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In re Hass

Supreme Judicial Court of Massachusetts

May 31, 2017


         Attorney at Law, Disciplinary proceeding, Suspension.

          David M. Hass, pro se.

         The respondent attorney, David M. Hass, appeals from the order of a single justice of this court suspending him from the practice of law for two months.[1] We affirm.


         In early 2013, the respondent settled a client's personal injury claim against the Massachusetts Bay Transportation Authority (MBTA) for $6, 600. Understanding that the settlement would not be paid until approximately July, 2013, the client signed a release of her claim, and the respondent delivered the release to the MBTA. In late February, 2013, the client informed the respondent that she wanted to obtain an advance on the settlement, and she authorized the respondent to provide information about her claim to suppliers of such services.[2] From his work with other clients, the respondent was familiar with the process. He sent a facsimile transmission to an entity, inquiring about potential suppliers for the client. Eventually, the client obtained three advances from two suppliers, and the respondent received related documentation, as described below:

         1. In late February, 2013, the respondent received a "cash advance agreement" and other documents from Global Financial Credit, LLC (Global) indicating that, in consideration of a "cash advance of $1, 025.00" the client assigned a security interest in the proceeds of the MBTA settlement to Global. The respondent signed and returned documents acknowledging that he would pay Global that amount, together with other fees described in the agreement, from the client's portion of the MBTA settlement. On March 4, 2013, the respondent received a formal "notice of assignment" from Global.

         2. On or about March 14, 2013, the respondent received documents from Excel Legal Funding (ELF). At a meeting at the respondent's office, the client executed an "irrevocable letter of instruction, " and the respondent signed an "attorney acknowledgment." Pursuant to the acknowledgment, the respondent agreed that the settlement funds would not be disbursed to the client until ELF was paid in full; acknowledged receipt of the client's letter of instruction; agreed to place the documents in his file; and represented, "to my knowledge the plaintiff has not received any prior cash advances against his/her claim/s." ELF thereafter gave notice to the respondent that the client had granted it a "security interest and lien" in the amount of $920 from the proceeds of her MBTA claim. The respondent's file has an ELF lien notice sticker affixed to it.

         3. On or about April 12, 2013, the respondent received a second letter of instruction from Global, signed by the client, as well as a cash advance agreement for $725. The respondent signed and returned to Global an accompanying acknowledgment representing "that [the client] has NOT previously received a cash advance against his/her legal claim similar to the attached agreement."

         The MBTA paid the $6, 600 settlement in late June, 2013, and the respondent deposited the settlement funds into his client trust account. A settlement statement was prepared reflecting the $1, 998.00 payoff amount for Global's two cash advances to the client and accompanying fees; the respondent's legal fees and costs of $2, 569.30; and the balance, $2, 032.70, due to the client. There was no payoff amount indicated for ELF. The respondent disbursed the amounts indicated on July 2 and 3, 2013.

         The respondent did not notify ELF of receipt of the MBTA settlement funds. As of July 2, 2013, under the terms of the client's agreement with ELF, approximately $1, 265 would have been due. When ELF inquired about the MBTA settlement and learned that the respondent already had disbursed the settlement proceeds to the client, it demanded payment from the respondent. The respondent refused. It was ELF's request that bar counsel investigate that gave rise to these proceedings.[3]

         After a hearing, at which the respondent and a witness from ELF testified, a majority of the hearing panel found that the respondent made intentionally false statements to Global and ELF concerning the absence of prior cash advances, in violation of Mass. R. Prof. C. 4.1 (a), 426 Mass. 1401 (1998), and Mass. R. Prof. C. 8.4 (c), 426 Mass. 1429 (1998). The hearing panel unanimously found that the respondent failed to comply with the client's ELF letter of instructions by failing to contact ELF to determine what the client owed to ELF, in violation of Mass. R. Prof. C. 1.2 (a), 426 Mass. 1310 (1998), and Mass. R. Prof. C. 1.3, 426 Mass. 1313 (1998). It also found that the respondent failed to notify ELF that the settlement proceeds had been received, and failed to promptly deliver funds to ELF, in violation of Mass. R. Prof. C. 1.15 (c), as appearing in 440 Mass. 1338 (1998). A majority of the panel recommended a three-month term suspension. Both the respondent and bar counsel appealed.

         The board adopted the hearing committee's findings of fact and conclusions of law, but recommended that the respondent receive a public reprimand. At bar counsel's request, the board filed an information in the county court. See Rules of the Board of Bar Overseers § 3.57(a) (2011) . The single justice concluded that the hearing committee's findings, adopted by the board, were supported by the record. He concluded that a two-month term suspension was warranted. The respondent appeals.


         We begin with the immutable principle that "[t]he most fundamental duty which a lawyer owes the public is the duty to maintain the standards of personal integrity upon which the community relies. The public expects the lawyer to be honest and to abide by the law." Matter of Barrett, 447 Mass. 453, 464 (2006), quoting American Bar Association, Standards for Imposing Lawyer Sanctions § 5.0 Introduction (1991). See Matter of Hilson, 448 Mass. 603, 619 (2007). The respondent's principal argument is that the client's agreements with Global and ELF were either void or voidable, pursuant to G. L. c. 271, § 49, and G. L. c. 140, § 96, and that his own failure to comply with his client's letter of instruction and his separate ...

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