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In re Diviacchi

Supreme Judicial Court of Massachusetts

November 2, 2016

IN THE MATTER OF VALERIANO DIVIACCHI

         Attorney at Law, Disciplinary proceeding, Suspension, Contingent fee agreement, Attorney-client relationship. Supreme Judicial Court, Superintendence of inferior courts. Administrative Law, Substantial evidence. Board of Bar Overseers.

          Valeriano Diviacchi, pro se.

         The respondent, Valeriano Diviacchi, appeals from an order of a single justice of this court suspending him from the practice of law for twenty-seven months, as recommended by the Board of Bar Overseers (board). We affirm.

         1. Procedural background.

         Bar counsel filed a petition for discipline with the board, alleging that Diviacchi committed the following violations of the Massachusetts Rules of Professional Conduct:

(a) failure to explain to the client contingent fee agreement provisions not contained in Forms A or B of Mass. R. Prof. C. 1.5 (f), as appearing in 459 Mass. 1301 (2011), and to obtain the client's informed consent to these provisions, in violation of Mass. R. Prof. C. 1.5 (f);
(b) limitation of representation of the client, failure to seek the client's lawful objectives, and failure to represent the client competently and diligently, in violation of Mass. R. Prof. C. 1.1, 426 Mass. 1308 (1998); Mass. R. Prof. C. 1.2 (a), 426 Mass. 1310 (1998); and Mass. R. Prof. C. 1.3, 426 Mass. 1313 (1998);
(c) false statements of material fact to the United States District Court and the Boston Municipal Court, in violation of Mass. R. Prof. C. 3.3 (a) (1), 426 Mass. 1383 (1998); and Mass. R. Prof. C. 8.4 (c), 426 Mass. 1429 (1998); and
(d) attempting to charge and collect a clearly excessive fee, in violation of Mass. R. Prof. C. 1.5 (a), as appearing in 459 Mass. 1301 (2011) .[1]

         Diviacchi denied any violation of the disciplinary rules. After an evidentiary hearing, a hearing committee found all the violations charged by bar counsel, found no mitigating factors and several aggravating factors, and recommended that Diviacchi be suspended from the practice of law for fifteen months. The respondent appealed to the board, which adopted the hearing committee's findings and made some additional findings. The board filed an information in the county court recommending that Diviacchi be suspended for twenty-seven months. After a hearing, the single justice adopted the board's recommendation and entered an order of term suspension.

         2. Factual background.

         The single justice summarized the following relevant findings made by the hearing committee and the board, which we supplement with certain additional findings of the hearing committee. On the recommendation of a mutual acquaintance, a client contacted Diviacchi seeking representation in a Federal action filed against her by a lender. The lender alleged that the client had defaulted on a construction loan and on a line of credit and owed approximately $2.8 million. The client asserted a counterclaim against the lender. Although the client had retained other counsel to represent her in this action, rising legal fees motivated her to seek new representation on a contingent fee basis.

         The client consulted with Diviacchi, who agreed to represent her on a contingent fee basis with an upfront payment in the amount of $25, 000. Because the client could not pay that amount in a lump sum, Diviacchi agreed to accept $15, 000 up front. Diviacchi presented the client with a contingent fee agreement providing that "[t]he claim, controversy, and other matters with reference to which the services are to be performed are SOVEREIGN BANK v. [CLIENT] & COUNTERCLAIM." It further provided that "[t]he contingency upon which compensation is to be paid is: recovery by judgment or settlement or otherwise."

         Modifying the language provided in the forms appearing in Mass. R. Prof. C. 1.5 (f), the contingent-fee agreement stated the following: "Client is responsible for any amount owed to prior or other counsel not associated with the undersigned. CLIENT IS TO RECEIVE A CREDIT FOR A NON-REFUNDABLE FLAT RATE PAYMENT OF $15, 000 PAID NOW AND $10, 000 STILL DUE." Diviacchi made additional modifications to the contingent fee agreement which, according to the board, "favor[ed] [Diviacchi] in any attempt to collect fees and expenses from the client if the relationship [was] terminated or if the client obtain[ed] a nonmonetary compensation or no money." The client "looked the agreement over quickly; [Diviacchi] did not review the agreement with her paragraph by paragraph; he did not explain to the client the provisions and wording he had added; and he did not obtain her informed consent in writing to the modifications he had made."

         Diviacchi entered his appearance in the Federal litigation on May 8, 2012 and filed an amended counterclaim and an emergency motion for a thirty-day stay in view of his plans to be out of State for approximately two weeks. The board found the amended counterclaim to be "only marginally different from the one filed by the client's prior counsel." The amended counterclaim asserted claims under G. L. c. 93A, § 9, and State common law, and it included, among other things, a request for an injunction preventing the lender from foreclosing on the client's property. Nonetheless, although the client requested, on multiple occasions, that Diviacchi try to stop the scheduled foreclosure of her property because she wanted to end the matter with a short sale, Diviacchi refused to do so. Consequently, the client hired another attorney, Harold Jacobi, who filed a limited appearance to enjoin the foreclosure. The court denied the client's emergency motion for injunctive relief, and, with Jacobi representing her as her principal counsel on that matter, the client appealed to the United States Court of Appeals for the First Circuit.

         On May 23, 2012, the client contacted Diviacchi with an inquiry about filing for bankruptcy. In response, Diviacchi strongly advised the client against this, indicating that such action would not be beneficial. He specifically told the client to "[t]alk to whatever idiot attorney told [her] to file for bankruptcy." Nevertheless, the client filed for bankruptcy, which stayed the impending foreclosure for approximately two months.

         Meanwhile, on May 29, 2012, the First Circuit notified counsel of record, including Diviacchi, of a "Mandatory Pre-Argument Settlement Conference" scheduled for July 12, 2012. Diviacchi informed Jacobi that he expected him to "handle the First Circuit matters." Diviacchi did not attend the July 12 mediation and did not provide any input to Jacobi.

         In June, 2012, Diviacchi filed an opposition to the lender's motion to dismiss the counterclaim. The board found that "[t]hereafter, [Diviacchi] did no work of substance on the client's case and filed nothing further on her behalf in [F]ederal court."

         After refusing to meet with the client between May 29 and July 12, [2] Diviacchi sent an electronic mail (e-mail) message to her asking that she make "'the remaining flat rate payment' by the end of July" and threatening to file an attorney's lien if she did not do so. The client wrote in response: "I was not aware there was a deadline on that payment, especially since I thought it was related to costs." Diviacchi then informed the client, for the first time, that this payment "ha[d] been past due for months." The client begged Diviacchi not to file for the lien as she awaited a sale and settlement. She also indicated that she needed to discuss with him what had happened at the mediation. Nonetheless, Diviacchi filed a notice of lien on July 17, 2012, and agreed to meet with the client the next day. At this meeting, the client revealed "disturbing" information from the mediation, the nature of which the record does not disclose. In response, Diviacchi ordered the client to leave his office and threatened to telephone the police if she did not do so immediately. At the hearing before the hearing ...


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