had received two offers. He would not discuss the offers in any detail until the amount of his brokerage commission was set. The sisters subsequently learned that one of the offers that Lupo had brought to them was the same offer that their first broker had earlier received. Lupo was fired. The siblings’ new lawyer filed a grievance against Lupo. Lupo then sued the sisters, their new lawyer, and their original broker for a breach of the Lupo brokerage agreement and also sought damages against the lawyer who had lodged the grievance against him for the disciplinary filing. The latter claim was dismissed on motion and the defendants settled with him as to his other claims. As to the second disciplinary count, Lupo’s aunt Eleanor, then well into her nineties, consulted with him about her Medicaid eligibility in the event that she had to enter a nursing home. He suggested that she “spend-down” her assets by selling her house, thus qualifying for assistance. Shortly thereafter, she entered a nursing home. Two months later, Lupo bought his Aunt’s home for $170,000, although he was well aware that the fair market value for the property was no less than $240,000. In connection with the sale, Lupo furnished his Aunt with an appraisal valuing the property at $170,000. A hearing panel described this appraisal, however, as a “drive-by”, meaning that the appraiser just drove by the parcel and never physically inspected it. Later, another nephew learned of the transaction and hired a lawyer to investigate. When this nephew determined the true details of the transaction, Eleanor was informed of Lupo’s chicanery and she revoked his power of attorney. The other nephew requested that Lupo provide an accounting to the Aunt, but Lupo refused to do so unless the nephew provided him with an indemnification agreement. Eventually, a hearing panel concluded that Lupo had taken advantage of elderly, unsophisticated, and vulnerable clients and recommended a one-year suspension. Both Lupo and Bar Counsel appealed this recommendation. A review panel affirmed, but recommended that he be suspended for two years and be ordered to make a “full accounting” of his handling of Eleanor’s funds prior to reinstatement. Both parties objected to this report, and the Massachusetts Supreme Judicial Court was called upon to review the case. On appeal, Lupo challenged many of the findings and also claimed that he was deprived due process in the disciplinary proceeding as the board had filed an amicus brief in his civil lawsuit against the lawyer who had filed the grievance against him. The Court summarily rejected the due process argument, finding that an individual who files a grievance against a lawyer with Bar Counsel is, by Supreme Court rule, immune from civil liability. Lupo claimed, however, that, in filing suit, he was merely advancing a good faith “novel” argument to “test the scope” of a rule that had not been subject to “authoritative construction”. He further claimed that, in doing so, he was relying upon the advice of counsel. The court rejected the advice of counsel argument and ‘authoritatively constructed’ its immunity rule for Lupo, holding that, as a lawyer, he should be familiar with court rules. By filing a lawsuit in the wake of a grievance, he engaged in conduct prejudicial to the administration of justice. The Court concluded that an indefinite suspension, requiring Lupo to wait a minimum for five years before he could reapply for reinstatement, coupled with a restitution order to his elderly aunt’s estate, would be the appropriate sanction. As to the quantum of discipline, the Court considered Bar Counsel’s argument that similarities existed between the Respondent’s overreaching of clients and the conversion of client funds, the latter offense generally resulting in disbarment or indefinite suspension. The Court agreed with Bar Counsel noting that:
While there is a distinction between the respondent’s intentional misrepresentations that inured to his financial benefit, and the intentional deprivation of client funds, for purposes of comparable sanctions, the two forms of misconduct bear remarkable similarities. In both cases the attorney benefits financially from his misdeeds at the expense of clients. We therefore concluded that an indefinite suspension is appropriate.
NOTE: Lupo filed for reconsideration on August 25, 2006. After the motion for reconsideration was denied on Sept 11, 2006, a single justice entered the order of suspension on September 22, 2006, with the suspension effective October 22, 2006.
