Attorney Grievance Commission v. Gerace

BARBERA, C.J. Respondent, Michael Francis Gerace, has been a member of the Bar of this Court since November 19, 1980. Petitioner, the Attorney Grievance Commission of Maryland, acting through Bar Counsel (“Commission” or “Bar Counsel”), filed with this Court a Petition for Disciplinary or Remedial Action (“Petition”) against Respondent on July 2, 2012. See Md. Rule 16-751(a). The Petition alleged numerous violations of the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) in connection with (1) Respondent’s representation of Colin Schafer, Esq. in a landlord-tenant dispute and (2) Respondent’s continued practice of law following this Court’s issuance of a decertification order for his having failed to pay his annual Client Protection Fund assessment.

In particular, the Petition alleged that Respondent engaged in professional misconduct by violating the following Rules: MLRPC 1.1 (competence) 1 ; 1.3 (diligence) 2 ; 1.5(b) (fees) 3 ; 1.16(d) (termination of representation) 4 ; 5.5(a) and (b) (unauthorized prac ⁶³⁶ tice of law) 5 ; 8.1(b) (bar admission and disciplinary matters) 6 ; and 8.4(a), (b), (c), and (d) (misconduct). 7 On July 17, 2012, we designated the Honorable Michele D. Jaklitsch of the Circuit Court for Anne Arundel County to conduct an evidentiary hearing and file written findings of fact and conclusions of law in this matter. See Md. Rules 16-752(a) and 16-757(c). Respondent was served with process, but did not file an Answer to the Petition, timely or otherwise. As a result, on October 22, 2012, the hearing judge entered a default order, see Md. Rule 16-754(c), and the matter was set ⁶³⁷ for a hearing on December 10, 2012.

Respondent, though notified of the order of default, neither moved to vacate the order nor appeared at the hearing. The hearing judge received evidence from the Commission, acting through Bar Counsel, and concluded that Respondent had violated MLRPC 1.1, 1.3, 1.5(b), 1.16(d), 5.5(a) and (b), 8.1(b), and 8.4(a), (b), (c), and (d). Accepting Judge Jaklitsch’s findings of fact and agreeing with her conclusions of law, on June 25, 2013, we entered a per curiam order disbarring Respondent. We explain in this opinion the reasons for Respondent’s disbarment.

I. Hearing Judge’s Findings and Conclusions Because Respondent failed to file an Answer to the Commission’s Petition for Disciplinary or Remedial Action, the hearing judge treated the averments in the Petition as admitted. See Md. Rule 2-323(e). Upon clear and convincing evidence, see Md. Rule 16—757(b), the hearing judge set forth the following findings of fact: 8 A. The Schafer Complaint Colin Schafer, Esquire, filed a complaint with the Office of Bar Counsel against Respondent concerning the conduct that Mr. Schafer believed to be in violation of the Maryland Lawyers’ Rules of Professional Conduct. Mr. Schafer is an attorney licensed to practice law in the District of Columbia, New York, and Pennsylvania.

Beginning [i]n or about October 2009, the Schafer family began experiencing problems with a well at the family’s [rented] home, located [in Annapolis, Maryland] (hereinafter “the home”). The well failed, and as a result, polluted water entered into the home, ultimately forcing the Schafer family to move from the home. Despite these events, the landlord of the home refused to refund a security deposit. As a result, Mr. Schafer filed suit against the landlord in the District Court for Anne Arundel County, Maryland.

(Colin Schafer, et al. v. Patrick Argentiere, Case No. 0702-0003231-2010) (hereinafter “the Schafer case”). ⁶³⁸ In April of 2010, the Schafers retained Respondent to represent them in their case and agreed to a fixed fee of $500.00 for the representation. Throughout the representation of the Schafers, Respondent failed to communicate timely and adequately with Mr. Schafer concerning the basis and rate of the fee Respondent charged the [Schafers]. Despite a written and executed fee arrangement of $500.00 for the representation, and following commencement of the representation and payment of the $500.00, Respondent attempted to alter the fee arrangement by stating on several occasions that it was within his discretion to change the fee arrangement to an hourly rate. On November 80, 2010, and as a result of several disagreements that arose concerning Respondent’s handling of the case, the Schafers terminated [their representation by] Respondent.

Upon termination of the representation, Respondent failed to take the necessary steps to protect his client’s interests. Despite Mr. Schafer’s repeated requests, Respondent refused to file a motion to withdraw from the Schafer case. Respondent also failed to return the case file, which included original documents that Mr. Schafer previously provided to Respondent. Respondent has never returned these documents.

Respondent also failed to refund fees, paid in advance by the Schafers, which were not earned. At or shortly following the termination, Respondent and Mr. Schafer agreed to a $475.00 refund out of the $500.00 fee. The $475.00 represented fees that Mr. Schafer paid in advance that were not earned. Despite this agreement, and notwithstanding Mr. Schafer’s numerous requests for this refund, Respondent failed to refund the $475.00.

Respondent failed to return Mr. Schafer’s phone calls and emails, or otherwise made himself unavailable. As a result, Respondent not only put the Schafer’s then-pending case at risk, but subjected the Schafer family to unnecessary stress and concern. B. Unauthorized Practice of Law and Failing to Respond to Bar Counsel ⁶³⁹ On April 7, 2010, the Court of Appeals of Maryland issued an Order decertifying Respondent for failing to pay annual [Client Protection Fund] assessments. This Order prohibited Respondent from the further practice of law.

On May 17, 2011, the Office of Bar Counsel requested that Respondent provide a response to Mr. Schafer’s complaint, but Respondent failed to provide a response. Bar Counsel again requested a response on June 14, 2011; September 22, 2011; October 15, 2011; November 15, 2011; November 28, 2011; and November 30, 2011. After unsuccessful attempts were made, Bar Counsel assigned an investigator, Mr. Edwin P. Karr, to locate the Respondent. Mr. Karr experienced significant difficulties and delays in locating Respondent.

Mr. Karr visited several addresses, including addresses previously provided by the Client Protection Fund.[ 9 ] He contacted the Anne Arundel County Sheriff’s Office, and otherwise exhausted all leads concerning Respondent’s whereabouts, all to no avail. Thereafter, Bar Counsel, by way of a Maryland Judiciary Case Search, obtained information suggesting Respondent was employed with the Law Offices of Murphy & Price, LLP, and instructed Mr. Karr to contact Respondent at the law film’s address. On November 15, 2011, Mr. Karr visited the law firm and met with Respondent. In an effort to conceal the grievance and his decertified status [from his employer], Respondent escorted Mr. Karr outside to continue the conversation.

Respondent informed Mr. Karr that he had been working with the law firm for approximately six months and that the firm did not have any knowledge of the grievance against him. Respondent told Mr. Karr that he was aware of his decertified status, that he had not paid his bar dues,[ 10 ] and ⁶⁴⁰ that the firm did not have any knowledge of his decertification. Respondent did not provide Mr. Karr with a response to Mr. Schafer’s complaint, but instead scheduled a time for an interview at Bar Counsel’s office. Respondent later cancelled this interview and rescheduled it for November 30, 2011.

Respondent thereafter cancelled this interview. To date, Respondent has never provided a response to Bar Counsel concerning the original complaint. Respondent, in all respects, held himself out to the public as an attorney licensed to practice law. Respondent provided Mr. Karr with a business card that referenced Respondent as an attorney.

Respondent’s name is included on the law firm’s exterior window signed as “Michael F. Gerace, Esq.” Respondent’s name, at all times relevant, is identified on the law firm’s website as “Of Counsel, licensed in MD and CA.” Up and until Bar Counsel notified the law firm that Respondent had been decertified, Respondent represented himself as an attorney to the members of the law firm. Respondent also held himself out as a licensed attorney to the Schafers, as the representation of the Schafers commenced on or around the same date as the Decertification Order of the Court of Appeals. Respondent knowingly engaged in an unauthorized practice of law in Maryland when he represented the Schafers in their suit against the landlord. Additionally, Respondent was decertified during his entire tenure with the Murphy & Price law firm.

Since December 2010, Respondent assisted the law firm in approximately eight matters, some of which involved his appearance as counsel of record before Maryland District and Circuit Courts. Respondent also represented his own clients while employed with the law firm. ⁶⁴¹ Based upon those findings, Judge Jaklitsch concluded, as follows, that Respondent violated MLRPC 1.1 (competence); 1.3 (diligence); 1.5(b) (fees); 1.16(d) (termination of representation); 5.5(a) and (b) (unauthorized practice of law); 8.1(b) (bar admission and disciplinary matters); and 8.4(a), (b), (c), and (d) (misconduct): A. Rule 1.1 Competence [and] Rule 1.3 Diligence In its [Petition, the Commission] charged Respondent with violating Rule 1.1 and Rule 1.3 of the Maryland Lawyers’ Rules of Professional Conduct (hereinafter “MLRPC”). Rule 1.1 states that a lawyer shall provide competent representation to a client. This rule requires competent representation, including legal knowledge, skill, thoroughness and reasonable preparation, be rendered to a client.

Attorney Grievance Comm’n v. Awuah, 374 Md. 505, 522 , 823 A.2d 651, 661 (2003). Rule 1.3 requires a lawyer to act with reasonable diligence and promptness in representing a client. Unless the relationship is terminated as provided in Rule 1.16, a lawyer should carry through to conclusion all matters undertaken for a client. See Rule 1.3, Comment [4], Following the notice of discharge, Respondent had an obligation to withdraw from the representation and to take reasonable measures to protect his client’s interests.

Compare with Attorney Grievance Comm’n v. Robertson, 400 Md. 618, 638 , 929 A.2d 576, 588 (2007) (“While the failure to withdraw from a client matter, as required, and to inform the client that the lawyer has been suspended is a violation of some of the Rules of Professional Conduct, it simply does not address, and is not dispositive of, a lawyer’s competence to handle a particular matter.”). Respondent violated Rule 1.1 by failing to file a motion to withdraw his appearance from the Schafer case, failing to communicate with Mr. Schafer, and failing to return original documents to Mr. Schafer. Respondent also violated Rule 1.3 by completely failing to carry out the representation upon notice of termination. Instead of concluding the representation in a proper manner, Respondent abandoned the ⁶⁴² representation, leaving his clients in a state of uncertainty.

Respondent lacked the requisite thoroughness and preparedness to complete the representation, and failed to complete the representation at all, much less in a diligent fashion, as required under the MLRPC. Respondent never withdrew from the representation and further exacerbated this conduct by ultimately discontinuing contact with his client. Therefore, Respondent violated Rules 1.1 and 1.3. B. Rule 1.5 Fees [The Commission] charged Respondent with violating Rule 1.5(b) when Respondent unilaterally altered the method of charging Mr. Schafer for legal fees.

Rule 1.5(b) provides that the scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation. It is inappropriate for an attorney to unilaterally increase a fee after an understanding with respect to the fee has been reached with the client. Head v. Head, 66 Md.App. 655, 674 , 505 A.2d 868, 877 (1986) (interpreting Attorney Grievance Comm’n v. Kerpelman, 292 Md. 228 , 438 A.2d 501 (1981)). Despite an agreement of a $500.00 fixed fee for the representation, Respondent subsequently informed Mr. Schafer that he would be changing the fee to hourly.

Perhaps more egregious is Respondent’s statement to Mr. Schafer that it was within Respondent’s discretion to change the fee at any time. Respondent’s intent could only be to secure a larger fee than had been originally secured. Respondent’s actions therefore violate Rule 1.5(b). C. Rule 1.16(d) Declining or Terminating Representation Respondent violated Rule 1.16(d) by failing to move to withdraw his appearance, failing to return the client file, and failing to refund fees, paid in advance, that Respondent did not earn.

Rule 1.16(d) provides that upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for ⁶⁴³ employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The record is clear that Respondent not only failed to return the client file and unearned fees, but Respondent wholly failed to conclude the representation. Respondent discontinued communication with Mr. Schafer and left his clients to fend for themselves in the midst of litigation. Such conduct represents a violation of Rule 1.16(d).

D. Rule 5.5(a) and (b) Unauthorized Practice of Law The flagship violation of [the Commission]’s case centers around its charge that Respondent knowingly engaged in the unauthorized practice of law, established a systematic and continuous presence in Maryland for the practice of law, and held himself out to the public as admitted to practice law in Maryland. In [the Petition], Respondent is charged with violating Rule 5.5(a) and (b) of the MLRPC. Rule 5.5(a) states that a lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so. The Maryland Court of Appeals issued an Order, dated April 7, 2010, that decertified Respondent for failing to pay annual assessments.[ 11 ] This Order prohibited Respondent from the further practice of law in the State of Maryland. [The Commission] demonstrated, by clear and convincing evidence, that Respondent practiced law despite this decertification Order.

Respondent represented the Schafers in their case against their landlord, a representation that commenced the same month of the decertification Order. J. Dennis Murphy, Esquire, of the Law Offices of Murphy & Price, LLP, stated that beginning in or around December of 2010, Respondent assisted the firm in several cases, entered his appearance as counsel of record in Maryland Courts, ⁶⁴⁴ and represented his own clients. Respondent admitted to Mr. Karr that he had practiced law while knowing that the Court of Appeals had decertified him. Respondent’s actions were intentional and in disregard of the MLRPC and the April 7, 2010, Court of Appeals Order and therefore, violated Rule 5.5(a).

Rule 5.5(b) provides that a lawyer who is not admitted to practice in this jurisdiction shall not (1) establish an office or other systematic and continuous presence in this jurisdiction for the practice of law or (2) hold out to the public or otherwise represent that the lawyer is admitted to practice law in this jurisdiction. (The Commission also] demonstrated, by clear and convincing evidence, that Respondent violated Rule 5.5(b). Respondent practiced law with the Law Offices of Murphy & Price, LLP, while decertified, for approximately one year. Respondent represented himself as a licensed attorney to the Schafers and failed to inform the Schafers of his decertified status upon learning of the same.

Respondent provided Mr. Karr with a business card that referenced Respondent as an attorney. Respondent’s name is included on the exterior of the law firm’s exterior window as “Michael F. Gerace, Esq.” Respondent’s name, at all times relevant, is identified on the law firm’s website as “Of Counsel, licensed in MD and CA.” Lastly, Respondent represented himself as an attorney to the members of the law firm. Therefore, Respondent established a systematic presence in Maryland and held himself out to the public as a licensed attorney, all while decertified and unauthorized to practice law in Maryland, in violation of Rule 5.5(b). E. Rule 8.1 Bar Admission and Disciplinary Matters MLRPC 8.1(b) provides that a knowing failure to respond to a lawful demand for information from a disciplinary authority is a violation of the MLRPC.

Attorney Grievance Comm’n v. Alston, 428 Md. 650, 675 , 53 A.3d 1142, 1157 (2012). The Court of Appeals has consistently held that repeated failures to respond to Bar Counsel’s investigative requests can be violative of Rule 8.1. See, e.g., Attorney Grievance Comm’n v. Nelson, 425 Md. 344, 362 , 40 A.3d ⁶⁴⁵ 1039, 1049 (2012). In the case sub judice, Respondent’s failure to respond to letters sent from the Office of Bar Counsel and his refusal to be interviewed by an investigator for the Attorney Grievance Commission violated Rule 8.1(b).

F. Rule 8.4 Misconduct i. 8.4(a) [The Commission] charged Respondent with violating 8.4(a), (b), (c), and (d) of the MLRPC. Rule 8.4(a) is violated when other Rules of Professional Conduct are breached. Nelson, 425 Md. at 363 , 40 A.3d at 1050 . As noted above, Respondent