Attorney Grievance Commission v. Elliott

MURPHY, J. On September 15, 2009, the Attorney Grievance Commission of Maryland, Petitioner, filed a “PETITION FOR DISCIPLINARY OR REMEDIAL ACTION” against Walter Carroll Elliott, Jr., Respondent. On that same day, this Court ordered that the charges against Respondent “be heard and ⁶⁶¹ determined by Judge Vicki Ballou-Watts of the Third Judicial Circuit [ (the Hearing Judge) ], in accordance with Maryland Rule 16-757[.]” The Hearing Judge filed “FINDINGS OF FACT AND CONCLUSIONS OF LAW” in which she concluded that Respondent violated Rules 1.2, 1.4, 1.15, 8.1, 8.4(a)(b)(c) and (d) of the Maryland Rules of Professional Conduct (MRPC), and Section 10-306 of the Business Occupations and Professions Article of the Maryland Code (BO). 1 Respondent has noted thirteen exceptions to those Findings and Conclusions. For the reasons that follow, this Court overrules every one of Respondent’s exceptions, and concludes that Respondent’s disbarment is required to protect the public interest. Background MRPC 1.2, in pertinent part, requires that a lawyer “abide by a client’s decisions concerning the objectives of the representation and, when appropriate, [ ] consult with the client as to the means by which they are to be pursued.” MRPC 1.4(a)(1) requires that a lawyer inform his or her client of any “circumstance” that requires the client’s “informed consent.” MRPC 1.15, in pertinent part, requires that a lawyer comply with the safekeeping and record keeping requirements of Title 16, Chapter 600 of the Maryland Rules when the lawyer is holding funds that have been entrusted to the lawyer by a client.

MRPC 8.1(a) prohibits a lawyer from knowingly making a false statement of material fact “in connection with a disciplinary matter[.]” BO § 10-306 prohibits a lawyer from using funds entrusted to him or her “for any purpose other than the purpose for which the trust money is entrusted to the lawyer.” MRPC 8.4, in pertinent part, provides: It is professional misconduct for a lawyer to: ⁶⁶² (a) violate or attempt to violate the Maryland Lawyers’ Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another; (b) commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects; (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; (d) engage in conduct that is prejudicial to the administration of justice!.] The Hearing Judge’s Findings and Conclusions included the following numbered paragraphs: 2. On March 12, 2008, Respondent signed an Employment Contract with the law firm of Macey & Aleman, also known as “Legal Helpers, P.C.,” which identified itself as “America’s Largest Consumer Bankruptcy Firm.” Under the terms of the contract, Respondent was hired to serve as the managing attorney for the firm’s Maryland consumer bankruptcy practice. At the time Respondent was hired, the firm had two offices with three additional employees—an attorney, a law clerk and a receptionist. One office was located in Greenbelt, Maryland.

The second office was located in Baltimore, Maryland. 4. Respondent’s duties included interviewing prospective bankruptcy clients, providing legal advice regarding consumer bankruptcy matters, preparing and filing bankruptcy petitions, and attending hearings associated with clients’ bankruptcy cases. As the managing attorney for the firm’s Maryland offices, Respondent was also responsible for accounting for all client payments and trustee checks received. He was expected to forward all payments to the firm’s office in Chicago, Illinois on a weekly basis. ⁶⁶³ 8.

At all relevant times herein, Kevin Van Hout, Esquire was the firm’s regional managing attorney. Shobhanna Katsuri, Esquire was one of the firm’s four partners. Ms. Katsuri’s office was located in Chicago, Illinois. Respondent reported to both attorneys. 11.

Evangeline Arcilla attended the June 17, 2008 appointment between Gary Magsalin and Respondent. Mr. Magsalin is Ms. Arcilla’s brother. Ms. Arcilla did not have a scheduled appointment. 14. At the time of the June 17, 2008 meeting with Mr. Magsalin, Respondent also discussed with Ms. Arcilla her financial concerns and advised her of her legal rights.

Mr. Magsalin encouraged Ms. Arcilla to file a Chapter 7 Bankruptcy Petition. 15. On June 17, 2008, Evangeline Arcilla executed a “Macey & Aleman—Chapter 7 Contract.” Respondent signed the contract on behalf of the firm. 16. Under the terms of the contract, Ms. Arcilla agreed to pay Macey & Aleman a “flat fee, earned upon receipt, court costs, and optional due diligence product costs ... prior to the filing of the bankruptcy petition.” The contract also states that before filing, Ms. Arcilla “will provide $299.00 for the filing fee and $274.00 for the due diligence products.” In the contract, these amounts were denoted as costs separate from any attorney’s fees. 17. At the time of the June 17, 2008 meeting, Ms. Arcilla made a $20.00 cash payment to Respondent.

The Respondent utilized the firm’s cash receipt book to issue a written receipt to Ms. Arcilla for her $20.00 payment. Ms. Arcilla also gave Respondent a copy of three (3) credit card bills. 18. The Respondent signed the receipt, noting that the $20.00 payment was for “Retainer Fees.” Respondent ⁶⁶⁴ also noted that Ms. Arcilla’s balance was $1,454.00. Below the balance due figure on the receipt was written: “[tff (299 ”].

Ms. Arcilla’s Chapter 7 contract required payment of $99.00 for filing fees before the bankruptcy petition would be filed. 20. During the June 17, 2008 meeting, Respondent gave Ms. Arcilla an envelope addressed to the new Macey & Aleman office location at 809 Glen Eagle’s Court in Towson, Maryland and instructed her to make a check for the balance due. Respondent also instructed Ms. Arcilla to send a note with the check indicating that she was referred to the firm by Mr. Magsalin so that he (Magsalin) would receive a $50.00 credit on the balance of his flat fee to the firm. 21. Portia Tidwell, a Towson University student, was employed by the law firm as a legal assistant/office manager from July 2, 2008 through the end of October 2008. 22.

On July 2, Ms. Arcilla issued a check in the amount of $1,454.00 made payable to Macey & Aleman. She also wrote a note stating that she was referred to Respondent by Gary Magsalin. 28. Ms. Arcilla’s check and note arrived at the firm’s Towson office between July 2, 2008 and July 15, 2008. Ms. Tidwell opened the mail and checked the firm’s database for an account under Ms. Arcilla’s name. 24.

When Ms. Tidwell was unable to locate Ms. Arcilla’s name in the firm’s database, she presented the check to Respondent. Respondent told Ms. Tidwell that Ms. Arcilla was his client and that he was going to represent her after he left he law firm. 25. Respondent applied white out to the check and changed the payee from “Macey & Aleman” to ‘Walter Elliott, Jr., Esq.” ⁶⁶⁵ 26. During all relevant times herein, Ms. Arcilla’s telephone contact numbers were: (Home) [ ] and (Cell) [ ].

Telephone records reflect that there were no telephone calls between Respondent and Ms. Arcilla during the time period from July 2, 2008 to July 15, 2008. 27. Respondent testified that upon receipt of the check, he immediately placed a telephone call to Ms. Arcilla. He said that he used the office telephone. According to Respondent, he spoke with Ms. Arcilla, advised her of the mistake and asked if she wanted him to change the payee or return the check to her for reissue in his name.

Respondent testified that Ms. Arcilla authorized him to substitute his name as payee. Respondent has acknowledged that he altered the check by using “white out” to change payee names. 28. Ms. Tidwell testified that she was present when Respondent purportedly spoke with Ms. Arcilla. She could not hear what the person on the other end of the call said.

However, she testified that when the telephone call ended, she saw Respondent “scratch out” the firm name and insert Respondent’s name on the check. 29. The testimony of Respondent and Ms. Tidwell regarding the aforementioned telephone call and Ms. Arcilla’s authorization is not credible. Ms. Arcilla testified that she did not talk to respondent during the relevant time period and did not give him permission to alter her check. A review of the law firm’s certified telephone records (and Respondent’s cell phone records) for the time period from July 2, 2008 through July 15, 2008, show no calls to Ms. Arcilla and thus corroborate her testimony.

In addition, Ms. Tidwell’s description of how the check was altered contradicts the description acknowledged by Respondent. As a result, this court finds that Ms. Arcilla did not authorize Respondent to substitute his name as payee on the aforementioned check. ⁶⁶⁶ 30. In June, 2008, Respondent complained to Ms. Katsuri and Mr. Van Hout about the high volume of cases and the need for more attorneys, support staff and supplies. They discussed increasing his salary and obtaining more support.

However, the only additional employees hired were Ms. Tidwell (July 2, 2008) and an associate attorney who began working for the firm in the latter part of July 2008. Respondent’s salary was not increased. In June, Respondent explored the possibility of starting his own firm or sharing office space with another attorney. In early to mid July 2008, Respondent became “angry” with the firm and decided that he wanted to terminate his employment relationship with the firm. 31.

On July 15, 2008, Respondent deposited Ms. Arcilla’s check into his personal bank account with USAA Federal Savings Bank [ ]. The bank account did not identify the accountholder as an Attorney at Law or Law Office, nor was it designated as an Attorney Trust Account or Attorney Escrow Account. 32. Respondent deposited Ms. Arcilla’s check together with two additional cheeks for a total deposit of $4,484.63. The account balance immediately prior to the July 15, 2008 deposit was $398.26. 33.

On August 1, 2008, Respondent transferred $4,384.83 from the USAA Federal Savings Bank Account to another personal bank account with Bank of America. As a result of the transfer, respondent’s remaining balance in the USAA Federal savings Bank account was $500.00. 34. On August 1, 2008, during a telephone conference call, respondent advised Ms. Katsuri and Mr. Van Hout that he intended to resign. On August 3, 2008, respondent gave the firm the required written sixty (60) day notice of his resignation by email.

Respondent continued to work full time as managing attorney for the firm’s Maryland offices. ⁶⁶⁷ 35. During August 2008, Ms. Arcilla called Respondent several times to discuss the status of her case. Respondent told Ms. Arcilla that he had worked on her case, but that she needed to forward documents to him and take a credit counseling course before the Chapter 7 bankruptcy petition could be filed. 36. On August 29, 2008, an Express Mail package from Ms. Arcilla was addressed to Respondent and delivered to the law firm’s Towson office.

The package contained documents Respondent had requested in order to process the bankruptcy petition. 37. Ms. Arcilla called Respondent again on September 3, 2008, and the two exchanged calls on September 10, 2008 and September 17, 2008. The last telephone conversation between Respondent and Ms. Arcilla occurred on September 17, 2008 for a duration of five (5) minutes. 38. On September 22,2008, Ms. Arcilla called the law firm’s 800 number to complain about the handling of her case.

She had also learned that Respondent was leaving the firm. She subsequently spoke to the firm’s regional managing attorney, Kevin Van Hout, who asked her to forward a copy of the cancelled check, executed contract with the law firm and other papers related to her case. 39. On or about September 23, 2008, after speaking with Ms. Arcilla and receiving the documents she provided, Mr. Van Hout confronted Respondent and terminated this employment with the firm. The termination was effective the same day. 40.

On September 24, 2008, Respondent obtained a money order in the amount of $1,454.00. He delivered the money order and Ms. Arcilla’s documents to Mr. Van Hout. The money order represents the total amount Respondent collected from Ms. Arcilla in cash on June 17, 2008 and by check in July, 2008. ⁶⁶⁸ 42. During the Commission investigation of Mr. Van Hout’s complaint, Respondent, through his attorney, advised Bar Counsel that he (Respondent) was in the process of leaving the firm when he met Mr. Magsalin and Ms. Arcilla on June 17, 2008.

According to Respondent, he explained to Ms. Arcilla that he would charge her the same flat fee ($1,454.00) that the firm charged Mr. Magsalin. Respondent explained that he “agreed to handle Ms. Arcilla’s matter on his own once he left Macey & Aleman and established his own practice (or affiliated with a new law firm).” He also advised Bar Counsel that after he received the $1,454.00 check in July, he called Ms. Arcilla and received permission to substitute his name on the check made payable to Macey & Aleman. In addition, Respondent told Bar Counsel that “on July 3, 2008, prior to receiving the check, [he] called Kevin Van Hout to inform him of his decision to resign.” 43. During the hearing before this court, Respondent testified, in pertinent part, that on June 27, 2008, Ms. Arcilla retained him (not Macey & Aleman) and that he charged her a flat “fee” of $1,454.00 for a Chapter 7 filing.

According to Respondent, the fee agreement was better than the amount charged by the law firm because his “fee” included the court filing fees ($299.00). He also testified that although the law firm utilized “Best Case” software to prepare bankruptcy cases, he also owned the same software and used it to prepared Ms. Arcilla’s petition. Respondent testified that he performed work on her Chapter 7 case and completed everything he could by June 25, 2008. According to Respondent, all that remained before filing the petition in court was for Ms. Arcilla to forward the requested documents to his office and complete the required credit counseling course.

In addition, as noted, he testified that after he received the $1,454.00 check in July, he called Ms. Arcilla and she authorized ⁶⁶⁹ him to substitute this name as the payee on the aforementioned check. 44. Respondent never sent to Ms. Arcilla any written confirmation that would support his claim that he (as opposed to the law firm) was retained to handle her Chapter 7 bankruptcy case. 45. During the hearing Respondent testified that in June he talked with the law firm’s managing partners and complained about the lack of additional attorneys and support staff as noted under Paragraph 30 herein. In early to mid July, he became “angry” with the firm’s lack of progress in addressing his concerns and decided to leave the firm.

However, he did not notify the firm of his intention to resign until August 1, 2008, which is contrary to the representations Respondent made to Bar Counsel during the investigation of Mr. Van Hout’s complaint. (Emphasis in original. Footnotes omitted). The Hearing Judge found that Respondent violated MRPC 1.2 in two ways: (1) “he failed to abide by Ms. Arcilla’s decision to retain the law firm of Macey & Aleman to represent her in Chapter 7 bankruptcy proceedings!,]” and (2) “he took action on Ms. Arcilla’s behalf that she did not authorize when he substituted his name and payee on a check made payable to Macey & Aleman.” The Hearing Judge found that Respondent violated MRPC 1.4(a)(1)