Attorney Grievance Comm'n of Md. v. Johnson

Hotten, J. On November 3, 2017, the Attorney Grievance Commission of Maryland, acting through Bar Counsel ("Petitioner"), filed a Petition for Disciplinary or Remedial Action against Jerome P. Johnson ("Respondent"). After Petitioner had made reasonable efforts to serve Respondent, Judge Paul W. Ishak of the Circuit Court for Harford County ("the hearing judge"), authorized substitute service upon the Client Protection Fund pursuant to Maryland Rule 19-723. Respondent failed to file an answer to the petition "within 15 days after a copy of the petition and order was mailed ..." as required by Md. Rule 19-724(a)(2). On May 17, 2018, Petitioner filed a Request for Order of Default.

See Md. Rule 19-724(c). On May 21, 2018, the hearing judge signed an Order of Default, which included notice that a hearing would be held on June 29, 2018 at 9:00 a.m. The clerk of the circuit court issued notice of the entry of default on May 22, 2018. Respondent did not move to vacate the order within 30 days after its entry.

See Md. Rule 2-613(c) and (d). Respondent failed to appear in court on June 29, 2018, when the case was called for a hearing. At the June 29, 2018 hearing, Petitioner submitted an exhibit binder containing seventeen numbered exhibits that the court received in evidence. The hearing judge considered the exhibits and averments of the petition, recognizing the prior pronouncement of the Court of Appeals that "where an order of default has been entered in a [disciplinary] case and not vacated, the hearing judge may accept the averments in the Petition for Disciplinary or Remedial Action as admitted and is not obligated to conduct a hearing." Attorney Grievance Commission v. Johnson , 450 Md. 621 , 642, 150 A.3d 338 , 350-51 (2016).

THE HEARING JUDGE'S FINDINGS OF FACT We summarize the hearing judge's findings of fact. Respondent was admitted to the Maryland Bar on June 23, 1998. Pursuant to an Opinion and Order filed December 14, 2016 in Misc. Docket AG No. 68, September Term, 2015, this Court suspended Respondent from the practice of law in Maryland for one year, effective thirty days from the date of the opinion.

Attorney Grievance Commission v. Johnson , 450 Md. 621 , 150 A.3d 338 (2016), reconsideration denied Jan. 19, 2017. Respondent's one-year suspension took effect January 13, 2017. 1 The misconduct charges outlined in the present matter involve events that preceded Respondent's suspension. During a period of approximately eight months prior to his suspension, while the disciplinary matter resulting in that suspension was pending, Respondent repeatedly ignored Petitioner's inquiries and lawful requests for information based on PNC Bank's reported overdraft in Respondent's attorney trust account, discussed in detail infra . When Petitioner's efforts to obtain a response from Respondent proved fruitless, Petitioner filed the additional disciplinary charges that are currently at issue.

Petitioner's action was filed after Respondent was suspended from practicing law. As such, these particular allegations were not before us in crafting our sanction of suspension in the previous Johnson opinion. On or about April 21, 2016, Petitioner received a notice from PNC Bank, reporting an overdraft on Respondent's Attorney Trust Account (account number ending in 0313). The reporting form indicated that an item in the amount of $37.54 on February 22, 2016, caused an overdraft of $30.37.

On April 28, 2016, Petitioner sent Respondent identical letters by both regular and certified mail to the address maintained by Respondent with the Client Protection Fund of the Bar of Maryland. Petitioner requested a written explanation for the overdraft, as well as account records specified in the letter. The envelope containing the certified letter was returned to Petitioner "unclaimed" by the post office after two notices were left at the P.O. Box maintained by Respondent. The letter sent by regular mail was not returned and presumably was delivered to Respondent's post office box.

However, Respondent failed to respond to Petitioner's April 28, 2016 correspondence. On June 6, 2016, Charles E. Miller, IV, an investigator for Petitioner, spoke to Respondent and received verbal agreement that Respondent would provide a response by June 10, 2016. Respondent failed to respond by that date. On July 12, 2016, Mr. Miller sent Respondent a letter describing their previous communication and directing him to respond to Petitioner's overdraft inquiry by July 22, 2016.

Respondent failed to respond by that date. On August 15, 2016, following further communication with Mr. Miller, Respondent faxed copies of his trust account bank statements for the months of February through May 2016, without any written explanation concerning the cause of the February 22, 2016 overdraft. Respondent failed to provide other account records previously requested in Petitioner's April 28, 2016 correspondence. On August 31, 2016, Petitioner wrote to Respondent and again requested an explanation for the overdraft, as well as trust account records that attorneys are required to maintain in accordance with the Maryland Rules.

The letter requested a response by September 16, 2016. On September 16, 2016, Respondent emailed a request for a two-week extension in which he stated that the additional documents requested "will require more time [to] gather." By letter dated September 27, Petitioner acknowledged the extension request and confirmed that a response was due by September 30, 2016. Respondent failed to respond by September 30. On November 14, 2016, Petitioner received a copy of a letter from Respondent dated September 30, 2016, with an enclosure identified by Respondent as "my client chronological transaction record for my trust account which has been requested in your previous correspondence." (emphasis in original).

The copy of the September 30, 2016 letter received by Petitioner on November 14, 2016, bore a handwritten post-it note on which Respondent wrote, in part, "Copy of original mailed 9-30-16." THE HEARING JUDGE'S CONCLUSIONS OF LAW Based on the aforementioned findings of fact, the hearing judge concluded that Respondent violated the Maryland Attorneys' Rules of Professional Conduct ("MARPC") 2 19-301.15(a) (Safekeeping Property), 19-407 (Attorney Trust Account Record-Keeping), 19-308.1(b) (Disciplinary Matters), and 19-308.4(a) and (d) (Misconduct). The following are summaries of the relevant MARPC and the hearing judge's reasoning for concluding Respondent violated each part. Rule 19-301.15 Safekeeping Property (1.15) (a) An attorney shall hold property of clients or third persons that is in an attorney's possession in connection with a representation separate from the attorney's own property. Funds shall be kept in a separate account maintained pursuant to Title 19, Chapter 400 of the Maryland Rules, and records shall be created and maintained in accordance with the Rules in that Chapter.

Other property shall be identified specifically as such and appropriately safeguarded, and records of its receipt and distribution shall be created and maintained. Complete records of the account funds and of other property shall be kept by the attorney and shall be preserved for a period of at least five years after the date the record was created. (emphasis added). The hearing judge concluded that Respondent violated Rule 19-301.15(a) because he failed to create and maintain records relating to the funds in his attorney trust account.

The hearing judge found that this conclusion was supported by "Respondent's inability to produce such records when [Petitioner] requested him to do so on numerous occasions." According to the hearing judge, Respondent should have been able to produce proper records, particularly because the Rule specifies preserving records for a minimum of five years. Rule 19-407 Attorney Trust Account Record-Keeping (a) Creation of Records. The following records shall be created and maintained for the receipt and disbursement of funds of clients or of third persons: (1) Attorney Trust Account Identification. An identification of all attorney trust accounts maintained, including the name of the financial institution, account number, account name, date the account was opened, date the account was closed, and an agreement with the financial institution establishing each account and its interest-bearing nature.

(2) Deposits and Disbursements. A record for each account that chronologically shows all deposits and disbursements, as follows: (A) for each deposit, a record made at or near the time of the deposit that shows (i) the date of the deposit, (ii) the amount, (iii) the identity of the client or third person for whom the funds were deposited, and (iv) the purpose of the deposit; (B) for each disbursement, including a disbursement made by electronic transfer, a record made at or near the time of disbursement that shows (i) the date of the disbursement, (ii) the amount, (iii) the payee, (iv) the identity of the client or third person for whom the disbursement was made (if not the payee), and (v) the purpose of the disbursement; (C) for each disbursement made by electronic transfer, a written memorandum authorizing the transaction and identifying the attorney responsible for the transaction. (3) Client Matter Records. A record for each client matter in which the attorney receives funds in trust, as follows: (A) for each attorney trust account transaction, a record that shows (i) the date of the deposit or disbursement; (ii) the amount of the deposit or disbursement; (iii) the purpose for which the funds are intended; (iv) for a disbursement, the payee and the check number or other payment identification; and (v) the balance of funds remaining in the account in connection with the matter; and (B) an identification of the person to whom the unused portion of a fee or expense deposit is to be returned whenever it is to be returned to a person other than the client.

(4) Record of Funds of the Attorney. A record that identifies the funds of the attorney held in each attorney trust account as permitted by Rule 19-408(b). (b) Monthly Reconciliation. An attorney shall cause to be created a monthly reconciliation of all attorney trust account records, client matter records, records of funds of the attorney held in an attorney trust account as permitted by Rule 19-408(b), and the adjusted month-end financial institution statement balance.

The adjusted month-end financial institution statement balance is computed by adding subsequent deposits to and subtracting subsequent disbursements from the financial institution's month-end statement balance. (c) Electronic Records. Whenever the records required by this Rule are created or maintained using electronic means, there must be an ability to print a paper copy of the records upon a reasonable request to do so. (d) Records to be Maintained.

Financial institution month-end statements, any canceled checks or copies of canceled checks provided with a financial institution month-end statement, duplicate deposit slips or deposit receipts generated by the financial institution, and records created in accordance with section (a) of this Rule shall be maintained for a period of at least five years after the date the record was created. Based on Respondent's inability to produce the aforementioned records, particularly Respondent's inability to produce a chronological record of all deposits and disbursements (subsection (a)(2) ), individual client matter records (subsection (a)(3) ), and financial institution month-end statements, canceled checks and duplicate deposit slips or deposit receipts (subsection (d) ), the hearing judge found that Respondent violated Rule 19-407. Rule 19-308.1 Bar Admission and Disciplinary Matters (8.1) An applicant for admission or reinstatement to the bar, or an attorney in connection with a bar admission application or in connection with a disciplinary matter, shall not: * * * (b) fail to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority , except that this Rule does not require disclosure of information otherwise protected by Rule 19-301.6 (1.6). (emphasis added).

The hearing judge accepted the averments of the petition and Petitioner's supporting evidentiary submission, which established that Respondent knowingly failed to respond to Petitioner's letters dated April 28 and July 12, 2016. Both of these letters sought Respondent's explanation regarding the overdraft of his PNC trust account and requested records for that account. On June 6, 2016, Petitioner's investigator, Mr. Miller,