Attorney Grievance Commission v. Landau

BARBERA, C.J. Petitioner, the Attorney Grievance Commission of Maryland, acting through Bar Counsel, filed with this Court a Petition for Disciplinary or Remedial Action against Respondent, attorney Lee Elliott Landau, on February 22, 2013. See Md. Rule 16-751 (a). The petition alleged violations of the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) in connection with Respondent’s agreement to pursue his client’s delinquent accounts receivable on a contingency fee basis and subsequent failure to remit to that client any portion of the funds he collected on the client’s behalf. Specifically, the petition alleged that Respondent violated MLRPC 1.3 (diligence) 1 ; MLRPC 1.4(a) and (b) (communication) 2 ; MLRPC 1.15(a) (safekeeping property) 3 ; MLRPC ⁶⁴⁴ 1.16(d) (declining or terminating representation) 4 ; MLRPC 8.1(a) and (b) (bar admission and disciplinary matters) 5 ; ⁶⁴⁵ MLRPC 8.4(a), (b), (c), and (d) (misconduct) 6 ; Maryland Rule 16-609 (prohibited transactions) 7 ; Maryland Code (1989, 2010 Repl.

Vol.), § 10-806 of the Business Occupations and Professions Article (hereinafter “BOP”) (misuse of trust money) 8 ; and BOP § 10-606(b) (penalties). 9 On March 1, 2013, we designated the Honorable Nelson W. Rupp, Jr., of the Circuit Court for Montgomery County (“the hearing judge”) to conduct an evidentiary hearing and render written findings of fact and conclusions of law. See Md. Rules 16-752(a) and 16-757(e). Respondent did not file a response to the Petition, timely or otherwise. Accordingly, on June 20, 2013, the hearing judge entered a default order against Respondent and the matter was set for a hearing on July 29, 2013.

Respondent, notified of the default order and hearing ⁶⁴⁶ date, neither moved to vacate the order nor appeared at the hearing. During the July 29 hearing, the hearing judge received evidence from Petitioner, acting through Assistant Bar Counsel. Thereafter, the hearing judge issued written findings of fact and conclusions of law, in which he concluded, by clear and convincing evidence, that Respondent had violated MLRPC 1.3; MLRPC 1.4; MLRPC 1.15(a); MLRPC 1.16(d); MLRPC 8.1(b); MLRPC 8.4(a), (b), (c), and (d); Maryland Rule 16-609; BOP § 10-306; and BOP § 10-606. On March 7, 2014, we held oral argument, at which only Petitioner, acting through Assistant Bar Counsel, appeared.

That day, we entered a per curiam order disbarring Respondent. We explain in this opinion the reasons for Respondent’s disbarment. I. Based on the evidence accepted at the July 29 hearing, the hearing judge set forth findings of fact. We summarize them: Respondent has been a member of the Bar of this Court since November 1, 1978.

In March 2003, Cindy and Matthew Griswold, owners of American Marketing Services, Inc. (a company that does business as “The Merchandiser”), retained Respondent to collect delinquent accounts receivable on behalf of their company, filing collection actions whenever necessary. Respondent was to be paid on a contingency basis: he would keep as his fee one-third of any collections he made on behalf of The Merchandiser. In March 10 2011, Ms. Griswold received a telephone call from a client requesting a statement from The Merchandiser that her delinquent account had been paid in full subsequent to the filing of a collection action against her. Ms. Griswold looked into the matter and discovered that this client’s account had been referred to Respondent for collection, Respondent had filed an action against the client, a judgment had been ⁶⁴⁷ awarded, and the judgment had been satisfied.

The Merchandiser, however, had never received any portion of the judgment from Respondent. Ms. Griswold then searched the Maryland Judiciary Case Search website for various clients whose accounts were listed as delinquent. She discovered that lawsuits had been filed in many matters referred to Respondent and the cases had been settled, with judgments denoted as satisfied. Ms. Griswold believed that Respondent had collected approximately $78,773 from The Merchandiser’s debtors on the company’s behalf.

Yet, The Merchandiser had received no funds from Respondent in connection with those claims. From June through August 2011, Ms. Griswold requested from Respondent by telephone and email the status of various collection matters he was handling on behalf of The Merchandiser. Respondent remitted the collection amount, minus his fee, for approximately seven delinquent accounts but failed to respond as to over 200 other accounts. 11 On August 29, 2011, Ms. Griswold sent a letter to Respondent demanding explanation of the status of all collection matters that had been referred to him, along with payment of any funds owed to The Merchandiser. Respondent did not ⁶⁴⁸ reply to this letter.

Ms. Griswold then retained counsel, John Sadler, to assist in obtaining a response, and any funds owed to The Merchandiser, from Respondent. On September 16 and October 7, 2011, Mr. Sadler sent letters to Respondent requesting the status of all collection accounts and demanding that he remit all funds owed to The Merchandiser. Respondent did not reply to those letters. On October 28, 2011, Mr. Sadler sent a complaint letter to the Attorney Grievance Commission describing Respondent’s failure to respond to The Merchandiser concerning the status of the collection accounts.

On November 15 and 29, 2011, Bar Counsel sent letters to Respondent requesting a written response to Mr. Sadler’s complaint. Respondent did not reply to those letters. Bar Counsel obtained a subpoena for the records of Respondent’s attorney trust account at Capital One Bank. On August 2, 2012, after reviewing the records, Bar Counsel sent a letter to Respondent requesting an accounting of numerous withdrawals he made from his attorney trust account without any notation as to the client matter for which the disbursements were made.

Respondent did not reply to that letter. Based upon these factual findings, the hearing judge concluded, by clear and convincing evidence, that Respondent violated MLRPC 1.3 (diligence); MLRPC 1.4 (communication); MLRPC 1.15(a) (safekeeping property); MLRPC 1.16(d) (declining or termination representation); MLRPC 8.1(b) (bar admission and disciplinary matters); MLRPC 8.4(a), (b), (c), and (d) (misconduct); Maryland Rule 16-609 (prohibited transactions); and BOP § 10-306 (misuse of trust money). The hearing judge wrote: This Court concludes that the Respondent, after being engaged to provide legal services to The Merchandiser, failed to act with reasonable diligence and promptness in carrying out that representation, thereby violating [MLRPC] 1.3. The Respondent also failed to keep his client reasonably informed about the status of his representation and failed to respond to his client’s reasonable re ⁶⁴⁹ quests for information, thereby violating MLRPC 1.4.

The Respondent repeatedly failed to respond to the numerous emails, telephone calls and letters from Ms. Griswold, other officers of The Merchandiser, and the company’s attorney, Mr. Sadler, concerning the status of the two hundred (200) collection accounts Respondent was handling on behalf of The Merchandiser. Upon abandoning his representation of The Merchandiser, the Respondent violated MLRPC 1.16(d) by not giving reasonable notice to the client and by failing to take steps to the extent reasonably practicable to protect his client’s interests, such as surrendering papers and property to which his client was entitled. Despite his collection, on behalf of The Merchandiser, of over $78,000 [ 12 ] from debtors of The Merchandiser’s outstanding accounts, Respondent never paid any portion of said funds to his client nor advised the company that he received such funds on its behalf. The Respondent kept all funds collected on behalf of The Merchandiser and failed to submit any portion of same to his client.

The Respondent knowingly misappropriated his client’s, The Merchandiser’s, portion of the settlement funds received from numerous collection matters he settled on its behalf, thereby violating MLRPC 1.15(a) and 8.4(a), (b), and (c), Maryland Rule 16-609, and [BOP] §§ 10-306 and 10-606.[ 13 ] ⁶⁵⁰ The Respondent violated MLRPC 8.1(b) when he knowingly and repeatedly failed to respond to lawful demand for information from the office of Bar Counsel. Taken in its totality, the Respondent’s conduct was prejudicial to the administration of justice, and therefore violated MLRPC 8.4(d). Mitigation The Respondent has provided no evidence that mitigates his misconduct.

II

In attorney discipline proceedings, this Court “has original and complete jurisdiction and conducts an independent review of the record.” Attorney Grievance Comm’n v. Page, 430 Md. 602, 626 , 62 A.3d 163 (2013) (citing Attorney Grievance Comm’n v. Jarosinski, 411 Md. 432, 448 , 983 A.2d 477 (2009)). We accept the hearing judge’s findings of fact as correct unless shown to be clearly erroneous. Attorney Grievance Comm’n v. Lara, 418 Md. 355, 364 , 14 A.3d 650 (2011) (citing Attorney Grievance Comm’n v. Palmer, 417 Md. 185, 205 , 9 A.3d 37 (2010)). If no exceptions are filed, we may treat the findings of fact as established for the purpose of determining the appropriate sanction.

Md. Rule 16-759(b)(2)(A). We review de novo the hearing judge’s conclusions of law. Md. Rule 16 — 759(b)(1); Page, 430 Md. at 626 , 62 A.3d 163 . This is true even if, as in this case, a default order was entered against the respondent by the hearing judge.

See Attorney Grievance Comm’n v. Tinsky, 377 Md. 646, 653 , 835 A.2d 542 (2003). The ultimate decision as to whether an attorney has engaged in professional conduct lies with this Court. Attorney Grievance Comm’n v. Joehl, 335 Md. 83, 88 , 642 A.2d 194 (1994).

III

Neither Respondent nor Bar Counsel filed exceptions to the hearing judge’s findings of fact. We therefore treat ⁶⁵¹ those findings — with the exception of the finding that Respondent “never” responded to Ms. Griswold — as established. See Md. Rule 16-759(b)(2)(A), supra note 11. Likewise, neither party filed exceptions to the hearing judge’s conclusions of law.

Based upon our de novo review of the record in this case, we agree with the hearing judge, for the reasons stated in his written conclusions of law, that Respondent violated MLRPC 1.3; MLRPC 1.4; MLRPC 1.15(a); MLRPC 1.16(d); MLRPC 8.1(b); MLRPC 8.4(a), (b), (c), and (d); Maryland Rule 16-609; and BOP § 10-306. The task that remains, then, is for us to determine the appropriate sanction for Respondent’s misconduct. Respondent did not submit a recommendation for sanction. Bar Counsel, for his part, recommends disbarment.

Bar Counsel contends that, absent “compelling extenuating circumstances,” which the hearing judge did not find were