In re Ellis, No. SJC-10612 (Mass. 07/29/2010), the Massachusetts Supreme Court disagreed and found that a lawyer, convicted of insurance fraud and disbarred, has been rehabilitated and should be allowed to return to the practice of law. Nicholas J. Ellis was disbarred by the Supreme Court on November 16, 2000, retroactive to July 21, 1997, the date of his temporary suspension from the practice of law. The temporary suspension and ultimate disbarrment arose from a criminal investigation into the conduct of the law firm that bore his name as one of its partners, Ellis & Ellis, and his indictment and subsequent guilty plea to two indictments charging him with motor vehicle insurance fraud, a misdemeanor. A number of other attorneys and employees who worked at the firm, some of its clients, a chiropractor, and a physician also were indicted during the course of the investigation that exposed a pattern of insurance fraud in the firm's highly publicized personal injury law practice. The disbarrment was reported at Matter of Ellis, 425 Mass. 332 (1997). In that case the court found, with regard to Ellis and the members of his firm, despicable conduct that even caused their clients to be convicted and concluded that disbarrment was appropriate.

The Supreme Court concluded:

 "The pattern of conduct of the lawyers persuades us that there is a substantial risk of future harm to the public interest, including harm to present and future clients. We are not dealing here with a single instance of misrepresentation of fact to an insurance company. Although collusive wrongdoing between a client and a lawyer of the type involved here is difficult to discover, there are numerous examples of such conduct in the record. The lawyers' willingness to engage in such conduct has led to the indictment of certain of their clients, whom they aided in wrongdoing, and raises serious doubts about their conduct and its impact on their clients if they are allowed to continue to practice law. In addition, the lawyers' plan to try to save their interests in their law practice, in the face of investigations by prosecutors and bar counsel, by establishing seemingly independent but controlled entities and by transferring clients' cases as if they were accounts receivable, demonstrates an indifference to ethical considerations and an inclination to engage in unethical conduct.

"As a result of his guilty pleas on September 22, 2000, the petitioner was sentenced to six months in a house of correction and five years' probation. One of the conditions of his probation was that he not apply to be reinstated to the practice of law during the period of probation. He was released from incarceration after three months and performed forty hours of community service each week for the balance of the six months. In 2008, three years after completing his probationary term, the reinstatement petition before the Supreme Court was filed, and the Board of Bar Overseers (board) commenced reinstatement proceedings. Bar counsel opposed reinstatement."

After reviewing the petitioner's reinstatement questionnaire and holding a two-day evidentiary hearing, that included the petitioner's testimony as well as the introduction of other evidence in support of and in opposition to the petitioner's reinstatement, the hearing panel voted unanimously to recommend reinstatement. The board, over bar counsel's continued objection, adopted the hearing panel's report and, with one dissenting vote, recommended that this court reinstate the petitioner to the practice of law subject to certain conditions (also proposed by the hearing panel). An information to that effect was filed in the county court, and the matter was reserved and reported to the full court by a single justice. The Supreme Court adopted the recommendation of the board.

The test applied by the court is whether, at the present time, in spite of his previous misconduct, the lawyer has rehabilitated himself sufficiently to inspire public confidence, that is, whether he currently possesses the necessary moral character and legal acumen to be admitted to the bar of the Commonwealth. In judging whether he is fit to serve as an attorney, the court looked to:

(1)  the nature of the original offense for which the petitioner was disbarred;

(2)  the petitioner's character, maturity, and experience at the time he was disbarred;

(3)  the petitioner's occupation and conduct in the time since his disbarrment;

(4)  the time elapsed since the disbarrment; and

(5)  the petitioner's present competence in legal skills. 

In the reinstatement proceedings before the board, the hearing panel paid particular attention to the standards and factors that bear on readmission. Its findings and recommendations, as adopted by the board, are entitled to deference, although they are not binding on the Supreme Court.

The hearing panel began by focusing on the petitioner's misconduct that, as reflected in the indictments to which he pleaded guilty, occurred in 1990 and 1992 when he forwarded information he knew to be false to insurers in order to win settlements for two of his personal injury clients. The hearing panel also assessed the environment in which this conduct occurred. While the law firm eventually bore his name, the petitioner was new to the practice of law when he joined the firm in 1986. The firm was established by his father and tightly controlled by his more experienced older brother, James Ellis, Jr., both of whom were also indicted for fraud and conspiracy. As the prosecutor made clear to the judge at the petitioner's plea and sentencing, the petitioner's conduct paled in comparison to that of his brother, and he was a considerably less significant actor in the crimes committed at the Ellis law firm, playing a supporting role in the frauds that the firm's clients and James Ellis, Jr., perpetrated on insurers.

Balanced against the conduct to which he pleaded guilty, the hearing panel considered the petitioner's postdisbarment activities that included the parenting of his children at home while his wife worked, his efforts to become a teacher, his coaching endeavors on four of his town's youth teams, and his many charitable activities through his church and other organizations. Based on the evidence it received, the hearing panel found that the petitioner had reformed himself. He acknowledged his misconduct and the dishonor it had brought to the profession, himself, and his family, and was credible in his expressed remorse and insights into what would be necessary to restore himself to an honorable practice. Most particularly, he understood that he could not again practice with family members or within their sphere of influence. In sum, the hearing panel found that the petitioner had established that he presently was of "good moral character, committed to serving his family and community."

The hearing panel also found that the petitioner had demonstrated the competency and learning required for admission to practice law. In addition to taking and passing the multistate professional responsibility examination, the petitioner had taken a number of Massachusetts continuing legal education courses and had undertaken to keep current in his legal reading sufficient to assist him in transitioning into the practice of law in specialty areas different from those in which he practiced at Ellis & Ellis. More particularly, the petitioner, on reinstatement, intends to focus his practice on immigration law, Social Security disability law, District Court criminal defense, and debt collection, areas of practice in which he has arranged for mentors to assist him. The petitioner has also secured two experienced attorneys with whom he is acquainted to act as his ethical advisers. Perhaps the most challenging hurdle for the petitioner to overcome is the effect and perception of his reinstatement on the public and the bar. The panel recommended the following conditions on his reinstatement:

(1)  prior to reinstatement, the petitioner shall take a course recommended by bar counsel concerning the proper method of handling an [Interest on Lawyers Trust Account (IOLTA) ] account;

(2)  the petitioner shall sign an agreement with bar counsel to have his IOLTA account audited for a period of two years at his cost, and shall use for his law practice accounting and auditing an accountant other than Mr. Kyriakis (or any member of his firm), who has been and continues to be his father's accountant;

(3)  for a period of five years, the petitioner shall not engage in practice with any family member or former member of the Ellis & Ellis firm, or the James N. Ellis, Sr. & Associates firm, nor shall he employ in his law practice any employee of his father's firm or his sister's office employees;

(4)  the petitioner shall not engage in any personal injury or workers' compensation cases, and shall not represent any family members for a period of five years;

(5)  the petitioner shall purchase and maintain malpractice insurance in a minimum of $1,000,000 per claimant with a deductible not to exceed $10,000 for a period of five years; and

(6)  within the next two years, the petitioner shall take forty hours of [continuing legal education] courses in the areas of the law in which he intends to practice."

The Supreme Court adopted the conditions. They convey in part the message that the petitioner's reinstatement is decidedly not a reopening of the disgraced law practice of Ellis & Ellis. They also confirm the seriousness with which the board and this court take their obligation to assure the protection of the public interest above all else.
Having demonstrated to the board that he possesses the current moral qualifications and learning to practice law, and that his admission to the bar would not be detrimental to the public interest, the petitioner is reinstated with the aforementioned conditions.

ZIFL hopes that the Supreme Court of Massachusetts is correct and that Mr. Ellis will be a fair, reasonable and honorable member of the bar. ZIFL has some doubt and would not be surprised if new reports of Mr. Ellis' actions will be reported in these pages in the future. I note, also, in Commonwealth v. Ellis, 429 Mass. 362, 708 N.E.2d 644 (Mass. 04/14/1999), brother James Ellis attempted to avoid prosecution by claiming that the indictments should be dismissed because the state attorney general received funding from insurers which failed and attempted to avoid criminal penalties by an attempt to trick the law.
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Readers may write to Barry Zalma, Esq. CFE at zalma@zalma.com