Attorney Grievance Commission v. Shockett

Adkins, J. The Attorney Grievance Commission of Maryland (“AGC”), acting through Bar Counsel, filed a Petition for Disciplinary or Remedial Action (“Petition”) against Respondent Steven Lee Shockett. Bar Counsel charged Shockett with violating the Maryland Lawyers’ Rules of Professional Conduct ¹⁶⁴ (“MLRPC”) in his capacity as attorney for Thankamma Indu-kumar, Tony Alvarez, Jr., and David Leader. 1 Specifically, Bar Counsel alleged that Shockett violated the following rules: (1) MLRPC 1.4(a)-(b) (Communication); 2 (2) MLRPC 1.15(a) (Safekeeping Property); 3 (3) MLRPC 8.1(b) (Bar Admission and Disciplinary Matters); 4 and (4) MLRPC 8.4(a)-(d) (Mis ¹⁶⁵ conduct). 5 Pursuant to Maryland Rules 16~752(a) 6 and 16-757(c), 7 this Court designated the Honorable Melissa K. Copeland of the Circuit Court for Baltimore City (“the hearing judge”) to conduct an evidentiary hearing and make findings ¹⁶⁶ of fact and conclusions of law. The hearing was held on March 4, 2016, and Shockett did not attend. Following the March 4, 2016 hearing, the hearing judge issued Findings of Fact and Conclusions of Law, in which she found by clear and convincing evidence that Shockett violated MLRPC 1.4(a)(l)-(3) and (b), 1.15(a), and 8.4(a)-(d).

The hearing judge found that Shockett did not violate MLRPC 8.1(b), and Bar Counsel did not take exception to this finding. Shockett neither filed Exceptions to the hearing judge’s findings of fact or conclusions of law, nor appeared before us for oral argument or submitted any written argument regarding sanctions to this Court. For the reasons below, we agree that Shockett violated MLRPC 1.4(a)(l)-(3) and (b), 1.15(a), and 8.4(a)-(d). We further conclude that the appropriate sanction is disbarment.

THE HEARING JUDGE’S FINDINGS OF FACT Shockett was admitted to the Maryland Bar in December 1985. On March 14, 2014, he was decertified from the practice of law in Maryland because he failed to pay his annual assessment to the Client Protection Fund. The AGC’s investigation of Shockett was triggered by the complaints of Than-kamma Indukumar, Tony Alvarez, Jr., and David Leader. As to each complaint, the hearing judge made the following findings of fact by clear and convincing evidence: Complaint of Thankamma Indukumar In 2012, Thankamma Indukumar retained Shockett to create a trust to benefit her grandchildren.

Shockett drafted an Irrevocable Trust Agreement (“the Agreement”) naming himself as the trustee. On November 23, 2012, Shockett and Indukumar signed the Agreement, and shortly thereafter In-dukumar gave Shockett $50,000 to place into the trust. Shock-ett placed the $50,000 into a trust account at Chapin Davis, an investment firm. In February 2014, Shockett informed Indukumar and her husband, Pakkunilathu Indukumar, that the value of the trust ¹⁶⁷ had grown to $62,500.00, and asked them if he could withdraw the funds to purchase gold and notes.

The Indukumars directed Shockett to leave the funds in the trust and requested an account statement from Chapin Davis. The statement showed that as of December 31, 2013, the trust account had a balance of $102.57. The statement also showed that $85,164.07 had been withdrawn from the trust in 2013. From the time of Shockett’s initial $50,000 deposit, the trust had earned $754.02 in interest and $13,316.99 due to changes in the value of securities.

The hearing judge found that Shockett removed no less than $61,077.71 from the Indukumars’ account without their authorization. 8 After the Indukumars contacted Shockett about the missing funds, he initially agreed to return the money to the trust. Shockett, however, stopped responding to Thankamma’s emails, and never returned any of the missing funds. 9 On June 26, 2014, Thankamma filed suit against Shockett in the Circuit Court for Baltimore City. On the same day, she filed a complaint against Shockett with the AGC through her attorney, John A. Hayden, III, Esq. Bar Counsel mailed letters to Shockett on July 11, 2014, August 5, 2014, and August 22, 2014 informing him of Than-kamma’s complaint against him and requesting a response.

Shockett did not respond to any of the letters. Complaint of Tony Alvarez, Jr. In December 2013, Tony Alvarez retained Shockett to represent him in his divorce action and paid Shockett a $5,000 retainer. Shockett told Alvarez that he had drafted and filed a Complaint for Absolute Divorce and served it on Alvarez’s wife. Shockett also informed Alvarez that a hearing would likely be scheduled for April or May 2014.

In fact, Shockett ¹⁶⁸ neither filed a complaint nor served one on Alvarez’s wife. Alvarez has not heard from Shockett since February 2014. On May 1, 2014, Alvarez filed a complaint with the AGO. Bar Counsel mailed letters to Shockett on May 6, 2014, July 15, 2014, and August 22, 2014 informing him of Alvarez’s complaint and requesting a response.

Shockett did not respond to any of the letters. Complaint of David Leader David Leader retained Shockett in 2013 to represent him in Financial Industry Regulatory Authority (“FINRA”) arbitration. Leader’s previous attorney referred him to Shockett, and Leader then authorized the attorney to transfer his $2,500 retainer to Shockett. On or about December 30, 2013, Shockett sent Leader a copy of a proposed complaint, but Shockett never filed the complaint.

Leader has not heard from Shockett since March 4, 2014. On April 17, 2014, Leader filed a complaint against Shockett with the AGC. Bar Counsel mailed letters to Shockett on April 18, 2014, July 15, 2014, and August 21, 2014 informing him of Leader’s complaint and requesting a response. Shockett failed to respond to any of the letters.

THE HEARING JUDGE’S CONCLUSIONS OF LAW From these facts, the hearing judge concluded that through his representation of all three clients, Shockett violated MLRPC 1.4(a)(l)-(3) and (b), 1.15(a), and 8.4(a)-(d). The judge also concluded that Shockett did not violate MLRPC 8.1(b). MLRPC 1.4: Communication MLRPC 1.4 requires attorneys to maintain communication with their clients. The hearing judge found that Shockett violated this rule in his representation of each of his three complaining clients.

As to the Indukumars, the hearing judge found that: [Shockett] violated MRPC 1.4(a)(1) by failing to promptly inform the Indukumars of his decision to withdraw funds ¹⁶⁹ from the trust account when the Rules required the Induku-mars’ informed consent. [Shockett] violated MRPC 1.4(a)(2), through his actions or inactions, by failing to keep the Indukumars reasonably informed of the status of the trust account. [Shockett] violated MRPC 1.4(a)(3) by failing to comply with reasonable requests] for information from the Indukumars. As to Shockett’s representation of Alvarez, the hearing judge concluded: [Shockett] violated MRPC 1.4(a)(1) by failing to promptly inform Mr. Alvarez of his decision not to file a Complaint for Absolute Divorce when it was Mr. Alvarez’s desire to have the Complaint filed. [Shockett] violated MRPC 1.4(a)(2) by failing to keep Mr. Alvarez reasonably informed about the status of his divorce case, namely that the Complaint was never filed. [Shockett] violated MRPC 1.4(a)(3) by failing to promptly comply with Mr. Alvarez’s repeated attempts to contact [Shockett] for information regarding the status of his case. In fact, the information communicated to Mr. Alvarez that the Complaint had been filed was false[.] Lastly, as to Leader, the hearing judge found: [Shockett] violated MRPC 1.4(a)(1) by failing to promptly inform Mr. Leader of his decision not to file the complaint with [FINRA]. [Shockett] violated MRPC 1.4(a)(2) by failing to keep Mr. Leader reasonably informed about the status of his [FINRA] action, specifically, that it was not filed. [Shockett] violated MRPC 1.4(a)(3) by failing to promptly comply with Mr. Leader’s reasonable requests for information and ceasing all communication with Mr. Leader after March 4, 2014. The hearing judge found that Shockett violated MLRPC 1.4(b) with regard to all three clients through his failure to communicate the status of their legal matters.

In each case, Shockett failed to communicate the status of the legal matter “to the extent necessary to permit the client to make informed decisions regarding the representation,” as required by MLRPC 1.4(b). Shockett failed to respond to requests for ¹⁷⁰ updates from all three clients and lied to Alvarez about the status of his divorce complaint. Furthermore, he failed to disclose to Leader that he had not filed his FINRA complaint and did not intend to do so, which prevented Leader from seeking alternate representation. MLRPC 1.15: Safekeeping Property MLRPC 1.15 requires attorneys to keep client funds separate from personal funds.

The hearing judge found by clear and convincing evidence that Shockett violated MLRPC 1.15(a) in his representation of Thankamma Indukumar. The hearing judge wrote, “[Shockett] violated MRPC 1.15(a) by failing to keep all of the funds in the trust account separate from his own property when he withdrew funds without authorization.” MLRPC 8.4: Misconduct MLRPC 8.4 defines professional misconduct for attorneys. The hearing judge found that Shockett violated MLRPC 8.4(a), (b), (c), and (d). Shockett violated MLRPC 8.4(a) by breaching other rules.

Shockett breached MLRPC 8.4(b) by committing a criminal act that reflects adversely on his honesty, trustworthiness, and fitness as a lawyer. The hearing judge explained, “An actual conviction is not required to establish that an attorney violated [MLRPC] 8.4(b), so long as the underlying conduct that constitutes the crime is proven by clear and convincing evidence.” (quoting Att’y Grievance Comm’n v. Gerace, 433 Md. 632, 645 , 72 A.3d 567 (2013)). The hearing judge found by clear and convincing evidence that Shockett violated Md. Code (1957, 2012 Repl. Vol.), § 7-104(b) of the Criminal Law Article 10 (“CR”) by committing theft by deception in his representation of the Indukumars: ¹⁷¹ [Shockett] deceived Mrs. Indukumar by advising her that he wanted to withdraw funds from their grandchildren’s trust account to buy gold and notes.

When the Indukumars disagreed with this and instructed him to put the money back in the trust, he failed to do so, and instead kept the money for his own personal and/or business use. [Shockett] knowingly used their funds, and therefore deprived the Indukumars of [their property]. In addition, the hearing judge concluded that Shockett violated MLRPC 8.4(c) in his representation of all three clients because he engaged in conduct'involving dishonesty, fraud, deceit, or misrepresentation in each matter. As to the Indukumar matter, “[Shockett] misrepresented to the Induku-mars that he intended to use the funds in the trust to buy gold and notes, and then never put the money back in the account when they instructed him to do so.” In his representation of Alvarez, Shockett accepted a $5,000 retainer but never initiated Alvarez’s divorce action. Furthermore, he made a false statement to Alvarez when he told him that the complaint had been filed and served on his wife.

As to Leader, Shockett agreed to represent him in FINRA arbitration, accepted a $2,500 payment, sent him a proposed complaint, and then allowed him to believe that his FINRA complaint had been filed. The hearing judge concluded, “By accepting clients’ funds for a specific purpose and then failing to perform services for those clients, [Shockett] violated Rule 8.4(c) in the Indukumar, Alvarez, and Leader matters.” Lastly, Shockett violated MLRPC 8.4(d) by engaging in conduct that is prejudicial to the administration of justice. The hearing judge found: In all three matters, [Shockett] promised to perform a service, took their money, deceived his clients, and then ¹⁷² disappeared. He led Mr. Alvarez and Mr. Leader to believe that their actions had been filed, then failed to respond to their requests for updates on their cases.

He withdrew money from the trust that Mrs. Indukumar created for their grandchildren, then when instructed to put it back, he failed to do so. His conduct undeniably brings the legal profession into disrepute, MLRPC 8.1: Bar Admission and Disciplinary Matters MLRPC 8.1(b) requires attorneys to respond to requests for information from the AGO. Specifically, it makes it a violation of the MLRPC to “knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority.” MLRPC 8.1(b). The hearing judge found that Shockett did not violate MLRPC 8.1(b) because Bar Counsel did not present evidence that Shockett knowingly failed to respond to