Attorney Grievance Commission v. Babbitt

PER CURIAM. The Attorney Grievance Commission (Commission) through Bar Counsel filed a petition for disciplinary action against the respondent, Gerald David Babbitt (Babbitt), alleging a violation of the Disciplinary Rules of the Code of Professional Responsibility. Pursuant to Maryland Rule BV 9 b, this Court referred the matter to Judge Jacob S. Levin of the Seventh Judicial Circuit. On 29 February 1984, after an evidentiary hearing, the hearing judge concluded that Babbitt had violated Disciplinary Rule 1-102(A)(4). 1 The hearing judge filed a written memorandum as follows: “FINDINGS OF FACT “This case is before the Court on an Attorney Grievance Commission’s Petition for Disciplinary action pursuant to Rule BVll(a)[ 2 ] of the Maryland Rules of Procedure.

In accordance with Rule BVll(a) this Court must present a written statement of its findings of the facts which are basically admitted by the Respondent Gerald David Babbitt as propounded at a hearing held on January 17, 1984. Accordingly, what follows is such a statement of those facts as summarized from the record. “The Respondent is a member of the Bar who was admitted to practice law in the State of Florida in 1967 and in the State of Maryland in June of 1972. Presently, the Respondent maintains his office at his residence at ⁶³⁹ 14900 Perrywood Drive, Burtonsville, Maryland, for the private practice of law. He was an attorney with the U.S. Internal Revenue Service for approximately five years and has engaged in private practice for some eight years, with emphasis on tax matters.

In March of 1977, the Respondent, together with Andrew Panholzer, formed the New Century Corporation, a Maryland Corporation, for the purpose of building and selling homes. The Respondent owned 25% of the Corporation’s shares (his wife owned 25%, as did Mr. Panholzer and his wife) and was a Vice President of the Corporation. “On April 8, 1979, New Century executed a contract with Arnold and Lee Johnson (Johnsons) to construct a home on property owned by New Century in Owings, Maryland (located in Calvert County). Settlement was to occur no later than October 15, 1979. However, due to construction delays the loan commitment of the lender Advance Mortgage Corporation was about to expire, and the 11% interest rate committed would rise to the then higher market rate.

As a result, a new contract was negotiated. This Contract, executed on October 31, 1979, extended the loan commitment to December 1, 1979 and carried with it a 12%% interest rate. To compensate the Johnsons for the increase, New Century made concessions amounting to a reduction in the purchase price and related costs at closing. “On the day of settlement, December 14, 1979, the Respondent was notified by the Lender that a Calvert County Use and Occupancy Permit (Permit) would be one of the necessary documents for settlement. It is contended that this was the first time the Respondent was informed that such a document would be required.

Knowing that it would have been impossible to secure the Permit from the Calvert County Department of Inspection and Permits for settlement that afternoon, the Respondent, Panholzer, and a secretary discussed the problem and possible solutions. At the direction of the Respondent, New Century’s secretary photocopied a bona ⁶⁴⁰ fide permit bearing the signature of Amos Bowen, the Calvert County Building Inspector, whiting out certain portions and materially altering the document so as to reflect the Permit as though it was a genuine and proper document for the Johnson property. The document was then placed in with other documents necessary for settlement and sent to the realtor for the afternoon settlement. Settlement occurred with New Century receiving the purchase price less amounts held in escrow for the completion of a ‘laundry list’ of unfinished work.

Subsequently, New Century filed for bankruptcy due to the economic climate revolving around high interest rates and was liquidated. Testimony proffered indicated that as of this date the Johnsons have not received a proper Use and Occupancy Permit. “The Respondent, though having admitted the aforementioned facts, urges that though he was responsible for the creation and falsification of the Permit there is some basis for justification. Here, the Respondent urges this Court to consider that he acted to rescue the John-sons’ loan commitment and to enable them to have the home they contracted for; that the Lender was fully aware that the premises were incomplete since they inspected the