
USCA1 Opinion

	




                            United States Court of Appeals                            United States Court of Appeals                                For the First Circuit                                For the First Circuit                                 ____________________            No. 97-1216                                SEARS, ROEBUCK & CO.,                                 Plaintiff, Appellee,                                          v.                             GOLDSTONE & SUDALTER, P.C.,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                    [Hon. Richard G. Stearns, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                Stahl, Circuit Judge,                                       _____________                            Bownes, Senior Circuit Judge,                                    ____________________                              and Lynch, Circuit Judge.                                         _____________                                 ____________________                      David G. Hanrahan,  with whom Ross D.  Ginsberg and                      _________________             _________________            Gilman,  McLaughlin &  Hanrahan,  LLP,  were  on  brief,  for            _____________________________________            appellant.                      Allan E. Taylor, with whom Elizabeth C. Sackett and                      _______________            ____________________            Taylor,  Duane,  Barton &  Gilman,  LLP, were  on  brief, for            _______________________________________            appellee.                                 ____________________                                   October 22, 1997                                 ____________________                      LYNCH, Circuit Judge.   This case raises  issues of                      LYNCH, Circuit Judge.                                _____________            Massachusetts law  concerning the obligations  that attorneys            owe clients in their billing practices.                        Attorney  Daniel   Goldstone  formed   Goldstone  &            Sudalter, P.C.  to purchase the  practice of  the late  Eldon            Sudalter, a collection  attorney.  Goldstone &  Sudalter then            billed Sears, Roebuck & Co.  in excess of one million dollars            for  past work Goldstone said Attorney Sudalter had performed            on Sears's cases.  Sears at first paid most of the bills, but            eventually  sued  Goldstone  &  Sudalter  for an  accounting,            asking for a  judicial determination of its  total liability,            if any, for the  past work.   Goldstone & Sudalter, in  turn,            counterclaimed for the unpaid balance.                        Following Goldstone's  admission  that  he  had  no            personal knowledge concerning Sudalter's billing practices to            support  his interpretation of  the records which  formed the            basis for his bills,  Sears amended its complaint to  include            common-law  claims for  breach  of  contract  and  breach  of            fiduciary   duty,  and  a  statutory  claim  of  "unfair  and            deceptive trade  practices" under  Mass. Gen.  Laws ch.  93A.            Sears sought reimbursement  for bills it had  previously paid            and an award of attorney's  fees.  The district court granted            Sears's  motion for summary judgment, and awarded it $833,409            --  the entire  amount of  Sears's payments  on  the disputed            bills -- and $112,000 in attorney's fees.                                         -2-                                          2                      Although  our  analysis  varies from  that  of  the            district  court,  the summary  judgment  record  reveals that            Goldstone & Sudalter has not met its burden of substantiating            its bills under Massachusetts law  and that Sears has met its            burden of showing unfair and deceptive practices.  We affirm.                                    I. The Facts.                                    _____________                      We state the facts in  the light most favorable  to            Goldstone &  Sudalter, the  party opposing  summary judgment.            Swain v. Spinney, 117 F.3d 1, 2 (1st Cir. 1997).             _____    _______                      In 1991, Daniel Goldstone, then a lawyer with three            years  of experience,  began  negotiations with  Mrs.  Janice            Sudalter  to purchase  the law practice  of her  late husband            Eldon Sudalter.   Eldon Sudalter was a  solo practitioner and            had been the primary collection attorney for Sears in eastern            Massachusetts  for the previous fifteen years.  Mrs. Sudalter            had worked in her husband's office  for most of that time and            her  regular duties included  preparing the  monthly billings            for Sears and other clients.                      In mid-1991, Goldstone  and Mrs. Sudalter  signed a            letter of intent,  and Goldstone formed Goldstone  & Sudalter            to  purchase  the assets  of  the practice  and  continue the            business.   In late  1991, the  relationship broke  down amid            mutual recriminations, and  Goldstone sued  Mrs. Sudalter  in            state court over the terms of their agreement.                                           -3-                                          3                      By early 1992,  Goldstone was in possession  of the            files of  the Eldon Sudalter  practice and was  servicing its            clients,  although   Goldstone  and  Mrs.  Sudalter  did  not            finally settle the state court litigation until January 1993.            The  settlement  provided  for  a  total  purchase  price  of            $150,000  for all of the  assets, tangible and intangible, of            the  Eldon Sudalter  practice.   Goldstone  had not  actually            worked with Attorney Sudalter, and had not discussed with him            the  firm's billing  practices.   Goldstone  had no  personal            knowledge of whether particular cases in Sudalter's files had            been  billed  or  were uncollectible,  or  had  been formally            closed, whether or not billed or uncollectible.                      Like  many  collection  attorneys, the  late  Eldon            Sudalter  operated on a contingency fee  basis.  Before 1987,            Sears  paid Attorney Sudalter  one-third of his  recovery and            reimbursed  him for  all  court  costs.   That  changed.   On            September   8,  1987,  Attorney   Sudalter  executed  a  form            "Attorney  Retention Agreement"  prepared  by Sears  for  its            collection attorneys throughout the United States.                      The  1987 Agreement  increased Attorney  Sudalter's            fee to forty-five  percent, but he was now  to be responsible            for all costs that were not reimbursed by debtors.  According            to  Mrs. Sudalter,  under  the new  agreement, "[W]e  take 45            percent of  what we  collect.   If we  can recover the  costs            [from debtors], great.  If we can't recover the costs, that's                                         -4-                                          4            just part of the agreement; that's why they're [Sears] paying            us  the  45  percent."   Goldstone  offered  no  evidence  to            contradict  Mrs.  Sudalter's  testimony  that the  forty-five            percent contingency fee was intended to take into account all            court costs.                      According  to  the 1987  Agreement,  the collection            attorney  was to  send all  monies  collected to  Sears on  a            monthly basis,  accompanied by a report; Sears would then pay            the attorney's contingency fee.  The 1987 Agreement provided:            "Attorney will be accountable for all monies collected on any            of the accounts and will submit at  least monthly a report to            Sears listing the accounts on which collections were made and            amount collected, together with a  check payable to Sears for            all  monies  collected."  (emphasis   supplied).    The  1987            ___            Agreement also  states, "Attorney waives any  attorney's lien            on Sears accounts and agrees  not to assert such lien against            Sears."                      Sears  did  not  send  individual  checks  to   the            Sudalter  firm for the particular matters for which they paid            Attorney Sudalter  his legal  fees or  costs over  the years.            Likewise, Attorney  Sudalter did  not customarily  record his            receipt of  the contingency fee  or costs from Sears  on each            debtor's  file.       Rather,  Attorney  Sudalter   regularly            deposited money from  debtors in a Sears client trust account            and  remitted a  single check  each month  to Sears  from the                                         -5-                                          5            account for  the total  amount of  that month's  collections.            Sears then remitted  the contingency fee for  that amount and            for any amounts that debtors  sent directly to Sears.  Before            1987, Sears would  reimburse court costs in  a single monthly            check if Sudalter could not collect them from debtors.  After            1987, Sears was  not responsible for those costs, although it            would still occasionally send Sudalter costs that debtors had            sent to  Sears instead of  Sudalter, again in a  single check            for that month.                        The  agreement set  forth  a separate  compensation            arrangement  if Sears  terminated  the agreement  or withdrew            customer accounts.   In that event, Sears  would pay Sudalter            $60  per hour  for his  time and  reimburse his  court costs,            although it would pay no such fees if Sudalter terminated the            agreement or was in breach of the agreement.  According to an            employee for a collection agency that Sears uses, withdrawing            accounts is  seen as a  "drastic" step because of  these fees            and  costs and  for that  reason  is rarely  employed in  the            collection industry.                       In early 1992, Goldstone  called Karen D'Angelo,  a            special  accounts  manager at  Sears,  to ask  why  Sears had            stopped sending cases to the  Sudalter firm, now operating as            Goldstone &  Sudalter.      D'Angelo was  a  low-level  Sears            employee who had been in her present job in Massachusetts for            two years  and  had first  spoken to  Attorney Sudalter  only                                         -6-                                          6            shortly  before he died in 1991.  D'Angelo informed Goldstone            that  Sears rated its  collection attorneys by  comparing the            amounts  the attorneys collected  monthly as a  percentage of            their  total portfolios.    According to  Goldstone, D'Angelo            informed him that  the law practice had "never  closed a file            in fifteen years," and urged the firm to close these accounts            to make its percentage appear more competitive.                      Goldstone began "closing" the old files,  informing            Sears  that  he would  attempt  no more  collections  on such            cases.    At  the  same  time,  he  implemented  the  billing            practices  at issue  in  this lawsuit.    Goldstone began  by            reviewing  thousands of old files contained in "dead storage"            in the basement  of the late Eldon  Sudalter's former office,            most  of which had  red stickers on them.   Some file folders            contained  handwritten  notations  of  court  costs  paid  by            Sudalter  and some  indicated whether  those  costs had  been            reimbursed by  debtors or Sears.  Goldstone prepared a letter            for signature by a Sears representative, "acknowledg[ing] the            assignment  to Goldstone  & Sudalter,  P.C.  of the  contract            executed by  Eldon B.  Sudalter, P.C." in  1987.   The letter            also referred to that  contract, stating, "Specifically, with            regard   to  the  'pre-1992  closed  cases,'  Sears  will  be            responsible for  costs expended  and attorneys'  fees at  the            rate of  $60.00  per  hour in  accordance  with  Exhibit  'B'                                         -7-                                          7            annexed to  the  1987 contract."    Emma Scott,  an  in-house            attorney for Sears, signed the letter.                        Goldstone  states that he  regarded this  letter as            "completely  consistent with  the earlier  Attorney Retention            Agreement"  and that he did not  believe that Scott's signing            of the  letter was intended  to alter the  terms of  the 1987            Agreement   in   any   way.      According   to   Goldstone's            interpretation  of the  agreement,  his  "closing" of  cases,            which  he did after his conversation with D'Angelo, triggered            Sears's  obligation to pay for court costs and work performed            on  an hourly basis under the contract's provisions regarding            cases "withdrawn"  by Sears.    There is  some evidence  that            Sears's in-house attorneys, at  least initially, agreed  with            Goldstone's interpretation.                      From  February 1,  1992  until  February 23,  1996,            Goldstone billed Sears for costs and attorney's  fees on each            of  over 15,000 files.  He  derived his cost figures from the            handwritten  notations  on the  outside of  the folders.   He            assumed that  Sudalter had  not been reimbursed  by Sears  or                   _            debtors unless there was a handwritten note to that effect on            the folder.   He derived  his figures for attorney's  fees by            estimating the amount of time that Sudalter had spent on each            file by examining the tasks  that the file reflected had been            performed,  or by having  non-attorney employees perform such                                         -8-                                          8            estimates  to his specifications.1   These bills  for "closed            cases" totaled over $1.1 million dollars; Sears paid $833,409            before bringing the present litigation.                       During this time,  Goldstone also submitted monthly            the money  he had  collected for Sears  on active  files, and            Sears paid the  forty-five percent contingency fee.   Despite            the 1987  Agreement and without Sears's  knowledge, Goldstone            also pocketed a portion of  the money he collected from Sears            debtors as reimbursement  for court costs before  sending the            balance to Sears each month.2                                            ____________________            1.      In  each  case,  the amount  of  attorney  time  that            Goldstone estimated was  minimal, almost always less  than an            hour.            2.  According to Goldstone, the  firm's practice of  skimming            reimbursement for costs off the top of collections from Sears            debtors was dictated by the law of champerty, which generally            requires  that clients  remain liable  for  expenses even  in            contingency fee arrangements.  According to Goldstone, a non-            attorney Sears employee  agreed with his interpretation.   In            fact, however, S.J.C.  Rule 3:05,  governing contingent  fees            for  Massachusetts   attorneys,  provides,   "Contingent  fee            arrangements concerning the collection of commercial accounts            . .  . made in accordance with  usual practices in respect of            such cases shall not be regarded as champertous and shall not            be subject to," inter alia, the requirement that "the client,                            __________            in   any   event,  is   to   be  liable   for   expenses  and            disbursements."   Regardless, the 1987 Agreement and DR 9-102            absolutely  forbid  Goldstone's unilateral  reimbursement  of            costs from  client funds  without the  client's knowledge  or            consent, even if he were entitled to such reimbursement.                      Under  the  Massachusetts   Rules  of  Professional            Conduct,  effective  January  1, 1998,  which  repeal  former            S.J.C.  Rule 3:05 and  the disciplinary rules,  attorneys may            make  payment of costs and expenses contingent on success for            all clients.  See Rule 1.8(e)(1).  Naturally, the requirement                          ___            to keep  client funds separate  remains in effect.   See Rule                                                                 ___            1.15.                                         -9-                                          9                      In mid-1992, Sears employees  began to question Mr.            Goldstone's  billings  when  they  noticed   that  his  bills            exceeded the amount  he had collected  for Sears for  several            months.  Goldstone explained that  many of the bills were not            for ongoing  cases, but for  closed cases  from the  Sudalter            firm.  He represented that Sears  had not previously paid for            these cases.  At a  meeting in the summer of  1992, Goldstone            showed a  box of files  to Karen D'Angelo, the  Sears special            accounts  manager with whom he had spoken earlier, explaining            that the  markings meant  that Sears had  not paid  for these            cases.   D'Angelo confirmed that  the account numbers  on the            files  represented genuine Sears collection accounts that had            been placed  with the  Sudalter firm,  but did  not challenge            Goldstone  on  the  meaning  of  the  file  folder  markings.            Goldstone  did not say that  this was just his interpretation            of the  file folder markings,  or that the markings  could be            interpreted differently.                      Later  that year,  higher-ranking Sears  executives            inquired about the  increase in expenses for  attorney's fees            that Goldstone's "closed cases" bills represented, asking the            office  to "stop" Goldstone's bills.  Renee Matta, D'Angelo's            supervisor, wrote  an e-mail explaining her  understanding of            the situation.                       This is not  something that I can "stop."  Attorney                      Goldstone  is charging for fees and costs that were                      never billed to us over an extended  period of time                      for services rendered  by Attorney Sudalter. .  . .                                         -10-                                          10                      I merely  asked him  to get  the bloodletting  over                      with  in 92  if  possible.   He  was  in today  and                      brought in the  "last" of the culling  process.  It                      should peak out  at $605,000 for the year!   All of                      these  cases should have (at some time) been billed                      to Sears --  but were not.  Mrs.  Sudalter has said                      that she had intended to  bill Sears -- but didn't.                      . . . I have reviewed many of the accounts and find                      the  bookkeeping to  be in  order.   Mr.  Goldstone                      merely  followed the intent of the contract when he                      was  told that accounts  that have not  been "paid"                      should not remain in his portfolio. . . .             Although the  e-mail states that Matta "reviewed  many of the            accounts," the  record reveals that  such review was  only to            determine whether  the account numbers accurately referred to            Sears debtors.  As Matta explained,                       [O]n  some  invoices  it was  difficult  for  us to                      determine  what we were  paying for.   The accounts                      were  very, very  old  .  .  .  .    I  recall  [my                      employees]   getting   some   clarification   [from                      Goldstone] on  some account  numbers. . .  .   I do                      recall them  getting some clarification  on account                      names to  substantiate the  name that  we had  been                      billed for.                            Other than the  review to see if the  account numbers matched            those of Sears's debtors,  Matta relied on Goldstone for  her            information.  Apart from reviewing the account numbers, Sears            employees did not independently review the law firm's records            to  determine   whether  the  amounts  Goldstone  billed  for            attorney  time  or  costs were  accurate;  they  trusted that            Goldstone, as their attorney, had a basis for those figures.                      Believing  that Goldstone had a basis for his bills            and  that the contract required the payments, Sears employees            did not question Goldstone again until the bills continued to                                         -11-                                          11            arrive  throughout 1993 and  early 1994 without  any apparent            end  in sight.  When Sears again  began to question the bills            and  to  delay its  payments  to Goldstone,  he  took action.            Goldstone  threatened to deduct his fees from money collected            from Sears's debtors.   He also noted in a letter that he and            the firm felt  "restrained from acting  in our client's  best            interest because of" Sears's failure  to pay.  In 1994, Sears            finally terminated its relationship with Goldstone & Sudalter            and brought the present action for an accounting to determine            whether   Goldstone's  bills  were   in  order.     Goldstone            counterclaimed for the unpaid balance.                      At  deposition,  Mrs. Sudalter  testified  that she            performed bookkeeping duties  for her husband's firm  and was            intimately  familiar   with  its  billing  practices.     She            testified that Sears  did not owe anything on  the old files,            i.e. files in dead storage of  whatever year, and that it was            impossible to  determine from the outside of a folder whether            Sears had paid  a fee for  the file.   Although he had  never            discussed with Attorney  Sudalter the system  for determining            whether  Sears had  paid  a  fee or  reimbursed  costs for  a            particular case, Goldstone's position was that the costs were            self-evident from  a review  of the  case jacket.   Likewise,            Goldstone  contends, the fee  could be reliably  estimated by            reviewing  the work performed  and determining, based  on his            experience, how much time each task ordinarily required.                                         -12-                                          12                      Mrs. Sudalter noted that, after 1987, Sears was not            obligated to reimburse for costs, and that she did not record            Sears's  payment of the forty-five percent contingency fee on            the outside  of each file  folder because it would  have been            time-consuming.   Mrs. Sudalter  also testified that  the red            stickers that many of the file folders contained marked those            cases as "closed," that the firm's "closed" cases were either            fully  paid up  or uncollectible,  and that the  law practice            never  intended  to  submit any  further  bills  to Sears  on            "closed" cases.  A preliminary review of a mere fourteen case            files demonstrated that Sears had already paid legal fees for            work performed on  some substantial portion  of the cases,  a            fact which Goldstone admitted at his deposition.                      Following  these  depositions,  Sears  amended  its            complaint,  alleging  a fraudulent  double-billing  scheme by            Goldstone.   Sears asked  for damages of  $833,409 to recover            all the  fees it had  paid for old  cases, and  also demanded            attorney's fees under Mass. Gen.  Laws ch. 93A for "unfair or            deceptive trade  practices."   On  cross-motions for  summary            judgment,  the   district  court  ruled  for  Sears,  finding            Goldstone in breach of his  contract and fiduciary duty as an            attorney and in  violation of Mass. Gen.  Laws ch. 93A,    2.            The  district court awarded the full  $833,409 in damages and            $112,000 in attorney's fees.                                         -13-                                          13                      Our review of the district court's grant of summary            judgment is de novo.  Swain, 117 F.3d at 5.                                  _____                    II.  Goldstone's Obligations In Billing Sears                    _____________________________________________                      The   attorney-client   relationship   is   "highly            fiduciary" in  Massachusetts.    Hendrickson  v.  Sears,  310                                             ___________      _____            N.E.2d  131, 135 (Mass. 1974);  Dunne v. Cunningham, 125 N.E.                                            _____    __________            560, 561 (Mass. 1920).  To state that elastic truism does not            answer the question of the level  of duty which is imposed on            a lawyer in billing clients.  The district court found that a            particularly  high   level   of  duty   was  required   here,            analogizing this case to situations  where the attorney has a            separate   business   relationship   with   a  person   while            simultaneously  representing  that  person as  counsel.   See                                                                      ___            Goldman  v. Kane, 329  N.E.2d 770 (Mass. App.  Ct. 1975).  To            _______     ____            the  extent  that  the  district  court's  opinion  might  be            misunderstood   to  suggest   that  the   separate  "business            transaction"  rules  in  Goldman  apply  to ordinary  billing                                     _______            arrangements  between a lawyer  and client when  the lawyer's            sole relationship  with the  person who is  the client  is as            counsel, we clarify that this is not the law.                      To  the extent that  the district court  was ruling            that the  more stringent  Goldman business  transaction rules                                      _______            apply  when an attorney purchases a practice and subsequently            bills for services rendered earlier by that practice, we need            not and do  not reach that issue.   We leave that  issue more                                         -14-                                          14            appropriately to the  Massachusetts courts to decide  in some            future  case.3   We  affirm  on the  basis  that the  summary            judgment  record shows  no  dispute  of  material  fact  that            Goldstone  violated the  usual  duties owed  by Massachusetts            lawyers when billing  clients and that he did so  in a manner            which was in breach of his contract and in violation of Mass.            Gen. Laws ch. 93A.                      In  Goldman, an attorney sued his client to enforce                          _______            a  loan agreement whose  terms greatly favored  the attorney.            The  loan agreement was  an independent  business transaction            between  the two.   In  this context,  the court  declined to            enforce  the agreement: "When  an attorney bargains  with his            client  in  a  business  transaction in  a  manner  which  is            advantageous to  himself, and  if that  transaction is  later            called  into question,  the court  will subject  it  to close            scrutiny."    Id. at  773.    When  there are  such  business                          ___            transactions, the fiduciary relationship requires a series of            heightened  duties   in  light  of   the  heightened   risks.            Specifically, these heightened  duties require the  lawyer to            meet the burden  of showing that (1) the  transaction "was in            all respects fairly and equitably conducted" and that (2) the                                            ____________________            3.  The  new  Massachusetts  Rules  of Professional  Conduct,            effective January 1,  1998, do not expressly  address whether            the  business transaction rules  should be applied  to such a            situation.   See Rule 1.8 (governing attorney-client business                         ___            transactions);  Rule  1.17  (governing  the  sale  of  a  law            practice).                                         -15-                                          15            client had received "independent advice in the matter or else            receive[d] from the attorney such  advice as the latter would            have  been  expected to  give  had the  transaction  been one            between his client and  a stranger."  Id.4   The Goldman rule                                                  ___        _______            has been  adopted by the Supreme  Judicial Court.  See  In re                                                               ___  _____            Stern,  682  N.E.2d   867,  871  (Mass.  1997)   (finding  an            _____            attorney's entering into a business transaction with a client            without urging an independent legal opinion a violation of DR            5-104 and  DR 1-102); Israel  v. Sommer, 197 N.E.  442 (Mass.                                  ______     ______            1935) (holding a trust agreement favoring an attorney invalid            for failure to obtain disinterested advice); Hill v. Hall, 77                                                         ____    ____            N.E. 831 (Mass. 1906) (holding  a sale invalid for failure to            obtain disinterested advice).  The new Massachusetts Rules of            Professional Conduct  restate the  Goldman requirements  as a                                               _______            separate  rule, see Rule 1.8,5  and essentially the same rule                            ___                                            ____________________            4.  Under  Goldman,  a prudent  attorney  would refrain  from                       _______            attempting  personally  to  give  the required  disinterested            advice.  The  attorney in Goldman had advised  his client not                                      _______            to enter  into the loan  agreement, yet the court  found that            "in the  circumstances of  this case,  [the attorney's]  full            disclosure and his advice were not sufficient to immunize him            from liability."  Id.                              ___            5.  Rule 1.8(a) provides:                      "A  lawyer   shall  not   enter  into  a   business                      transaction  with a client  or knowingly acquire an                      ownership, possessory, security, or other pecuniary                      interest adverse to a client unless:                           "(1) the transaction  and terms  on which  the                           lawyer acquires  the  interest  are  fair  and                           reasonable  to   the  client  and   are  fully                           disclosed and  transmitted in  writing to  the                           client in  a  manner which  can be  reasonably                           understood by the client;                                         -16-                                          16            has been proposed by the  ALI, see Restatement (Third) of the                                           ___ __________________________            Law  Governing Lawyers    207  (Proposed Final  Draft No.  1,            ______________________            March 29,  1996) (relying  on  Goldman and  similar cases  to                                           _______            require  independent legal  advice for  business transactions            between lawyers and clients).6                      Business  transactions  other than  fee  agreements            between  lawyers  and  clients create  special  conflicts  of            interest that  require the precaution of  independent advice.            However, attorneys, like fiduciaries  generally, are entitled            to  receive compensation for  their services, and  may pursue            their  legitimate  interests  in  receiving  payment  in  the            ordinary  fashion.   Thus,  seeking  to enforce  a  valid fee            contract  is an  exception to  the  general requirement  that                                            ____________________                           "(2) the   client   is  given   a   reasonable                           opportunity to seek  the advice of independent                           counsel in the transaction; and                           "(3) the client consents in writing thereto."            6.  As proposed by the ALI, Restatement   207 provides:                                        ___________                      "A  lawyer may  not participate  in  a business  or                      financial  transaction  with  a  client,  except  a                      standard commercial transaction in which the lawyer                      does not render legal services, unless                            "(1) the client has adequate information about                           the terms  of the  transaction  and the  risks                           presented by the lawyer's involvement in it;                           "(2)  the  terms   and  circumstances  of  the                           transaction  are  fair and  reasonable  to the                           client; and                           "(3) the client consents to the lawyer's  role                           in the transaction  under the limitations  and                           conditions  provided  in      202  [concerning                           client consent to conflicts of interest] after                           being  encouraged,  and   given  a  reasonable                           opportunity, to seek  independent legal advice                           concerning the transaction."                                         -17-                                          17            fiduciaries  subordinate their  interests to  those of  their            clients.   See generally  Restatement (Second)  of Agency                           _____________  _______________________________            441, 463  (1957) (providing  that a principal  has a  duty to            compensate his or her agent and that an agent may take action            in the  case  of  breach);  Restatement (Third)  of  the  Law                                        _________________________________            Governing Lawyers     29, 29A (P.F.D. No. 1,  March 29, 1996)            _________________            (providing that a client has an obligation  to compensate his            or  her lawyer  and that  a lawyer  may enforce  a valid  fee            contract).                      Massachusetts law does not regard the  ordinary fee            contract  as  a  "business  transaction  between  lawyer  and            client" subject to the special requirements of Goldman.   See                                                           _______    ___            Coupounas  v. Madden, 514 N.E.2d 1316 (Mass. 1987) (affirming            _________     ______            a client's  duty to pay  a lawyer-accountant and  refusing to            hold  invalid notes that client  signed for failure to obtain            independent legal advice);  see also  Restatement (Third)  of                                        ________  _______________________            the  Law Governing Lawyers   207  cmt. a (P.F.D. No. 1, March            __________________________            29, 1996)  ("The requirements [for  business transactions] do            not apply to ordinary client-lawyer fee agreements . . . .").            It would make little sense  to require an attorney, embarking            on representation  of a client and entering  into an ordinary            fee agreement, to advise the  client to hire another attorney            to  give  "independent  legal  advice"  concerning  that  fee            agreement.                                         -18-                                          18                      Nevertheless, this  case still  turns on  the rules            for the regulation of attorney's fees which Massachusetts has            established  to protect clients and to preserve the integrity            of  the bar.   Massachusetts  has established  that a  lawyer            always bears the burden of proof in any proceeding to resolve            a  billing dispute, whether the lawyer appears as a plaintiff            seeking  to recover a fee  or as a defendant  in a suit for a            refund.  First  National Bank of Boston v.  Brink, 361 N.E.2d                     ______________________________     _____            406, 410 (Mass. 1977) (suit for an accounting and refund of a            large fee  for tax advice);  Smith v. Binder, 477  N.E.2d 606                                         _____    ______            (Mass. App. Ct. 1985) (suit for an accounting and refund of a            portion  of large retainer fee); see also Restatement (Third)                                             ________ ___________________            of the Law Governing Lawyers   56(2) (P.F.D. No. 1, March 29,            ____________________________            1996) (following the Brink rule).  As the  Restatement notes,                                 _____                 ___________            "A lawyer . . . will usually have better access than a client            to evidence about the  lawyer's own services . . . ."  Id. at                                                                   ___              56  cmt. c.   That concern is particularly  salient in this            case, where  the items  of evidence  that Goldstone  presents            consist  of cryptic handwritten notations on several thousand            old file folders.                      To  satisfy an  attorney's  burden  of proof  under            Massachusetts law,  he or she  must provide more  than purely            speculative evidence to support a  claim that a client owes a            particular charge  in order  to defeat  a properly  supported            motion for  summary judgment.   See Beatty  v. NP  Corp., 581                                            ___ ______     _________                                         -19-                                          19            N.E.2d  1311, 1314-16 (Mass. App. Ct. 1991) (finding evidence            of an agreement by  a client to pay  a performance bonus  too            "isolated" to  support  attorney's claim);  accord  Davis  v.                                                        ______  _____            Glenville  Haldi, P.C.,  253 S.E.2d  207, 208  (Ga. Ct.  App.            ______________________            1979) (rejecting  attorney's claim  where  he introduced  "no            evidence indicating the  amount of time spent on  the case or            the amount of work he performed," but only the attorney's own            opinion that a prospective contingency fee would be $25,000).            Scanty  or speculative evidence concerning the value of legal            services  is insufficient to  create a genuine  issue for the            trier of  fact.  See  Beatty, 581 N.E.2d at  1315-16 (summary                             ___  ______            judgment  appropriate);  accord  Davis,  253  S.E.2d  at  208                                     ______  _____            (directed  verdict appropriate).  Placing the burden of proof            on the  attorney is  sensible in light  of the  difficulty of            monitoring the attorney's services.                      While Sears is  the moving party, it  has supported            its  summary  judgment  motion  by  pointing   to  undisputed            material facts in the record.  Now, the burden of proof rests            with Goldstone to  present clear evidence that the  bills are            owed by Sears.  "Once the moving party has properly supported            her  motion for  summary judgment, the  burden shifts  to the            nonmoving party, with  respect to each issue on  which he has            the  burden of  proof, to  demonstrate that  a trier  of fact            could reasonably find  in his favor."  DeNovellis v. Shalala,                                                   __________    _______            1997  WL 527912, at  *5 (1st Cir. Sept.  2, 1997).  Goldstone                                         -20-                                          20            has failed to demonstrate that a trier of fact could find  in            his favor.   The  evidence he  presented to  substantiate the            bills he submitted for over 15,000 files consists entirely of            his own interpretation of the handwritten markings  contained            on the  outside of  the files  and his  own estimates  of the            amount  of time that Sudalter  spent on cases stretching over            fifteen years.  He lacks personal knowledge that Sudalter had            not already  billed Sears on these accounts or had determined            that they were not to be billed.                      On  the summary judgment  record, Mrs.  Sudalter is            the  only competent witness to her late husband's bookkeeping            practices;  Goldstone has no personal knowledge regarding the            firm's records  and never even  met Attorney Sudalter.7   See                                                                      ___            F.R.C.P. 56(e) ("Supporting and  opposing affidavits shall be            made on personal knowledge . . . and shall show affirmatively            that the  affiant  is competent  to  testify to  the  matters            stated therein.").   Mrs. Sudalter  has testified that  it is            impossible to  determine from  the old  file folders  whether                                            ____________________            7.  Goldstone  also calls our  attention to the  affidavit of            Frederick Casson, which  was stricken by the  district court.            Goldstone failed  to disclose  Casson's identity pursuant  to            F.R.C.P. 26(a) at the outset of the litigation.  The district            court  ordered   the   affidavit   stricken,   the   sanction            established  by  F.R.C.P.  37(c)(1).    The  district court's            decision was well  within its discretion.   See Rivera-Flores                                                        ___ _____________            v.  Bristol-Myers Squibb Caribbean, 112 F.3d  9, 14 (1st Cir.                ______________________________            1997) ("Our review of the  district court's discovery-related            decisions  is for abuse of  discretion, and we will intervene            in  such  matters  only  upon a  clear  showing  of  manifest            injustice.").                                         -21-                                          21            Sears owed any money for  attorney's fees and costs, that the            Sudalter firm never intended to submit further bills to Sears            for files in "dead storage" and that the  red stickers on old            files  indicate that  the  matters were  considered "closed."            Goldstone's only  response is to  say that  Mrs. Sudalter  is            biased against him.  But that does not satisfy  his burden to            "set  forth specific facts  showing that  there is  a genuine            issue" for trial.  Anderson  v. Liberty Lobby, Inc., 477 U.S.                               ________     ___________________            242, 248 (1986); DeNovellis, 1997 WL 527912, at *5.   A party                             __________            cannot create an  issue for the trier of fact "'by relying on            the  hope that  the jury  will not  trust the  credibility of            witnesses. . . .  There must be some affirmative evidence . .            .  .'"   Dragon  v.  Rhode  Island  Dep't of  Mental  Health,                     ______      ________________________________________            Retardation and  Hospitals, 936 F.2d  32, 35 (1st  Cir. 1991)            __________________________            (quoting Wright  and Miller, Federal Practice  and Procedure:                                         ________________________________            Civil  2d    2527  (1st ed.  1971) (misquoted  as    2528  in            _________            Dragon)).             ______                      Goldstone  nonetheless  urges  us   to  vacate  the            summary judgment  for Sears and  remand the case in  order to            require   Sears  to  establish  its  injury  by  showing  the            impropriety of his bills for each  of over 15,000 files.   As            the district  judge noted,  "[i]t would  be perverse  for the            court  to hold  Sears  . . . to  a  standard the  [defendant]            himself  could never  achieve."   This  case illustrates  the            reasons  for the  Commonwealth's rule  that  a lawyer  always                                         -22-                                          22            bears the burden to prove  that he is owed compensation under            a valid fee agreement.  The burden of proof was not on Sears;            it was on Goldstone.  He   has had his opportunity to satisfy            his  burden.   While Sears's  record  keeping practices  were            sloppy at best and Sears does  not evoke much sympathy, it is            the  lawyer's burden  to justify  amounts  billed.8   Because            Goldstone  has failed to produce evidence that Sears actually            owed Sudalter  any of  the $833,409  that represents  Sears's            payment  on the  closed files,  the  district court's  damage            award was proper.9                                            ____________________            8.  Goldstone argues  that a ruling  for Sears means  that no            attorney  can  recover  for  his  work  in   the  absence  of            contemporaneous time records.   The issue  is not whether  an            attorney may  charge fees in the absence of contemporary time            records.  It  is whether a lawyer  without personal knowledge            that  a bill  is  owed  has  produced  sufficient  admissible            evidence to survive  summary judgment that the  obligation in            fact exists.   We  also note that  in the  purchase of  a law            practice, the  lack of  adequate billing  records to  support            accounts  receivable  can,  of course,  be  reflected  in the            purchase price.            9.  Goldstone's attorney contended in oral argument that some            of the $833,409 in bills that Sears paid  were not for closed            files, but for new  work that Goldstone performed.   However,            the  district  court   had  ordered  Goldstone  to   make  an            accounting of invoices  he submitted for fees and  costs that            he  claimed  were owing  to  his deceased  partner,  Eldon B.            Sudalter, and according to the district court, "[t]he parties            agree[d] that the  relevant sum charged to and  paid by Sears            [was]  $833,409.  Goldstone   &  Sudalter's  own   accountant            provided that figure as  "an accounting of all charges  . . .            for  'closed accounts' . . . ."  Goldstone's attorney did not            dispute  that  figure  at the  damages  hearing,  but instead            contended that  Sears had  not shown that  all the  files had            previously  been billed.  Given Goldstone's burden, that fact            is  not material  to the  damages issue.   Goldstone  has not            sustained his  argument that  part of  the $833,409  judgment            covers bills for work that he himself  performed, rather than                                         -23-                                          23                                   III. Chapter 93A                                        ___________                      The district court found that  the undisputed facts            established   that   Goldstone's  conduct   was   "unfair  or            deceptive," in  violation of Chapter  93A.  This  Chapter 93A            finding,  and the finding that Sears  suffered harm from that            violation, entitled  Sears to  an award  of attorney's  fees.            Mass. Gen. Laws ch. 93A,   11; NASCO v. Public Storage, Inc.,                                           _____    ____________________            1997 WL 610055, at *1 (1st Cir. Oct. 8, 1997).                      Chapter  93A  applies  to  attorneys, and  unlawful            billing or other  unethical conduct can constitute  a Chapter            93A violation.   See  Guenard v. Burke,  443 N.E.2d  892, 896                             ___  _______    _____            (Mass. 1982) (reliance on an illegal contingent fee agreement            to collect  a fee violates  Chapter 93A); Brown  v. Gerstein,                                                      _____     ________            460  N.E.2d 1043,  1051-52 (Mass.  App.  Ct. 1984)  (lawyer's            unethical  deceit toward his clients concerning the status of            litigation  violated  Chapter  93A).   To  establish  that no            genuine  issue of  material fact  existed on the  Chapter 93A            claim, Sears is  required to show  that the undisputed  facts            reveal that Goldstone's  conduct "falls 'within at  least the            penumbra of  some common-law, statutory, or other established            concept of unfairness' or  is 'immoral, unethical, oppressive            or unscrupulous.'"  Cambridge Plating  Co. v. NAPCO, Inc., 85                                ______________________    ___________            F.3d 752,  769 (1st Cir.  1996) (quoting PMP Assoc.,  Inc. v.                                                     _________________            Globe Newspaper Co., 321 N.E.2d 915, 917 (Mass. 1975)).              ___________________                                            ____________________            bills for Sudalter's work.                                         -24-                                          24                      Goldstone's  breach  of  his obligations  in  these            circumstances  is  sufficient  to  establish  a  Chapter  93A            violation. Cambridge  Plating, 85  F.3d at  769; Doucette  v.                       __________________                    ________            Kwiat,   467  N.E.2d  1374  (Mass.  1984)  (finding  that  an            _____            attorney's collection of  a fee to which he  was not entitled            under his fee agreement  violated Chapter 93A).  Furthermore,            Goldstone  admitted to  conduct  which constitutes  unethical            behavior  in   skimming  his  costs  off  the  top  of  Sears            collections  without  Sears's  knowledge  or consent  and  in            violation of his  contract.  See DR 9-102.  Violations of the                                         ___            rules  governing the legal  profession are evidence  of legal            malpractice,   and   are  also   relevant   in  Chapter   93A            determinations.   See Fanaras Enterprises, Inc. v. Doane, 666                              ___ _________________________    _____            N.E.2d 1003,  1006 (Mass. 1996);  Brown, 460 N.E.2d  at 1050,                                              _____            1052 n.22.                      The  district  court's  finding  of a  Chapter  93A            violation does  not  depend on  whether  Goldstone  knowingly            devised a scheme to defraud Sears or was merely opportunistic            and reckless in  making the assumptions he did  regarding the            files.   Whether  or not  Goldstone's  conduct was  knowingly            fraudulent,  the record clearly  shows that his  conduct fell            "within  at least the penumbra of some common-law, statutory,            or  other  established  concept  of unfairness."    Cambridge                                                                _________            Plating,  85 F.3d  at 769  (citation  and internal  quotation            _______            marks  omitted).   Sears did  not seek  the double  or treble                                         -25-                                          25            damages  that are available for knowing violations of Chapter            93A, see  Mass. Gen.  Laws ch.  93A,    11, so  the issue  of                 ___            Goldstone's knowledge  is not  a "genuine  issue of  material            fact"  that  would  defeat summary  judgment.    The district            court's award of  attorney's fees of $112,000  was warranted.            Goldstone  does not  dispute the  amount  of attorney's  fees            awarded.                      The  district court's  grant  of summary  judgment,            damages and attorney's fees is affirmed.                                           ________                                         -26-                                          26
