In the Matter of James F. McAleer (December 19, 2023)

Supreme Court
No. 2023-31-M.P.
In the Matter of James F. McAleer. :
ORDER
This attorney disciplinary matter came before the Court pursuant to Article
III, Rule 6(d) of the Supreme Court Rules of Disciplinary Procedure. On October
23, 2023, the Disciplinary Board of the Supreme Court (the Board) forwarded to us
a decision finding that the respondent, James F. McAleer, had violated the Supreme
Court Rules of Professional Conduct, along with its recommendation that we disbar
the respondent. Rule 6(d) provides:
“If the [Disciplinary] Board determines that a proceeding
should be dismissed, or that it should be concluded by
public censure, suspension or disbarment, it shall submit
its findings and recommendations, together with the entire
record, to this Court. This Court shall review the record
and enter an appropriate order. Proceedings, if any, before
this Court shall be conducted by [Disciplinary] Counsel.”
We directed respondent to appear before the Court at its conference on
November 21, 2023, to show cause, if any, why we should not accept the
recommendation of the Board. The respondent appeared before the Court without
counsel. Having heard the representations of respondent and this Court’s
Disciplinary Counsel, we concur with the decision of the Board that respondent
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violated several Rules of Professional Conduct and should be disbarred. We hereby
disbar respondent for his actions.
The respondent was authorized to practice law in the State of Rhode Island
during all times material to this matter. 1 The respondent is subject to the Rules of
Professional Conduct as adopted and promulgated as Article V of the Rhode Island
Supreme Court Rules. The facts found by the Board are as follows. The respondent
was appointed as the Executor and Fiduciary for the Estate of Valerie Webb
(appointed August 5, 1996); Estate of Hertha Champlin (appointed December 3,
2014); and the Estate of Chauncey Champlain (appointed October 3, 2008). Clifford
K. Webb was the sole beneficiary of the three estates.
On May 21, 2020, Mr. Webb filed a verified complaint (the Complaint) in
Providence County Superior Court, alleging respondent failed to account for
$557,496.27 in estate funds out of an estate worth $1,000,000. Mr. Webb alleged
he only received $282,313.73. The Complaint also alleged respondent neglected to
convey property in Oklahoma left to Mr. Webb and neglected to pay property taxes
on the parcel. Mr. Webb alleged that, as a result, the property was sold at auction.
Mr. Webb, through counsel, filed a motion for leave to issue a prejudgment writ of
attachment.
1
At the time of the filing of the Petition, respondent had been removed from the
Master Roll of attorneys.
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On August 4, 2020, respondent signed and later submitted an affidavit (the
Affidavit) to the Superior Court attesting to, among other things, that he was “in the
process of obtaining all (IOLTA) account disbursements made by [him] as necessary
expenditures of the above estates.” The respondent’s Affidavit also alleged “none
of the expenditures of the estates taken from [his] (IOLTA) account were for [his]
personal benefit,” and he “can account for all disbursements referenced above.” The
Affidavit does not refer to respondent having any physical limitations. At the time
of filing this Affidavit, respondent was represented by counsel.
On September 9, 2020, the Superior Court issued an order restraining and
enjoining respondent from “transferring and/or alienating any real or personal
property until further order of the court” and from “transferring any and all checking
accounts, bank accounts, savings accounts, stocks, bonds, investments and the like,
other than the reasonable and necessary living expenses of the defendant and his
family as well as reasonable attorney’s fees incurred by the defendant, until further
order of the court.” The respondent was also ordered to conduct an investigation
into his clients’ accounts, including the bank accounts referenced in the Complaint.
Furthermore, respondent was ordered to provide all disbursement documents to the
plaintiff.
On October 9, 2020, Mr. Webb filed a complaint with Disciplinary Counsel
bringing this matter to their attention. In response to the disciplinary complaint,
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respondent submitted the same August 4, 2020 Affidavit to Disciplinary Counsel.
On December 18, 2020, the Superior Court issued a Prejudgment Writ of Attachment
in the amount of $300,000.00 against respondent.
On January 26, 2023, Disciplinary Counsel, following her investigation, filed
a Petition for Disciplinary Action (Petition) against respondent, alleging several
violations of the Rules of Professional Conduct for his conversion of at least $243,
115.50 from the Hertha V. Champlin Estate (the Estate) for his own personal and
professional benefit, with an additional $120,901.99 unaccounted for. The Petition
alleged that $839,810 was transferred from the Estate account held at Wells Fargo
into respondent’s IOLTA account. Disciplinary Counsel charged violations of Rule
1.1 (“Competence”); Rule 1.3 (“Diligence”); Rule 1.5 (“Fees); Rule 1.15
(“Safekeeping property”); Rule 1.19 (“Required bookkeeping records”); Rule 3.3
(“Candor toward the tribunal”); Rule 5.3 (“Responsibilities regarding nonlawyer
assistants”); and Rule 8.1 (“Bar admission and disciplinary matters”); and Rule 8.4
(“Misconduct”).
The Petition was served on respondent, who was required to respond within
twenty (20) days pursuant to disciplinary procedure. The respondent requested and
was granted two thirty (30) day extensions on February 17, 2023, and March 22,
2023, respectively. On April 18, 2023, Disciplinary Counsel’s office received a
written request for a third thirty (30) day extension from respondent, citing ongoing
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medical treatment and providing certain medical documentation. Attached to this
third request were copies of two (2) checks (#3168 - $1,000.00 and #3169 -
$3,500.00) payable to the Rhode Island Division of Taxation and U.S. Treasury. The
memo line on both checks stated “H. Champlin Estimated Tax.”2 Because Rule
3.7(a) of the Rules of Procedure of the Disciplinary Board of the Supreme Court of
Rhode Island allows no more than two (2) continuances, the Board denied
respondent’s third request for another thirty (30) day extension on April 21, 2023.
On July 12, 2023, a hearing was held before a three-member hearing panel of
the Board (the Hearing Panel). Both respondent and Disciplinary Counsel presented
their respective positions. Other than the above-referenced copies of checks, the
Board found that respondent failed to provide any substantive accounting of the
Estate funds to Disciplinary Counsel, the Superior Court, or Mr. Webb’s counsel.
The Board found that respondent also failed to file an answer in accordance with
Rule 3.18 of the Rules of Procedure of the Disciplinary Board. Rule 3.18(b) requires
that answers
“shall be in writing, and drawn so as to advise fully and
completely the participants and the Board as to the nature
of the defense. They shall admit or deny specifically, and
2
Bank records in evidence reflect that Check No. 3105 in the amount of $8,000 was
written on September 20, 2016, payable to McAleer and McAleer and that Check
No. 3181 was written on August 16, 2019, and made payable to James McAleer in
the amount of $4,276. The Board found no record of any checks written, processed,
and clearing between those check numbers and dates.
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in reasonable detail, each material allegation of the
petition and state clearly and concisely the facts and
matters of law relied upon.” See also Article III, Rule 6(b)
of the Supreme Court Rules.
Because respondent never filed an answer to the Petition, despite obtaining two
extensions to do so and being informed by Disciplinary Counsel in writing of the
consequences of failing to file an answer, all the charges contained in the Petition
were deemed admitted pursuant to Article III, Rule 6(b) of the Supreme Court Rules
of Disciplinary Procedure for Attorneys.
The Disciplinary Board found that Disciplinary Counsel’s investigation
included a review of respondent’s bank statements for his IOLTA account. There
were twenty-eight (28) checks written from July 2014 through August 2019 from
the Estate totaling $243,115.50 paid to respondent, with $175,170 paid to McAleer
and McAleer and $69,945 paid to either James McAleer or James F. McAleer. The
Board found that respondent provided no accounting of what those funds were for
or where the money was. As of March 1, 2020, $1,979.32 remained in the IOLTA
account for the benefit of the Estate, and an additional $120,901.99 remained
unaccounted for.3
3
The Board found that Disciplinary Counsel’s investigation also revealed that
$93,593.19 was paid on behalf of the Estate and that approximately $380,220 was
paid to Mr. Webb.
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At the hearing, Disciplinary Counsel offered the Petition and forty-eight (48)
exhibits into evidence, which were admitted in full over respondent’s objection. The
basis for respondent’s objection was he had not “been able to get to the files” because
of a lifting and walking restriction, presumably imposed by a medical care provider.
The only exhibits respondent offered into evidence, which were admitted over
Disciplinary Counsel’s objections, were certain medical documentation from the
timeframe of June 2023 and July 2023.
When asked directly by the Hearing Panel if he had any explanation in
response to the allegations or if he had anything to offer in mitigation, respondent
repeatedly indicated that he “would have to get the files” and he attempted to have
others retrieve files with no success. He also testified that two attorneys who had
volunteered to search for the files had found some of the files but did not retrieve
any documents. He further testified that his now-deceased secretary wrote certain
checks at issue from his IOLTA account.
Chief Disciplinary Counsel Kerry Reilley Travers was sworn in at the hearing
and testified regarding her investigation and interaction with respondent. Chief
Travers testified that during the investigation she was contacted by an attorney with
the firm from which respondent had rented office space. The attorney advised Chief
Travers that respondent had been a tenant in their building and that he was being
evicted. Chief Travers further testified that the attorney told her that respondent’s
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files were still at their office and they were trying to negotiate with him regarding
their removal. Chief Travers went to the attorney’s office and confirmed the
presence of a large number of client files, including the files that related to the
investigation.
Chief Travers was advised that the firm had given respondent a “drop date set
for removing the files from the office; and [she] had reached an agreement with [the
attorney] that if he did not comply by that date, [she] would come in and retrieve the
files that he had, essentially, abandoned at her office.” Right before the deadline,
respondent sent a moving company to box and remove all the files. The respondent
admitted to Chief Travers in a subsequent conversation that he had moved the files
to his brother’s garage in Warwick, Rhode Island. In a February 2022 meeting,
respondent refused Chief Travers’ request that her investigator be allowed to retrieve
the files from the Warwick house. Chief Travers further testified that respondent’s
actions “stymied” her efforts to obtain the files.
Given a final chance to rebut the evidence or offer any information in
mitigation, respondent testified in closing that the Affidavit submitted to both the
Superior Court and to Disciplinary Counsel was signed by him, but never read. He
also acknowledged refusing to allow access to the files at the request of Disciplinary
Counsel and, lastly, testified that he did not dispute the authenticity of any of the
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documents included in Petitioner’s Confidential Exhibit 15 (copies of checks
negotiated from his IOLTA Account) offered into evidence by Disciplinary Counsel.
Based on the facts and evidence presented at the hearing, the Board concluded
that respondent violated several Rules of Professional Conduct. 4 First, the Board
found that respondent violated Rule 1.1 (“Competence”). According to Comment 5
to Rule 1.1, “[c]ompetent handling of a particular matter includes inquiry into and
analysis of the factual and legal elements of the problem, and use of methods and
procedures meeting the standards of competent practitioners.” The Board found that
respondent failed to utilize proper methods and procedures to meet the standard of
competence, as reflected in his inability to provide an explanation of the
disappearance of $243,115.50, despite ample time and requests for an explanation.
See In re Coaty, 985 A.2d 1020, 1022-25 (R.I. 2010) (mem.) (finding that the
respondent, who did not provide an accounting, violated Rule 1.1, because the
respondent’s “billing practices and handling of client funds can, at best, be described
charitably as sloppy and well below the standard of care expected as a fiduciary”).
4
The Board declined to find a violation of Rule 3.3 (“Candor toward the tribunal”)
at this time because respondent failed to cooperate with reasonable requests for
information by Disciplinary Counsel in violation of Article III, Rule 6(e) of the
Supreme Court Rules, and thus the Board could not determine the veracity of
respondent’s statements to the Panel.
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A competent attorney utilizing the standard of a competent practitioner would be
able to provide an explanation to his client, Disciplinary Counsel or the Court.
Second, the Board found that respondent violated Rule 1.3 (“Diligence”).
Where, as here, an attorney refuses to provide an accounting to a client, such conduct
is a violation of Rule 1.3. See In re Foster, 826 A.2d 949, 952 (R.I. 2003) (affirming
the Board’s determination that the respondent violated Rule 1.3 where the attorney
failed to provide an accounting). Third, the Board found that respondent violated
Rule 1.5 (“Fees”). The respondent’s unsupported and unexplained payment of
$243,115.50 to himself and his firm indicates that he has charged Mr. Webb an
“unreasonable fee” for the services provided. The lack of an explanation for the
missing funds or why such significant payments were made to respondent or his firm
reflects an improper fee arrangement.
Fourth, the Board found that respondent violated Rule 1.15 (“Safekeeping
property”). The respondent’s failure to provide an accounting after multiple requests
by the Board and Mr. Webb constitutes a violation of Rule 1.15(d), which requires
that a lawyer shall “promptly render a full accounting regarding [the client’s]
property.” See also In re Howard, 108 A.3d 204, 205 (R.I. 2015) (mem.) (finding
that failure to provide an accounting that was accurate or based on contemporaneous
time records violated Rule 1.15). Furthermore, as the commentary to Rule 1.15
makes clear, lawyers should hold funds or property of others “with the care required
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of a professional fiduciary.” Here, respondent has not held his client’s funds “with
the care required of a professional fiduciary.” Moreover, over $120,000 of client
money is still unaccounted for.
Fifth, the Board found that respondent violated Rule 1.19 (“Required
bookkeeping records”) because he failed to maintain proper records regarding
$243,115.50 that he paid to himself and his firm, as well as providing no explanation
for over $120,000 that remains unaccounted for. According to Rule 1.19(a)(1), all
attorneys must maintain “records of all deposits in and withdrawals from special
accounts specified in Rule 1.15 and of any other bank account which records the
operations of the lawyer’s practice of law.” Likewise, respondent was required to
maintain “[c]opies of all statements to clients or other persons showing the
disbursement of funds to them or on their behalf.” The respondent’s failure to
provide such records, upon request, violates Rule 1.19.
Sixth, the Board found that respondent violated Rule 5.3 (“Responsibilities
regarding nonlawyer assistants”). To the extent respondent claims that any rule
violation was due to a non-attorney in his employ, that is no excuse for any rule
violations. The respondent was required to make reasonable efforts to oversee the
actions of the non-attorneys—in this case, his secretary. Seventh, the Board found
that respondent violated Rule 8.1 (“Bar admission and disciplinary matters”)
because, despite multiple continuances and opportunities to do so, he has failed to
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“respond to a lawful demand for information from * * * disciplinary * * * authority
* * *.” Disciplinary Counsel requested that respondent provide various records on
multiple occasions and each time it was “stymied” by respondent. The respondent
took affirmative steps to ensure that physical files which contained documents
related to the investigation would not land in the hands of the investigators. Finally,
the Board found that respondent violated Rule 8.4 (“Misconduct”). The respondent
has violated a number of the Rules of Professional Conduct, which violations
themselves provide a basis to find a violation of Rule 8.4.
The Board next turned to the issue of an appropriate sanction to recommend
to this Court. In fashioning an appropriate sanction, the Board and this Court are
cognizant that the purposes of professional discipline are to protect the public and to
maintain the integrity of the profession, In re McBurney, 13 A.3d 654, 655 (R.I.
2011) (mem.), and not to punish the attorney. In re Almonte, 678 A.2d 457, 458 (R.I.
1996). Mitigating and aggravating factors must be weighted to determine the proper
level of discipline that should be imposed. In re Fishbein, 701 A.2d 1018, 1020 (R.I.
1997). This Court has previously held that the presumptive sanction for the
intentional misappropriation of funds is disbarment. See In re Amaral, 981 A.2d
1027, 1029 (R.I. 2009) (mem.) (disbarring attorney for converting over $52,000
despite making full restitution prior to disciplinary hearing); In re Coningford, 815
A.2d 54, 55-57 (R.I. 2003) (disbarring attorney for commingling and converting
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$6,300 of client funds and provided no mitigating testimony, no restitution, and
failed to appear at disciplinary hearing). Further, writing and cashing checks payable
to oneself while serving as administrator or attorney for an estate is tantamount to
embezzlement and warrants disbarment. See Lisi v. Grimes, 601 A.2d 497, 497 (R.I.
1992).
Here, the Board found a complete lack of mitigating factors to warrant a lesser
sanction, and in fact found that aggravating factors—namely, that respondent
impeded Disciplinary Counsel’s investigation—warranted the imposition of the
most severe disciplinary sanction. “While this Court gives great weight to the
recommendations of the [B]oard, we remain the final arbiter of professional
discipline.” In re Hellew, 828 A.2d 531, 533 (R.I. 2003) (mem.). We agree with the
Board’s thorough analysis of the facts and evidence and adopt their
recommendation. It should further be noted that at the show cause hearing,
respondent failed to answer the Court’s questions about where the money is and
failed to provide any mitigating circumstances or evidence to support his position
that he has not been able to adequately defend himself, a claim which this Court
finds self-serving and wholly unsubstantiated. Thus, we hereby disbar respondent
James F. McAleer for his conduct.
The respondent is directed to comply with the mandates of Article III, Rule
15 of the Supreme Court Rules of Disciplinary Procedure for Attorneys, and within
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ten days after the effective date of the disbarment order, the respondent shall file
with the Clerk of this Court an affidavit showing:
(1) That he has fully complied with the provisions of this Order and with the
requirements of Article III, Rule 15;
(2) A list of other state, federal and administrative jurisdictions to which he is
admitted to practice law; and
(3) That he has served a copy of the affidavit upon Disciplinary Counsel. The
affidavit shall also set forth the residence or other address where
communications may thereafter be directed to respondent.
Justice Robinson and Justice Long did not participate.
Entered as an Order of this Court this 19th Day of December 2023.
By Order,
/s/ Meredith A. Benoit
Clerk
.
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STATE OF RHODE ISLAND
SUPREME COURT – CLERK’S OFFICE
Licht Judicial Complex
250 Benefit Street
Providence, RI 02903
ORDER COVER SHEET
Title of Case In the Matter of James F. McAleer.
Case Number No. 2023-31-M.P.
Date Order Filed December 19, 2023
Justices Suttell, C.J., Goldberg, and Lynch Prata, JJ.
Source of Appeal N/A
Judicial Officer from Lower Court N/A
For Petitioner:
Kerry Reilley Travers, Esq.
Attorney(s) on Appeal Chief Disciplinary Counsel
For Respondent:
James F. McAleer, pro se
SU-CMS-02B (revised November 2022)