Attorney Grievance Commission v. Shaw

BELL, Chief Judge. The issues we address today are twofold. First, we decide whether an attorney who researches stocks for a disabled person’s estate is engaged in the practice of law. Second, we shall determine under what circumstances an attorney may be disciplined for violations of the Rules of Professional Conduct, occurring while not practicing law.

I. The Attorney Grievance Commission of Maryland, the petitioner, acting through Bar Counsel and at the direction of the Review Board, see Maryland Rule 16-709, 1 filed a Petition for Disciplinary Action against Pamela L. Shaw, the respondent, charging her with misconduct, as defined by Rule 16-701 (k), 2 ⁶⁴¹ in connection with her handling of a tax capital gains and loss analysis for the estate of a disabled person, John Berger. The petition alleged that the respondent, who had virtually no experience in determining the losses and gains of stocks, was hired by Michelle Towson, the guardian of the property of Mr. Berger, to prepare a capital gains and loss analysis, a matter she was not competent to handle, for which she charged the estate an inordinate fee of $20,000, of which she was paid between $18,500 and $19,000. According to the petitioner, the product of her work was “completely and utterly worthless” and incorrect. The petition also alleged that the respondent held herself out as an attorney by using the term “esquire” and charging a “fee for professional services rendered.” In addition, the petitioner charged, the respondent knowingly and willfully failed to respond to Bar Counsel’s requests for information.

Specifically, the petition alleged that the respondent violated the following disciplinary rules: 1.1 (Competence); 3 1.5(a); 4 8.1 (Bar Admission); 5 and 8.4(a), (c), and (d). 6 ⁶⁴² We referred the case to the Honorable Richard T. Rombro, of the Circuit Court for Baltimore City, for hearing. See 16-711(a). 7 Following the hearing, at which the respondent, who was represented by counsel, was present and testified, 8 Judge Rombro made the following findings of fact: ⁶⁴³ “1. That the Respondent is a member of the Maryland Bar and although on the inactive list, as a result of non-payment to the Clients’ Security Trust Fund, she is subject to disciplinary action. Attorney Grievance Commission v. Hopp, 830 Md. 177 [ 623 A.2d 193 ] (1993); “2.

That the Respondent held herself out as an attorney when she was seeking to do the work on the Berger matter. The court notes that her letter of March 1st, 1993 ... is signed ‘Pamela L. Shaw, Esq.’; “3. That the court finds as a fact that the Respondent had no experience, and indeed little knowledge, of the workings of the stock market or the evaluation of an estate consisting of stocks and bonds; “4. That the $20,000.00 fee charged for a service which would have been performed for nothing by the stockbroker was an inordinate fee; “5.

This court believes and finds that the Respondent undertook this task as legal work. The respondent testified that she did not believe that her work for the guardian was the practice of law. Even if the Respondent is correct, where the act complained of is ‘committed in a nonprofessional capacity ... it ... bears upon the fitness of a lawyer to practice his profession.’ Attorney Grievance Commission v. Lazerow, 320 Md. 507, 513 [ 578 A.2d 779 ] (1990), citing Attorney Grievance Commission v. Silk, 279 Md. 345 [ 369 A.2d 70 ] (19[8]7[1977]). In Vice President Agnew’s disbarment proceeding, the Court of Appeals declared that “The professional ethical obligations of an attorney, as long as he remains a member of the bar, are not affected by a decision to pursue his livelihood by practicing law, entering the business world, becoming a public servant, or embarking upon any other endeavor.” Maryland St. Bar Ass’n v. Agnew, 271 Md. 543, 550 [ 318 A.2d 811 ] (1974).” ⁶⁴⁴ The hearing court concluded as follows as to the charged misconduct: “1.

Rule 1.1. Competence. The court finds that the Respondent violated this rule. As noted, the Respondent had no special knowledge or skill involving the matter which she undertook for the guardian.

Indeed, when questioned as to the methodology which she used in determining the evaluations of the portfolio, she was unable to recall or to respond to any of the questions. This court finds that the documents submitted to the guardian were valueless, and were provided solely for the purpose of collecting a fee. “2. The Respondent is also charged with violation of Rule 1.5 dealing with fees. The Rules of' Professional Conduct require that the fee should be reasonable, and sets forth eight matters to be considered in determining the reasonableness of the fee.

Without setting forth all of the criteria, this court finds that the amount charged in this case was unreasonable when measured against these guidelines. The matter involved was not novel or difficult; its undertaking did not preclude other employment by the Respondent; although the amount involved was substantial, the results obtained were worthless; the Respondent had no particular experience, reputation or special ability to perform the services; and while there was no testimony as to what fee would customarily be charged in this locality by a lawyer performing the same task, there was testimony from a stockbroker that this service is performed by his company for no charge. “3. The Petitioner charged that the Respondent violated Rule 8.1 by knowingly failing to respond to a lawful demand for information from a disciplinary authority. This court finds that the Respondent did violate this rule.

Assuming that the Respondent did not receive the first two letters from Bar Counsel (an assumption that is generous to the Respondent), it is clear that she eventually received the letters when they were left with her nephew. She had two subsequent conversations with the investigator for the Petitioner, and she failed to respond to either. The Respondent ⁶⁴⁵ even failed to answer the request for Admission of Facts. This court therefore concludes that the Respondent not only failed to respond, but that such failure was knowing and intentional on her part. “4.

Finally, the Respondent is charged with violation of Rule 8.4, Misconduct. This court finds that the Petitioner has not met the burden of showing a violation of Subsection (a) of Rule 8.4, that Respondent acted or assisted or induced another person to violate the Rules of Conduct or did so through the acts of another person. “This court finds that the Respondent did violate Subsection (c) by engaging in conduct involving dishonesty, fraud, deceit or misrepresentation. This court finds by clear and convincing evidence that the conduct of the Respondent in holding herself out as competent in this area and charging an excessive fee for the services she rendered amounts to dishonesty and misrepresentation. “This court finds that the Respondent also violated Subsection (d) of Rule 8.4, engaging in conduct prejudicial to the administration of justice. The Respondent knew that her report [ ] would be used by the guardian in the administration of the guardianship estate, which would by definition amount to conduct prejudicial to the administration of justice.” Unlike the petitioner, who took no exceptions to the hearing court’s findings of fact and conclusions of law, the respondent excepted to several of the findings of fact, ie., that she failed to respond to discovery, that she held herself out as an attorney, that she had little knowledge of the workings of the stock market, that the fee was inordinate, and that she had engaged in the practice of law, arguing that they were clearly erroneous.

The respondent also excepted to the hearing court’s conclusions of law, similarly contending that they were erroneous. In addition to the conclusions with respect to the Rule violations, she challenges the conclusion that she is subject to discipline as a lawyer, despite being on the inactive list. ⁶⁴⁶ II. A. The respondent’s exception to the hearing court’s finding and conclusion that she did not respond to discovery requests can be disposed of easily and quickly. Other than stating the exception, the respondent did not further pursue the matter.

The exception, therefore, is overruled. As will become clear hereafter, the case is being remanded to the hearing court for further proceedings. Consequently, whether to impose a sanction in respect of this violation and, if so, what the appropriate sanction is, must await our subsequent review of this case. B. This Court has original and complete jurisdiction over attorney disciplinary proceedings.

Md. Rule 16-709(b); Attorney Grievance Comm’n v. Adams, 349 Md. 86, 93 , 706 A.2d 1080, 1083 (1998); Attorney Grievance Comm’n v. Glenn, 341 Md. 448, 470 , 671 A.2d 463, 473 (1996); Attorney Grievance Comm’n v. Kent, 337 Md. 361, 371 , 653 A.2d 909, 914 (1995); Attorney Grievance Comm’n v. Powell, 328 Md. 276, 287 , 614 A.2d 102, 108 (1992). Accordingly, the ultimate decision as to whether a lawyer has violated the Rules of Professional Conduct rests with this Court. Attorney Grievance Comm’n v. Garland, 345 Md. 383, 392 , 692 A.2d 465, 469 (1997); Attorney Grievance Comm’n v. Breschi, 340 Md. 590, 599 , 667 A.2d 659, 663 (1995); Attorney Grievance Comm’n v. Joehl, 335 Md. 83, 88 , 642 A.2d 194, 196 (1994). Under our independent review of the. record, we must determine whether the findings of the hearing judge are based on clear and convincing evidence.

Attorney Grievance Comm’n v. Powell, 328 Md. 276, 287 , 614 A.2d 102, 108 (1992); Attorney Grievance Comm’n v. Clements, 319 Md. 289, 298 , 572 A.2d 174, 179 (1990). The “hearing court’s findings of fact are prima facie correct and will not be disturbed unless they are shown to be clearly erroneous,” however. Attorney Grievance Comm’n v. Garland, 345 Md. at 392 , 692 A.2d at 469 (citing Attorney ⁶⁴⁷ Grievance Comm’n v. Goldsborough, 330 Md. 342, 347 , 624 A.2d 503, 505 (1993)). We can dispose of the respondent’s argument that she is not subject to discipline by this Court because she was not a practicing attorney at the time of the alleged misconduct rather quickly.

We have stated that, to be subject to discipline, one must be an attorney. See Attorney Grievance Comm’n v. Hyatt, 302 Md. 683, 689 , 490 A.2d 1224, 1227 (1985). As defined by Rule 16-701, former Rule BV.l, an attorney is: “any person admitted by the Court of Appeals to practice law. For purposes of discipline or inactive status, the term also includes a member of the bar of any other state, district, or territory of the United States who engages in the practice of law in this State, or who holds himself or herself out as practicing law in this State, or who has the obligation of supervision or control over another attorney who engages in the practice of law in this State.” Attorney Grievance Comm’n v. Hopp, 330 Md. 177, 183 , 623 A.2d 193, 196 (1993) (an attorney admitted to the Maryland Bar, who has not resigned from the Maryland Bar, although practicing only in California, is subject to this State’s disciplinary rules) (citing Attorney Grievance Comm’n v. Hyatt, 302 Md. 683, 688-89 , 490 A.2d 1224, 1227 (1985)).

The respondent has been admitted to the Bar of this State and she has not tendered her resignation. Accordingly, she remains subject to the disciplinary authority of this Court, notwithstanding her being on the inactive list of attorneys, by virtue of her failure to pay the Client Security Trust Fund assessment. C. In this case, the hearing court’s finding that the respondent was engaged in the practice of law was premised on the respondent’s affixing the designation “Esq.” to a piece of correspondence to Ms. Towson. From this, it concluded that the respondent “undertook this task as legal work.” Although “prima facie correct and not [to] be disturbed unless clearly ⁶⁴⁸ erroneous,” Attorney Grievance Comm’n. v. Glenn, 341 Md. 448, 470 , 671 A.2d 463, 474 (1996), to be sustained, this finding of fact must be supported by clear and convincing evidence.

See Attorney Grievance Comm’n v. Kemp, 335 Md. 1, 9 , 641 A.2d 510, 514 (1994). Since the respondent filed exceptions, we are required to make an “ ‘independent’, detailed review of the complete record with particular reference to the evidence relating to the disputed factual finding.” Attorney Grievance Comm’n v. Alison, 349 Md. 623, 629 , 709 A.2d 1212, 1215 (1998) (quoting Bar Ass’n of Baltimore City v. Marshall, 269 Md. 510, 516 , 307 A.2d 677, 680-81 (1973)). See Attorney Grievance Comm’n v. Ober, 350 Md. 616, 625 , 714 A.2d 856, 861 (1998). The primary issue in this case is whether the work the respondent did for the guardian constituted the practice of law.

What constitutes the practice of law is a determination that, ultimately, this Court makes, see Public Serv. Comm’n v. Hahn Transp., Inc., 253 Md. 571, 583 , 253 A.2d 845, 852 (1969); Lukas v. Bar Ass’n of Montgomery County, Inc., 35 Md.App. 442, 447 , 371 A.2d 669, 672 , cert. denied, 280 Md. 733 (1977), although some guidance has been provided by the General Assembly. See Maryland Code (1989, 1995 Repl.Vol.), § 10-101(h) of the Business Occupations & Professions Article, which defines “Practice law” to include: “(h)(1) “Practice law” means to engage in any of the following activities: (1) giving legal advice; (ii) representing another person before a unit of the State government or of a political subdivision; or (in) performing any other service that the Court of Appeals defines as practicing law. (2) “Practice law” includes: (i) advising in the administration of probate of estates of decedents in an orphans’ court of the State; (ii) preparing an instrument that affects title to real estate; ⁶⁴⁹ (iii) preparing or helping in the preparation of any form or document that is filed in a court or affects a case that is or may be filed in a court; or (iv) giving advice about a case that is or may be filed in a court.” This Court has stated that the practice of law includes “[u]tilizing legal education, training, and experience [to apply] the special analysis of the profession to a client’s problem.” Kennedy v. Bar Ass’n of Montgomery County, Inc., 316 Md. 646, 662 , 561 A.2d 200, 208 (1989).

Further, because “the very acts of interview, analysis and explanation of legal rights constitute practicing law in Maryland,” id. at 666 , 561 A.2d at 210 , depending on the circumstances, meeting with prospective clients may also constitute the practice of law. When determining whether an activity constitutes the practice of law, this Court has said, a court must “consider each state of facts and determine whether it falls within the fair intendment of the term.” In re Application of Mark W., 303 Md. 1, 8 , 491 A.2d 576, 579 (1985) (quoting Grievance Committee v. Payne, 128 Conn. 325, 329 , 22 A.2d 623, 625 (1941)). In that regard, we are aware that ‘ “ practice of law [is] a term of art connoting much more than merely working with legally-related matters.” ’ In Re Application of Mark W., 303 Md. 1, 19 , 491 A.2d 576, 585 (1985) (quoting Petition of Nenno, 472 A.2d 815, 820 (Del.1983)). The focus of the inquiry is, in fact, “whether the activity in question required legal knowledge and skill in order to apply legal principles and precedent.” In re Discipio, 163 Ill.2d 515 , 206 Ill.Dec. 654 , 645 N.E.2d 906, 910 (1994); Louisiana State Bar Ass’n v. Edwins, 540 So.2d 294, 299 (La.1989) (“Functionally, the practice of law relates to the rendition of services for others that call for the professional judgment of a lawyer.”).

Thus, in In re Mark, this Court concluded that a Bar applicant, who had served as Hearing Examiner for the Maryland Department of Employment & Training, where he assigned cases, reviewed decisions, and provided guidance on issues that arose, was not engaged in the practice of law and, so, was not eligible to take ⁶⁵⁰ the attorney’s examination. 303 Md. at 4-6 , 491 A.2d at 577-79 . On the other hand, “[w]here trial work is not involved but the preparation of legal documents, their interpretation, the giving of legal advice, or the application of legal principles to problems of any complexity, is involved, these activities are still the practice of law.” Lukas v. Bar Ass’n of Montgomery County, 35 Md.App. 442, 448 , 371 A.2d 669, 673 , cert. denied, 280 Md. 733 (1977) (quoting F.T. Vom Baur, Administrative Agencies and Unauthorized Practice of Law, 48 A.B.A. J. 715 , 716 (1962)). We have also recognized, “The Hallmark of the practicing lawyer is responsibility to clients regarding their affairs, whether as advisor, advocate, negotiator, as intermediary between clients, or as evaluator by examining a client’s legal affairs.” In Re Application of R.G.S., 312 Md. 626, 632 , 541 A.2d 977, 980 (1988). Like defining the activity that constitutes the practice of law, “[w]hat constitutes an attorney-client relationship is a rather elusive concept.” Folly Farms I, Inc. v. Trustees, 282 Md. 659, 670 , 387 A.2d 248, 254 (1978).

The existence of the relationship does not depend on there being a formal fee arrangement. See Central Cab Co. v. Clarke, 259 Md. 542, 549-50 , 270 A.2d 662, 666-67 (1970). As we have pointed out: “Although an agreement upon the amount of a retainer and its payment is rather conclusive evidence of the establishment of the attorney-client relationship, the absence of such an agreement or payment does not indicate conclusively that no such relationship exists. Indeed, the payment of fees is not a necessary element in the relationship of attorney and client.

The services of an attorney to the client may be rendered gratuitously but the relationship of attorney and client nonetheless exists.” Id. (citing Fort Myers Seafood Packers, Inc. v. Steptoe and Johnson, 381 F.2d 261 (1967), cert. denied, 390 U.S. 946 , 88 S.Ct. 1033 , 19 L.Ed.2d 1135 (1968)). Indeed, the determination of whether an attorney-client relationship exists can, and often must, be implied from the facts and circumstances of the ⁶⁵¹ given case. See Crest Investment Trust v. Comstock, 23 Md.App. 280, 296 , 327 A.2d 891, 901 (1974).

An important