Attorney Grievance Commission v. Miller

COUCH, Judge. The Attorney Grievance Commission, acting through Bar Counsel, filed a petition for disciplinary action against Stephen H. Miller, alleging numerous violations of the Code of Professional Responsibility. Pursuant to Maryland Rule BY 9(b), we referred the matter to Judge Raymond G. Thieme, Jr., Circuit Court for Anne Arundel County. After conducting an evidentiary hearing, Judge Thieme concluded that Miller violated certain provisions of DR 9-102, DR 1-102, and DR 2-110. 1 We agree and order, in light of the extenuating circumstances of this case, that Stephen H. Miller be indefinitely suspended from the practice of law.

I Stephen Miller began the practice of law in 1975. He quickly developed a burgeoning practice in zoning, building and realty law. Miller’s success was short-lived, as worsening economic conditions and a deteriorating marriage forced him to close his office. Excessive drinking, combined with the strong medication Miller was already taking) exacerbated his problems.

In spite of Miller’s inability to properly attend to his practice, he agreed to represent a client named Fred Pritt in a business transaction in December of 1981. What followed, and ultimately gave rise to Miller’s transgressions, was stated by Judge Thieme in his findings of fact: 2 “In the beginning of December, 1981, Fred Pritt gave Miller a check in excess of $73,642 which was payable to ⁵⁹⁶ Equitable Trust Company. Pritt testified that at that time he gave Miller oral instructions to make certain loan payments and secure the release of certain pieces of property which were subject to various mortgages. Pritt instructed Miller to take the check to Baltimore and secure these releases from Equitable.

Apparently, Equitable’s loan was about to become due and if it was to be extended, would be renegotiated at a higher interest rate. Fred Pritt was obviously anxious to secure the release from under the mortgage of as much of his property as he financially could before these negotiations commenced. There is a conflict as to whether Miller or his secretary actually received this $73,642 check. Nevertheless, the evidence is clear that on December 3, 1981, a deposit of $73,642 was made to Miller’s escrow account at Equitable Trust.

On the reverse side of the check was stamped “Stephen H. Miller, Attorney-at-Law”. Pritt testified that he never authorized Miller to stamp the back of the check and deposit it in his account. During December, Miller represented both to Equitable Trust Company and Pritt that he dropped off both the check and the releases with Equitable. Pritt relied on this information when dealing with Equitable.

Not receiving its loan payments when due, Equitable advised Fred Pritt it intended to foreclose on his property as of December 15, 1981. Pritt’s loan was now in default. On Christmas Eve, while at a party, Fred Pritt questioned Miller about the releases. Miller advised Pritt that he would promptly look into the matter when he returned to his office next week.

The statements Miller made on Christmas Eve are accepted by the Court regardless of what Miller previously stated concerning his continuing alcohol and drug abuse. From November, 1981 through January, 1982, numerous checks which were made payable to Miller were drawn on his escrow account. These withdrawals were not authorized by Pritt as fees for Miller. Also, there was a check for $1,998.50 which was made payable to the ⁵⁹⁷ Clerk of the Court for Anne Arundel County.

Some of the checks drawn on Miller’s escrow account at Equitable were signed by Miller and others by his secretary. Miller testified that he neither authorized his secretary to write these checks nor authorized her to sign his name to them. However, Collison, an investigator for the State’s Attorney’s Office, testified that Miller told him that he knew that his secretary was writing checks on the escrow account and signing his name to them. During this period, Miller maintained a joint account with his secretary, Ms. Jackson, at State National Bank.

This account was used to pay office bills and Miller’s personal expenses. On December 1, 1981, the joint account was overdrawn by approximately $920.00. After December 3, 1981, most of the checks drawn on the escrow account and made payable to Miller were deposited into the joint account. From December, 1981 through February, 1982, both Miller and his secretary drew checks on this joint account both for Miller’s personal use and to pay office expenses. 1 Miller testified that the first time he knew that Pritt’s funds were in his escrow account was in January, 1982.

He also learned of the foreclosure at that time. The more credible evidence clearly shows that Miller permitted his secretary to write the checks drawn on the escrow account and knew that the funds were being deposited into the joint accounts. Miller’s testimony that the money in the escrow account was for past fees due from Pritt has absolutely no factual basis. On January 12, 1982, Miller cashed a $50,500 check drawn on his escrow account at Equitable Trust.

He then deposited $50,000 into an old operating account (# 700-405-2) at State National Bank. Miller spent the remaining $500 of the escrow funds to see his father in the Virgin Islands to apprise him of the situation. Miller testified that he was aware that he was using escrow funds for the trip. Throughout the month of January, 1982, funds were being transferred from Miller’s operat ⁵⁹⁸ ing account at State National to the joint account.

Miller admitted to authorizing his secretary to pay a private security guard from funds in the joint account. From the evidence presented, the Court finds that Miller knew that Pritt’s funds were being transferred from the operating account to the joint account to pay bills. Miller either paid or authorized payment for his office and personal bills that were drawn on the joint account. On February 3, 1982, Pritt retained Jerome May as his counsel.

That afternoon May spoke with Miller and demanded the return of Pritt’s money. Miller told him that Pritt owed him money for legal services. Unsatisfied with Miller’s answer, May filed a Bill of Complaint and sought an Order to freeze Miller’s bank accounts. This was immediately signed by Judge Wray.

The next morning, Miller and May met with Judge Wray. At this meeting, Miller represented that there was no intermingling of funds and that all of the funds were on deposit at First National Bank. Miller said that there was no problem in returning the money to Pritt at once. Relying on these representations, May agreed to follow Miller to a previously scheduled hearing, then they would proceed to the bank.

After the hearing, Miller first stopped at his office. He talked to his secretary about a transfer of funds. Counsel then went to State National Bank. At State National, May found that Miller only had about $32,000 in the operating account.

After making many telephone calls at the bank, Miller informed May that $48,000 was being wired from his father in Ocean City. May received a certified check for $32,000 representing the balance in Miller’s account at State National. The balance of the funds were received by May the next day, February 5, 1982. ⁵⁹⁹ After hearing testimony of two physicians on Miller’s physical condition, the court concluded: “at the time of the misconduct (December 1981 — February 1982), Miller’s mixed substance abuse (alcohol and Percodan), personal and marital problems impaired his ability to handle his limited law practice. However, Miller knowingly misappropriated his client’s funds.

Further, he consciously made misrepresentations to Judge Wray. At the present time, Miller has his psychiatric and emotional difficulties under control. He is presently working fulltime as an assistant to an attorney, Anne McKenzie, in Baltimore, Maryland. She has a general practice which does not include real estate work.

Miller’s work involves the preparation of legal cases and he goes to Court with Ms. McKenzie. McKenzie is willing to act as his mentor and allow him to practice in her office under her direct supervision.” The court then discussed the findings with respect to the violations of the disciplinary rules. “Disciplinary Rule 9-102 ‘Preserving Identity of Funds and Property of a Client. (A) All funds of clients paid to a lawyer or a law firm, other than advances for costs and expenses, shall be deposited in one or more identifiable bank accounts maintained in the state in which the law office is situated and no funds belonging to the lawyer or law firm shall be deposited therein except as follows: 2. Funds belonging in part to a client and in part presently or potentially to the lawyer or law firm must be deposited therein, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client, in which event the ⁶⁰⁰ disputed portion shall not be withdrawn until the dispute is finally resolved.

(B) A lawyer shall: 3. Maintain complete records of all funds, securities and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his client regarding them. 4. Promptly pay or deliver to the client as requested by a client the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive.’ The Court finds that Respondent failed to preserve the property of his client; Fred Pritt, by intentionally drawing checks on the escrow account for Respondent’s personal and office use; by withdrawing the remaining $50,500 of Pritt’s funds from the escrow account and not placing it into an escrow account at another bank; and by subsequently transferring Pritt’s funds from his operating account at State National into his joint account at the same bank. Respondent failed to maintain complete records of Pritt’s funds.

In addition, when Miller was asked by Pritt and representatives from Equitable Trust about the funds (because Equitable had not received the money to secure the releases of the lots) he did not reveal the true location of the money to them. Lastly, Respondent violated D.R. 9-102(B)4 by not promptly delivering the money to his client when demanded on February 3 and 4, 1982. Disciplinary Rule 1-102 ‘Misconduct. (A) A lawyer shall not: 2.

Circumvent a Disciplinary Rule through actions of another. 3. Engage in illegal conduct involving moral turpitude. 4. Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. ⁶⁰¹ 5. Engage in conduct that is prejudicial to the administration of justice.’ Respondent, by authorizing his secretary to draw checks on his escrow account for his personal and office use, had the effect of circumventing D.R. 9-102(A)2 and D.R. 1-102(A)3.

Miller’s conduct clearly shows that he knew the escrow account was almost solely made up by the deposit of the $73,000 check and his joint account was overdrawn. Miller’s intentional use of his client’s funds for personal and office expenses was illegal conduct involving moral turpitude. Respondent misrepresented both to Equitable Trust and Pritt that he had completed the transaction. He further misrepresented to Judge Wray and May that Pritt’s funds were not commingled and were all located in one bank.

Miller’s misrepresentations to Judge Wray and his delay in returning Pritt’s money amounted to conduct that was prejudicial to the administration of justice. Disciplinary Rule 2-110 ‘Withdrawal from Employment. (B) Mandatory withdrawal. A lawyer representing a client before a tribunal, with its permission if required by its rules, shall withdraw from employment, and a lawyer representing a client in other matters shall withdraw from employment, if: 2.

He knows or it is obvious that his continued employment will result in violation of a Disciplinary Rule. 3. His mental or physical condition renders it unreasonably difficult for him to carry out the employment effectively.’ By Respondent’s own statements, he realized that his drug and alcohol problem, as well as his marital problems, impaired his ability to undertake the strain of private practice and render competent legal services. The Court commends Miller for recognizing his impair ⁶⁰² ment and voluntarily winding down his law practice. Unfortunately, Respondent should not have undertaken this task for Fred Pritt.

Having found the above violations, it follows that Stephen Miller violated the blanket provisions of: Disciplinary Rules 1-102 ‘Misconduct. (A) A lawyer shall not: 1. Violate a Disciplinary Rule. 6. Engage in any other conduct that adversely reflects on his fitness to practice law.'” Judge Thieme found as mitigating factors occurring during the entire period of misconduct Miller’s excessive daily drinking coupled with