Sunday, September 16, 2018

Lifestyles Of The Rich And Suspended

A justice of the Massachusetts Supreme Judicial Court adopted recommendations of its Board of Bar Overseers and ordered suspension of two attorneys in a 72-page opinion

This matter came before me on an information and record of proceedings pursuant to S.J.C. Rule 4:01, § 8(6), and a recommendation and vote by the Board of Bar Overseers (board) that respondent Gerald L. Nissenbaum be suspended from the practice of law in the Commonwealth for a period of three years for multiple instances of misconduct. These included knowing misrepresentations of fact to a judge of the Probate and Family Court and before the Appeals Court; "improperly disparaging the presiding judge" in a guardianship case (in which Nissenbaum publically [sic] represented the ward and also had an "agreement of representation" with the ward's sons; making knowingly false and disparaging remarks in two motions to have the judge recused after the judge declined to approve what he viewed as excessive fees in the guardianship case; charging and collecting ''clearly excessive fees"; and engaging in a conflict of interest involving his former clients (the sons). 

As set forth more fully below, Nissenbaum was a highly-successful domestic relations attorney.

The (not my) three sons had retained him to assist with their father's financial affairs. 

Kenneth Simon Sr. (Kenneth Sr.) was in poor health and was living in a nursing home on Cape Cod. The brothers told Nissenbaum they were concerned that his much younger wife, Anne Flaherty Simon (Anne), was dissipating his assets and that his health care costs were not being paid. At the time, the Simon sons were estranged from their father because they had disapproved of his marriage to Anne; they did not attend the wedding and had not had much contact with him after the marriage. The sons told Nissenbaum they had become concerned when the nursing home contacted them to say that the facility had not been receiving payments. After speaking with the Simon sons, Nissenbaum recommended appointing a temporary guardian for Kenneth Sr...

The sons wanted the eldest, Kenneth Jr., to be appointed as guardian, but Nissenbaum advised them that a judge probably would not agree to that arrangement because of the conflict of interest with Anne.

The guardian was also prosecuted

The board recommended also that respondent James Veara be suspended for a period of one year and one day for his role in the joint misconduct. More particularly, the board found that Veara failed to correct what he knew to be Nissenbaum's deliberate misrepresentations that Nissenbaum was no longer representing the sons; made knowingly false and disparaging statements impugning the integrity of the presiding judge in a case; and charged and collected clearly excessive fees.

Nissenbaum was admitted in 1967.

He persuaded a judge to appoint Veara to serve as a guardian and did not disclose that he had never previously served in that capacity.

Although his usual fee for legal work was from $100 to $300 per hour, he told Nissenbaum that he would charge an hourly rate of $400 if he were appointed as temporary guardian for Kenneth Sr. Veara decided to increase his rate "simply because he knew he could and because the ward could afford it.'' Nissenbaum did not inform the sons of Veara's lack of experience or that Veara was charging a significantly higher rate than his usual hourly rate.

Veara in turn retained Nissenbaum as counsel so both could water themselves at the trough. 

Throughout the guardianship, Nissenbaum and Veara had paid themselves from the margin loan on Kenneth Sr. 's brokerage account. Each also kept an "evergreen retainer," which never fell below a certain sum; Nissenbaum replenished his retainer from Kenneth Sr. 's estate at least twice.

The pie

When the guardianship began, Kenneth Sr. 's assets totaled approximately $4.5 million. Soon after his marriage to Anne in July, 2004, Kenneth Sr. had transferred title to his house in Harwich Port to himself and Anne as tenants by the entirety. In September, 2004, he executed a will that left Anne $150,000.00, the Harwich Port house, and $120,000 in an education trust; he executed a declaration of trust leaving the residue of his estate to his grandchildren.

On the day that he was appointed, Veara retained Nissenbaum as his counsel. That same day, Nissenbaum filed the previously prepared complaint for divorce on behalf of Veara. Veara did not consult with Kenneth Sr. and did not read the divorce complaint before authorizing Nissenbaum to file it.

In fact, Veara at that point had never met Kenneth Sr.

When they actually did meet at a later hearing, Kenneth Sr. expressed his love for Anne and eschewed any desire for a divorce.  

The plot thickened

Nissenbaum filed, on Veara's behalf, a petition to prepare a new estate plan for Kenneth Sr. The proposed plan would have revoked Kenneth Sr.'s will and replaced it with one that created a family trust for the lifetime benefit of Kenneth Sr., and thereafter his sons, and would have created a real estate trust to hold title to the house in Harwich Port. The next day, Nissenbaum filed, on Veara's behalf, a complaint to annul Kenneth Sr. 's marriage to Anne; the complaint alleged that the marriage had resulted from Anne's "deceit and imposition, fraud and duress," and that the "essentials of the marriage relationship" had been so "abrogat[ed] and vitiat[ed)" that no marriage should be deemed to have existed. Kenneth Sr. was not consulted about a new estate plan or an annulment. Nissenbaum also filed a motion to amend the earlier complaint for divorce to add grounds of cruel and abusive treatment. 

 A hearing was held on a motion to hold Anne in contempt and on the guardianship status

The judge then asked Nissenbaum if he continued to represent the Simon sons. Nissenbaum responded, "No, I represent Mr. Veara now. The children are not parties to the case." After confirming the details of the manner in which Veara had been appointed, the judge asked Nissenbaum about the status of his relationship with the Simon sons after Veara was appointed. Nissenbaum replied, "Well, in terms of -- well, I don't represent them in this case."

He was still billing the sons for his services.

By late October, 2005, Kenneth Sr. 's health was declining. At the end of the month, he was placed on ventilation and lifesustaining medications. On October 22, 2005, Nissenbaum revised a draft motion, prepared by his associate, to enter "do not resuscitate" and "do not intubate" orders concerning Kenneth Sr.'s care.

One less witness, I suppose. He died on November 2. 

Then the fees

Veara charged a total fee of $126,813.45 to Kenneth Sr. 's estate. Veara also charged the estate $21,169.28 in expenses for payments he made to a private investigator to investigate whether Anne had been engaged in illegal activities, and to a research firm to determine whether an annulment action would survive the death of one of the parties. Veara had not consulted with Kenneth Sr. about these activities. Veara's first and final account also charged the estate $375,177.03 for legal fees paid to Nissenbaum, at a rate of $600 per hour. Together, these fees totaled $523,159.76.

For a temporary guardianship that lasted 83 days. 

Anne deigned to object and a judge noticed

When Veara confirmed that he had been charging approximately $375 per hour for his services as a court appointed guardian, Judge Scandurra asked "Are you kidding?" When the judge noted that Veara was seeking an additional $45,000 in fees that were not covered in the invoices he had submitted, Veara explained that the extra fees sought accounted for his activities after Kenneth Sr. 's death to "wind up affairs." After Veara also confirmed that Nissenbaum had charged $600 per hour, Judge Scandurra responded "Gentlemen, I'm not going to sign this motion. This is an insult and an affront to the Court," and added, "you'll have to have a hearing on this."

A Master actually approved the fees (two of the sons objected and cited conflicts of interest) but the judge disagreed.

Nissenbaum then sought that judge's recusal

The motion stated that, at the September hearing, Judge Scandurra had "verbally attack[ed) " Veara and Nissenbaum "in a loud, aggressive, often angry voice, repeatedly chastising them for charging hourly rates which Scandurra, without benefit of a trial, concluded could never be justified and, worse, were an 'insult to the court! ' '' The motion claimed that Judge Scandurra's conduct "went beyond intentionally inflicting embarrassment on counsel in front of others then in the courtroom to being an embarrassment to the court, itself." "This was all the more shocking to counsel because, until that point in time, they held Scandurra in high regard."

Another judge (Judge Steinberg) held an 11-day hearing on the fee request and issued an order concerning the already fully-paid amounts

He ordered Veara to return $107,741.75, and Nissenbaum to return $199,859.64, to Kenneth Sr. 's estate. He also determined that the $21,169.28 in charges from the private investigator and the research group were unreasonable, and ordered Nissenbaum and Veara to reimburse Kenneth Sr. 's estate for those charges, with each to pay one half of the amount.

The attorneys appealed and sought to recuse Judge Steinberg. They lost on both counts.

Judge Scandurra filed the bar complaint in 2008. Bar Counsel filed charges in 2014.

Justice Lenk on Nissenbaum

the description of "charging an excessive fee" does not adequately convey the nature of the respondents' misconduct. The act of attempting to wring the largest possible amount of money from his client's elderly ward, in the months before his death, for his own financial gain, as described in Nissenbaum's own words, is abhorrent on its own and cannot but harm the public's perception of the reputation and integrity of the bar. Particularly where there has been extensive publicity surrounding the respondents' actions, it would do additional substantial harm to the perception of the public and the bar, and serve to encourage, rather than deter, similar misconduct by others, if Nissenbaum simply were allowed to evade any sanction because of his last minute retirement, after vigorously pursuing litigation challenging the hearing committee's and the board's findings for approximately three and one-half years, and having previously pursued a strategy in the Probate and Family Court of what Judge Steinburg described as filing actions in ''bad faith,'' where the respondents' "egregious litigation conduct was designed to make the proceedings as costly as possible in an attempt to force the Simon children to withdraw or abandon their objections."

She concluded that the evidence supported the conclusion that Veara knew Nissenbaum falsely denied representing the sons and failed to correct that falsehood.

Cape Cod Times reported on the lower court return of fees order and noted that Anne had served time for operating a Cape Cod prostitution ring. The same source reported that the attorneys accused her of marrying Kenneth Sr. for his money and plotting to kill him with a Viagra overdose or by pushing him down a flight of stairs when he was drunk. 

Huffington Post covered Nissenbaum's book on high-end divorce matters entitled Love Sex and Money: Revenge and Ruin in the World of High-Stakes Divorce

Nissenbaum’s clients are the ultra-rich, he explains, “because only the rich can pay what I charge: $700 an hour, which is tops for this kind of work in Boston and in most places around the country.” His clients must also have $5 million in assets, and many have another zero or two after the 5. They have so much money, he says, that they “don’t mind my fees and expenses.” One case — with a twenty-four-day trial — earned him $2 million. “One case went on for seventeen years,” he writes. “My fee? A cool and hard-earned million. For a client who left happy.”

If the hard luck of rich folks in extremis is your thing, the fast-paced, sometimes sexually explicit case histories in Sex, Love and Money will take your mind off your troubles and make you glad, once and for all, that you don’t have $5 million in bank — because, that way, you know your spouse won’t ever hire Nissenbaum to divorce you.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2018/09/a-justice-of-the-massachusetts-supreme-judicial-court-this-matter-came-before-me-on-an-information-and-record-of-proceedings.html

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