Attorney Grievance Comm'n of Md. v. Steinhorn

Argued before Barbera, C.J., Greene, * Adkins, McDonald, Watts, Hotten, Getty, JJ. Barbera, C.J. *^{189 824} On June 26, 2017, the Attorney Grievance Commission of Maryland ("Petitioner"), acting through Bar Counsel, filed in this Court a Petition for Disciplinary or Remedial Action ("Petition") against Neil Warren Steinhorn ("Respondent"). The Petition alleged, among other things, 1 violations of the Maryland Lawyers' Rules of Professional Conduct ("MLRPC") 3.3 (Candor Toward the Tribunal) and 8.4 (Misconduct). 2 Those charges arise from misleading complaints *¹⁹⁰ Respondent filed with the District Court of Maryland sitting in Baltimore County while representing the Council of Unit Owners of Kingswood Commons, Inc. ("Kingswood"), a homeowners' association, in several debt collection cases. Specifically, Respondent inflated the damages sought on the complaint form by thirty percent without separately indicating, as the form requires, that this increase constituted his attorney's fees.

Pursuant to Maryland Rules 19-722(a) and 19-727, this Court designated the Honorable Keith R. Truffer ("hearing judge") of the Circuit Court for Baltimore County to conduct an evidentiary hearing and make findings of fact and conclusions of law. The hearing was held on March 13, 2018. Respondent testified and presented evidence on his behalf. On April 27, 2018, the hearing judge issued written findings of fact and conclusions of law, concluding that Respondent did not commit any violations of the MLRPC.

Bar Counsel, on behalf of Petitioner, took no issue with the hearing judge's findings of fact but filed exceptions to each conclusion of law. Petitioner asserts that Respondent violated MLRPC 3.3(a)(1) and 8.4 because he provided the District Court with false information, misled the District Court with that information, and engaged in disreputable conduct. Petitioner also excepts to the hearing judge's finding of certain mitigating factors and asks us to consider other aggravating factors in addition to the ones the hearing judge found. Respondent counters that although he made a mistake, he did not violate any of the MLRPC.

On October 9, 2018, this Court heard oral argument in this matter. Petitioner asks us to disbar or, in the alternative, suspend Respondent. Respondent requests that we affirm the hearing judge's legal conclusions and dismiss this action. For *¹⁹¹ the following reasons, we agree with Petitioner that Respondent violated MLRPC 3.3 and 8.4 and, consequently, suspend Respondent from practicing law indefinitely with the right to apply for reinstatement no sooner than six months after the suspension takes effect.

I. A. The Hearing Judge's Findings of Fact 1. Background Respondent was admitted to the Maryland Bar in 1974. In 1979, after a five-year ⁸²⁵ stint as an Assistant State's Attorney, Respondent transitioned to private practice. On June 4, 1990, Respondent was convicted of money laundering and transporting stolen goods, United States v. Steinhorn , 927 F.2d 195 , 196 (4th Cir. 1991), and subsequently, in September 1990, this Court suspended him from practicing law in Maryland.

Thereafter, on February 1, 1994, following affirmance of his convictions, 3 this Court disbarred Respondent by consent. Attorney Grievance Comm'n v. Steinhorn , 333 Md. 580 , 636 A.2d 480 (1994). In October 2007, this Court granted Respondent's Petition for Reinstatement to the Maryland Bar. In re Reinstatement of Steinhorn , 401 Md. 698 , 934 A.2d 948 (2007).

Since his reinstatement, Respondent has handled exclusively debt collection cases, representing homeowner associations, small businesses, and bail bondsmen. In one such matter, Respondent assisted Kingswood in collecting past due condominium fees from several condominium unit owners. 2. Respondent's Court Filings As part of his work for Kingswood, Respondent filed two form complaints-entitled DC-CV-001, Complaint/Application *¹⁹² and Affidavit in Support of Judgment-with the District Court of Maryland sitting in Baltimore County in 2014. The first complaint, filed on January 14, 2014, sought to recover $9,120 in delinquent condominium fees from Aileen Pratt, a condominium unit owner.

The second complaint, filed on April 2, 2014, also sought to collect $9,120 in outstanding condominium fees from Jason Green, another condominium unit owner. Respondent submitted affidavits in support of those claims, which were signed by Marc Greenberg ("Greenberg"), an agent of Kingswood. Greenberg relied on Respondent's representations about the accuracy of those filings. The $9,120 figure listed on both complaints represented unpaid condominium fees for a four-year period (2011-2014) plus Respondent's thirty-percent attorney's fee. 4 In other words, of the $9,120 sought in the complaints, $6,912 was for the outstanding HOA fees and $2,208 was for attorney's fees. 5 Respondent conjoined the unpaid assessments ($6,912) with the agreed-upon attorney's fees ($2,208) in each complaint filed with the court, listing one figure ($9,120) in the damages line, leaving the line designated for attorney's fees blank (see image below). *^{193 826} 3.

The Complaint to the Attorney Grievance Commission In 2016, Kingswood terminated Respondent's representation and replaced him with Brian Fellner, Esq. ("Fellner"). Fellner discovered that Respondent did not timely remit several payments he collected for Kingswood. Fellner then filed a complaint with Petitioner, alleging that Respondent's delay was unwarranted.

Bar Counsel investigated and determined that Respondent was also inflating the amount of damages sought in his court filings, and that he failed to rectify the issue once it was called to his attention. Petitioner concluded that such conduct violated MLRPC 3.3 and 8.4, among other charged violations. 6 4. Respondent's Testimony During the hearing on his conduct, Respondent "candidly admitted" that he made a mistake, and he "denied any intent to deceive the court." He testified that he only sought to collect that which was rightfully owed to him based on his fee agreement with Kingswood. The hearing judge found, as a matter of fact, that Respondent's testimony was credible and that Respondent never intended to make a false statement to the District Court.

The hearing judge was persuaded by the fact that Respondent did not personally benefit from his conduct. The judge was also swayed by Respondent's sincere remorse and his implementation *¹⁹⁴ of new office procedures to prevent those issues from reoccurring. B. The Hearing Judge's Conclusions of Law Based on the record and the above-summarized findings of fact, the hearing judge concluded that Petitioner failed to demonstrate, by clear and convincing evidence, that Respondent violated MLRPC 3.3(a)(1) and 8.4 (a), (c), and (d). As noted at the outset, Petitioner has filed exceptions to the hearing judge's conclusions of law.

II

Standard of Review "In attorney discipline proceedings, this Court has original and complete jurisdiction and conducts an independent review of the record." Attorney Grievance Comm'n v. Good , 445 Md. 490 , 512, 128 A.3d 54 (2015) (citation omitted). Where, as here, neither party has filed exceptions to the hearing judge's findings of fact, we treat those facts as established. ⁸²⁷ Attorney Grievance Comm'n v. Reno , 436 Md. 504 , 508, 83 A.3d 781 (2014) ; see also Md. Rule 19-741(b)(2)(A). We review de novo the hearing judge's legal conclusions, Md. Rule 19-741(b)(1), to determine if they are supported by clear and convincing evidence, Md. Rule 19-727(c), and we decide, if the attorney committed misconduct, the appropriate sanction. Attorney Grievance Comm'n v. Butler , 456 Md. 227 , 238, 172 A.3d 486 (2017).

III

The Rule Violations Based upon our independent review of the record, we disagree with the hearing judge's legal conclusions and hold that Respondent violated MLRPC 3.3(a)(1) and 8.4(a), (c), and (d). *¹⁹⁵ MLRPC 3.3, Candor Toward the Tribunal 7 MLRPC 3.3(a)(1) provides, in pertinent part, that a lawyer shall not "knowingly ... make a false statement of fact ... to a tribunal." This duty is premised on the idea that "[e]very court has the right to rely upon an attorney to assist it in ascertaining the truth of the case before it." Attorney Grievance Comm'n v. Smith , 442 Md. 14 , 34, 109 A.3d 1184 (2015) (citation omitted). Therefore, "an attorney 'must be candid at all times with a tribunal or inquiry board.' " Butler , 456 Md. at 238 , 172 A.3d 486 (quoting Attorney Grievance Comm'n v. Joseph , 422 Md. 670 , 699, 31 A.3d 137 (2011) ). Accordingly, a lawyer violates MLRPC 3.3(a)(1) when he or she knowingly provides the court with false information, Smith , 442 Md. at 34 , 109 A.3d 1184 (citing Attorney Grievance Comm'n v. Ward , 394 Md. 1 , 32, 904 A.2d 477 (2006) ), or fails to correct any false information previously provided, Joseph , 422 Md. at 699 , 31 A.3d 137 . Petitioner excepts to the hearing judge's conclusion that Respondent did not violate MLRPC 3.3(a)(1).

Petitioner contends that the hearing judge applied an erroneous legal standard in concluding that Respondent's filings were not "knowingly false" because he had "no intent to deceive anyone" and no "party suffered any harm." Respondent counters that he made an honest mistake, but the factual findings of the hearing judge compel the legal conclusion that he did not violate MLRPC 3.3(a)(1). We agree with Petitioner and therefore sustain its exception. As an initial matter, we reject Respondent's assertion that we are compelled to uphold the hearing judge's legal conclusions because we have accepted his factual findings as established. According to Respondent, the only legal conclusion that can be reached from the hearing judge's "exculpatory" factual findings is that Respondent did not violate MLRPC 3.3.

Respondent is mistaken. His assertion runs counter to the *¹⁹⁶ well-established standard of review in attorney grievance proceedings. As part of our independent review of the record, we are free to reach different legal conclusions than those of the hearing judge, even if we accept the judge's factual findings. See Attorney Grievance Comm'n v. Patterson , 421 Md. 708 , 724, 28 A.3d 1196 (2011) (noting that we afford no deference to a hearing judge's legal conclusions).

In Attorney Grievance Commission v. Taylor , for example, the hearing judge found, and Bar Counsel did not contest, that Mr. Taylor never commingled or mishandled client funds deposited into his client trust account. 405 Md. 697 , 707, 714, 955 A.2d 755 (2008). We concluded, however, that because he deposited "personal funds into the trust account in excess of the amount ⁸²⁸ needed to cover bank charges," Mr. Taylor violated MLRPC 1.15(b) (Safekeeping Property). 8 Id. at 714 , 955 A.2d 755 . We therefore overturned the hearing judge's legal conclusion and sanctioned Mr. Taylor, "notwithstanding the hearing judge's finding that there was no ... misuse of client funds." Id. at 715 , 955 A.2d 755 . Likewise, here, our de novo review leads us to the conclusion that Respondent violated MLRPC 3.3(a)(1), notwithstanding the hearing judge's finding that Respondent acted with no intent to deceive anyone.

We need not look any further than Respondent's testimony to reach this conclusion. Respondent testified that he reviewed each complaint to ensure its accuracy before filing it with the court. He further testified that he " knew what the attorney's fees were," that he " knew what the division was going to be subsequent to the payment of the judgment" ($6,912 for the debt and $2,208 for attorney's fees), and that those figures *¹⁹⁷ "should have been separated." 9 (Emphasis added). Yet, despite this knowledge, Respondent did not separate those figures on the complaint forms he filed with the District Court, and he did not file corrected forms thereafter, even after this issue was called to his attention.

It follows that Respondent knowingly submitted false information to the court-that the underlying debt was $9,120, when, in fact, it was only $6,912-which he failed ever to correct. Consequently, clear and convincing evidence demonstrates that Respondent violated MLRPC 3.3(a)(1). That the hearing judge found as a fact that Respondent did not intend to deceive the court, did not harm anyone, and did not benefit from this practice-findings that Bar Counsel has not excepted to and we thus adopt-is immaterial to our analysis. What matters for purposes of finding an MLRPC 3.3(a)(1) violation is whether an attorney knows that the information he or she presents to the tribunal is incorrect.

Ward , 394 Md. at 32 , 904 A.2d 477 . When it came to the accuracy of court filings in Respondent's office, "the buck stop[ped]" with him, 10 as he noted in his testimony; the blame therefore rests with him for the erroneous filings at issue here. 11 *^{198 829} MLRPC 8.4, Misconduct 12 1. MLRPC 8.4(c) MLRPC 8.4(c) states that "[i]t is professional misconduct for a lawyer to ... engage in conduct involving dishonesty, fraud, deceit or misrepresentation." This rule is grounded in the idea that "[h]onesty is of paramount importance in the practice of law." Attorney Grievance Comm'n v. Agbaje , 438 Md. 695 , 715, 93 A.3d 262 (2014) (citing Attorney Grievance Comm'n v. Ellison , 384 Md. 688 , 867 A.2d 259 (2005) ); see also Attorney Grievance Comm'n v. Myers , 333 Md. 440 , 449, 635 A.2d 1315 (1994) ("Candor and truthfulness are two of the most important moral character traits of a lawyer."). We have held that, "in the context of Rule 8.4(c), so long as an attorney knowingly makes a false statement, he necessarily engages in conduct involving misrepresentation.

No intent to deceive is necessary." Attorney Grievance Comm'n v. Dore , 433 Md. 685 , 708, 73 A.3d 161 (2013) ; see also Attorney Grievance Comm'n v. Zhang , 440 Md. 128 , 168-69, 100 A.3d 1112 (2014) (highlighting the difference between fraud and deceit, which require an intent to deceive, and dishonesty and misrepresentation, which do not require any specific intent). Petitioner excepts to the hearing judge's conclusion that Respondent did not violate MLRPC 8.4(c). Petitioner asserts that the hearing judge erred in concluding that Respondent did not violate MLRPC 8.4(c) because his pleadings "never ... disrupt[ed] ... any court proceeding" and "no judge ... ever objected" to his filings. Respondent again counters that the hearing judge's finding that Respondent committed a genuine error but did not intend to deceive anyone necessarily means that he did not violate MLRPC 8.4(c).

We again agree with Petitioner and therefore sustain its exception. There is significant overlap between MLRPC 3.3(a)(1) and 8.4(c). Dore , 433 Md. at 707 , 73 A.3d 161 . Indeed, "[a] lawyer that violates [MLRPC] 3.3(a) generally violates [MLRPC] *¹⁹⁹ 8.4(c) as well." Id.

(quoting Douglas R. Richmond, The Ethics of Zealous Advocacy : Civility, Candor and Parlor Tricks , 34 Tex. Tech L. Rev. 3 , 28 (2002) ). This overlap occurs because both rules are violated when a lawyer-regardless of intent-knowingly makes a false statement to the court. Id. at 708, 73 A.3d 161 ; see also Attorney Grievance Comm'n v. Framm , 449 Md. 620 , 662, 144 A.3d 827 (2016).

Because we have concluded that Respondent knowingly submitted false statements to the court, we similarly conclude that such submissions violated MLRPC 8.4(c). We nevertheless address the significance of Respondent's misrepresentations independent of his lack of candor towards the tribunal because there are instances where an attorney may engage in misleading conduct, in violation of MLRPC 8.4(c), that is not necessarily dishonest conduct, in violation of 3.3(a)(1). 13 See ⁸³⁰ Attorney Grievance Comm'n v. Nwadike , 416 Md. 180 , 194, 6 A.3d 287 (2010) (citing Attorney Grievance Comm'n v. Calhoun , 391 Md. 532 , 548, 894 A.2d 518 (2006) ) (noting that an attorney can mislead "by silence and lack of communication[,]" in violation of MLRPC 8.4(c), without acting dishonestly). By grouping his attorney's fees with the damages listed in his complaints, Respondent misled the court into believing that he was not collecting any attorney's fees when the facts demonstrate otherwise. See In re Clark's Case , 163 N.H. 184 , 37 A.3d 327 , 329, 331 (2012) (finding a violation when an attorney "entered zeros ... on the two [bankruptcy] forms instructing filers to enter ... the debtor's spouse's income" *²⁰⁰ because he "in effect [told] the court that [the debtor's] husband had no income when ... he did").

In other words, Respondent concealed the material fact that he was collecting attorney's fees, thereby preventing the court from assessing the reasonableness of those fees. We have long held that concealment of material facts constitutes an MLRPC 8.4(c) violation. See Attorney Grievance Comm'n v. Barton , 442 Md. 91 , 142, 110 A.3d 668 (2015) (citation omitted) ("[w]e have found a [MLRPC] 8.4(c) violation when a misrepresentation is ... based upon a concealment of material facts."); see also Attorney Grievance Comm'n v. Robaton , 411 Md. 415 , 428, 983 A.2d 467 (2009) (holding that an attorney violated MLRPC 8.4(c) by failing to disclose a debtor's payment to a non-attorney professional on a bankruptcy form submitted to the court). Accordingly, we hold that when a lawyer, like Respondent, files a complaint and conceals his or her intent to collect attorney's fees by joining them together with the damages sought, listing one aggregate amount due, that lawyer commits misconduct. 2.

MLRPC 8.4(d) In light of the above, we have no difficulty sustaining Petitioner's final exception, and therefore conclude that Respondent also violated MLRPC 8.4(d). MLRPC 8.4(d) provides that "[i]t is professional misconduct for a lawyer to ... engage in conduct that is prejudicial to the administration of justice." Prejudice to the administration of justice may "be measured by the practical implications the attorney's conduct has on the day-to-day operation of our court system." Dore , 433 Md. at 710 , 73 A.3d 161 . Thus, we have held that depriving the court of knowledge and, in turn, the ability to act upon that knowledge is a violation of MLRPC 8.4(d). See Robaton , 411 Md. at 429 , 983 A.2d 467 (holding that an attorney violated MLRPC 8.4(d) by failing to inform the court that a bankruptcy debtor was paying the attorney, which "deprived the court and trustee of the knowledge that the debtor was being assisted by counsel," thus preventing "the court and creditors *²⁰¹ of the ability to find out how much of the debtor's assets ha[d] been paid to the attorney").

Here, Respondent failed to inform the court that he was collecting attorney's fees. 14 Through his omissions, Respondent deprived the court of the ability to evaluate the reasonableness of his fees, an essential judicial oversight function. See Cohn v. Bd. of Prof'l Responsibility , 151 S.W.3d 473 , 489 (Tenn. 2004) ("[b]y filing for attorney's fees using a method that ⁸³¹ avoided, almost entirely, the scrutiny of the court, [respondent] eviscerated ... [essential] judicial oversight functions."), superseded by statute , Tenn. Sup. Ct. R. 9, § 1.3, as recognized in Hughes v. Bd. of Prof'l Responsibility , 259 S.W.3d 631 , 638 (Tenn. 2008).

Respondent also failed to submit any supporting documentation justifying the reasonableness of the fees sought, in contravention of the Maryland Rules. See Md. Rule 3-306(c)(4)(C) ; Md. Rule 3-741(d)(2). 15 Such conduct is prejudicial to the administration of justice, in violation of MLRPC 8.4(d). Robaton , 411 Md. at 429 , 983 A.2d 467 . Respondent stresses that no District Court judge ever objected to his filings.

Respondent is correct that, technically speaking, no objections were ever made, but that is not because the District Court judges approved of or overlooked Respondent's conduct; on the contrary, it is because those judges were unaware of what was occurring since Respondent's complaints, on their face, concealed the material fact that he was collecting attorney's fees. Respondent's conduct thus engendered disrespect for the court, constituting further *²⁰² evidence of his misconduct. See Attorney Grievance Comm'n v. Brigerman , 441 Md. 23 , 40, 105 A.3d 467 (2014) (quoting Agbaje , 438 Md. at 717 , 93 A.3d 262 ) (" 'Conduct which is likely to ... engender disrespect for the court is conduct prejudicial to the administration of justice.' "). 3. MLRPC 8.4(a) MLRPC 8.4(a) provides, in relevant part, that