Roger C. Chadwick Jr. (2019)

Lawyer Sanctions (2005) {"Standards"]. Lawyer Sanctions (2005) ("Standards"). 60 (2005). The sanction is also in accord with the ABA Standards for Imposing 60 (2005). The sanction is also in accord with the ABA Standards for Imposing Conner's Case 158 N.H. 299. 303 (2009); Richmond's Case, 152 N.H. 155, 159- Conner's Case 158 N.H. 299, 303 (2009); Richmond's Case, 152 N.H. 155, 159sanction is In accord with the purposes of attorney discipline. See e.g., sanction is in accord with the purposes of attorney discipline. See e.g., The Committee also concluded that a Reprimand is appropriate. Its The Committee also concluded that a Reprimand is appropriate. Its

50, as stipulated. 50, as stipulated. violated Rules of Professional Conduct 1.15; 8.4(a); and Supreme Court Rule violated Rules of Professional Conduct 1.15; 8.4(a); and Supreme Court Rule evidence. It further found that Mr. and Mr. Chadwick's conduct evidence. It further found that Mr. and Mr. Chadwick's conduct The Committee approved the facts as stipulated by clear and convincing The Committee approved the facts as stipulated by clear and convincing

Stipulation," attached as Exhibit A and B). Stipulation," attached as Exhibit A and B) . Respondent's Stipulation as to Facts, Violations and Sanction ("the Respondent's Stipulation as to Facts, Violations and Sanction ("the The Professionsil Conduct Committee ("the Committee") deliberated each The Professional Conduct Committee ("the Committee") deliberated each

Chadwick, Roger C„ Jr. advs. Attorney Dtscipline OJpce - #2 7-044 Chadwick, Roger C., Jr. advs. Attorney Discipline Office - #17-044

Richard C. Guerriero, Jr. Richard C. Guerriero, Jr. Barbara J. Quay, Legal Assistant Barbara J. Guay, Legal Assistant Peter G. Beeson Peter G. Beeson * non attorney member * non attorney member Kathleen M. Ames* Kathleen M. Ames* Martha Van Oot Martha Van Got Ronald K. Ace* Ronald K. Acc* Georges J. Roy* Georges J. Roy* Elaine Holden,* Vice Chair Elaine Holden,* Vice Chair 603-224-5828• Fax 228-95II 603-224-5828 • Fax 228-9511 Mona T. Movafaghi Mona T. Movafaghi Heather E. Krans, Vice Chair Heather E. Krans, Vice Chair Concord, New Hampshire 03301 Concord, New Hampshire 0.1301 Caroline K. Leonard Caroline K. Leonard David M. Rothstcin, Chair David M. Rothstein, Chair 4 Chenell Drive, Suite 102 4 Chcnell Drive, Suite 102 Margaret R. Kerouac Margaret R. Kerouac

a committee of the attorney discipline system a committee of the attorney discipline system Professional Conduct Committee Professional Conduct Committee New Hampshire Supreme Court New Hampshire Supreme Court p. 2 Page 2 of 2

File Russell F. Hilliard, Esquire cc: Elizabeth M. Murphy, Assistant Disciplinary Counsel

for all costs of investigation and prosecution of this matter. agreement that and Mr. Chadwick shall reimburse the Committee Having approved the stipulated sanction, the Committee approved the p. 3 October 10, 2017 ("Self-Report Letter").

5. This disciplinary matter was initiated by a letter of self-report dated

4. Mr. Chadwick does not have a previous disciplinary history.

Main Street, Nashua, NH 03060.

the law firm of Chadwick-Fricano-Weber, PLLC, ("CFW") located at 255

3. At all times material to this proceeding, Mr. Chadwick practiced law at

Massachusetts Bar.

December 30, 1991. He is currently on retired status for the

2. Mr. Chadwick was also admitted to practice law in Massachusetts on

Mr. Chadwick was admitted to practice in 1992.

1. Mr. Chadwick is an attorney licensed to practice law in New Hampshire.

Office (ADO) stipulate as follows:

Respondent Roger C. Chadwick, Jr., Esq., and the Attorney Discipline

determine all current trust account balances.

Heath to examine the activity in the IOLTA Account from p. 4 2014 forward to

11. On November 11, p. 4 2017, CFW hired the accounting firm of Melanson

CFW stopped making use of Ms. Neveu's services.

confidence in Ms. Neveu's skills to properly maintain the IOLTA Account.

10. In November p. 4 2017, CFW decided to change bookkeepers, lacking

to law firms, she failed to properly reconcile the CFW IOLTA Account.

9. Despite Ms. Neveu's purported experience providing bookkeeping services

$ p. 4 2,250.00 to correct eight client matters going back three years.

IOLTA Account and in September p. 4 2017 deposited an additional

Account was still not in compliance. CFW conducted a review of the

8. After the switch to Cosmolex, Ms. Neveu informed CFW that the IOLTA

switched its accounting software to Cosmolex.

this issue. Several months later and upon Ms. Neveu's advice, CFW

$5,740.50 from its operating account into the IOLTA Account to resolve

Robyn Neveu. Acting upon Ms. Neveu's advice, CFW transferred

that the IOLTA Account was not in compliance by their bookkeeper,

Supreme Court Rule 50's requirements. In late p. 4 2016, CFW was informed

7. It is not clear when the IOLTA Account fell out of compliance with

trust.

with Supreme Court Rule 50 and that the IOLTA Account was out of

Citizen's Bank ("IOLTA Account") had not been reconciled in compliance

6. The Self-Report Letter indicated that the CFW IOLTA account located at p. 5 3

the accountants from Melanson Heath who have been performing

Melanson Heath to reconcile the IOLTA Account. The ADO has met with

16. Since November 2017, CFW has continued to use the services of

trust.

found. CFW has since resolved all of these issues and is no longer out of

holding $150.00 for a restitution payment to a victim that could not be

others were funds to be refunded to clients. In one case, CFW was

earned fees which should have been removed from the IOLTA while

funds for clients whose matters were closed. Some of these funds were

provided by CFW, the ADO determined that CFW continued to hold

15. After review of the Melanson Heath report and the accounting records

Account.

14. Melanson Heath now performs the monthly reconciliations for the IOLTA

misappropriated.

funds or fraudulent activity or instances of assets being intentionally

1 p. 5 3. Melanson Heath's examination did not identify any illicit commingling of

Stipulation.

Account. A copy of the May 4, 2018, report is attached to this

unnoticed. CFW has since deposited that amount into the IOLTA

consisted of an accumulation of errors over the years that had gone

that they were out of trust in the amount of $15,012.17. This amount

results of the examination. As a result of the examination, CFW learned

12. Melanson Heath prepared a report dated May p. 6 4, 2018, detailing the 4

receiving financial institution, of cash, bank cashier's check, (A) (i) deposit, receipt of which is acknowledged by the (d) Funds may be disbursed from lawyer trust accounts upon incurred. withdrawn by the lawyer only as fees are earned or expenses and expenses that have been paid in advance, to be (c) A lawyer shall deposit into a client trust account legal fees purpose. on that account, but only in an amount appropriate for that account for the sole purpose of paying bank service charges (b) A lawyer may deposit the lawyer's own funds in a client trust and appropriately safeguarded. client and third party property shall be identified as such distribution of such other property or any portion thereof. All shall be preserved for a period of six years after final of clients or third persons shall be kept by the lawyer and aspect of those Rules. Sufficient records of all other property Supreme Court Rules and shall comply with every other third party funds as may be required by the New Hampshire minimum financial records with respect to the client and Supreme Court Rules. The lawyer shall maintain the accordance with the provisions of the New Hampshire representation separate from the lawyer's own property, in is in a lawyer's possession in connection with a (a) A lawyer shall hold property of clients or third persons that

19. Rule 1.15 states as follows:

18. The facts set forth above are incorporated by reference.

Rule 1.15: Safekeeping Property and Supreme Court Rule 50

follows:

violations of the New Hampshire Rules of Professional Conduct, as

17. The parties agree that Mr. Chadwick's conduct in this case involves

Melanson Heath, consistent with Rule 1.15 and Supreme Court Rule 50.

services for CFW and reviewed the monthly reconciliations performed by p. 7 5

R. Prof. Conduct 8.4(a).

evidence that Mr. Chadwick's conduct, as described herein, violated N.H.

22. Having found the foregoing violation, there is clear and convincing

IOLTA Account; in violation of Rule 1.1 p. 7 5 and Supreme Court Rule 50.

client funds with earned fees that had not been withdrawn from the

resulting in the IOLTA Account being out of trust; and (2) commingling

in excess of the amount that the client had in the IOLTA Account,

in: (1) CFW withdrawing funds from the IOLTA Account for some clients

21. Mr. Chadwick's failure to properly reconcile the IOLTA Account resulted

Rule 1.1 p. 7 5 and Supreme Court Rule 50.

20. Mr. Chadwick's failure to properly reconcile the IOLTA Account violates

property as to which the interests are not in dispute. The lawyer shall promptly distribute all portions of the be kept separate by the lawyer until the dispute is resolved. whom may be the lawyer) claim interests, the property shall possession of property in which two or more persons (one of (1) When in the course of representation a lawyer is in such property. person, shall promptly render a full accounting regarding entitled to receive and upon request by the client or third any funds or other property that the client or third person is lawyer shall promptly deliver to the client or third person otherwise permitted by law or by agreement with the client, a the client or third person. Except as stated in this rule or third person has an interest, a lawyer shall promptly notify (e) Upon receiving funds or other property in which a client or receiving financial institution. and (B) availability of such funds to the lawyer from the other form of deposit by such receiving financial institution, to the sum of such disbursements, or (ii) clearance of any certified check, or electronic transfer of funds at least equal p. 8 6

the first step is to categorize the respondent's misconduct and identify

Conner's Case, 158 N.H. at 303 (stating that "[i]n applying these factors,

characterizing the misconduct and determining a baseline sanction. See

27. The first three parts of the analysis create the framework for

p. 8 613, 621 (2007)); Standards § 3.0.

aggravating or mitigating factors." Id. (quoting Douglas' Case, 15 p. 8 6 N.H.

injury caused by the lawyer's misconduct; and (d) the existence of

duty violated; (b) the lawyer's mental state; (c) the potential or actual

four-part analysis for courts to consider in imposing sanctions: "(a) the

guidance. Conner's Case, 158 N.H. at 303. The Standards set forth a

2 p. 8 6. Although the Court has not adopted the Standards, it looks to them for

513 (2005).

account the severity of the misconduct." Coffey's Case, 152 N.H. 503,

Case, 158 N.H. 299, 303 (2009). "The sanction . . . must take into

legal profession, and preventing similar conduct in the future." Conner's

maintaining public confidence in the bar, preserving the integrity of the

25. The purpose of the Court's disciplinary power is "protecting the public,

Imposing Lawyer Sanctions (2005) (" Standards') support this sanction.

24. Both case law and the American Bar Association's Standards for

would serve the purposes of attorney discipline.

reprimand is the appropriate sanction in this matter. This sanction

23. The Attorney Discipline Office and Mr. Chadwick jointly agree that a

property: appropriate in cases involving the failure to preserve client of the factors set out in 3.0, the following sanctions are generally Absent aggravating or mitigating circumstances, upon application

Standards. That Section provides:

32. Mr. Chadwick's 1.15 rule violation implicates Section 4.1 of the

out of trust, putting the funds of other clients at risk.

client had in the IOLTA Account, resulting in the IOLTA Account being

the IOLTA Account for some clients in excess of the amount that the

to properly reconcile the IOLTA Account; and by withdrawing funds from

31. Mr. Chadwick's conduct caused potential injury to his clients by failing

actual or potential injury caused by Mr. Chadwick's misconduct.

30. The third prong of the sanction analysis requires an assessment of the

was negligent.

the sanction analysis, the parties agree that Mr. Chadwick's mental state

29. With respect to Mr. Chadwick's mental state under the second prong of

Standard §4.1.

to clients by failing to properly reconcile the IOLTA Account. See

28. Under the first prong of the analysis, Mr. Chadwick violated duties owed

mitigating factors on the ultimate sanction").

sanction, [the Court] consider[s] the effect of any aggravating or

affect the baseline sanction. See id. (stating that "[a]fter determining the

existence of any aggravating or mitigating factors, and whether they

the Court then looks to the fourth and final part of the analysis: the

the appropriate sanction"). Once the baseline sanction is determined, p. 10 8

Standards, is analogous to a public censure in New Hampshire. reprimand in New Hampshire. The term "reprimand," as used in the ABA ' The term "admonition," as used in the ABA Standards, is analogous to a

mitigating factor under the Standards, the ADO considered the fact that

their accounts. See Standards § 9.32. Although not a recognized

misconduct by hiring the accounting firm of Melanson Heath to review

proceedings, and a good faith effort to rectify the consequences of

disciplinary board, a cooperative attitude toward the disciplinary

absence of a dishonest or selfish motive, full and free disclosure to

36. Mitigating factors include the absence of prior disciplinary record,

substantial experience in the practice of law. See Standards § 9.22.

35. In this case there is one aggravating factor present, Mr. Chadwick's

mitigating factors. E.g., Conner's Case, 15 p. 10 8 N.H. at 303.

34. The baseline sanction must be considered in light of any aggravating and

4.13, would call for a baseline sanction of a public censure.

33. Mr. Chadwick's conduct in this matter, when considered under Standard

little or no actual or potential injury to a client. lawyer is negligent in dealing with client property and causes 4.14 Admonition' [Reprimand] is generally appropriate when a

injury or potential injury to a client. lawyer is negligent in dealing with client property and causes 4.13 Reprimand [Public Censure] is generally appropriate when a

property and causes injury or potential injury to a client. should know that he is dealing improperly with client 4.12 Suspension is generally appropriate when a lawyer knows or

potential injury to a client. knowingly converts client property and causes injury or 4.11 Disbarment is generally appropriate when a lawyer p. 11 9

conditionally accept the Stipulation pursuant to Rule 37A(III)(aa)(1).

recommended disposition, and that the PCC may accept, reject, or

40. Mr. Chadwick understands that this Stipulation represents a

is the subject of a separate agreement signed by Mr. Chadwick.

Court Rule 37(1 p. 11 9). His agreement to pay the costs incurred by the ADO

investigation and enforcement of this disciplinary matter. See Supreme

Chadwick agrees to pay the costs incurred by the ADO in the

3 p. 11 9. Subject to the PCC's approval of Mr. Chadwick's Stipulation, Mr.

ADO and made available their work product for ADO review.

Melanson Heath accountants have also discussed the matter with the

ADO believes that there is no need to further monitor compliance. The

monthly reconciliations since January 2018 to the ADO to review, the

future. However, given that CFW and Melanson Heath have provided

to ensure compliance with Rule 1.15 and Supreme Court Rule 50 in the

38. The Attorney Discipline Office would typically seek a period of monitoring

discipline and is an appropriate sanction in this case.

from the baseline sanction to reprimand will serve the purposes of

aggravating and mitigating circumstances, that a downward departure

37. The parties agree that given the baseline sanction, and consideration of

be highly mitigating.

Mr. Chadwick self-reported the firm's out of trust situation to the ADO to p. 12 10

43. Mr. Chadwick knowingly and intelligently waives his right to a hearing.

Stipulation and he is fully aware of the consequences of the Stipulation.

42. Mr. Chadwick has been represented by counsel in reaching this

inducements not set forth in the Stipulation

result of any threats, coercion, or duress, or of any promises or

and voluntarily submitted; that he is not entering this Stipulation as a

proposed disposition contained in this Stipulation are freely, knowingly,

41. Mr. Chadwick acknowledges that the admissions of misconduct and the p. 12 p. 13 10

43. Mr. Chadwick knowingly and intelligently waives his right to a hearing.

Stipulation and he is fully aware of the consequences of the Stipulation.

42. Mr. Chadwick has been represented by counsel in reaching this

inducements not set forth in the Stipulation

result of any threats, coercion, or duress, or of any promises or

and voluntarily submitted; that he is not entering this Stipulation as a

proposed disposition contained in this Stipulation are freely, knowingly,

41. Mr. Chadwick acknowledges that the admissions of misconduct and the p. 14 Melanson Heath Karen Boulay, CFE, CPA, CVA

/<ezAzif.

Sincerely,

hesitate to call. Our report and final balances are contained in the following pages. if you have questions, please do not

6. Various CFW prepared bank reconciliations 5. Various bank statements 4. Various billing records/meeting notes 3. Cosmolex Legal Practice Management trust accounting records from March 2017 2. Clio Law Practice Management trust accounting records from January 2014 through February 2017 1. QuickBooks accounting software records from March 2011 through February 2017 the IOLTA accounting, we obtained various CFW documents including, but not limited to: IOLTA account balances through December 31, 2017. In order to complete our investigation and reconcile The report reflects the outcome of the investigation, including the proper three-way reconciliation of the for any other purpose. The specific procedures are outlined in the following pages. we make no representations as to the sufficiency of the procedures as described in the following report or Weber, PLLC (CFW) was solely responsible for the sufficiency of the agreed-upon procedures. Therefore, engagements of the American Institute of Certified Public Accountants (AICPA). Chadwick-Fricano- Our engagement was conducted in accordance with attestation standards for agreed-upon procedures Attached is our report of the Interest on Lawyer Trust Accounts (IOLTA) investigation dated May 4, 2018. RE: IOLTA Account Investigation

Nashua, NH 03060 255 Main Street Ellsworth, ME Chadwick-Fricano-Weber, PLLC Manchester, NH Greenfield, MA Andover, MA Additional Offices: Roger Chadwick, Esq.

from March 1, p. 15 2017 to December 31, 2017 • Obtained, reviewed and analyzed Cosmolex Legal Practice Management trust accounting records through February 28, 2017, the last date the software was utilized by CFW O Obtained, reviewed, and analyzed Clio Law Practice Management trust accounting records

p. 15 2017, the last date the software was utilized by CFW • Obtained, reviewed, and analyzed QuickBooks trust accounting records through February 28, As part of the examination on this matter, the team took the following actions: Procedures Karen Boulay, CFE, CPA, CVA, Melanson Heath; Samantha Binning, Supervisor, Melanson Heath Examination Team Members Approach

includes reconciling the accounts through April p. 15 28, 2018 (most-current month end). reconciliation of all client data and balances through December 31, 2017. The second phase completed with the intent of CFW self-reporting the findings to the ADO. The first phase includes current trust account balances. This is to be completed in two stages, the first of which will be O Examine the clients' trust fund activity from 2014 forward to determine appropriately reconciled, The objective of the fraud examination team was as follows: Scope

investigate and reconcile the IOLTA accounting. process. We met with the attorneys in early December p. 15 2017 and began the agreed-upon procedures to realized the IOLTA trust accounts were in fact not going through the proper three-way reconciliation money needed to be replenished from the CFW operating account. It was at this time that the attorneys late-2017 the accountant began telling the attorneys there were discrepancies in the trust accounts and that September 2017, the accountant assured the attorneys the proper reconciliations were being completed. In reconciliation was being properly conducted and appropriate records were being kept. As recently as attorneys were given monthly IOLTA reconciliations by the accountant and were told that the three-way issues and a change in software packages, as outlined by Attorney Hilliard in the self-reporting letter, the for attorneys. She worked with CFW from approximately 2015 to 2017. After an initial period of accounting CFW had previously retained the services of an accountant who purported to specialize in trust accounting current. We were engaged on November 11, 2017. was contacted to discuss the examination and reconciliation of the IOLTA accounting from July, 1 2014 to which it was out of compliance with Supreme Court Rule 50. Trust Accounts. Shortly thereafter, our firm NH Attorney Discipline Office (ADO) that their firm's trust account (IOLTA) had certain instances in Fricano-Weber P.L.L.C., through their attorney, Russell F. Hilliard of Upton Hatfield, self-reported to the On October 10, 2017 and Roger (Rusty) Chadwick, Esq. (the attorneys) of Chadwick- Background

IOLTA Investigation Chadwick-Fricano-Weber p. 16 P a c

balances as of December 31, 2017. the examination, the team has created a proper three-way reconciliation of the IOLTA client trust fund Based on the documents reviewed, information collected, and interviews conducted during the course of Findings

and verification. • Each attorney was provided with the detail behind the each client trust account balance for review

December 31, 2017. to the clients' February 28, 2017 trust account balances to determine the client balances at documents provided by CFW and the bank statements. These reconciled transactions were added 2017 and December 31, 2017. All transactions were reconciled between the source billing 9 Exported all Cosmolex Legal Practice Management trust accounting records between March 1,

adjusted, if there was documentation to back up the change. an attorney felt there was a discrepancy, that discrepancy was investigated and the balances was ▪ The attorneys reviewed the February 28, 2017 balances for any known issues or discrepancies. If that occurred to make the account negative. client balance that appeared to be negative, information was included regarding the transactions • We provided the attorneys with a preliminary list of client balances at February 28, 2017. For any account(s). QuickBooks, instead of investigating the discrepancies and allocating them to the proper client QuickBooks. The prior accountant used these accounts to 'reconcile' the trust account balance in • We investigated the "Unknown" and "Due from Operating" general ledger accounts contained in o Inquiry of the attorneys regarding client activity o Verification of the transaction against CFW's monthly billing records o Tracing of the transaction in the Citizens bank statement records • Every discrepancy was investigated through one or more of the following methods:

individual transactions to determine discrepancies. o For every client trust balance that did not match between QuickBooks and Clio, we examined the client trust account balances in QuickBooks versus the client trust account balances in Clio. • Exported all Clio transactions into an excel database. We utilized a pivot table to compare the client and obtain client trust account balances at February 28, 2017. with specific transactions. We utilized these names to separate out the trust account activity by had booked the majority of transactions to one trust liability account. There were names associated O Exported all QuickBooks trust account transactions to an excel database. The prior accountant ensured us that all transactions were accounted for in QuickBooks through this timeframe. reconciled at February 28, 2017 to the QuickBooks accounting records. This reconciliation • Analyzed the trust bank account held at Citizens Bank to verify the balance of $117,851.77

anticipate the follow-up to be completed May 31, 2018. completing the proper three-way reconciliation and complying with Supreme Court Rule 50. We internal control and IOLTA accounting procedures, focusing specifically on verifying that they arc to engage us to reconcile the client balances through April 28, 2018 and conduct an on-site review of their accounts are reconciled at least monthly. To ensure the balances are up to date currently, CFW has agree forward. In December, the attorneys set into place internal control procedures for ensuring that the The team has discussed with CFW the need for proper three-way reconciliations to be conducted going Follow-up/Recommendations

acceptable to include client names in the attachments, and such confidentiality extends to the ADO. (Exhibit 2). We understand that because this is an Attorney Discipline Office (ADO) process, it is We are attaching a summary of client balances at 12/31/17 (Exhibit 1) and account activity for each client Supreme Court Rule 50 at December 31, 2017. Based upon the examination and reconciliation, Chadwick-Fricano-Weber, p. 17 P.L.L.C. is in compliance with between the bank balance and the actual client liabilities. at December 31, 2017 is $197,805.28. CFW will replenish the trust fund for $15,012.17, the discrepancy The reconciled bank balance at December 31, 2017 is $182,793.11. The client trust fund liability balance Impact

not find instances of assets being intentionally misappropriated). no instances of money being transferred out of the IOLTA without corresponding client activity (i.e. did investigation, the IOLTA account always maintained a substantial positive balance and we found We did not identify any illicit comingling of funds or fraudulent activity. Throughout the course of our