In re Brauer, 452 Mass. 56, 890 N.E.2d 847 (2008)
Brief Summary
Factual determinations in a civil case held usable by way of offensive collateral estoppel in bar disciplinary proceedings governed by “preponderance” standard if those determinations were essential to the underlying civil matter.
Complete Summary
In a civil case brought against him, defendant Brauer was held to have unlawfully converted funds owned by Grand Pacific Finance Corp (GPFC). During subsequent disciplinary proceedings based on the same conduct, bar counsel sought to use offensive collateral estoppel to prevent Brauer from re-litigating the factual findings in the GPFC civil matter. In Massachusetts, the Bar’s burden of proof is the same “preponderance” standard that applies in civil litigation. The Massachusetts Supreme Court affirmed the decision below to allow the use of offensive collateral estoppel and indefinitely suspended Brauer.
The court asserted that “the offensive use of collateral estoppel is appropriate in bar disciplinary proceedings.” Id. at 66 (quoting Bar Counsel v. Board of Bar Overseers, 420 Mass. 6, 10-11 (1995)). Nevertheless, “the determination of the issues for which preclusion is sought must have been essential to the underlying judgment.” Id. at 67. Brauer contended that the board’s chairman erred by failing to determine what facts were actually litigated, and essential to, the GPFC judgment. The court overcame this argument by reviewing the GPFC trial court’s findings and itself concluding that they were actually litigated and essential to the GPFC matter. Further, “[t]he [GPFC] judge’s findings were mirrored in the allegations of misconduct set forth in the petition for discipline[.]” Id. at 68.
Brauer also made additional arguments to no avail. He argued that the board’s chairman was required to review the entire trial court record. The court held review of the entire record would not have made any material difference with respect to the determination of issue preclusion. Further, Brauer argued that application of collateral estoppel was unfair because his trial counsel in the GPFC matter had had conflicts of interest. The court dismissed this argument because Brauer failed to raise any concerns about his trial counsel during the GPFC matter. Finally, Brauer alleged unfairness in the fact that the hearing officer had also acted as the board chair. The court noted this proposition was unsupported by authority. Further, even if the chair had selected the appeal panel, Brauer failed sufficiently to allege prejudice from the dual role.
In arguing for a lesser sanction, Brauer noted that GPFC was not his client. GPFC was a potential lender to Brauer’s client, and Brauer held GPFC’s money in trust for the client. The court held misappropriation of third party funds is on a par with misappropriation of client’s funds and is therefore equally sanctionable.
Significance of Opinion
This opinion highlights the risk to attorneys of offensive collateral estoppel when adverse findings in civil matters meet or exceed the level of proof required in disciplinary matters.
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