In the Matter of James A. Gibbons

MEMORANDUM OF DECISION²

On February 12, 2002, James A. Gibbons, the respondent, submitted to the Board of Bar Overseers an affidavit of resignation from the practice of law, pursuant to the provisions of Supreme Judicial Court Rule 4:01, § 15. In his affidavit, the respondent admitted that sufficient evidence existed to prove by a preponderance of the evidence the material facts alleged in a statement of disciplinary charges involving intentional misappropriation of funds from two separate client estates, with the intent to deprive the clients or others of the funds at least temporarily and with actual deprivation resulting. He also admitted to other related misconduct. The Board of Bar Overseers voted on March 11, 2002, to recommend to the Supreme Judicial Court that the respondent's affidavit of resignation be accepted and that an order of disbarment be entered forthwith. Bar Counsel seeks enforcement of the Board's recommendation. The respondent seeks an order accepting his resignation but that the disciplinary component of the order consist of a suspension. The details follow. Bar counsel had filed a petition for discipline of the respondent on June 28, 2001. The gravamen of that matter involved the respondent's misappropriation of $36,781 from the estate of Madeline Sargent in early 1998. The respondent repaid $40,000, principal and interest, to the estate on or about December 22, 2000, after Bar Counsel became involved in the matter. The respondent reported to Bar Counsel that repayment had been made through a loan from the respondent's family. Based on these facts, Bar Counsel agreed to recommend an indefinite suspension, and on August 2, 2001, this court ordered the indefinite suspension of the respondent from the practice of law in the Commonwealth. The order required the respondent to notify all clients and certain third parties of his suspension and to file an affidavit of compliance with the order within twenty-one (2 1) days.

On November 2, 2001, Bar Counsel filed a petition for contempt alleging that the respondent failed to notify clients and certain third parties of his suspension, and that he failed to complete and file an affidavit certifying compliance with the terms of his suspension within twenty-one days, all as required by Supreme Judicial Court Rule 4:01, § 17(7), and the August 2, 2001, order of indefinite suspension. On November 15, after being contacted by the executrix of the estate of Mary Murphy, another of respondent's clients, Bar Counsel filed a motion to amend the petition for contempt to add a charge that the respondent failed to notify the executrix of the Murphy estate of his suspension. A hearing was held on December 17, 2001, and continued to February 13, 2002 because Bar Counsel had also learned that the source of the $40,000 used to repay the Sargent estate had not been the respondent's family, as the respondent had represented, but the Murphy estate. Thus, Bar Counsel began an investigation of the respondent's misappropriation of funds from the Murphy estate and discovered the following.

The-respondent was retained to represent the Murphy estate in December, 1999. Murphy's will named her niece and nephew as equal beneficiaries, and her niece as executrix. The principal asset of the estate was the decedent's residence, which was sold on December 15, 2000. The respondent attended the closing on behalf of the estate and received a check payable to the executrix for the net sale proceeds in the amount of $158,239.28. He had advised the executrix that he would deposit the check in the estate account at the Leominster Credit Union. Instead, he endorsed the check on behalf of the estate, took it to the bank on which it was drawn, and obtained four cashier's checks.

Checks for $50,000 were made payable to each beneficiary; a third check, in the amount of $18,239.28, was made payable to the estate; the fourth check, for $40,000, was made payable to the respondent. The respondent deposited the $40,000 check in his IOLTA account at Sovereign Bank on December 22, 2000, to make restitution to the Sargent estate and its heirs, as discussed above. On January 8, 2001, he negotiated the $18,229.28 check, depositing $ 10,000 to the Murphy estate account at the Leominster Credit Union, and keeping the balance for his own use. In early February, the respondent endorsed the beneficiaries' checks and deposited them in the Murphy estate account at the Leominster Credit Union. During the next three months he signed the executrix's name as maker of four checks totaling $22,400, drawn on the Murphy estate account at the Leominster Credit Union, payable to himself.

The beneficiaries contacted the respondent in July, 2001, about finalizing the estate. The respondent said he would send the nephew his share of the estate, but misrepresented to the executrix that he could not release her share until the estate was closed. In fact, the estate contained insufficient funds to cover her rightful share. On August 13, he sent the nephew a cashier's check in the amount of $63,717.69 drawn on the Leominster Credit Union, and then closed out the account the same day with a cashier's check in the amount of $16,127.31 made payable to the executrix. However, he did not send that check to her.

On September 1, 2001, the executrix telephoned the respondent and informed him that, if he could not complete the administration of the estate, she would retain another attorney. The respondent said he would finish the remaining work. He did not advise her that he had been suspended from the practice of law. On October 8, she again spoke with the respondent and said she would be in the area the following week on business, and intended to retain other counsel. The respondent persuaded her to let him prepare the final paperwork, which he indicated would be ready for her signature when she arrived. He also told her that he would go to the Probate Court the day after she signed the papers, and that he would distribute the remaining funds.

On October 16, 2001, the executrix met with the respondent. He provided her with a copy of the settlement agreement from the sale of the house, a copy of the estate inventory, and a copy of the final account for the estate. The final account included distributions of $63,717.69 to both beneficiaries, reimbursement to the executrix of $13,073.52 for expenses she had advanced to the estate, and $9,665.76 for legal fees and expenses. She signed the final account. The respondent said he would file the papers in the Probate Court on October 18. They agreed to meet on October 19, at which time the respondent said he would distribute the funds due the executrix.

The respondent canceled the October 19, 2001 meeting, but he met with the executrix on October 20. He told her that he was not able to finalize the estate because the other beneficiary's signature was needed on the final account. He gave her the cashier's check dated August 13, 2001, in the amount of $16,127.31. The executrix telephoned the Leominster Credit Union the following week to obtain information about the estate account. She was advised that the account had been closed and that the respondent had been suspended from the practice of law on August 2. She then contacted Bar Counsel.

After completion of the investigation into the respondent's misappropriation of funds from the Murphy estate, Bar Counsel prepared the statement of disciplinary charges which the respondent has conceded. The respondent has made restitution in the amount of $65,000 to the executrix of the Murphy estate individually and to the Murphy estate from appropriate sources.

The respondent's intentional misappropriation of funds from the Murphy estate and the Murphy heirs, with intent to deprive the estate and the heirs of the funds at least temporarily, and with actual deprivation resulting, is conduct in violation of Mass. R. Prof. C. 8.4 (c), (h), and Mass. R. Prof. C. 1.15(a).

The respondent's intentional misrepresentations to the executrix of the Murphy estate throughout 2001 as to the status of the estate, his misrepresentations to her after August 2, 2001, that he could continue to represent the estate to complete the administration, and his intentional misrepresentations to Bar Counsel prior to his indefinite suspension that all clients had received restitution in full and that the Sargent estate and the Sargent estate heirs were repaid with a family loan, is conduct in violation of Mass. R. Prof. C. 8.4 (c), (h).

The respondent's failure to comply with the August 2, 2001, order of indefinite suspension, by failing to timely notify the executrix of the Murphy estate and all other clients and certain third parties of his suspension as required by Supreme Judicial Court Rule 4:01, § 17 (7), and by continuing to hold himself out to the executrix as counsel to the Murphy estate after his indefinite suspension, is conduct in violation of Mass. R. Prof. C. 8.4 (d).

Although the respondent has made some significant contributions to his community over the years, those contributions do not weigh against the seriousness of his violations of the Rules of Professional Conduct. The comparable sanction for similar misconduct is disbarment. See In re: Crafts, 10 Mass. Atty. Disc. R. (1994); In re: Hurley, 8 Mass. Atty. Disc. R. 102 (1992). An order of disbarment is the appropriate disposition.

In accordance with Supreme Judicial Court Rule 4:01, § 15 (2), the respondent's affidavit of resignation is accepted, an order of disbarment is to be entered retroactive to March 11, 2002, and the affidavit of resignation is not to be impounded.

By the Court,

_______________________
Francis X. Spina
Associate Justice

ENTERED: May 30, 2002

¹ The complete Order of the Court is available by contacting the Clerk of the Supreme Judicial Court for Suffolk County.

² Compiled by the Board of Bar Overseers based on the record before the Court.

Related to No. BD-2001-051

• S.J.C. Order of Indefinite Suspension entered by Justice Spina, 08/02/2001