Attorney Grievance Commission v. Keister

ROBERT M. BELL, Judge. The Attorney Grievance Commission, the petitioner, filed a Petition for Disciplinary Action against John William Keister, the respondent, in which it alleged both the respondent’s misconduct 1 and incompetency. 2 With regard to the former, violations of Rules 1.15 and 8.4 3 , of the Maryland ⁵⁹ Rules of Professional Conduct, see Rule 1230, Appendix, as well as Maryland Code (1957, 1987 Repl.Vol.) Art. 10, § 44, 4 Maryland Code (1972, 1989 Repl.Vol.), §§ 10-301-307 of the Business Occupations and Professions Article 5 and the BU Rules 6 were charged. The allegations that the respondent was incompetent “as a result of his dependency on alcohol, cocaine, and possibly other drugs, during the time period set forth in this petition,” specified violations of Rules 1.1 and 1.16. 7 The petition was based on two complaints filed ⁶⁰ against the respondent, both involving the respondent’s handling of his escrow account. Judge Joseph F. Murphy, Jr., of the Circuit Court for Baltimore County, to whom the matter was referred pursuant to Maryland Rule BV 9b, held hearings on the petition. 8 Having requested, and received from each of the parties, proposed findings of fact and conclusions of law, Judge Murphy accepted the petitioner’s submittal and rejected the respondent’s. 9 He concluded that the respondent committed each of the violations alleged. ⁶¹ I. A. At issue in the complaint of Susan Waranch was the respondent’s handling of funds acquired on behalf of Evan Shifren, whom he represented in connection with PIP and third-party liability claims arising out of an accident in which Shifren was involved.

The respondent obtained a check for $278.00 from the Harleysville Mutual Insurance Company to pay Waranch Physical Therapy, P.A. for treatment it rendered to Shifren. On June 26, 1989, he placed that check, along with others totaling $1,055.09, into his First National Bank escrow account, which at that time, was overdrawn by $140.01. Between June 26 and June 28, the respondent wrote checks on that account. Judge Murphy found that, rather than being for the benefit of the client or Waranch Physical Therapy, P.A., however, the checks that cleared “were written in whole or in part for Respondent’s personal use without the knowledge, authority or consent of Evan Shifren”.

On June 28, 1989, the account was overdrawn by $23.59. Judge Murphy did not believe, as the respondent contended, that the money in the account was actually the respondent’s; he rejected the respondent’s testimony that he gave Shifren cash in exchange for the checks. Waranch Physical Therapy, P.A. was ultimately paid, with different funds, in October 1989. The check the respondent issued to it on August 10, 1989 was returned twice, once for non-sufficient funds and the second time, because the account was closed.

Judge Murphy found that the respondent’s escrow account was used for business and personal use and for handling clients’ funds, thus, that he “continually co-mingled his funds with his clients’ funds.” B. David S. Pearl, Esq. filed a complaint against the respondent on behalf of his client, Edward Cohen, M.D. In payment for treatment given to his client, Barbara Spainh ⁶² our, the respondent, on or about January 10, 1990, wrote a check for $585.00, payable to Edward Cohen, M.D. on the respondent’s escrow account at the Commercial Bank. That account was used for client funds, as well as personal and business use, and, at that time, was overdrawn. The check was returned for non-sufficient funds, but ultimately paid from another source. Judge Murphy found that the respondent continually co-mingled his funds with his clients funds in violation of Rule 1.15, Article 10, § 44, § 10-301 et seq. of the Business Occupations and Associations Article, and the BU Rules.

Like the Inquiry Panel, with which the Review Board agreed, Judge Murphy expressly found that the respondent did not misappropriate any of his clients’ funds, as he “never intended to criminally deprive the clients of their funds.” II. Before the Inquiry Panel, and again in his answer to the Petition for Disciplinary Action, the respondent admitted having had a substance abuse—cocaine and alcohol—problem during the time when the charged violations occurred. Before the Inquiry Panel, he testified that his addiction, when at its worst from June, 1989 through the end of that year, cost him $500 to $1,000 per week. He denied, however, that it ever affected his professional life or competence.

Richard E. Vincent, Director of Lawyer Counseling for the Maryland State Bar Association, testifying on the respondent’s behalf, offered that the respondent had received in-patient drug treatment at Changing Point and had continued out-patient treatment and counseling. He opined that, although the respondent was still addicted, he did not believe the respondent had used drugs since the end of 1989. Unlike the respondent, Mr. Vincent said that the substance abuse carried over into the respondent’s professional life. ⁶³ In its recommendation to the Review Board, the Inquiry Panel, referring to both complaints, stated its belief that “Respondent’s practice of law requires further supervision due to his addiction, and the Review Board and/or the court is the appropriate body to do so.” The Review Board referred to the respondent’s substance abuse in both cases. In the Pearl case, under “General Information”, it summarized the testimony concerning its extent. 10 The reference in the Waranch case was less pointed; the Board mentioned the “General Information” section of the Pearl decision.

It also wrote: “His failure to monitor his escrow account was a result of his substance abuse and ... during the period in question, he was in the worst part of his addiction.” In neither case did it explicitly find that the respondent was then, or had been, incompetent “as a result of his dependency on alcohol, cocaine, and possibly other drugs,” within the meaning of Maryland Rule BV1 i. On the contrary, in the Pearl Report and Decision, the Review Board stated: [The Inquiry] Panel found no misappropriation of clients’ funds, that respondent adequately represented his clients and the handling of their cases, that he had made no misrepresentation to his clients, that he had given no satisfactory answer as to the bad checks in escrow accounts with insufficient funds and that he did not separate his monies from that of his clients or third parties. The Review Board did not disagree with those findings. Nor, in either case, did the Board, state that the respondent had violated Rules 1.1 or 1.16.

It simply agreed with the Inquiry Panel that, in both cases, the respondent had violated Rule 1.15(a) and § 10-301, et seq. of the Business and Occupations Article. Consequently, in both cases, “[b]y a vote of 13 for, none against and no abstentions, the Board recommended that charges be filed.” ⁶⁴ In addition to the specific violations mentioned by the Inquiry Panel and the Review Board, Bar Counsel charged in the Waranch case, but not the Pearl case, a violation of Disciplinary Rule 8.4. In both the Pearl and Waranch cases, Bar Counsel brought charges involving the respondent’s competence adequately to provide representation and to practice law. Bar Counsel moved for, and Judge Murphy ordered, a physical and mental examination of the respondent.

The examination was conducted by John M. Henderson, M.D. In the report he submitted to the court, Dr. Henderson opined that, the respondent had been, and may still be, addicted to cocaine and alcohol. His addiction to cocaine started, he believed, in 1987 and continued at least until he was admitted to the Changing Point treatment facility. He asserted that the respondent has abused alcohol for the majority of his adult life. In Dr. Henderson’s view, the addictions “significantly diminished” the respondent’s professional capabilities.

Indeed, he thought that the addiction caused, in whole or part, the respondent’s mismanagement of his escrow account. Dr. Henderson also expressed doubt that the respondent has stopped abusing cocaine and alcohol, noting that his urine revealed the presence of cocaine metabolites when he was tested during his visit to his office. Consequently, Dr. Henderson observed that the respondent’s steps to help himself and get proper treatment have been erratic and inconsistent and that he has failed to conform to the recommendations of Richard Vincent. Dr. Henderson concluded: [The respondent’s] ability to manage his law practice is diminished; his motivation is also lowered, and he appears to be functioning marginally at best in all areas of his life including his practice.

This observation was based, Dr. Henderson said, on his belief that the respondent had not stopped all drug use. Although the respondent and Mr. Vincent testified essentially as they had before the Inquiry Panel, Judge Murphy agreed with Dr. Henderson that the respondent was still ⁶⁵ abusing cocaine and alcohol and was inconsistent and erratic in helping himself with those problems. He found “that alcohol and drug abuse are the causes of respondent’s inability to comply with his duties as a lawyer.” III. Both parties excepted to the court’s findings of fact and conclusions of law.

A. The petitioner excepted to the court’s conclusion that “Respondent did not misappropriate client funds as he never intended to permanently deprive the clients of their funds.” It argues, relying on, inter alia, Attorney Grievance Commission v. Pattison, 292 Md. 599, 609-610 , 441 A.2d 328, 333 (1982), that an intent permanently to deprive a client is not a necessary element of misappropriation of clients funds by an attorney. 11 Whether this exception has merit must await the disposition of one of the respondent’s exceptions. Because, as we shall see, the respondent prevails on the argument that the misappropriation charge was improperly brought, we need not address the petitioner’s exception. Cf. Attorney Griev.

Comm’n v. Berger, 326 Md. 129, 131 , 604 A.2d 58 (1992); Attorney Griev. Comm’n v. Owrutsky, 322 Md. 334, 355 , 587 A.2d 511, 521 (1991). B. The respondent took four exceptions. Two of them—that he did not receive a fair hearing and to the total acceptance of the petitioner’s conclusions of fact and law and the total rejection of his own—are interrelated.

The latter exception does double duty by also being one of the reasons for the petitioner’s perception that he did not re ⁶⁶ ceive a fair hearing. That Judge Murphy ignored portions of Dr. Henderson’s testimony favorable to him, and did not consider evidence concerning a serious automobile accident in which he was involved, and which caused him to suffer post-traumatic stress syndrome, as well as Judge Murphy’s failure to formulate his own findings of fact and conclusions of law, in his view, further buttress his conclusion. Further, the court’s ruling on an evidentiary matter, which we address infra, also contributed to the respondent’s belief that Judge Murphy preferred the petitioner’s case to his own. The record does not support the respondent.

Those exceptions are overruled. C. The respondent also excepted “to the court’s refusal to strike all charges that were filed against the Respondent to the Attorney Grievance Commission that are not under the direction of the Review Board as applied by the BV Rules.” He argues that Rule BY9 a, which provides that “[c]harges against an attorney shall be filed by the Bar Counsel acting at the direction of the Review Board,” given its use of the word “shall”, which is mandatory, coupled with its requirement that Bar Counsel act at the “direction” of the Review Board, restricts Bar Counsel’s power to charge; it may only file those charges that the Review Board directs. In this case, the respondent asserts that the Review Board, in each case, authorized two charges; therefore, Bar Counsel could not bring more. 12 1. Addressing the misappropriation issue, the petitioner rejoins that the facts found by the Inquiry Panel and accepted by the Review Board support the charges brought and, in ⁶⁷ addition, the “direction” of the Review Board does not expressly preclude them.

The petitioner justifies the Rule 8.4 charge, brought in the Waranch case only, by reference to the Review Board’s decision in the Pearl case. It points out that the charge could have been sustained in both cases. Nevertheless, based on the evidence in the Pearl case, the Inquiry Panel explicitly found, and the Board agreed, that the respondent had not misappropriated client funds or misrepresented facts to his client, while in the Waranch case, the record was silent on those points. Thus, looking at the Board’s decision in the two complaints, the petitioner argues that it had more “elbow room” to charge misappropriation in the Waranch case.

In Attorney Grievance Commission v. McBurney, 282 Md. 116 , 383 A.2d 58 (1978), we considered an issue very much like that presented here. There, Bar Counsel’s petition alleged that McBurney violated portions of three disciplinary rules. The factual predicate for the petition consisted of the following: McBurney’s deposit of client funds in his personal checking account; his writing of two checks on that account, both made payable to the client, that were not honored because of insufficient funds; and McBurney’s payment of the client some months after McBurney had received the funds. 282 Md. at 118 , 383 A.2d at 60 . Before the three judge panel, McBurney successfully argued that only one of the violations—DR 9-102(A), pertaining to the preservation of the identity of funds and the property of a client—was properly before it.

He maintained that the other charges had not been before the Inquiry Panel which had earlier considered the matter, 282 Md. at 118 , 383 A.2d at 60 and, therefore, were never forwarded to the Review Board for its consideration. 282 Md. at 118-19 , 383 A.2d at 60 . He argued that inasmuch as the Inquiry Panel dismissed an allegation pertaining to counsel’s competence “and only sent forward the single charge [of] co-mingling of his client’s funds with his own funds”, Bar Counsel should not have framed the additional charges. 282 Md. at 119 , 383 A.2d at 60 . ⁶⁸ We sustained Bar Counsel’s exception. The nature of the procedure prescribed by the rules was critical to our analysis. Having reviewed the rules, we concluded that the proceedings before the Inquiry Panel were like those before a grand jury, 282 Md. at 122 , 383 A.2d at 62 , and those before the three-judge panel 13 were analogous to a hearing before a master in chancery. 282 Md. at 123 , 383 A.2d at 62 .

Thus, we pointed out, it is the “complaint that an attorney has committed an act of misconduct”, i.e., the operative facts alleged by the complainant as constituting the misconduct, that is referred to the Inquiry Panel. 282 Md. at 122 , 383 A.2d at 62 . We then said: What McBurney fails to recognize is that before the Inquiry Panel he was responding to the factual allegation that he placed funds of his client ... in his own personal account, that he did not attempt to pay over those funds to [his client] until some three months after the settlement, that his actions are susceptible of an inference that he had invaded those funds since he had an insufficient amount on deposit in his account to pay the sum due [his client] when each of the two checks was presented, and that it was not until about seven months after the settlement and more than three months after the first check was drawn that [the client] received his money. The Inquiry Panel found reason to believe this allegation, just as a grand jury may find probable cause. The Review Board agreed and directed that charges be filed.

Bar Counsel then framed the charges, noting the disciplinary rules which such charges would violate, just as a prosecutor would frame the formal charges of an indictment after a grand jury has returned a presentment. It is these charges in the petition to us, as framed by Bar Counsel, against which this attorney must defend himself. 282 Md. at 123-24 , 383 A.2d at 62 . Furthermore, we explained: ⁶⁹ The command of Rule BV 9c that “[t]he charges ... be sufficiently clear and specific reasonably to inform the attorney proceeded against of any misconduct charged” does not require Bar Counsel when he petitions us for disciplinary action against an attorney to say that the alleged conduct is a violation of a specific rule. It is the factual allegation against which the individual must defend himself.

If Bar Counsel wishes to specify a violation of certain disciplinary rules in the petition to us, then certainly he should, as he did here, select all rules which conceivably might have application to the facts of the particular case, because he becomes limited in the disciplinary action by such rules as he selects. 282 Md. at 123-24 , 383 A.2d at 62-3 . The petitioner concedes that, because the Board in the Pearl case expressly stated that it agreed with the Inquiry Panel’s finding that the respondent did not misappropriate client funds, it would have been improper to, hence, it could not, charge misappropriation in that case. It took a different approach in the Waranch case, however. Because the Board did not state, explicitly, that it agreed with the Inquiry Panel’s identical finding on the issue of misappropriation, without which the facts permitted an inference that the respondent did misappropriate client funds, the petitioner asserts that it was empowered to charge misappropriation in that case.

The petitioner thus interprets McBurney to permit the framing of a charge specifically found by the Inquiry Panel not to have been proven so long as the Review Board does not expressly adopt the Inquiry Panel’s finding in that regard. In both cases, the Inquiry Panel’s factual findings with regard to whether the respondent misappropriated client funds were identical. So, too, were the recommendations, regarding the charges to be brought, which it forwarded to the Board for its review. Notwithstanding that, in each case, the Board agreed with the Inquiry Panel’s recommendation as to the charges to be brought, based only on the fact, that in the Waranch case, the Board did not ⁷⁰ expressly state that it agreed with the Panel’s misappropriation of funds findings, the petitioner finds a sufficient basis to frame a misappropriation charge in that case.

Where, as here, the Inquiry Panel, in separate cases, has made substantially identical recommendations and findings of fact, one of which being that a charge otherwise supported by the facts has not been proved, and the Review Board adopts the recommendations without exception, Bar Counsel may not frame different charges in the two cases based on the Board’s express agreement with the finding in one and silence in that regard, in the other. The cases may be charged differently only if the Board affirmatively indicates that they should be; in short, where the cases are otherwise identical, authorization to charge may not be presumed from the absence of an express preclusion appearing in the record. 2. The petitioner did not respond to the respondent’s challenge to the propriety of the incompetence charges. The respondent has consistently maintained that such charges were not, and, indeed, could not have been, authorized by the Board.

Resolution of the issue requires application of the same analytical framework as we applied to the misappropriation charge. The Inquiry Panel was, to be sure, concerned with the respondent’s substance abuse. For that reason, it expressed the belief that “respondent’s practice of law requires further supervision due to his addiction,” suggesting that the Review Board might take responsibility in that regard. Nevertheless, in the Pearl case it explicitly found that the respondent “adequately represented his clients in the handling of their cases, including the preparation of settlement sheets at the conclusion of the cases.” As it did on the misappropriation issue, the Board agreed.

No issue in that regard having been presented, the Inquiry Panel made no explicit finding concerning the respondent’s handling of the legal matters giving rise to the Waranch ⁷¹ complaint. 14 Consequently, the Board did not have to expressly agree with the Inquiry Panel in that regard. The Board’s only conceivable reference to the respondent’s competence was its repetition of the respondent’s explanation for his failure to monitor his escrow account, i.e., that it was due to his substance abuse, which, at that time, was at its worst. A third complaint was also before the Inquiry Panel for hearing. That complaint, filed by Clevel Harris, alleged that the respondent “neglected the matter [for which he was retained], was unprepared at the [Workers’ Compensation] hearing, and failed to turn over her file to her on a timely basis so she could proceed with the appeal.” Following the hearing, the Inquiry Panel specifically found: * * * * * * b.

The delay in turning over the file to complainant after the WC case did not prejudice or damage complainant. c.