Attorney Grievance Commission v. Cappell

GREENE, Judge. The Attorney Grievance Commission, through Bar Counsel and in conformance with Maryland Rule 16-751, filed a Petition for Disciplinary or Remedial Action against respondent, Robert E. Cappell, alleging violations of the Maryland Rules of Professional Conduct (MRPC) 1.15(a), (b), and (c) (Safekeeping Property), 1 and 8.4(b), (c), and (d) (Misconduct). 2 We ⁴⁰⁵ referred the petition to Judge Cathy H. Serrette, of the Circuit Court for Prince George’s County, to conduct a hearing and submit to this Court her proposed findings of fact and conclusions of law. Judge Serrette conducted a hearing on April 5, 2005, and on May 9, 2005, submitted her findings and conclusions. She concluded that respondent had violated MRPC 1.15(a), (b), (c), 8.4(b), (c), and (d).

With regal'd to mitigation, Judge Serrette found, by a preponderance of the evidence, that “Mr. Cappell was suffering from a major depressive disorder at the time of the misconduct, with a secondary diagnosis of personality disorder.” She further found that, “[ajlthough Mr. Cappell understood the wrongfulness of his behavior, but for his illness, Mr. Cappell would not have committed the misconduct, his illness having been the root cause of his wrongdoing.” Neither petitioner nor respondent filed exceptions to the judge’s findings or conclusions of law. ⁴⁰⁶ BACKGROUND The facts of this case are not in dispute. Respondent was admitted to the District of Columbia Bar on June 16, 1980, the Maryland Bar on June 4, 1986, and the Virginia Bar in 1992. In addition to his Juris Doctor’s degree, he holds a Masters of Law degree in taxation from Georgetown University Law School. While attending undergraduate school, during his sophomore year, he became ill and was diagnosed with and treated for Hodgkin’s disease. 3 He married into a wealthy family in 1987 and apparently had difficulty trying to provide his wife with a comfortable standard of living.

In 1993, his wife requested that he move out. She divorced Mr. Cappell in 1995. In 1997, he began a romantic relationship with a woman he had met through his church. At the request of his new lady friend, Mr. Cappell obtained a life insurance policy and named her as the beneficiary.

As part of the process to obtain life insurance, Mr. Cappell was tested and learned that he was infected with Hepatitis C, 4 his second potentially-fatal illness. Upon receiving that diagnosis, he obtained medical treatment and took daily shots of interferon. 5 The hearing judge found that respondent “lost his health insurance [coverage], ... [sought ⁴⁰⁷ treatment at] a homeless shelter clinic [but only obtained] enough medication for a period of five months.” Instead of taking the medication, Mr. Cappell prayed for his health to improve. Unable to pay for his own medical necessities, nonetheless, Mr. Cappell managed to pay for groceries and rent for his lady friend and her two children. That relationship, however, ended abruptly when another man moved in with Mr. Cappell’s girlfriend, and she and the new gentleman friend decided to get married.

Thereafter, Mr. Cappell moved out of his apartment. The hearing judge further found that, in February 1999, “[Mr. Cappell] suffered paralysis of the right side of his face” and was diagnosed with “Bell’s [P]alsy.” 6 In addition, the hearing judge found that rather than pursue further diagnostic testing or medical care, “[Mr. Cappell] stayed home for several months during which time he took folic acid and antibiotics as his only form of treatment.” In 1997, he began experiencing sleep disturbances and other depression symptoms. Mr. Cappell believed he would die from the Hepatitis C infection. Although he did not follow through with medical treatment, Mr. Cappell indicated that, he “believed that God was punishing him and that God would save him.” At times, according to Mr. Cappell, “Lh]e felt anxious and agitated and contemplated suicide on a number of occasions.” Respondent did not seek psychiatric or psychological assistance of any type.

Instead, Mr. Cappell stated that he, “talked to an elder at his church and to God. His church directed him to pray....” The professional conduct which gave rise to disciplinary charges in Washington, D.C., Virginia, and Maryland began in 1998. A $7,000 check from the Hartford Insurance Company, payable to respondent and his client Ernest Tyrone Williams was deposited by respondent into his Trust Account in August 1998. The check represented payment for a personal injury ⁴⁰⁸ settlement.

Subsequently, respondent properly disbursed from that account a check in the amount of $3,191 representing payment for Mr. Williams’s share of the settlement. In addition, respondent drew a check in the amount of $2,333 representing payment for his own attorney fees. The sum of $1,476 should have been held in escrow to pay J. Richard Lilly, MD and Assoc., to cover Mr. Williams’s medical expenses. The hearing judge concluded that, in violation of the MRPC, the checks written by respondent and drawn on the Trust Account from October 6, 1998, through June 7, 1999, “were not issued to or on behalf of Mr. Williams or Dr. Lilly, the medical provider, but rather were knowingly drawn by Respondent for his business and personal expenses, or for client matters unrelated to Mr. Williams’s claim....” On June 11,1999, respondent drew a check on his Trust Account, in the amount of $1,476 payable to J. Richard Lilly, MD and Assoc., representing payment for medical services rendered to Mr. Williams.

In addition, respondent deposited a check in the amount of $8,000 from the Continental Insurance Company into his Trust Account on January 21,1999. Respondent properly disbursed the following checks: check number 1249 to his client, Ms. Herold, in the amount of $2,520.20, representing her share of the settlement proceeds; check number 1258 payable to himself in the amount of $2,000, representing a portion of his legal fees in the case; check number 1266 payable to Howard University Hospital in the amount of $349.90, representing payment for hospital services rendered to Ms. Herold; and check number 1268 payable to Dr. Joseph in the amount of $401.25, representing a partial payment for medical services rendered to Ms. Herold. From January 28 through March 16, 1999, respondent drew checks on the Trust Account for his business and personal expenses or for matters unrelated to Ms. Herold or her claim. Respondent paid the balance due to Dr. Joseph with a cashier’s check in the amount of $2,200.

From January 28 through March 11, 1999, the balance in respondent’s Trust Account was below the amount that should have been there to pay Howard University Hospital, Dr. ⁴⁰⁹ Joseph and HCC for the cost of medical records. HCC was never paid its bill of $29.10 from respondent’s Trust Account. Respondent’s Trust Account was overdrawn on March 19 and 80, 1999. These instances of misappropriation were the only acts of misconduct reported.

There were no prior disciplinary proceedings tiled against respondent. Disciplinary proceedings were filed first in the District of Columbia by the District of Columbia Bar Counsel. Maryland and Virginia Bar Counsel followed with separate disciplinary actions. Judge Serrette found that, [o]n July 22, 2004, the District of Columbia Court of Appeals ordered that Mr. Cappell be disbarred from the practice of law in the District of Columbia, but that operation of the disbarment be stayed and Mr. Cappell be placed on three-years’ probation subject to the conditions imposed by the Board of Professional Responsibility.

Those conditions required that Mr. Cappell: 1) not engage in further misconduct; 2) continue to receive regular treatment; 3) be monitored by a financial practice monitor appointed by the Board; and 4) submit quarterly medical and psychiatric reports to the Board. Any failure to comply with medical or psychiatric advice, or violation of any term of probation will subject Mr. Cappell to the revocation of probation and imposition of disbarment. The District of Columbia Bar notified Maryland Bar Counsel that a disciplinary action had been filed against respondent. On November 16, 2004, Maryland Bar Counsel filed a petition for Disciplinary or Remedial Action in the Circuit Court for Prince George’s County, while proceedings were pending in the District of Columbia.

It is not clear from the record when the District of Columbia Bar Counsel notified the Virginia State Bar of its disciplinary action against respondent. Shortly after Maryland filed disciplinary proceedings against respondent, and while disciplinary proceedings were pending in Virginia against respondent, Seth Guggenheim, Virginia State Assistant Bar Counsel, recommended to the ⁴¹⁰ Board of the Virginia State Bar Disciplinary System that, “an Order be entered by the Board vacating Mr. Cappell’s interim suspension, canceling the currently scheduled hearing date, and dismissing the matter without prejudice.” Mr. Guggenheim conferring with Virginia Bar Counsel, Barbara Ann Williams, reasoned that because “Mr. Cappell’s license to practice law in the District of Columbia has been neither revoked nor suspended, reciprocal action by the Virginia State Bar is not appropriate. Reciprocal action in Virginia will be appropriate in the event the D.C. Court of Appeals ... revok[es respondent’s] license in the District of Columbia because he has not fulfilled the terms of probation in effect in that jurisdiction.” Mr. Cappell’s psychiatric history was well documented in the District of Columbia disciplinary proceedings. That history was stipulated to and filed in the disciplinary action in Maryland and found by the hearing judge to have been established by clear and convincing evidence.

Judge Serrette found that respondent did not meet with a psychiatrist until the District of Columbia Bar Counsel referred him to Dr. Richard A. Ratner. In addition to Dr. Ratner, D.C. Bar Counsel referred Mr. Cappell to Dr. Thomas C. Goldman for an independent evaluation and Maryland Bar Counsel referred Mr. Cappell to Dr. Joanna Brandt for evaluation in connection with the Maryland disciplinary proceedings. The hearing judge held that, “[a]ll three doctors concluded that at the time of the professional misconduct, Mr. Cappell was suffering from a Major Depressive Disorder, as set forth in the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, Text Revision (DSM-IV-TV).” Further, the hearing judge found that, Mr. Cappell “experienced a depressed mood most of the day, nearly every day, and experienced significant sleep disorder [sic], feelings of worthlessness and guilt, [a] diminished ability to concentrate, and thoughts of death or suicide.” The hearing judge determined that Mr. Cappell met the criteria for having a personality disorder. In Dr. Ratner’s opinion, “Mr. Cappell’s illness caused the professional misconduct” and that “had Mr. Cappell not been ⁴¹¹ ill, he would not have made the same choices.” Dr. Ratner advised the District of Columbia Bar Counsel that “based upon (Mr. Cappell’s) conduct throughout this inquiry ... he has hidden nothing and attempted at all times to be as forthcoming as he is able to be, based upon his attitude toward treatment and his following through with it, I feel strongly that Mr. Cappell is not in any danger of recidivism.” The hearing judge found that Dr. Goldman’s testimony supported Dr. Ratner’s diagnosis: Dr. Goldman, testifying on behalf of Bar Counsel before the Board of Professional Responsibility of the District of Columbia Court of Appeals, opined that at the time Mr. Cappell committed the offenses, he was barely able to carry on the functions of his life due to the severity of the symptoms of his illness.

Dr. Goldman characterized Mr. Cappell as “a person whose functioning was very compromised and a person who would not have done this sort of thing if he was not in a state of significant depression.” He cited Hodgkin’s Lymphoma, and Bell’s Palsy as additional significant medical conditions affecting Mr. Cappell. He concluded, “[tjhere is no clear evidence to suggest any antisocial intent (that is to rob or defraud his clients).” Dr. Goldman maintained that while Mr. Cappell is at risk of a future recurrence of depression, it was unlikely that he would again engage in misconduct. Judge Serrette stated in her findings of fact that, “Dr. Brandt agreed with the diagnosis [of Drs. Ratner and Goldman]. [Dr. Brandt] testified, however, that Mr. Cappell’s mental illness had not rendered him utterly debilitated.” The hearing judge concluded that respondent recognized the impropriety of his conduct and that “he has consistently demonstrated remorse and has cooperated with the District of Columbia Board of Professional Responsibility and Attorney Grievance Commission of Maryland.” DISCUSSION Respondent admits that he has violated the provisions of Rules 1.15 and 8.4(a), (b), and (c) of the MRPC.

Petitioner ⁴¹² recommends disbarment and respondent proposes that we adopt the recommendation of the Maryland Peer Review Panel and impose corresponding discipline similar to the District of Columbia and Virginia. At the outset we note that this is not a case of reciprocal discipline under Md. Rule 16-773. 7 Here, Bar Counsel did not wait until disciplinary proceedings in the District of Columbia had concluded before litigating a proceeding in Maryland. The rules applicable to reciprocal discipline matters are not applicable in situations where the Attorney Grievance Commission does not initiate or process the disciplinary proceeding as a reciprocal discipline matter. See Attorney Griev.

Comm’n v. Steinberg, 385 Md. 696, 703 , 870 A.2d 603, 607 (2005). Although, in the present proceedings, Bar Counsel and respondent agreed to a stipulation of the facts entered in the District of Columbia disciplinary proceedings and conducted the hearing on the basis of those previously proven facts, there was no opinion from the District of Columbia Court of Appeals when the present case was docketed in Maryland, and Bar Counsel did not rely on Rule 16-731 in presenting its case. Even if this were a matter of reciprocal discipline, as to the appropriate sanction we have said that this Court is “inclined, but not required, to impose the same sanction as that imposed by the state in which the misconduct occurred. We are required to assess for ourselves the propriety of the sanction imposed by the other jurisdiction and that recommended by the Commission.” Attorney Griev.

Comm’n. v. Scroggs, 387 Md. 238, 254 , 874 A.2d 985, 995 (2005) (internal ⁴¹³ citations omitted). Thus, the disciplinary proceedings conducted in the District of Columbia, including the sanction imposed, while relevant to our consideration of this case, are not entitled to the same weight as if this were a proceeding pursued as a reciprocal discipline matter. In addition, matters which took place at the Peer Review Panel hearing are relevant in this case only because respondent raises the matter of the Panel’s recommendations in support of his argument for the appropriate disposition. Ordinarily the conduct of the Peer Review Panel is confidential and inadmissible in any proceeding.

See Md. Rule 16-723(a) (Confidentiality of peer review meetings). The Peer Review Panel met and recommended to Bar Counsel that because respondent’s misconduct “occurred when [he] was acting under both mental and physical disabilities,” as supported by the uncontradicted medical testimony, he “should not be disbarred[,] but[,] his actions should be monitored in a manner similar to that imposed by the D.C. Board on Professional Responsibilities.” In Attorney Griev. Comm’n v. Lee, 387 Md. 89, 108 , 874 A.2d 897, 908 (2005), in discussing the Peer Review process, we pointed out that the “process features a panel of ... attorneys and ... non-attorney[s], that make[ ] a preliminary determination as to whether formal charges should be filed against the respondent attorney.” Judge Harrell writing for the Court explained: [T]he Peer Review Panel proceeding is an informal, non-adversarial meeting designed to allow Bar Counsel, the respondent attorney, the complainant, and other invited persons to meet and discuss the issues presented in the complaint in an environment similar to a mediation process .... The Panel is not governed by any formal rules of evidence, but must respect lawful privileges....

The purpose of the Peer Review Panel is not principally to make recommendations as to the appropriateness of formal charges.... ⁴¹⁴ If a Peer Review Panel concludes that the complaint has a substantial basis indicating the need for some remedy, some behavioral or operational changes on the part of the lawyer, or some discipline short of suspension or disbarment, part of the peer review process can be an attempt through both evaluative and facilitative dialogue, (A) to effectuate directly or suggest a mechanism for effecting an amicable resolution of the existing dispute between the lawyer and the complainant, and (B) to encourage the lawyer to recognize any deficiencies on his or her part that led to the problem and take appropriate remedial steps to address those deficiencies. The goal, in this setting, is not to punish or stigmatize the lawyer or to create a fear that any admission of deficiency will result in substantial harm, but rather to create an ambience for a constructive solution. The objective views of two fellow lawyers and a lay person, expressed in the form of advice and opinion rather than in the form of adjudication, may assist the lawyer (and the complainant) to retreat from confrontational positions and look at the problem more realistically. [Committee note to Rule 16-743(a).] If, however, after hearing statements, the Panel determines that the Statement of Charges “has a substantial basis and that there is reason to believe that the [respondent] attorney has committed professional misconduct or is incapacitated, the Panel may ... make an appropriate recommendation to the Commission or ... inform the parties of its determination and allow the attorney an opportunity to consider a reprimand or a Conditional Diversion Agreement.” The Panel is authorized to recommend to the Commission that either a Petition for Disciplinary or Remedial Action be filed, the Statement of Charges be dismissed, or that a Conditional Diversion Agreement or reprimand is appropriate. Although the purpose of the Panel proceeding is not to generate any formal findings of fact, the Panel must accompany its recommendation with “a brief explanatory statement.” ⁴¹⁵ Lee, 387 Md. at 108-09 , 874 A.2d at 908-09 (internal citations omitted).

In the present case, the Peer Review Panel considered Bar Counsel’s evidence against respondent and concluded that there was a substantial basis for a finding that respondent violated Rules 1.15, 8.4(b), 8.4(c), and 8.4(d) of the MRPC; that respondent admitted the conduct; and that there was a substantial basis for mitigation in the punishment imposed in these violations. The Panel asked Bar Counsel to consider entering into a Conditional Diversion Agreement with respondent because “respondent was acting under a severe disability at the time of the misappropriation as a result of the breakdown of his marriage, problems with the IRS and mental and physical disabilities.” In the Panel’s view, a similar sanction to that imposed in the District of Columbia could be achieved in a diversion agreement and would be appropriate because of the mitigating evidence in this case. Bar Counsel declined that invitation indicating that it was not authorized to enter into such an agreement. Assistant Bar Counsel explained during oral argument in this case that, in light of Bar Counsel’s duty to investigate complaints of misconduct and our decision in Attorney Griev.

Comm’n. v. Vanderlinde, 364 Md. 376 , 773 A.2d 463 (2001), diversion agreements are inappropriate in matters involving misappropriation of client funds or other dishonest conduct. Because, for reasons to be explained, infra, we believe Bar Counsel and therefore the Commission may have misinterpreted the scope of Md. Rule 16-736, we shall remand this case for reconsideration. Effective July 1, 2001, the Maryland Rules of Practice and Procedure, for the first time contained a conditional diversion rule. Md. Rule 16-736.

See Attorney Griev. Comm’n v. Olver, 376 Md. 650, 652, 831 A.2d 66, 67 (2003). Rule 16-736 provides, in part: (a) When Appropriate. Upon completing an investigation, Bar Counsel may agree to a Conditional Diversion Agreement if Bar Counsel concludes that: ⁴¹⁶ (1) the attorney committed professional misconduct or is incapacitated; (2) the professional misconduct or incapacity was not the result of any wilful or dishonest conduct and did not involve conduct that could be the basis for an immediate Petition for Disciplinary or Remedial Action pursuant to Rules 16-771, 8 16-773, 9 or 16-774; 10 (3) the cause or basis of the professional misconduct or incapacity is subject to remediation or resolution through alternative programs or mechanisms, including (A) medical, psychological, or other professional treatment, counseling, or assistance, (B) appropriate educational courses or programs, (C) mentoring or monitoring services, or (D) dispute resolution programs; and (4) the public interest and the welfare of the attorney’s clients and prospective clients will not be harmed if, instead of the matter proceeding immediately with a disciplinary or remedial proceeding, the attorney agrees to and complies with specific measures that, if pursued, will remedy the immediate problem and likely prevent any recurrence of it. ⁴¹⁷ We said in Olver, “that the purpose for promulgating the diversion rule was to give Bar Counsel and the Commission the flexibility to resolve or remediate certain kinds of misconduct or incapacity, without resort to the full panoply of resources required for resolution of formal disciplinary proceedings.” Id. at 658 , 831 A.2d at 71 .

The Committee note to Rule 16-736 provides some examples of conduct that may be appropriate for conditional diversion: Examples of conduct that may be susceptible to conditional diversion include conduct arising from (A) unfamiliarity with proper methods of law office management, record-keeping, or accounting, (B) unfamiliarity with particular areas of law or legal procedure, (C) negligent management of attorney trust accounts or other financial matters, (D) negligent failure to maintain proper communication with clients, (E) negligent failure to provide proper supervision of employees, or (F) emotional stress or crisis or abuse of alcohol or other drugs. In Olver, we focused our discussion on the specific types of impairments which would qualify attorneys for the conditional diversion program. In that regard, Chief Judge Bell, writing for the Court, said: This case seems to fall within the Rule, to be the kind of case that the Court had in mind when it approved a diversion alternative to be administered outside of, and without the supervision of, judicial proceedings — the Comment to Rule 16-786(a) lists “emotional stress or crisis or abuse of alcohol or other drugs” as an “[ejxample of conduct that may be susceptible to conditional diversion.” Olver, 376 Md. at 656 , 831 A.2d at 70 . Although the hearing judge in Olver had made factual findings and drew conclusions of law, we elected not to consider the merits of the proceedings and remanded the case to the Attorney Grievance Commission in order for Bar Counsel to determine whether to propose a conditional diversion agreement or inactive status.

See Olver at 659, 831 A.2d at 71-72 . ⁴¹⁸ In Olver, however, we considered the testimony regarding the attorney’s mental disorder and the hearing judge’s factual findings pertaining thereto. Id. In our discussion of the attorney’s alleged misconduct which the hearing court concluded violated Rules 1.1, 1.3, 1.4, and 8.4(d), we placed considerable emphasis on the attorney’s misconduct stemming from his mental illness or