THE STATE OF NEW HAMPSHIRE SUPREME COURT LD IN THE MATTER OF Paul W. Bruzga, Esquire

Transcription

1 THE STATE OF NEW HAMPSHIRE SUPREME COURT LD IN THE MATTER OF Paul W. Bruzga, Esquire BRIEF FOR THE NEW HAMPSHIRE SUPREME COURT PROFESSIONAL CONDUCT COMMITTEE New Hampshire Supreme Court Professional Conduct Committee By its counsel: James L. Kruse, Esquire Assistant Disciplinary Counsel NH Bar ID No Chenell Drive, Suite 102 Concord, New Hampshire (Oral Argument by James L. Kruse)

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3 TABLE OF AUTHORITIES Page(s) CASES Bruzga s Case, 145 N.H. 62 (2000)... 26, 27 Coffey s Case, 152 N.H. 503, 513 (2005) In re Estate of McCool, 131 N.H. 340 (1988)... 23, 25 In re Guardianship of Jason Henderson, 150 N.H. 349, 350 (2003)... 19, 20 Richmond s Case, 153 N.H. 729 (2006) Shillen s Case, 149 N.H. 132, 140 (2003) Wolterbeek s Case, 152 N.H. 710 (2005)... 26, 27 Wyatt s Case, 159 N.H. 285 (2009)... 18, 21, 22, 23, 25, 28, 29 Young s Case, 154 N.H. 359 (2006) RULES OF PROFESSIONAL CONDUCT Rule , 18, 28, 29, 31 Rule 1.5(a)... 2, 29, Rule , 15, 19, 20, 28, 29, 32 Rule , Rule , 33 ABA STANDARDS Section , 34 Section , Section , 35 Section , 26, ii

4 QUESTIONS PRESENTED I. Whether Steven Doherty, who sought, received, and was billed for legal services rendered by Mr. Bruzga, had an attorney-client relationship with Mr. Bruzga. II. III. IV. Whether Mr. Bruzga breached his duty of competence by advising his client to disburse assets of a special needs trust upon the death of the trust beneficiary/medicaid recipient, without reimbursing Medicaid, contrary to the terms of the trust and applicable law. Whether Mr. Bruzga breached his duty of loyalty by continuing to represent Steven Doherty after the State initiated a fraud investigation into Mr. Doherty s failure, as trustee of a special needs trust, to reimburse Medicaid, where Mr. Doherty acted upon the advice of Mr. Bruzga. Whether Mr. Bruzga s incompetence, while professing knowledge and expertise in the area of special needs trusts, combined with his conduct under an obvious conflict of interest, warrants a suspension from the practice of law. 1

5 STATEMENT OF THE CASE The Complainant, Sandra J. Raymond, asserted claims against the Respondent, Paul W. Bruzga, Esq., in her letter of complaint filed with the Attorney Discipline Office (ADO) on September 25, Ms. Raymond alleged that Mr. Bruzga violated the Rules of Professional Conduct in connection with services rendered on behalf of Ms. Raymond s incapacitated brother, George Doherty, and on behalf of her other brother, Stephen Doherty, as guardian of George and as trustee of a special needs trust (SNT). PCC 10, Ex The Complaint Screening Committee referred the matter to Disciplinary Counsel on July 17, The ADO issued a Notice of Charges on May 15, 2009, (PCC 4) and an Amended Notice of Charges on August 19, 2009, (PCC 9). Charges set forth in the Amended Notice of Charges were tried before a Hearing Panel on October 14 and 15, PCC 15, 16. The Hearing Panel issued a Preliminary Report dated December 4, 2009, in which it found clear and convincing evidence of violations of Rules 1.1(a)-(c); 1.7(b); and 1.5(a). PCC 17. Following a sanction hearing convened on January 29, 2010, (PCC 20) the Hearing Panel issued the Report of the Hearing Panel On Sanction, dated March 16, 2010, recommending that Mr. Bruzga be suspended from the practice of law for a period of six months. PCC The entire PCC record consists of 29 tabbed entries in 3 Volumes. Exemplars of citations to the record are as follows: * PCC 10 would denote Tab 10 in the PCC Record. * F/R 2 would denote paragraph 2 of the Proposed Findings and Rulings of Law that were granted in whole or in part and can be found at PCC 14. 2

6 On May 18, 2010, the parties and counsel appeared for oral argument before the Professional Conduct Committee. PCC 28. In its order dated July 22, 2010, titled Six Month Suspension, the Committee adopted the Hearing Panel s findings of fact and rulings of law and recommended that Mr. Bruzga be suspended from the practice of law for a period of six months. PCC 29. Mr. Bruzga appeals the Committee s order and recommended sanction. 3

7 STATEMENT OF THE FACTS On April 22, 2005, Steven Doherty, pro se, filed a guardianship petition in Hillsborough County Probate Court, seeking his appointment as guardian of his incapacitated brother, George Doherty ( George ). PCC 14, F/R 2. On May 13, 2005, the court appointed Mr. Bruzga to represent George s interests in the proceeding, and Mr. Bruzga entered an appearance for George. PCC 14, F/R 3. Shortly after Mr. Bruzga s appointment, he conferred with Steven Doherty ( Steven ) about George s medical condition, his assets, and a Medicaid application. Mr. Bruzga advised Steven to set up a special needs trust (SNT) to protect George s assets, while, at the same time, allowing George to qualify for Medicaid benefits. Steven agreed to have Mr. Bruzga prepare such a trust. PCC 14, F/R. 5, Mr. Bruzga prepared a SNT for George. He knew that the SNT was required by law to provide that any assets remaining in the trust at the time of George s death must be paid to the State of New Hampshire as reimbursement for Medicaid services rendered. PCC 14, F/R 9, 11. However, Mr. Bruzga apparently held the view that actual reimbursement would depend upon whether a government bureaucrat was doing his job. PCC 14, F/R 8; PCC 15 at 219. Mr. Bruzga prepared the SNT in compliance with applicable law, including a provision for Medicaid reimbursement. Steven was named as trustee, and Steven and Ms. Raymond were identified as residuary beneficiaries. PCC 14, F/R 9; PCC 29 at 12, 15; PCC 10, Ex. 11. Mr. Bruzga 4

8 then obtained court approval for Steven to transfer George s funds ($58,000) into an account set up for the SNT and the transfer was complete by July 27, PCC 14, F/R 14, 15. Mr. Bruzga did not advise Steven of his obligation in connection with the Medicaid application to disclose the existence of the SNT or the transfer of funds into the trust. PCC 14, F/R 6, 16, 17. Ms. Raymond objected to Steven s appointment as George s guardian and wanted to be named co-trustee of the SNT. Her concerns were resolved under the terms of a Stipulation negotiated by Ms. Raymond s attorney, Barbara Maloney, Esq., and Mr. Bruzga on behalf of Steven. The Stipulation, executed on August 3, 2005, addressed Steven s responsibilities as guardian of George and as trustee of the SNT to provide Ms. Raymond access to information and to comply with regulations relating to the distribution of trust assets. In connection with these negotiations, Mr. Bruzga served as counsel to Steven and executed the Stipulation as Attorney for Steven Doherty. PCC 14, F/R On August 3, 2005, the probate court appointed Steven as George s guardian and ordered him to file annual reports. PCC 14, F/R 23. On September 6, 2005, Mr. Bruzga filed the SNT with the court; the court opened a new proceeding and identified Mr. Bruzga as attorney for Steven as trustee. PCC 14, F/R 24, 25. Starting in mid September 2005, Ms. Raymond began to complain that Steven was not providing her with information and records required under the terms of the Stipulation. Steven consulted with Mr. Bruzga about the 5

9 complaints and Mr. Bruzga responded on his behalf. PCC 14, F/R 26-28; PCC 29 at 12; PCC 10, Ex. 22. Mr. Bruzga billed Steven for these legal services. PCC 10, Ex. 76; PCC 29 at 12. George died on September 26, 2005, and Mr. Bruzga advised Steven concerning the winding up of George s affairs and disbursement of his assets. PCC 14, F/R 29; PCC 29 at 12. Mr. Bruzga knew that George had received Medicaid benefits and that reimbursement out of the SNT was required, but Mr. Bruzga did not advise Steven to contact the Medicaid office to inquire as to the amount of reimbursement due. PCC 14, F/R 32, 33, 42, 49; PCC 29 at 12. Commencing in October 2005, Mr. Bruzga undertook to prepare a trustee accounting for the SNT, as required by the probate court. PCC 14, F/R 40; PCC 10, Ex. 76. Mr. Bruzga advised Steven on various financial questions including payment of bills for expenses, determining the final figures for the accounting, and disbursing any remaining balance of the SNT account. Mr. Bruzga continued to work on preparing the trustee accounting until filing it with the probate court in July PCC 29, F/R 47-48, 50, 62; PCC 29 at 12-13; PCC 10, Ex. 25, 38, 76. During the course of preparing the accounting, Mr. Bruzga was aware that the balance in George s SNT account at the time of death was $50,000 and that he had received in excess of $74,000 in Medicaid benefits. PCC 14, F/R Mr. Bruzga advised Steven that he could make final disbursements from the SNT without regard to Medicaid reimbursement if he did not receive a bill or notice of claim from the State. PCC 14, F/R 50; PCC 29 at Such 6

10 final disbursements included checks payable to Steven and Ms. Raymond, totaling $38,000. PCC 14, F/R 52. Prior to closing out the SNT account, payment was stopped on a June 4, 2006, final disbursement check to Ms. Raymond in order to accommodate Mr. Bruzga s request for fees in advance of anticipated additional work. A replacement check for Ms. Raymond and other final disbursements were issued on June 27, PCC 14, F/R 53. Prior to the issuance of final checks drawn on the SNT account, Mr. Bruzga was aware of the State s claim for Medicaid reimbursement. PCC 14, F/R 54. A few days before the final disbursements were made from the SNT, the New Hampshire Attorney General s Medicaid Fraud Unit wrote to Steven and communicated with Mr. Bruzga, requesting records pertaining to Medicaid benefits received by George and an accounting of disbursements from the SNT. Steven conferred with Mr. Bruzga about the State s inquiry. PCC 14, F/R 44, 55; PCC 10, Ex. 30, 35, 76; PCC 16 at Prior to completing and filing the trustee accounting on July 21, 2006, Mr. Bruzga was aware of the State s claim for Medicaid reimbursement. PCC 14, F/R 32-34, 54, 62, 63. Mr. Bruzga knew that the accounting made no provision for Medicaid reimbursement. PCC 10, Ex. 38; PCC 14, F/R 50, 61. On or about July 21, 2006, Mr. Bruzga received a letter from the Attorney General s investigator ( AG investigator ) dated July 13, 2006, confirming the investigator s prior request for a copy of the accounting and expressing his concern that George had apparently received Medicaid benefits without 7

11 disclosing the SNT. In a subsequent conversation with Mr. Bruzga, the investigator inquired whether Medicaid reimbursement was forthcoming. Mr. Bruzga advised that final disbursements had already been made and that he was unaware of any bill or claim filed by the State for Medicaid reimbursement. PCC 14, F/R 60-61; PCC 10, Ex. 35, 37. Mr. Bruzga engaged in further communications with the AG investigator on behalf of Steven. PCC 10, Ex. 39, 40. Steven reasonably believed that Mr. Bruzga was representing his interests as trustee of the SNT and providing Steven with legal advice on which he could rely in connection with final disbursements from the SNT and preparation and filing of the trustee accounting. PCC 14, F/R 64. Mr. Bruzga billed Steven for legal services associated with the trustee accounting and disbursements from the SNT, as well as communications with the AG investigator. PCC 10, Ex. 76. In August 2006, Ms. Raymond filed an Objection of Remainderman to the Accounting, claiming that Steven had breached his fiduciary duty as trustee of the SNT and that fees paid to Mr. Bruzga were excessive. Steven consulted with Mr. Bruzga about the issues raised by Ms. Raymond. Mr. Bruzga filed a response defending Steven s conduct as well as his own. PCC 14, F/R Steven reasonably believed that Mr. Bruzga represented his interests as trustee in connection with Ms. Raymond s claims. PCC 14, F/R 70. Mr. Bruzga billed Steven for his services in this regard. PCC 10, Ex

12 On September 18, 2006, the probate court directed Steven to produce records of trustee expenses and to explain why the State had not been reimbursed for Medicaid benefits. After conferring with Mr. Bruzga during the period October 6 to 14, 2006, about documents to be supplied to the court (and to the AG investigator), Steven submitted materials to the court. He also represented that he had relied on Mr. Bruzga s advice about making disbursements from the SNT without reimbursing Medicaid. PCC 14, F/R 74, Mr. Bruzga billed Steven for consultations regarding responses to the court and to the AG investigator. PCC 10, Ex. 76. On October 17, 2006, the court conditionally approved the trustee accounting filed by Mr. Bruzga. It disallowed certain trustee expenses, approved Mr. Bruzga s bills for legal services through June 2006, and accepted Steven s explanation regarding his failure to reimburse Medicaid. PCC 14, F/R Mr. Bruzga withdrew as court-appointed counsel to George, effective October 5, PCC 14, F/R 75. Mr. Bruzga continued thereafter to provide legal services to Steven in connection with the probate court proceedings and issued additional invoices dated September 20, 2006, and March 5, PCC 10, Ex. 76; PCC 29 at 14; PCC 14, F/R 79, 110. On November 17, 2006, the AG investigator wrote to Ms. Raymond and Steven regarding his determination that distributions from the SNT without Medicaid reimbursement violated federal and state law and demanded payment in the total amount disbursed to Steven and Ms. Raymond: $36, PCC 9

13 14, F/R 85. Mr. Bruzga reviewed the AG investigator s letter and billed Steven for his services in this regard. PCC 10, Ex. 76. Steven responded to the investigator, explaining that he had relied on Mr. Bruzga s advice regarding final disbursements from the SNT. PCC 14, F/R 86. On December 12, 2006, Ms. Raymond filed a Motion to Re-Open the Probate of George E. Doherty and Impose Sanctions, claiming that Steven and Mr. Bruzga had committed fraud. After conferring with Steven, Mr. Bruzga filed a responsive pleading, defending Steven s conduct as well as his own. Mr. Bruzga claimed that he had served only as a typist for Steven in preparing the trustee accounting. PCC 14, F/R 87-89; PCC 10, Ex. 55. Mr. Bruzga billed Steven for his legal services in this regard. PCC 10, Ex. 76; PCC 14, F/R 110. Steven also filed a response indicating that he had relied on Mr. Bruzga and the court to make the right decisions. PCC 10, F/R 96 On January 12, 2007, the State filed a Motion to Re-open Trustee s Accounting, demanding Medicaid reimbursement, claiming that Mr. Bruzga was aware that disbursements from the SNT (without reimbursing Medicaid) were improper, and requesting court review of the Steven s and Mr. Bruzga s conduct. PCC 14, F/R 90. After conferring with Steven, Mr. Bruzga filed a responsive pleading defending Steven s conduct as well as his own. Mr. Bruzga claimed that he had served only as a typist for Steven in preparing the trustee accounting. PCC 14, F/R 91; PCC 10, Ex. 57. Mr. Bruzga billed Steven for his legal services in this regard. PCC 10, Ex. 76; PCC 14, F/R 110. Steven also filed a response, indicating that he had relied on Mr. Bruzga to set up the SNT 10

14 and to advise him regarding disbursements and the trustee accounting. PCC 14, F/R 95. On January 26, 2007, the probate court held a structuring conference, at which the State, Steven, Ms. Raymond, and Mr. Bruzga were directed to appear. The court ordered the State and Ms. Raymond to file case summaries. It also ordered Steven and Mr. Bruzga to file case responses with their respective defenses to the claims being made. Mr. Bruzga did not raise with the court the issue of his conflict of interest in responding to and appearing in connection with these claims. PCC 14, F/R On July 25, 2007, Mr. Bruzga filed a response to the State s case summary. Mr. Bruzga acknowledged being aware of the nature and purpose of the SNT and the law requiring Medicaid reimbursement, but denied that he or Steven had violated conditions of Medicaid eligibility or the terms of SNT. Mr. Bruzga claimed again to have served only as a scribe for Steven in preparing the trustee accounting. Mr. Bruzga also requested leave to withdraw from this case. PCC 14, F/R 105, 106. In July and August 2007, the parties communicated about mediating the claims associated with disbursements from the SNT and Medicaid reimbursement. PCC 14, F/R By this time, Steven believed he had been hung out to dry by Mr. Bruzga and told the AG investigator that Mr. Bruzga was not his attorney. PCC 29 at 14; PCC 14, F/R 107. The claims were ultimately resolved in mediation. PCC 14, F/R

15 SUMMARY OF ARGUMENT The Professional Conduct Committee reasonably determined, based on the record below, that Mr. Bruzga served as Steven s attorney from the time he prepared a special needs trust through a substantial portion of litigation over the issue of Medicaid fraud. Further, there is no dispute that Mr. Bruzga provided Steven with incompetent legal advice that, absent a bill from the State, and notwithstanding the terms of the SNT and applicable law, Steven, as trustee, could distribute the SNT assets to Steven and Ms. Raymond without reimbursing Medicaid. The record also provided substantial support for the Committee s finding that Mr. Bruzga operated under a conflict of interest by continuing to provide legal services to Steven after the State launched an investigation into the failure of Steven, as trustee, to reimburse Medicaid, followed by petitions filed by Ms. Raymond and the State asserting improprieties in handling the SNT. Mr. Bruzga s principal defense to these charges is that he only represented George and never represented Steven. The Committee properly adopted the Hearing Panel s findings that Mr. Bruzga s conduct belied that assertion. PCC 29 at 11. Further, Mr. Bruzga s conduct in assisting [Steven] with the Accounting, advising concerning disbursement of the Trust assets, advising concerning disputes with Sandra [Raymond], all show either the Respondent s assertions to be false, or, at least conduct pursuant to which any reasonable recipient of Respondent s advice would have assumed an attorneyclient relationship. PCC 29 at

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17 Mr. Bruzga s additional legal services included advising Steven regarding the handling of disbursements from the SNT and preparing a trustee accounting; responding to the AG s investigative inquiries; consulting with Steven regarding responses to the AG s inquiries and demands, as well as the court s order to produce documents and an explanation as to why Medicaid had not been reimbursed; consulting with Steven and filing responses to formal challenges to the SNT accounting and failure to reimburse Medicaid; conferring with Steven about a structuring conference scheduled with the probate court; and researching special needs trusts and Medicaid reimbursements. Mr. Bruzga billed Steven for all of these services. PCC 10, Ex. 76. Mr. Bruzga claims that he never represented Steven and his only client in this entire matter was George. Respondent s Brief, p. 7, 9, 22; PCC 16 at 179. However, the guardianship issue was resolved when the probate court issued its final order on August 3, 2005, appointing Steven as guardian, and by September 26, 2005, George had died. The Committee properly found that, as of that time, Mr. Bruzga had no further responsibilities to George. PCC 29 at 11. Mr. Bruzga also claims that he served only as a scribe or typist for Steven in the course of filling out the paperwork required by the Court accounting. Respondent s Brief, p. 4; PCC 16 at Yet, preparation of the accounting, along with consultations with Steven on financial issues relating to the SNT and Steven s responsibility as trustee, involved substantive matters and were billed to Steven at far more than ministerial or clerical rates. 14

18 PCC 16 at ; PCC 15 at 128; PCC 10, Ex. 76. Curiously, while insisting that he represented only George in connection with handling the SNT, Mr. Bruzga denied any responsibility to ensure that disbursements of George s money were proper or that the accounting was accurate. PCC 16 at While denying that Steven was ever his client, Mr. Bruzga has also focused on a note in his billing records that, on June 28, 2006, he asked the probate court clerk for permission to help Steven prepare the accounting and to confirm that there would be no conflict associated with his efforts in this regard. PCC 10, Ex. 76. No potential conflict could have troubled Mr. Bruzga other than one associated with his representation of both George and Steven. In short, Mr. Bruzga knew that he was representing Steven when he prepared and filed the trustee accounting. To the extent Mr. Bruzga also suggests that his alleged conversation with the clerk absolved him of liability for a conflict under Rule 1.7, it is likely that Mr. Bruzga did not disclose to the court that the State had recently launched an investigation of Steven s and Mr. Bruzga s conduct in handling the SNT. Mr. Bruzga claims that he was no longer involved as counsel for anyone by the time the State filed a motion to reopen the trustee s accounting in January 2007, because he had filed a withdrawal from the case. Respondent s Brief, p. 5. On September 20, 2006, Mr. Bruzga filed a motion to withdraw as counsel for George which was granted on October 5, However, after the withdrawal, Mr. Bruzga provided significant additional legal services, as described above, for which he continued to bill Steven. PCC 15

19 14, F/R 77, 89-91; PCC 10, Ex. 76. Moreover, Mr. Bruzga s belated withdrawal as counsel for George erases any doubt that the client he continued to represent was Steven. Mr. Bruzga cites portions of the trial transcript in support of the proposition that Steven had no reason to think that Mr. Bruzga provided him legal services. However, Mr. Bruzga ignores the context in some instances and disregards other testimony tending to prove that there was, indeed, an attorney-client relationship at all relevant times. After Mr. Bruzga negotiated the early Stipulation on Steven s behalf, Steven referred Ms. Raymond s letters of complaint to Mr. Bruzga because he relied on Mr. Bruzga s expertise in everything, especially when it came to any negative aspects with my sister. PCC 15 at 109. Steven used Mr. Bruzga as much as I could as for legal advice, and I relied on his information. PCC 15 at 118. Steven confirmed that when it was coming toward the end and after my brother had passed away, [Mr. Bruzga] said, I will stay to the end, and I won t let you go alone through the trial or through the hearings because of my sister. PCC 15 at , 151. Regarding the allegations against Steven, [a]nything any allegation, Mr. Bruzga said he would discuss and take care of. PCC 15 at 147. Steven said that, for legal advice on responding to the AG and making SNT disbursements without reimbursing Medicaid, he was relying on the court that agreed, the financial statement that I handled, and Attorney Bruzga. PCC 15 at 157, 159, 166. Steven also relied on Mr. Bruzga to file a response to Ms. 16

20 Raymond s August 2006 Objection of Remainderman because from day one, the court appointed a lawyer for my brother [George]. I was the guardian of my brother. I always believed that he was there for me also.... Any accusation, threat, questions I didn t know, any of the things to do, I relied on Paul Bruzga for the answer. PCC 15 at 150, Nevertheless, according to Steven, by the time Mr. Bruzga filed a response to Ms. Raymond s December 2006 motion to reopen, he thought he was being hung out to dry. Mr. Bruzga denied everything. I didn t do anything without his knowledge or the Court s knowledge. PCC 15 at 159, 162, With that impression in mind, Steven told the AG investigator in subsequent communications about mediation that Mr. Bruzga was not his attorney. PCC 15 at Mr. Bruzga has also insisted that he undertook these myriad tasks because the court ordered him to do so. PCC 16 at , , 167; PCC 20 at 82. In fact, after his appointment as counsel to George, the only orders requiring Mr. Bruzga to act were issued on January 26, 2007, requiring his appearance at a structuring conference with Steven and the other parties, and on March 6, 2007, requiring Mr. Bruzga to respond to case statements asserting claims against him by Ms. Raymond and the State. PCC 14, F/R 97, 98. These orders, of course, followed the legal work that Mr. Bruzga had already done on Steven s behalf after George died. Mr. Bruzga s denial of ever representing Steven and his disinclination even to accept responsibility on behalf of his deceased client, George, to ensure proper handling of the SNT, while still charging legal fees, left the Hearing 17

21 Panel understandably skeptical about the role Mr. Bruzga purported to play. PCC 16 at , 237; see PCC 16 at The Hearing Panel found, and the Committee properly adopted the finding that, after George died, Mr. Bruzga s only continuing role in the matter could have been as counsel to Steven. PCC 29 at 15. The Committee s finding on the existence of an attorney-client relationship is consistent with the law most recently articulated by this Court in Wyatt s Case, 159 N.H. 285 (2009). There was clear and convincing evidence that Steven repeatedly sought legal assistance or advice from Mr. Bruzga pertaining to matters and issues within Mr. Bruzga s claimed areas of professional competence; Mr. Bruzga impliedly agreed to and actually gave Steven the desired advice or assistance; and Steven relied on Mr. Bruzga s advice and assistance. PCC 29 at 15. B. MR. BRUZGA DOES NOT DISPUTE THAT HE RENDERED INCOMPETENT ADVICE IN VIOLATION OF RULE 1.1(a)-(c). The Committee properly found clear and convincing evidence that Mr. Bruzga violated Rule 1.1(a)-(c) by advising Steven that, absent a bill from the State, he could distribute the SNT assets without reimbursing Medicaid. PCC 29 at Mr. Bruzga does not appeal the Committee s finding. C. THE COMMITTEE PROPERLY FOUND THAT MR. BRUZGA CONTINUED TO REPRESENT STEVEN DOHERTY, AS TRUSTEE, UNDER A CONFLICT OF INTEREST. Having determined by clear and convincing evidence that Mr. Bruzga represented Steven at all relevant times, there can be no dispute that, once the 18

22 State launched its Medicaid fraud investigation, Mr. Bruzga s continued representation of Steven violated Rule 1.7(b). PCC 29 at 15. Mr. Bruzga s advice to Steven regarding disbursements from the SNT without reimbursing Medicaid lay at the heart of the investigation. PCC 29 at Accordingly, Mr. Bruzga s own interest in defending against possible fraud charges clearly threatened to collide with Steven s. The collision that occurred is well illustrated by Mr. Bruzga s repeated defense that he had nothing more to do with the trustee accounting than serving as Steven s typist. Hence, Steven was wholly responsible for whatever improprieties the accounting revealed. In short, as the Committee found, Mr. Bruzga could not reasonably have believed that his representation of Steven would not be adversely affected by his conduct in defense and pursuit of his own interests. PCC 29 at 16. Mr. Bruzga disputes the conflict based on a reading of Rule 1.14 and this Court s decision in In re Guardianship of Henderson, 150 N.H. 349 (2003). Neither the Rule nor the case excuses his conduct. Mr. Bruzga asserts that he complied with his obligations under Rule 1.14 to represent an incapacitated client. He then suggests that, once the probate court issued its order appointing a guardian, the Rule and the case contemplate that Mr. Bruzga, as counsel for the ward, and Steven, as guardian, necessarily had a commonality of interest in regard to George. Respondent s Brief at 21. There is little doubt that Mr. Bruzga, while undertaking to represent George in the context of the guardianship proceeding, was entitled to 19

23 communicate with Steven about what was in the best interests of George. It is also likely that Mr. Bruzga and Steven, in the first instance, agreed on the best course of action for George. However, unlike in Henderson, there is no concern here about the blurring of roles of a ward s legal counsel and a guardian ad litem on the question of guardianship. Accordingly, it is unclear how the Court s holding in Henderson is otherwise instructive in this matter. See In re Guardianship of Henderson, 150 N.H. at 350. The question here is simply whether the work undertaken by Mr. Bruzga under circumstances that arose after the guardianship was granted gave rise to an actual or potential conflict. Mr. Bruzga seeks refuge from the trappings of Rule 1.7 by taking the position that the probate court routinely expects appointed counsel to take on additional responsibilities to facilitate the process and that Mr. Bruzga acted in accordance with such expectations. However, the evidence in this case does not support Mr. Bruzga s position. Judge Patten testified that a court-appointed counsel for the ward might properly take on some responsibility after the guardianship is granted to help the guardian get the guardianship up and running the way it should be. PCC 20 at 30. Counsel can also be reappointed by the court at various stages. PCC 20 at 35. In cases involving special needs trusts, Judge Patten could not say that it would always be appropriate for court-appointed counsel for the ward to assist others in preparing a trustee accounting, although he had seen courtappointed counsel also serve as counsel to the trustee. PCC 20 at 31, Significantly, Judge Patten made clear that, when confronted with the prospect 20

24 of expanding the role of court-appointed counsel for the ward in a guardianship case to assume other responsibilities, lawyers are the[ir] own gatekeeper to ensure compliance with the rules of professional responsibility. PCC 20 at 42. Lawyers need to decide when that line is crossed.and they need to let the court know if they ve got a concern with that. PCC 20 at 49. Mr. Bruzga was a poor gatekeeper who did not look for or acknowledge the line he crossed. He continued to provide legal services to Steven after learning of the State s investigation in June 2006 and the ensuing claims of fraud and breach of fiduciary duty pursued by the State and Ms. Raymond. All of the claims and inquiries involved scrutiny of the conduct of both Steven and Mr. Bruzga, thereby ensuring that the personal interests of Steven and Mr. Bruzga would collide. If, as Mr. Bruzga insists, he continued to represent George in connection with this proceeding, his role in defending Steven s conduct as trustee would pose another obvious conflict. See Wyatt s Case, 159 N.H. at Contrary to Mr. Kitchen s advice, Mr. Bruzga would find himself, in effect, on both sides of the trust. PCC 29 at 10; PCC 16 at 103. Mr. Bruzga did not apprise Steven of the actual or potential conflict associated with his representation or otherwise obtain his knowing consent. See PCC 16 at ; PCC 15 at 125. Nor did Mr. Bruzga do anything to apprise the court of the ethical dilemma he confronted in appearing for the January 2007 structuring conference, in complying with the court s order to 21

25 file a response to the case summaries filed by Ms. Raymond and the State, and in communications regarding mediation. See PCC 16 at 223; PCC 14, F/R 99. Citing this Court s decision in Wyatt s Case, the Committee properly found that Mr. Bruzga must or should have known of the conflict that arose in this case, as it was obvious. PCC 29 at 19. D. MR. BRUZGA S MISCONDUCT WARRANTS SUSPENSION. The Committee undertook a sanction analysis, employing as its guide the American Bar Association s Standards for Imposing Lawyer Sanctions (1992) ( Standards ). The Committee s recommendation is entirely consistent with the accepted purposes of attorney discipline: to protect the public, maintain public confidence in the bar, preserve the integrity of the legal profession, and prevent similar conduct in the future. Coffey s Case, 152 N.H. 503, 513 (2005). Under the first prong of the sanction analysis contemplated under the Standards, the Committee found that Mr. Bruzga violated his duty to provide competent legal advice to Steven, as trustee of the SNT. Mr. Bruzga advised that, absent a bill from the State, Steven could distribute all of the SNT s assets after George s death without reimbursing Medicaid. PCC 29 at 18. Mr. Bruzga also violated his duty of loyalty owed to Steven by continuing to represent Steven after the State launched a Medicaid fraud investigation, knowing that Mr. Bruzga s advice regarding disbursements from the SNT lay at the heart of the investigation. PCC 29 at 18. In addition, Mr. Bruzga breached his duty not to charge illegal or excessive fees by continuing to charge Steven for 22

26 services rendered after the conflict arose. PCC 29 at 16, 18. See In re Estate of McCool, 131 N.H. 340, (1988). Pursuant to the second prong of the sanction analysis, the Committee assessed Mr. Bruzga s mental state to determine whether he acted with intent, knowledge, or negligence. See Wyatt s Case, 159 N.H. at 307. The Committee found a combination of knowing and grossly negligent behavior that caused harm. With respect to his duty of competence, Mr. Bruzga professed considerable expertise in the field of trusts and probate practice. Yet, he willingly advised his client not to reimburse Medicaid out of the SNT, knowing that the State had a claim for such reimbursement and that the law and the terms of the trust required such reimbursement. PCC 29 at 18-19, 21. With respect to Mr. Bruzga s duty to avoid operating under a conflict, the Committee adopted the Hearing Panel s view that Mr. Bruzga s assertion that he never represented Steven was not credible. It found that Mr. Bruzga s refusal to acknowledge any attorney-client relationship with Steven was deliberate, knowing, and disingenuous. PCC 29 at 19, 21. The Committee further ruled that Mr. Bruzga s failure to acknowledge the self-evident conflict constituted either a knowing or, at best, a grossly negligent failure to competently represent his client. PCC 29 at The Hearing Panel found that Mr. Bruzga lacked an understanding of the Medicaid reimbursement procedure applicable to SNT trustees and that Mr. Bruzga was negligent in his failure to consider the issue of conflict. PCC 22 at 23

27 2-3; see Standards, Upon review of the entire record, the Committee reasonably found that Mr. Bruzga operated with a more culpable state of mind, warranting a baseline sanction of public censure or suspension. PCC 29 at In addition to his disinclination to acknowledge limits to his expertise (PCC 29 at 20) and his disingenuous denial of an attorney-client relationship with Steven, Mr. Bruzga disregarded the law he knew governed the SNT and the facts confronting him at the time he rendered his advice. He also ignored the obvious conflict associated with his ongoing representation of Steven. See PCC 29 at Under these circumstances, the Committee could properly find that Mr. Bruzga committed knowing violations, warranting a baseline sanction of suspension. See Standards 4.32 and Under the third prong of the sanction analysis, there is no doubt that Mr. Bruzga s misconduct caused harm. Mr. Bruzga offers a curious argument on appeal that Steven and Ms. Raymond were not victimized because they ended up with money they should never have received and which they later had to repay to Medicaid. Respondent s Brief, p However, the Committee has good reason based on this record to find that Mr. Bruzga placed Steven in the position of violating the terms of SNT, breaching his fiduciary duty, and violating the law, in turn causing him to become the target of a criminal investigation and civil claim. PCC 29 at Mr. Bruzga also caused harm to his attorney-client relationship with Steven and to the reputation and integrity of the legal profession. Finally, the Committee determined that Attorney Bruzga s disinclination to acknowledge limits to his expertise and his 24

28 apparent propensity to disregard an obvious conflict pose a danger to the public. PCC 29 at The Committee also considered mitigating and aggravating factors relevant to sanction, resulting in its unequivocal conclusion that Mr. Bruzga should be suspended for, among other things, breaching what this Court has deemed the bedrock duty of the legal profession. See Wyatt s Case, 159 N.H. at 306. The Committee found no mitigating factors. See Standards 9.3. Contrary to Mr. Bruzga s suggestion on appeal, the absence of proof that Mr. Bruzga violated the Rules for dishonest or selfish reasons does not serve as a basis for rewarding Mr. Bruzga with mitigation for laudable motives. Certainly, Mr. Bruzga s advice about avoiding Medicaid reimbursement suggests a state of mind that is less than open and forthright. Mr. Bruzga testified at the sanction hearing in support of mitigation for unselfish behavior, claiming that [t]his was not to benefit myself. I was ordered to be there, and the register s office ordered me to answer pleadings. PCC 20 at 82. However, the record does not support his position. Mr. Bruzga did legal work after a conflict arose and before any relevant procedural orders were issued. Further, Mr. Bruzga s inclination to bill for services rendered while operating under a clear conflict of interest is neither proper nor consistent with an unselfish motive. See Estate of McCool, 131 N.H. at (1988). As Mr. Bruzga s counsel predicted at the sanction hearing, recitation of such proposed mitigation did not move the ball very far. PCC 20 at

29 Mr. Bruzga s complaints about having to respond to comprehensive charging documents (which also served to describe the ADO s entire case) and about delay in the disciplinary process, amount to no more than displeasure at having to deal with a case made complex and time-consuming by Mr. Bruzga s own conduct in the underlying matter. The passage of time between complaint and prosecution in this case was not unreasonable and Mr. Bruzga cites no authority to the contrary. See Wolterbeek s Case, 152 N.H. 710, 713, 716 (2005). With respect to aggravating factors, the Committee properly identified Mr. Bruzga s prior disciplinary record, his refusal to acknowledge the wrongful nature of his conduct, and his substantial experience in the practice of law. PCC 29 at 22. See Standards 9.2. Mr. Bruzga s prior disciplinary record is significant. In April 2000, this Court suspended Mr. Bruzga from practice for one year. Bruzga s Case, 145 N.H. 62 (2000). The Court found that, in connection with a post-divorce proceeding involving Mr. Bruzga s ex-wife and children, Mr. Bruzga violated Rule 3.1 by pursuing a frivolous claim in order to harass and injure another, and Rule 3.3 by knowingly exaggerat[ing] facts and omit[ting] material detail regarding the events underlying his allegations to a point of perverting the truth. Id. at With particular regard to sanction, the Court commented on Mr. Bruzga s conduct during the attorney discipline hearing. It was troubled by Mr. Bruzga s conduct because he repeatedly engaged in semantical word play to explain his representations in the district court 26

30 petition that he knew lacked a good faith basis. Id. at 71. The Court also observed that Mr. Bruzga s conduct in the disciplinary process raises a question as to the likelihood that he would modify his conduct in the future. Id. at 72. Mr. Bruzga argues, as he did below, that the prior Bruzga case is too old to be considered as an aggravating factor. Mr. Bruzga suggests on appeal that Rule 609 of the New Hampshire Rules of Evidence, governing the use of prior convictions to impeach a witness, should be used as a measure of remoteness in this case. Rule 609 has no bearing on the sanction analysis contemplated under the Standards. Moreover, even if the specified time since conviction had elapsed, Mr. Bruzga ignores the provision for a court s determination that the prior record has probative value substantially outweighing any prejudicial effect. Rule 609(b). The Hearing Panel considered whether the prior disciplinary case might be too remote to consider in this matter. PCC 22 at 4-5. However, given the similarities apparent in Mr. Bruzga s approach to attorney discipline in both cases, the Hearing Panel and the Committee properly exercised their discretion to consider the prior case as an aggravating factor in this proceeding. PCC 29 at 22. See Wolterbeek, 152 N.H. at ; Young s Case, 154 N.H. 359, 369 (2006); and Richmond s Case, 153 N.H. 729, 745 (2006). Mr. Bruzga s attitude and evasiveness were apparent at trial in this matter. See PCC 16 at The Committee found that Mr. Bruzga s lack of candor and disingenuousness to the point of misrepresentation - are repeated in this matter. PCC 29 at

31 Mr. Bruzga s failure to acknowledge the wrongful nature of his conduct is also a valid aggravating factor in this case. It does not serve, as Mr. Bruzga would argue, to penalize him for contesting the charges against him. Rather, it is an appropriate reflection of Mr. Bruzga s persistent efforts to minimize his role in the underlying probate and investigative proceedings. Considering the clear and convincing evidence of the aforesaid violations and the aggravating factors, it is clear that the public censure urged on the Committee and this Court by Mr. Bruzga would not serve the purposes of attorney discipline. Mr. Bruzga s conduct is unlike that in Shillen s Case, 149 NH 132 (2003), for example, where this Court sanctioned the Respondent with a public censure for violating Rule 1.7. Mr. Shillen, who was representing a husband and wife in an auto accident personal injury case, negligently failed to recognize a conflict in a more timely fashion. However, Mr. Shillen withdrew entirely from the case as soon as the issue was raised by other counsel. Id. at 139. Further, Mr. Shillen did not violate Rule 1.1, and he had no disciplinary record. Id. at 140. By recommending that Mr. Bruzga be suspended, the Committee does not suggest that Mr. Bruzga s conduct necessarily rises to the level exhibited in Wyatt s Case, where this Court suspended Mr. Wyatt for two years for multiple violations of the rules on conflicts of interest. Wyatt s Case, 159 N.H. at 309. However, Mr. Bruzga, like Mr. Wyatt, proceeded with legal representation of his client notwithstanding the emergence of an obvious conflict of interest. Considering the gravity with which this Court viewed such a knowing violation 28

32

33 APPENDIX TO BRIEF FOR THE NEW HAMPSHIRE SUPREME COURT PROFESSIONAL CONDUCT COMMITTEE TABLE OF CONTENTS Page(s) I. Text of Authorities a. New Hampshire Rules of Professional Conduct b. American Bar Association s Standards for Imposing Lawyer Sanctions

34 New Hampshire Rules of Professional Conduct Rule 1.1. Competence (a) A lawyer shall provide competent representation to a client. (b) Legal competence requires at a minimum: (1) specific knowledge about the fields of law in which the lawyer practices; (2) performance of the techniques of practice with skill; (3) identification of areas beyond the lawyer's competence and bringing those areas to the client's attention; (4) proper preparation; and (5) attention to details and schedules necessary to assure that the matter undertaken is completed with no avoidable harm to the client's interest. (c) In the performance of client service, a lawyer shall at a minimum: Rule 1.5(a). Fees (1) gather sufficient facts regarding the client's problem from the client, and from other relevant sources; (2) formulate the material issues raised, determine applicable law and identify alternative legal responses; (3) develop a strategy, in collaboration with the client, for solving the legal problems of the client; and (4) undertake actions on the client's behalf in a timely and effective manner including, where appropriate, associating with another lawyer who possesses the skill and knowledge required to assure competent representation. (a) A lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; 31

35 (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. Rule 1.7. Conflicts of Interest: General Rule (a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless: (1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and (2) each client consents after consultation and with knowledge of the consequences. (b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interest, unless: (1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation and with knowledge of the consequences. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved. Rule Client Under a Disibility (a) When a client's ability to make adequately considered decisions in connection with the representation is impaired, whether because of minority, mental disability or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client. The client's impairment shall also be considered in determining the adequacy of consultation. 32

36 (b) A lawyer may seek the appointment of a guardian or take other protective action with respect to a client, only when the lawyer reasonably believes that the client cannot adequately act in the client's own interest. Rule 8.4. Misconduct It is professional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another; (b) commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects; (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; (d) state or imply an ability to influence improperly a government agency or official; or (e) knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law. 33

37 Section 3.0: Generally American Bar Association s Standards for Imposing Lawyer Sanctions In imposing a sanction after a finding of lawyer misconduct, a court should consider the following factors: (a) (b) (c) (d) the duty violated; the lawyer s mental state; the potential or actual injury caused by the lawyer s misconduct; and the existence of aggravating or mitigating factors. Section 4.3: Failure to Avoid Conflicts of Interest 4.31 Disbarment is generally appropriate when a lawyer, without the informed consent of client(s): (a) (b) (c) engages in representation of a client knowing that the lawyer s interests are adverse to the client s with the intent to benefit the lawyer or another, and causes serious or potentially serious injury to the client; or simultaneously represents clients that the lawyer knows have adverse interests with the intent to benefit the lawyer or another, and causes serious or potentially serious injury to a client; or represents a client in a matter substantially related to a matter in which the interests of a present or former client are materially adverse, and knowingly uses information relating to the representation of a client with the intent to benefit the lawyer or another, and causes serious or potentially serious injury to a client Suspension is generally appropriate when a lawyer knows of a conflict of interest and does not fully disclose to a client the possible effect of that conflict, and causes injury or potential injury to a client Reprimand 2 is generally appropriate when a lawyer is negligent in determining whether the representation of a client may be materially affected by the lawyer s own interests, or whether the representation will adversely affect another client, and causes injury or potential injury to a client. 2 Section 4.33 uses the term Reprimand. The most analogous sanction in New Hampshire is a Public Censure. 34

38 4:34 Admonition 3 is generally appropriate when a lawyer engages in an isolated instance of negligence in determining whether the representation of a client may be materially affected by the lawyer s own interests, or whether the representation will adversely affect another client, and causes little or no actual or potential injury to a client. Section 4.5: Lack of Competence 4.51 Disbarment is generally appropriate when a lawyer s course of conduct demonstrates that the lawyer does not understand the most fundamental legal doctrines or procedures, and the lawyer s conduct causes injury or potential injury to a client Suspension is generally appropriate when a lawyer engages in an area of practice in which the lawyer knows he or she is not competent, and causes injury or potential injury to a client Reprimand is generally appropriate when a lawyer: (a) (b) demonstrates failure to understand relevant legal doctrines or procedures and causes injury or potential injury to a client; or is negligent in determining whether he or she is competent to handle a legal matter and causes injury or potential injury to a client Admonition is generally appropriate when a lawyer engages in an isolated instance of negligence in determining whether he or she is competent to handle a legal matter, and causes little or no actual or potential injury to a client. 3 Section 4.34 uses the term Admonition. The most analogous sanction in New Hampshire is a Reprimand. 35