Attorney Grievance Commission v. Dacy

² PER CURIAM. The Attorney Grievance Commission, by Bar Counsel, filed a petition for disciplinary action against Edward Anthony Dacy, alleging violations of the Maryland Code and of the disciplinary rules of the Code of Professional Responsibility. Pursuant to Maryland Rule BV9(b), we referred the matter to Judge J. James McKenna of the Circuit Court for Montgomery County. The facts, as disclosed by the record and the circuit judge’s findings, are as follows.

The respondent, a member of the Bar of this Court since 1964, frequently represented First Maryland Savings and Loan Association in real estate settlement matters. 1 In transactions in which the respondent represented First Maryland, the savings and loan had agreed that, before the date of a closing, it would directly deposit the requisite funds into the respondent’s client escrow account at Maryland National Bank. During 1983, however, the respondent learned that on several occasions First Maryland had failed to make the deposits in a timely fashion. In order to ensure that future closings would be funded on time, the respondent directed one of his employees to make more satisfactory arrangements with First Maryland. The employee, Ms. McNeill, was not an attorney; nor, apparently, did she receive any specific instructions from the respondent.

At First Maryland’s suggestion, Ms. McNeill agreed to a system under which the savings and loan would deposit a check for the requisite amount into the respondent’s personal, interest-bearing checking account at First Maryland. Immediately thereafter, Ms. McNeill would write a check, on the respondent’s personal account, payable to the client escrow account at Maryland National Bank. Later in 1983, Ms. McNeill established a separate, interest-bearing office account at First Maryland in the name of Dacy & Associ ³ ates, the respondent’s firm. Subsequently, monies destined from First Maryland to the Maryland National escrow account would pass through this Dacy & Associates account.

The respondent’s uncontradicted testimony indicates that it was not until some point after Ms. McNeill had established the Dacy & Associates account that he inquired about or learned of the particular solution which she had devised. 2 The record also establishes that in August 1983 the respondent attended a meeting at which First Maryland, as the lender, and several other parties agreed to close a real estate transaction. The borrowers, who had accounts at First Maryland, wanted the loan proceeds to be credited immediately to their accounts. Consequently, the parties considered it impractical first to deposit the amount of the loan into the respondent’s escrow account at Maryland National Bank and then to authorize a disbursement out of the escrow account. Instead, First Maryland’s president proposed that the money be deposited in the respondent’s personal account and that the respondent then disburse the amount of the loan from that account to the borrowers.

The respondent agreed to do so. According to his testimony before Judge McKenna, he believed that, because he had the consent of all parties involved, his conduct would not violate any statute or disciplinary rule. In response to a question by Bar Counsel, the respondent admitted that, on this occasion, he knowingly had clients’ money placed in his personal account. It is undisputed that none of the respondent’s clients suffered any losses as a result of his conduct.

Based on the foregoing evidence, the circuit court found that the respondent had commingled client funds with his personal funds. In addition, however, the court found that ⁴ such commingling was inadvertent, although, the court added, it was “inadvertence of a rather extraordinary nature.” Finally, the circuit court concluded that, because of his conduct, the respondent had violated Maryland Code (1957, 1987 Repl.Vol.), Art. 10, § 44(a)(1), 3 DR 9-102(A), 4 and DR 1-102(A)(1) and (6). 5 Bar Counsel has excepted to the circuit court’s finding that the respondent’s conduct was inadvertent. According to Bar Counsel, “[t]he clear and convincing evidence shows ⁵ that the Respondent did have scienter.” 6 As to Ms. McNeill’s purported solution to the difficulties with First National, there is abundant evidence that the respondent acted negligently. Indeed, he concedes as much.

Had the respondent given Ms. McNeill reasonably specific instructions, it is clear that the problems with First Maryland might have been solved by creating an escrow account at that savings and loan. Moreover, had the respondent exercised a reasonable degree of supervision over Ms. McNeill, he