Sunday, April 10, 2016

Duped Into Reprimand

The attorney partners in a two-partner firm (Hutton and Vasa) purchased a highly-successful personal-injury law practice. The seller - attorney Lipis -  was later suspended  for two years in 2008 and lost a  bid for reinstatement.

The attorneys employed him in violation of unauthorized practice restrictions in order to bolster the ailing practice.


Beginning in 2010, Hutton moved in with Lipis' to Lipis's home. They currently share Lipis's split-level home. 

 At all times relevant to the petition, Hutton and Vasa were aware of Lipis's suspensiOn. 

The former attorney was quite skilled at negotiating settlement but crossed the line

we have no hesitation in concluding that in the circumstances of this case, Lipis's actions constituted the practice of law. We do not need to provide an abstract or stand-alone definition of the "practice of law" to resolve this issue. To be sure, the Court has provided some general guidance about the nature of work that might readily be categorized as the practice of law: "In the context of bar discipline proceedings, it is relevant whether a disbarred or suspended lawyer draws on his or her legal education and experience and exercises judgment in applying legal principles to address the individual needs of clients." Matter of Bott, 462 Mass. 430, 437, 28 Mass. Att'y Disc. R. 54, 62 (2012). Using that criterion, Lipis's evaluation of V &H's cases would appear prima-facie to fall generally within the practice of law. Done properly, such evaluation required that Lipis consider, in the specific factual context of each client's individual case, the evidence and the applicable law, including rights to recovery, available defenses, the admissibility of the available evidence and the legal avenues available for obtaining evidence where needed, all for the purpose of making a recommendation for settlement...

We have detailed above the respondents' nearly complete lack of supervision of. Lipis. It is undisputed that he worked alone in a conference room across the hall from the respondents' offices. Hutton was out of the country when Lipis started, and Vasa was rarely in the office during the relevant time period; both respondents had offices in a separate suite from the one where Lipis was working. Although the respondents did not think he was doing so, Lipis indeed called clients. In addition, as discussed below, Lipis was permitted to adopt and use a false name. Bar counsel has proved a violation of these rules.

 Hutton was visiting h is sick father in Europe when Lipis started. Vasa told Hutton on his return that Bar Counsel had blessed the arrangement.

A few months later

Vasa asked Lipis to do a voice shot for the firm, where his voice would be recorded saying he was Jay Lipis and he was back at the firm. We find that Lipis told Hutton about the voice shot and the proposed salary in October 2012. After learning in mid-October about the proposed salary and the voice shot, Hutton called assistant bar counsel Linda Bauer on October 16, 2012. 

 Hutton asked Bauer if the firm could hire Lipis in a non-legal capacity to negotiate with insurance adjusters on bodily injury claims. Bauer said that this was prohibited, referred him to SJC Rule 4:01, § 17(7) and confirmed her advice with a letter dated October 16, referencing their phone conversation earlier that day.  

Hutton fired Lipis after his conversation with Bauer. 

Lipis used the false name ("Larry Kreiger") so that insurance adjusters would not know they were dealing with him

The fact that Lipis decided he needed to use a false name to avoid recognition by insurance adjusters he had worked with in the past should have raised a large red flag for the respondents. Their admission that it did not speaks volumes. Indeed, Vasa thought the false name was a joke, and Hutton was apparently unperturbed. In their requests for findings, both respondents resist the conclusion that there is anything wrong with the use of a false name. · Hutton cites an IRS Bulletin that apparently authorizes the use of pseudonyms...

The court rejected the argument and found a violation of Rule 8.4(c).

As to sanction

We do not think the respondents' conduct rises to the level manifest in the six-month suspension cases. Bar counsel did not prove that Lipis gave legal advice, actively assisted in litigation matters, had extensive client contact or had access to IOLTA funds. Lipis worked parttime for at most ten weeks. We think a six-month suspension is too severe for the conduct we have found. Turning to Hutton first, we note that he could certainly have been more proactive about contacting bar counsel once he learned Lipis was back. However, we find that Hutton was misled by Vasa into thinking that bar counsel had given the arrangement her blessing, and that this misplaced reliance on Vasa was reasonable. This does not mean there should be no sanction, since we have found above that Hutton, too, violated various rules. But to some extent, Hutton was Vasa's dupe; as discussed below, Vasa did not include Hutton when he emailed Lipis about starting work, he brought Lipis back while Hutton was out of town, and he twice tried to make arrangements with Lipis behind Hutton's back- the proposal that Lipis do a voice shot, and the proposal to pay him $1,000 per week to stay on.

Clearly some sanction is in order for Hutton. As a partner and a supervising attorney in a small firm, he was equally responsible with Vasa for V &H engaging Lipis in violation of the rules. Further, Hutton knew that Lipis was using a false name and he knew that on at least one occasion, Lipis represented himself to an insurance agent as an attorney. At any point, Hutton could have called Linda Bauer to determine if indeed the Lip is arrangement was lawful, or he could have opened the rule book. But unlike Vasa, Hutton was ashamed, contrite and insightful and, as indicated, fired Lipis promptly once he heard from Bauer that the firm could not engage Lipis. He acknowledged that he violated the ethical rules and conceded that punishment is called for.

The Board of Bar Overseers imposed a public reprimand of Hutton and recommended a three-month suspension for Vaca.

Lipis received an indefinite suspension for the misconduct. (Mike Frisch)

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