Attorney Grievance Commission v. McDowell

WATTS, J. This attorney discipline proceeding involves a lawyer who “robo-signed” a large number of foreclosure-related documents, ³¹ 1 and the managing partner of the law firm at which the robo-signing occurred. While John Stephen Burson (“Burson”), Respondent, a member of the Bar of Maryland, was the managing partner of the law firm that is now Shapiro Brown & Alt, LLP (“the Shapiro Firm”), 2 Matthew John McDowell (“McDowell”), Respondent, a member of the Bar of Maryland and a lawyer at the Shapiro Firm, signed trustee’s deeds 3 and affidavits on behalf of William M. Savage (“Savage”), another lawyer and partner at the Shapiro Firm. At the Shapiro Firm, paralegals (who were also notaries public) notarized the trustee’s deeds and affidavits. Although McDowell had signed the trustee’s deeds and affidavits outside the paralegals’ presence, the notary jurats stated that the trustee’s deeds and affidavits had been signed in the paralegals’ presence.

The robo-signing and notarizations at the Shapiro Firm came to the attention of the Attorney Grievance Commission (“the Commission”), Petitioner. ³² On October 17, 2012, on the Commission’s behalf, Bar Counsel filed in this Court a “Petition for Disciplinary or Remedial Action” against Burson and McDowell, charging Burson with violating Maryland Lawyers’ Rule of Professional Conduct (“MLRPC”) 5.1 (Responsibilities of Partners, Managers, and Supervisory Lawyers) and 5.3 (Responsibilities Regarding Nonlawyer Assistants); charging McDowell with violating MLRPC 5.2(a) (Responsibilities of a Subordinate Lawyer); 4 and charging Burson and McDowell with violating MLRPC 1.1 (Competence) and 8.4 (Misconduct). On October 22, 2012, this Court designated the Honorable Marielsa A. Bernard (“the hearing judge”) of the Circuit Court for Montgomery County to hear this attorney discipline proceeding. On July 9, 2013, the hearing judge conducted a hearing. On September 27, 2013, the hearing judge filed in this Court an opinion including findings of fact and conclusions of law that McDowell had not violated any MLRPC and that Burson: had violated MLRPC 5.1(a) and 5.3(a); had not violated MLRPC 1.1, 5.3(b), or 8.4; 5 was not vicariously responsible for McDowell’s conduct under MLRPC 5.1(c); and was not vicariously responsible for the paralegals’ conduct under MLRPC 5.3(c).

On April 29, 2014, we heard oral argument. For the below reasons, we reprimand Burson and McDowell. ³³ BACKGROUND In her opinion, the hearing judge found the following facts, which we summarize. In 1985, this Court admitted Burson to the Bar of Maryland. In June 1985, Burson helped form the Shapiro Firm, which represented mortgagees in foreclosure actions in Maryland and Virginia.

Burson was the Shapiro Firm’s managing partner. On December 12, 2001, this Court admitted McDowell to the Bar of Maryland. In 2009 (for present purposes), McDowell began working for the Shapiro Firm. 6 Savage was McDowell’s supervisor. At Savage’s direction and over the relevant period of time, McDowell reviewed for accuracy trustee’s deeds and affidavits in approximately 900 foreclosure actions and signed the trustee’s deeds and affidavits on Savage’s behalf.

The affidavits contained averments regarding facts that trial courts had already found {e.g., that the mortgagors were not serving in the military). McDowell had the legal knowledge that was reasonably necessary to review for accuracy the trustee’s deeds and affidavits. McDowell was conscientious in reviewing for accuracy the trustee’s deeds and affidavits; McDowell did not make any errors in doing so, and none of the trustee’s deeds were defective or challenged in court. McDowell believed (albeit mistakenly) that it was not improper to sign trustee’s deeds and affidavits on Savage’s behalf.

Burson neither ordered nor ratified McDowell’s conduct. At the Shapiro Firm, paralegals (who were also notaries public) notarized the trustee’s deeds and affidavits that McDowell had signed on Savage’s behalf. Although McDowell had signed the trustee’s deeds and affidavits outside the paralegals’ presence, the notary jurats stated that the trustee’s deeds and affidavits had been signed in the paralegals’ presence. Burson neither ordered nor ratified the paralegals’ conduct; at the hearing, Burson testified that he believed that ³⁴ the notarizations at the Shapiro Firm did not violate Virginia law. 7 Sometime in or before 2010, two other lawyers at the Shapiro Firm signed each other’s names on foreclosure-related documents.

Various circuit courts issued show cause orders regarding the lawyers’ signatures. In 2011, Burson learned that McDowell had signed trustee’s deeds and affidavits on Savage’s behalf outside the paralegals’ presence. Until then, Burson had made no efforts to ensure that the Shapiro Firm had in effect measures giving reasonable assurance that lawyers did not robo-sign documents and that paralegals did not falsely notarize documents. After learning that McDowell had signed trustee’s deeds and affidavits on Savage’s behalf outside the paralegals’ presence, Bur-son made timely good faith efforts to rectify the misconduct’s consequences and to prevent future misconduct by ensuring that McDowell’s past signing of the trustee’s deeds on Savage’s behalf neither created any problems as to title nor necessitated that the trustee’s deeds be executed again, requiring all employees at the Shapiro Firm to promise in writing that they would neither sign others’ names nor allow others to sign their names, and requiring all notaries public at the Shapiro Firm to promise in writing that they would not violate laws regarding notarizations.

Burson is respected for his integrity. As a result of the robo-signing at the Shapiro Firm, Burson was sued, received adverse media coverage, voluntarily stopped the active practice of law, and withdrew from the Shapiro Firm, which no longer bears his name. ³⁵ Burson and McDowell have never before received attorney discipline. In the matter before us, they lacked dishonest or selfish motives, were cooperative with Bar Counsel, and showed remorse. STANDARD OF REVIEW In an attorney discipline proceeding, this Court reviews for clear error a hearing judge’s findings of fact, and reviews without deference a hearing judge’s conclusions of law.

See Md. R. 16-759(b)(2)(B) (“The Court [of Appeals] shall give due regard to the opportunity of the hearing judge to assess the credibility of witnesses.”); Attorney Grievance Comm’n v. Reno, 436 Md. 504, 508 , 83 A.3d 781, 783 (2014) (“[T]his Court reviews for clear error a hearing judge’s findings of fact[.]” (Citations omitted)); Md. R. 16-759(b)(l) (“The Court of Appeals shall review de novo the [hearing] judge’s conclusions of law.”). This Court determines whether clear and convincing evidence establishes that a lawyer violated the MLRPC. See Md. R. 16-757(b) (“The [Commission] has the burden of proving the averments of the petition [for disciplinary or remedial action] by clear and convincing evidence.”). DISCUSSION (A) Findings of Fact Burson and McDowell state that they do not except to any of the hearing judge’s findings of fact. 8 The Commission ³⁶ excepts to the hearing judge’s finding that, at the hearing, Burson testified that he believed that the notarizations at the Shapiro Firm did not violate Virginia law.

We need not rule on the exception; as Burson’s counsel conceded at oral argument, the hearing judge’s other findings of fact establish that the notarizations at the Shapiro Firm were false, regardless of whether Burson believed that the notarizations at the Shapiro Firm did not violate Virginia law. Specifically, the hearing judge found that, although McDowell had signed the trustee’s deeds and affidavits outside the paralegals’ presence, the notary jurats stated that the trustee’s deeds and affidavits had been signed in the paralegals’ presence. Although Va.Code Ann. § 55-118.3 permits a notary public to notarize a document that has been signed outside the notary public’s presence, Virginia law does not permit a notary public to falsely represent that a document has been signed in the notary public’s presence. (B) Conclusions of Law Burson does not except to any of the hearing judge’s conclusions of law.

Originally, McDowell did not except to any of the hearing judge’s conclusions of law, but the Commission excepted to the hearing judge’s conclusion that McDowell had not violated MLRPC 8.4(c) (Dishonesty, Fraud, Deceit, or Misrepresentation). Later, however, McDowell and the Commission filed in this Court a “Joint Petition for Reprimand by Consent” in which McDowell and the Commission agree that McDowell violated MLRPC 8.4(d) (Conduct That Is Prejudicial to the Administration of justice). MLRPC 1.1 (Competence) “A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” MLRPC 1.1. ³⁷ Here, the hearing judge was correct in concluding that clear and convincing evidence did not establish that Burson had violated MLRPC 1.1.

Nothing in the hearing judge’s findings of fact indicates that Burson failed to provide competent representation to any client. The hearing judge was correct in concluding that clear and convincing evidence did not establish that McDowell had violated MLRPC 1.1. McDowell had the legal knowledge that was reasonably necessary to review for accuracy trustee’s deeds and affidavits. McDowell was conscientious in reviewing for accuracy the trustee’s deeds and affidavits, and McDowell did not make any errors in doing so.

Although McDowell signed the trustee’s deeds on Savage’s behalf, none of the trustee’s deeds were defective or challenged timely in court. MLRPC 8.4(b) (Criminal Act) “It is professional misconduct for a lawyer to ... commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects[.]” MLRPC 8.4(b). It is a crime to “willfully make a false entry in a public record[J” Md.Code Ann., Crim. Law (2002, 2012 RepLVol.) (“CR”) § 8-606(b)(l).

Additionally, it is a crime to “willfully and falsely make an oath or affirmation as to a material fact ... in an affidavit required by any state, federal, or local law[.]” CR § 9 — 101(a)(2). Here, the hearing judge was correct in concluding that clear and convincing evidence did not establish that McDowell had violated MLRPC 8.4(b). Although McDowell signed trustee’s deeds and affidavits on Savage’s behalf, none of the trustee’s deeds were defective, and the affidavits contained averments regarding facts that trial courts had already found; thus, the signatures did not render the trustee’s deeds and affidavits “false entries]” under CR § 8 — 606(b)(1). Because the affidavits contained averments regarding facts that trial courts had already found, that McDowell signed the affidavits was obvi ³⁸ ously not “material” under CR § 9 — 101(a)(2) for purposes of determinations by trial courts. 8.4(c) (Dishonesty, Fraud, Deceit, or Misrepresentation) “It is professional misconduct for a lawyer to ... engage in conduct involving dishonesty, fraud, deceit[,] or misrepresentation[.]” MLRPC 8.4(c).

Here, we refrain from reviewing the hearing judge’s conclusion that McDowell had not violated MLRPC 8.4(c). As noted above, originally, the Commission had excepted to the hearing judge’s conclusion that McDowell had not violated MLRPC 8.4(c); later, however, McDowell and the Commission filed in this Court the Joint Petition for Reprimand by Consent, which contains a stipulation that McDowell violated MLRPC 8.4(d) (Conduct That Is Prejudicial to the Administration of Justice), but does not contain a stipulation that McDowell violated MLRPC 8.4(c) (Dishonesty, Fraud, Deceit, or Misrepresentation). At oral argument, Bar Counsel stated that the Commission had not officially withdrawn its exception to the hearing judge’s conclusion that McDowell had not violated MLRPC 8.4(c). Nonetheless, Bar Counsel made it clear that the Commission recommends that we reprimand McDowell based on his violation of MLRPC 8.4(d), regardless of any conclusion as to whether McDowell also violated MLRPC 8.4(c).

At oral argument, McDowell’s counsel advised that he believed that the Commission had withdrawn its exception to the hearing judge’s conclusion that McDowell had not violated MLRPC 8.4(c). Although we acknowledge the position that Bar Counsel took at oral argument, it is highly unlikely that McDowell would have conceded that he had violated MLRPC 8.4(d) (which the hearing judge concluded that McDowell had not violated) had McDowell not believed that the Commission had withdrawn its exception to the hearing judge’s conclusion that he had not violated MLRPC 8.4(c). For purposes of our review, we are satisfied that — by filing the Joint Petition for Reprimand by Consent based only on a violation of MLRPC 8.4(d), regardless of the outcome of any exception to the ³⁹ hearing judge’s conclusion that McDowell had not violated MLRPC 8.4(c) — the Commission has essentially engaged in a de facto withdrawal of its exception to the hearing judge’s conclusion that McDowell had not violated MLRPC 8.4(c). Although this Court has the discretion to do so, “[ojrdinarily, we will not look for additional violations where [the Commission] filed no exceptions.” Attorney Grievance Comm’n v. Geesing, 436 Md. 56 , 63 n. 6, 80 A.3d 718 , 722 n. 6 (2013) (alteration in original) (quoting Attorney Grievance Comm’n v. Dore, 433 Md. 685, 707 , 73 A.3d 161, 174 (2013)).

For example, in Geesing, 436 Md. at 63 n. 6, 80 A.3d at 722 n. 6, and Dore, 433 Md. at 707 , 73 A.3d at 174 , attorney discipline proceedings that involved robo-signing, this Court refrained from reviewing hearing judges’ conclusions that lawyers had not violated MLRPC 8.4(c) where the Commission did not except to the same. Consistent with Geesing and Dore , here, we refrain from reviewing the hearing judge’s conclusion that McDowell had not violated MLRPC 8.4(c). MLRPC 8.4(d) (Conduct That Is Prejudicial to the Administration of Justice) “It is professional misconduct for a lawyer to ... engage in conduct that is prejudicial to the administration of justice[.]” MLRPC 8.4(d). Generally, a lawyer violates MLRPC 8.4(d) where the lawyer’s conduct negatively “impacts ... the public’s perception ... of the ... legal profession.” Geesing, 436 Md. at 65 , 80 A.3d at 723 (quoting Dore, 433 Md. at 696 , 73 A.3d at 167 ) (internal quotation marks omitted).

For example, in Geesing, 436 Md. at 65, 58 , 80 A.3d at 723, 719 , this Court held that a lawyer had violated MLRPC 8.4(d) by “negative[ly] impacting] ... the public’s perception of the legal profession” where the lawyer had “authorized [staff members] ... to sign his name on documents — including affidavits — in foreclosure filings[, and had] instructed the staff members (who were also notaries public) to notarize the affidavits, even though he had not signed them.” This Court noted that the robo-signing had, among other consequences, “caused significant media coverage” and “prompted certain ⁴⁰ mortgagors to file several lawsuits arising out of the robosigning against” the lawyer and the law firm. Id. at 65 , 80 A.3d at 723 . Here, the hearing judge was correct in concluding that clear and convincing evidence did not establish that Burson had violated MLRPC 8.4(d). Burson did not participate in, or know of, the robo-signing at the Shapiro Firm.

Thus, Burson’s conduct is distinguishable from that of the lawyer who participated in robo-signing in Geesing, id. at 58, 80 A.3d at 719 . The sole basis for concluding that Burson violated MLRPC 8.4(d) would be that he made no efforts to ensure that the Shapiro Firm had in effect measures giving reasonable assurance that lawyers did not robo-sign documents and that notaries public did not falsely notarize documents. Although, under some circumstances, a supervisor’s failure to take reasonable preventative measures may constitute a violation of MLRPC 8.4(d), here, the existence of this circumstance alone, where Burson was unaware of McDowell’s and the paralegals’ conduct, is insufficient to establish a violation of MLRPC 8.4(d). Clear and convincing evidence persuades us to reverse the hearing judge’s conclusion that McDowell had not violated MLRPC 8.4(d).

Paramount to this conclusion, as noted above, is the circumstance that McDowell concedes that he violated MLRPC 8.4(d). McDowell signed trustee’s deeds and affidavits on Savage’s behalf. 9 Once it became public knowledge, the robo-signing at the Shapiro Firm prompted adverse media coverage and a lawsuit against the Shapiro Firm. Cf. Geesing, 436 Md. at 65 , 80 A.3d at 723 (This Court held that a lawyer had violated MLRPC 8.4(d) where the lawyer had participated in robo-signing that had “caused significant media coverage” ⁴¹ and “prompted certain mortgagors to file several lawsuits arising out of the robo-signing against” the lawyer and the law firm.).

Thus, McDowell’s conduct negatively impacted the public’s perception of the legal profession. MLRPC 5.1 (Responsibilities of Partners, Managers, and Supervisory Lawyers) MLRPC 5.1 states: (а) A partner ... shall make reasonable efforts to ensure that the [law] firm has in effect measures giving reasonable assurance that all lawyers in the [law] firm conform to the [MLRPC]. (c) A lawyer shall be responsible for another lawyer’s violation of the [MLRPC] if: (1) the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved; or (2) the lawyer is a partner ... and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action. “Whether an employee’s ethical breaches are due to the employee’s sub-standard performance or the deliberate circumvention of standard procedures, proper supervision must include mechanisms to determine whether the delegated tasks are being performed.” Attorney Grievance Comm’n v. Kimmel, 405 Md. 647, 682 , 955 A.2d 269, 290 (2008) (footnote omitted). Here, clear and convincing evidence supports the hearing judge’s conclusion that Burson had violated MLRPC 5.1(a).

Prior to Burson’s discovery of McDowell’s and Savage’s conduct, two other lawyers at the Shapiro Firm signed each other’s names on foreclosure-related documents and were the subjects of show cause orders in various circuit courts as a result of the practice. As the Shapiro Firm’s managing partner, Burson was aware that circuit courts issued show cause orders regarding the two lawyers’ signing of documents. ⁴² The hearing judge found that, despite being aware of the “prior incident,” before learning that McDowell had signed trustee’s deeds and affidavits on Savage’s behalf, Burson made no efforts to ensure that the Shapiro Firm had in effect measures giving reasonable assurance that lawyers did not robo-sign documents. McDowell signed Savage’s name in approximately 900 cases. The existence of the show cause orders involving allegedly improper signing of documents, coupled with the number of cases in which McDowell signed Savage’s name, leads to the conclusion that clear and convincing evidence supports the hearing judge’s determination that Burson made no efforts to ensure that the Shapiro Firm had in effect measures giving reasonable assurance that lawyers did not robo-sign documents.

The hearing judge was correct in concluding that clear and convincing evidence did not establish that Burson was vicariously responsible for McDowell’s conduct under MLRPC 5.1(c). 10 As discussed above, McDowell violated MLRPC 8.4(d) by signing trustee’s deeds and affidavits on Savage’s behalf. However, Burson neither ordered nor ratified the signatures; and, after learning about the signatures, Burson took reasonable remedial action by ensuring that McDowell’s signing of the trustee’s deeds on Savage’s behalf neither created any problems as to title nor necessitated that the trustee’s deeds be executed again. Thus, it is readily apparent that Burson did not vicariously violate MLRPC 8.4(d) through McDowell’s conduct. MLRPC 5.3 (Responsibilities Regarding Nonlawyer Assistants) MLRPC 5.3 states: With respect to a nonlawyer employed or retained by or associated with a lawyer: ⁴³ (a) a partner ... shall make reasonable efforts to ensure that the [law] firm has in effect measures giving reasonable assurance that the [nonlawyer'J’s conduct is compatible with the professional obligations of the lawyer; (b) a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the [nonlawyer]’s conduct is compatible with the professional obligations of the lawyer; (c) a lawyer shall be responsible for conduct of [a nonlawyer] that would be a violation of the [MLRPC] if engaged in by a lawyer if: (1) the lawyer orders or, with the knowledge of the specific conduct, ratifies the conduct involved; or (2) the lawyer is a partner ... and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action[.] Here, clear and convincing evidence supports the hearing judge’s conclusion that Burson had violated MLRPC 5.3(a).

Before learning that paralegals (who were also notaries public) had notarized trustee’s deeds and affidavits that had been signed outside the paralegals’ presence with notary jurats that stated that the trustee’s deeds and affidavits had been signed in the paralegals’ presence, Burson — the Shapiro Firm’s managing partner — made no efforts to ensure that the Shapiro Firm had in effect measures giving reasonable assurance that paralegals did not falsely notarize documents. Just as Burson violated MLRPC 5.1(a) by negligently failing to supervise lawyers, so too did Burson violate MLRPC 5.3(a) by negligently failing to supervise paralegals. The hearing judge was correct in concluding that clear and convincing evidence did not establish that Burson had violated MLRPC 5.3(b). The hearing judge did not find that Burson directly supervised paralegals at the Shapiro Firm.

The hearing judge was correct in concluding that clear and convincing evidence did not establish that Burson was vicariously responsible for the paralegals’ conduct under MLRPC ⁴⁴ 5.3(c). 11 At the Shapiro Firm, paralegals (who were also notaries public) notarized trustee’s deeds and affidavits that had been signed outside the paralegals’ presence. The notary jurats stated that the trustee’s deeds and affidavits had been signed in the paralegals’ presence. Thus, the paralegals falsely notarized the trustee’s deeds and affidavits. Had the paralegals been lawyers, they would have violated MLRPC 8.4(c) (Dishonesty,