Attorney Grievance Commission v. Kotlarsky

Hotten, J. Respondent, Mark Kotlarsky, was admitted to the Bar of Maryland on December 15, 1992. On August 22, 2016, the Attorney Grievance Commission of Maryland (“the Commission”), through Bar Counsel, filed in this Court a Petition for Disciplinary or Remedial Action (“Petition”) against Respondent as a result of having received a notice from Citibank that Respondent had over-drafted his operating account ending in - 3487. Upon investigation, the Commission discovered that Respondent had failed to disclose assets that were associated with his law firm’s pension plan in his bankruptcy petition, and ⁴⁷³ that Respondent had outstanding federal and state tax liens totaling $85,092.72. 1 In its Petition, the Commission alleged that Respondent violated Maryland Attorneys’ Rules of Professional Conduct (“MARPC”) § 19-301.15(a) (safekeeping property), 2 § 19-308.1(b) (bar admission and disciplinary matters), 3 and § 19-308.4(a), (c), and (d) (misconduct). 4 ⁴⁷⁴ On September 1, 2016, this Court referred the matter to the Honorable Steven G. Salant (“the hearing judge”) in the Circuit Court for Montgomery County to conduct a hearing and issue findings of fact and conclusions of law pursuant to Maryland Rule 19—727(d). 5 On February 10, 2017, the hearing judge conducted an evidentiary hearing regarding Respondent’s professional misconduct. Thereafter, the hearing judge issued Findings of Fact and Conclusions of Law, determining by clear and convincing evidence that Respondent violated MARPC § 19-308.1(b) and MARPC § 19-308.4(a),(c), and (d).On April 4, 2017, this Court entered a per curiam order disbarring Respondent, effective immediately.

For the reasons stated below we hold that the hearing judge’s conclusions regarding Respondent’s violations of MARPC § 19-308.1(b) and § 19-308.4(a), (c), and (d) were supported by clear and convincing evidence and disbarment is the appropriate sanction. I. BACKGROUND a. The Hearing Judge’s Findings of Fact In his Findings of Fact and Conclusions of Law, the hearing-judge rendered the following factual findings: During the time covered by the [Petition], Respondent maintained a general solo practice in Montgomery County. On January 14, 2015, a check presented to Citibank account No. X3487 by the Respondent was dishonored for insufficient funds.

On January 26, 2015, Bar Counsel received notice from Citibank that Respondent had over- ⁴⁷⁵ drafted account No. X3487 in the amount of $103.83. Bar Counsel informed the Respondent through letter dated January 27, 2015 that he should provide information and documentation relating to the overdraft within ten days of receipt of the letter. The letter was sent to the address maintained with the Client Protection Fund. Respondent wrote to Bar Counsel by letter dated March 12, 2015, stating the account was an operating account, not an attorney trust account, and the overdraft was due to a stop payment.

Respondent provided a copy of the January 2015 statement for account Nos. X3487 and X1177. Account No. X1177 was Respondent’s attorney trust account. The statement showed that Respondent disbursed a sum of $53,484 to “6 Beachside LLC” (“LLC”) from his attorney trust account on January 7, 2015. The LLC is a Florida limited liability company owned by the Respondent.

The LLC owns real property in Palm Coast, and the resident agent for the LLC is Alla March, aka, Alla Marchenko, who is Respondent’s girlfriend and paralegal. Respondent replied to Bar Counsel’s inquiries that the transactions to the LLC were for his law firm’s pension plan. After further investigation, Bar Counsel discovered that Respondent filed a Petition for Chapter 7 Bankruptcy. Respondent failed to disclose all of his assets, as well as assets associated with his pension plan in the bankruptcy petition, which is signed under oath.

Additionally, Bar Counsel learned that Respondent had outstanding state and federal tax liens in the amount of approximately $22,948. Respondent was instructed to provide information and documentation about the tax liens and related tax liability by July 10, 2015 through a letter from Bar Counsel dated June 22, 2015. However, Respondent failed to respond in any manner after receiving the letter. Bar Counsel sent another letter on July 13, 2015 requesting a reply no later than July 27, 2015 and Respondent again failed to answer after receiving the second letter.

On August 4, 2015, Bar Counsel sent a third letter to Respondent, which he did not answer. ⁴⁷⁶ Bar Counsel received Respondent’s bank records from Citibank through a subpoena issued on June 22, 2015. Bar Counsel requested information about eight transactions pertaining to Respondent’s attorney trust account and relating to client ledgers for six named individuals through letter dated January 26, 2016. Respondent received the letter on about the same day and has failed to answer. b. The Hearing Judge’s Conclusions of Law Based on the aforementioned findings of fact, the hearing judge concluded that Respondent had violated MARPC § 19-308.1(b) (bar admission and disciplinary matters), and 8.4(a), (c), and (d) (misconduct).

MARPC § 19-308.1(b) MARPC § 19-308.1(b) prohibits a lawyer from [F]ail[ing] to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority, except that this Rule does not require disclosure of information otherwise protected by Rule 19-301.6 (1.6). The hearing judge concluded that Respondent violated MARPC § 19-308.1(b) by failing to respond to Bar Counsel’s letters and requests for information dated June 22, 2015, July 13, 2015, August 4, 2015, and January 26,2016. MARPC § 19-308.4 MARPC § 19-308.4 provides, inter alia, that “[i]t is professional misconduct for an attorney to:” (a) violate or attempt to violate the Maryland Attorneys’ Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another; * ⅜ * (c) engage in conduct involving dishonest, fraud, deceit or misrepresentation; ⁴⁷⁷ (d) engage in conduct that is prejudicial to the administration of justice[.] The hearing judge determined that Respondent violated subsection (a) because Respondent had violated other Rules of Professional Conduct. See Attorney Grievance Comm’n v. Gallagher, 371 Md. 673, 710-11 , 810 A.2d 996, 1018 (2002) (“As we have held that respondent violated several Rules of Professional Conduct, [the attorney] necessarily violated [MARPC] 8.4(a) as well.”); see also Attorney Grievance Comm’n v. Foltz, 411 Md. 359, 411 , 983 A.2d 434, 465 (2009).

The hearing judge held that Respondent violated MARPC § 19-308.4(c) by failing to disclose assets associated with his pension plan when he filed his Petition for Chapter 7 Bankruptcy on February 6, 2013. The hearing judge also concluded that Respondent’s conduct, taken as a whole, was prejudicial to the administration of justice in violation of Rule 8.4(d). 6 The hearing judge also determined there were no mitigating factors in the case at bar.

II

STANDARD OF REVIEW In Attorney Grievance Comm’n v. Hodes, 441 Md. 136 , 105 A.3d 533 (2014), we articulated our oft-cited standards for reviewing attorney disciplinary proceedings, stating that: This Court has original and complete jurisdiction over attorney discipline proceedings in Maryland. We conduct an independent review of the record and we accept the hearing judge’s findings of fact unless shown to be clearly errone ⁴⁷⁸ ous. Under our independent review of the record, we must determine whether the findings of the hearing judge are based on clear and convincing evidence. With respect to exceptions, upon our review of the record, the hearing judge’s findings of fact generally will be accepted unless they are clearly erroneous.

A hearing judge’s factual finding is not clearly erroneous if there is any competent material evidence to support it. As to the hearing judge’s conclusions of law, such as whether provisions of the Maryland [Attorneys’] Rules of Professional Conduct were violated, our consideration is de novo. Id. at 168 , 105 A.3d at 552 (citations, internal quotation marks, and footnote omitted).

III

DISCUSSION We note that Respondent did not appear for either the fact-finding or for oral argument before this Court and that neither Bar Counsel nor Respondent filed exceptions to the hearing judge’s findings of fact or conclusions of law. Accordingly, we conclude that the hearing judge’s findings of fact are thereby established. See Maryland Rule 19-741(b)(2)(A) (“If no exceptions are filed, the Court may treat the findings of fact as established.”). We also agree that the findings of fact establish by clear and convincing evidence that Respondent violated MARPC § 19-308.1(b) and § 19-308.4(a), (c), and (d) when he failed to respond to lawful demands for information by Bar Counsel and failed to disclose assets associated with his law firm’s pension plan in his petition for bankruptcy. 7 ⁴⁷⁹ IV.

SANCTION The Commission requests that this Court disbar Respondent from the practice of law. According to the Commission, Respondent’s repeated failure to respond to Bar Counsel’s inquiries regarding outstanding tax liens, his attorney trust account, and his failure to disclose assets associated with his law firm’s pension plan in his Petition for Chapter 7 Bankruptcy, warrant such a sanction. We agree. “In fashioning the appropriate sanction to be imposed, we are guided by our interest in protecting the public and the public’s confidence in the legal profession.” Attorney Grievance Comm’n v. Pennington, 387 Md. 565, 595 , 876 A.2d 642, 660 (2005) (citing Attorney Grievance Comm’n v. Powell, 369 Md. 462, 474 , 800 A.2d 782, 789 (2002)). We have also noted that “the purpose of attorney disciplinary proceedings is not to punish the lawyer, but to protect the public as well as to deter other lawyers from engaging in similar misconduct.” Id. at 596 , 876 A.2d at 660 (citing