In the Matter of John Arthur Johnson

Judgment modified on appeal, 444 Mass. 1002 (2005)

MEMORANDUM OF DECISION

A Hearing Panel of the Board of Bar Overseers (Panel) has recommended that respondent John Arthur Johnson be suspended indefinitely from the practice of law for the misuse of client funds. I have reviewed the entire record before the Panel, and I have heard argument from counsel and a statement by Johnson. The Panel's recommendation, while understandable and not unreasonable, does not address facts that in the totality of the circumstances constitute compelling evidence of special mitigation. As a result, the Panel's recommended punishment is markedly different from the thirty month indefinite suspension ordered in comparable circumstances in Matter of Guidry, 15 Mass. Att'y Disc. R. 255 (1999). I therefore conclude that the appropriate sanction for Mr. Johnson is a suspension for a term of thirty months, and an order imposing that suspension shall issue consistent with this memorandum.

1. Background. From his admission to the Massachusetts Bar in 1961 until the late 1990s, Mr. Johnson had an honorable and unblemished career in the practice of law. During that period he argued approximately one thousand cases before the Massachusetts district and superior courts, federal district court, the Massachusetts Appeals Court, and the Supreme Judicial Court. Until this petition, Mr. Johnson had never been the subject of any bar discipline action in the course of his career.

The circumstances giving rise to Mr. Johnson's misconduct began in 1992, when he stopped receiving business from both a major client and certain referring attorneys. The resulting decrease in business forced him to leave his law partnership in 1995, and, since then, he has bounced from practice to practice, working independently, primarily on cases referred to him by friends. In 1995, because of the significant diminution in his income, Mr. Johnson was unable to pay the mortgage on a townhouse that he owned in Loon, and he lost that property to foreclosure. Shortly thereafter, in 1996, Mr. Johnson filed for bankruptcy because he was unable to meet back tax obligations to the Internal Revenue Service. All the while, Mr. Johnson kept his deteriorating financial situation a secret, offering a variety of excuses to family and friends for his apparent unwillingness to make discretionary expenditures.

In November 1998, Mr. Johnson was at a low point, both financially and psychologically. He was drinking heavily, he had no credit or liquid assets and insufficient income to meet his expenses, and he was suffering from mild depression. His thought processes during this period are perhaps best illustrated by his reaction to news of his brother's impending death. Mr. Johnson's brother suffered internal injuries after a fall during a hunting trip in Maine. Mr. Johnson's sister informed him that his brother was dying in a Maine hospital, but Mr. Johnson knew that he could not afford to drive to Maine or to stay in a motel. Although his sister would have paid if he had asked, Mr. Johnson, in his words, "was prideful enough" that he would not allow his sister to know how bad his financial situation was. Instead, he lied to her, telling her that he was in a trial and could not leave. His brother died before Mr. Johnson could put together enough money to visit him.

It was in this context that Mr. Johnson appropriated client funds for his own use, plainly in violation of Massachusetts Rules of Profession Conduct 1.15 and 8.4. Specifically, Mr. Johnson used client funds for his own purposes on two occasions. First, in late 1997, Mr. Johnson entered into an oral contingent-fee agreement with John Corcoran², for representation in a personal injury case. When Mr. Johnson received a settlement check in that matter, he deposited it into his business checking account, rather than his IOLTA account. From September through November, 1998, Mr. Johnson issued checks to medical providers on Mr. Corcoran's behalf, totaling $3,758.90, but he did not refund the $4,241.10 balance to Mr. Corcoran. Mr. Johnson wrote a series of checks from his business account to cover mortgage payments and other personal expenses and debts. In early 1999, after Mr. Corcoran had filed a complaint with the Office of Bar Council, Mr. Johnson made restitution.

Second, in December 1998, Mr. Johnson received a $4,500 settlement check for Mary Ciraso, another personal injury client whom he had represented on a one-third contingency-fee basis. Mr. Johnson deposited this check into his business account, and issued a check to Ms. Ciraso for her portion of settlement, less $964, which he retained to pay a lien filed by Tufts Health Plan against Ms. Ciraso. In January 1999, Mr. Johnson attempted to pay the Tufts lien, but Tufts informed him that the lien had been discharged. Instead of returning the $964 to Ms. Ciraso, Mr. Johnson retained it and used it for personal expenditures. Mr. Johnson ultimately made restitution to Ms. Ciraso after this disciplinary action was underway.

Bar Counsel filed a petition for discipline against Mr. Johnson on July 22, 2002, and Mr. Johnson filed no answer. After Mr. Johnson also failed to file a brief on disposition, the Board voted on December 9, 2002, to recommend indefinite suspension from the practice of law. On April 1, 2003, I allowed Mr. Johnson's motion for remand for the limited purpose of permitting evidence and argument on mitigation and the appropriate sanction for Mr. Johnson's misconduct. After a hearing at which Mr. Johnson testified, the Panel issued findings of fact and conclusions of law, and determined that there were no mitigating facts sufficient to warrant departure from the standard discipline of indefinite suspension.

2. Discussion. When an attorney intentionally uses clients' funds, and that use results in a permanent or temporary deprivation of funds, "the standard discipline is disbarment or indefinite suspension." Matter of Schoepfer, 426 Mass. 183, 187 (1997). Nevertheless, this "rule is not mandatory"; rather, "[t]here may be special mitigating facts that justify less severe discipline." Id. at 187, 188. A lawyer has the "heavy burden" of presenting "clear and convincing reasons" for departing from the standard punishment. Id. at 187, 188.

In this case, Mr. Johnson's testimony offered a series of potential mitigating facts: substantial financial difficulties, heavy drinking, depression, and emotional turmoil as a result of Mr. Johnson's brother's death. The Panel's opinion addresses each of these facts in isolation and concludes, for various reasons, that none of these facts is sufficient to warrant a departure from the standard discipline. But as the Supreme Judicial Court has consistently held, individual facts in discipline cases are not to be treated in isolation; rather, "[a]ll bar discipline proceedings take into account the 'totality of the circumstances.'" Matter of Saab, 406 Mass. 315, 327 (1989), quoting Matter of McInerney, 389 Mass. 528, 531 (1983). Taken in isolation, neither Mr. Johnson's financial difficulties, nor his depression, nor his drinking justifies less severe discipline; taken together, however, Mr. Johnson's circumstances reveal a once successful attorney overwhelmed, frightened, and ashamed by snowballing financial losses and mounting emotional distress. Against the backdrop of his otherwise unblemished and successful legal career, ³ Mr. Johnson's unethical actions in the late 1990s are plainly the anomalous result of unfortunate and turbulent circumstances, outside of his control.

As a result of its focus on individual mitigating facts at the expense of the totality of the circumstances, the Panel adopted a recommendation that is strikingly dissimilar to the discipline approved by this Court in Matter of Guidry, supra. ⁴ In that case, an attorney representing five clients received a settlement check for $15,000, deposited it into an IOLTA account, and paid three of his clients the full amount owed. Id. at 255. He did not pay the other two clients the nearly $4,000 that they were owed; instead, he "knowingly used the $4000 due these two clients for his own benefit unrelated to the clients." Id. The attorney subsequently made restitution. Id. At a hearing, the attorney presented evidence of "extreme financial and emotional stress arising from grave and acute family problems" in the two years preceding the appropriation. Id. at 256. Because these mitigating facts were thought to be of an "extraordinary nature," Bar Counsel recommended, and the attorney received, a thirty-month suspension. Id. I see no material factual differences between the Guidry case and this case. ⁵ Accordingly, the rule that a "sanction is not to be markedly different from what has been ordered in comparable cases" suggests that Mr. Johnson receive a thirty-month suspension.

3. Conclusion. I conclude that, in the totality of the circumstances, special mitigating circumstances surrounded Mr. Johnson's misconduct, such that a departure from the standard discipline is justified. Because Mr. Johnson's misconduct and mitigating circumstances are similar to those of the attorney in the Guidry case, the discipline imposed on that attorney — a thirty-month suspension from the practice of law — is the proper discipline for Mr. Johnson.

FOOTNOTES

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

² The Panel concluded that Mr. Johnson's use of an oral contingent-fee agreement constituted a violation of Supreme Judicial Court Rule 3:05(4) and Canon Two, Disciplinary Rule 2-106(C), both of which require contingent fees to be in writing.

³ As the Supreme Judicial Court has made clear, the absence of disciplinary action against an attorney does not, alone, constitute a special mitigating circumstance sufficient to warrant departure from standard discipline. Matter of Alter, 389 Mass. 153, 156-157 (1983). Nonetheless, an attorney's disciplinary history is plainly relevant background, necessary to evaluate the attorney's misconduct in the totality of the circumstances.

⁴ The Supreme Judicial Court in Matter of Schoepfer, 426 Mass. 183 (1997), stated that the "uneven disposition of past disciplinary cases concerning the misuse of clients' funds" permitted the Court to disregard the general rule that discipline should be consistent. Id. at 188. However, since the Schopfer case, the Court has reaffirmed the rule that a "sanction is not to be markedly disparate from what has been ordered in comparable cases." Matter of Kersey, 432 Mass. 1020, 1020 (2000). Now that courts have the benefit of the Supreme Judicial Court's general rule in the Schopfer case, there is no longer an excuse for "markedly disparate" punishments in "comparable" cases.

⁵ There are, of course, minor differences distinguishing this case and Matter of Guidry, supra. Plainly, Mr. Johnson committed an additional violation of the ethical rules by failing to deposit his client's funds in an IOLTA account, unlike the attorney in the Guidry case. By the same token, the attorney in the Guidry case had a record of prior misconduct, while Mr. Johnson does not. See id. at 256. On balance, the misconduct and the mitigating circumstances in each case are sufficiently similar that the cases are "comparable" and therefore the sanction in this case should not be "markedly different" from that in the Guidry case. Matter of Kersey, supra at 1020.

____________________
Robert J. Cordy
Associate Justice
Entered: May 19, 2004

Related to No. BD-2003-003

• S.J.C. Judgment of Reinstatement entered by Justice Cordy, 09/02/2011