Attorney Grievance Commission v. Sperling

BELL, Chief Judge. The Attorney Grievance Commission of Maryland, the petitioner, by Bar Counsel filed, pursuant to Maryland Rule 16-751 1 of the Maryland Rules of Procedure, a Petition For ¹⁸² Disciplinary Or Remedial Action, against Leonard J. Sperling, the respondent, in which it was charged that the respondent violated Rules 1.15, Safekeeping Property, 2 and 8.4, Miscon ¹⁸³ duct, 3 of the Maryland Rules of Professional Conduct, as adopted by Maryland Rule 16-812. Bar Counsel also alleged that the respondent violated Maryland Code (1989, 2000 Replacement Volume) § 10-306 of the Business Occupations and Professions Article. 4 We referred the case to the Honorable Michael J. Finifter, of the Circuit Court for Baltimore County, for hearing. See 16-757.

Following the hearing, at which both the petitioner and the respondent appeared and participated, the hearing court concluded: “Respondent unintentionally and unknowingly violated Maryland Lawyer’s Rule of Professional Conduct 1.15 ..., Rule 8.4 ([a]) ... and Section 10-306 of the Business Occupations and Professions Article, Maryland Code, when he failed to realize that a shortfall had been created and existed in his trust account due to his failure to reconcile his account.” See Rule 16-757(c). 5 These conclusions of law flowed from findings of fact, made by the trial court to the requisite degree of certainty, i.e. clear and convincing proof. See Rule 16-757(b). 6 Further, it was not disputed by the respondent, that, ¹⁸⁴ following an investigation and analysis by Bar Counsel, the respondent’s trust account had a shortfall of $42,415.91, for which the respondent could not, and did not, account. 7 The investigation into the respondent’s trust account was not triggered by a complaint alleging that the respondent had engaged in misconduct. On the contrary, the hearing court found as a fact that “[tjhere have been no complaints by any client of Respondent or other person for whom Respondent was holding funds with regard to, or as the result of, the aforementioned shortfall.” Rather, it was the petitioner’s receipt of a notice from the bank in which the respondent’s trust account was deposited, that a check drawn on the respondent’s trust account had been returned for non-sufficient funds (NSF) that formed the basis for the investigation. 8 The trust account was brought into balance on or about January 8, 2003, when the respondent deposited his personal funds, in the amount of the shortfall, into the account. The hearing court made additional findings of fact.

The cause of the shortfall was “one or more errors in the administration of the account prior to January 1, 2001,” the source of ¹⁸⁵ which could not be located. And there was no evidence that the respondent benefitted from the shortfall. Moreover, the hearing court determined: “8. After a thorough investigation by Bar Counsel, there was: “a.

No evidence of any theft of funds from the trust account by Respondent or anyone else; “b. No evidence that Respondent had ever engaged in improper commingling of personal funds with trust funds; “e. No evidence that any client or person for whom Respondent was holding funds suffered a loss directly as a result of the shortfall, or as a result of errors made by Respondent in his administration of the trust account; and “d. No evidence or indication that any ongoing or additional errors were made in Respondent’s trust account during the period examined, other than those stemming from the aforementioned shortfall.” The hearing court also made findings of fact in mitigation.

One such factual finding was, as we have seen, the absence of any complaint by a client or a person for whom the respondent was holding funds. In addition, the hearing court noted that: the respondent’s failure properly to administer and provide oversight of the trust account “[was] due to his lack of education, training and understanding regarding the proper administration and oversight of such accounts”; 9 the respondent expressed remorse and regret concerning the errors he made in administering the trust account; 10 and that he has taken steps to address the deficient administration of the account. 11 ¹⁸⁶ The petitioner took no exceptions to the findings and conclusions of the hearing court, but it did file Petitioner’s Recommendation for Sanction, in which it urged the respondent’s indefinite suspension from the practice law, “with the right to apply for readmission in six months.” In support of that recommendation, while conceding the respondent’s cooperation with the petitioner in its investigation and that no client suffered loss, it points to the facts that: the respondent’s deficient oversight of the trust account, including particularly his failure to reconcile it, “exposed his clients to risk,”; “Respondent paid the obligations he owed to clients with the funds he was supposed to maintain for other clients”; and the failure of reconciliation of the account “went on literally for decades.” Another significant factor in the petitioner’s recommendation is the length of time that elapsed between the respondent’s becoming aware of the shortfall — “no later than May 2002”— ¹⁸⁷ and the account being brought into balance — “January 8, 2003.” In addition, the petitioner relies on our recent attorney discipline cases, in which a violation of rule 1.15(a) was found, but in which there was no finding of intentional misappropriation. See Attorney Grievance Comm’n v. Seiden, 373 Md. 409 , 818 A.2d 1108 (2003); Attorney Grievance Comm’n v. McClain, 373 Md. 196 , 817 A.2d 218 (2003); Attorney Grievance Comm’n v. DiCicco, 369 Md. 662 , 802 A.2d 1014 (2002); Attorney Grievance Comm’n v. Jeter, 365 Md. 279 , 778 A.2d 390 (2001). In these cases, sanctions ranging from a thirty (30) day suspension, McClain, 373 Md. at 212 , 817 A.2d at 228 , to an indefinite suspension with the right to apply for readmission within six (6) months, Jeter, 365 Md. at 293-94 , 778 A.2d at 398 , were imposed.

In Seiden , the sanction was an indefinite suspension with the right to apply for readmission in thirty (30) days, 373 Md. at 425, 818 A.2d at 1117 , and, in DiCicco , an indefinite suspension with the right to apply for readmission after ninety (90) days. 369 Md. at 688 , 802 A.2d at 1028 . Citing Seiden for the proposition that an attorney’s prior grievance history, including the nature of the misconduct involved and the sanction imposed, is a proper consideration in determining the appropriate sanction, 373 Md. at 422, 818 A.2d at 1115-16 , the petitioner points out that the respondent has thrice been sanctioned for misconduct: he was reprimanded in 1983 for a violation of DR 7-102(B)(l) of the Code of Professional Responsibility, 12 see Attorney Grievance Comm’n v. Sperling, 296 Md. 558 , 463 A.2d 868 (1983); he was issued a private reprimand by the Review Board in 1998 for failing to notify medical services providers as required by Rule 1.15(b); 13 and he was reprimanded in 1999 for violating Rule ¹⁸⁸ 1.15 in connection with a disputed claim to funds in his possession. Like the petitioner, the respondent took no exceptions from the findings of fact or conclusions of law. He does, however, take exception to the petitioner’s recommendation of a sanction.

As to it, he responds: “The Petitioner has made a recommendation which, the Respondent respectfully submits, is far more severe than warranted in light of certain of the Findings of Fact made by the trial judge; far more severe than warranted when compared to the facts and sanctions involved in other decisions of this Court; and far more severe than is necessary to achieve the ultimate goal of these proceedings, to protect the public. In fact, a suspension will in all likelihood irreparably damage the Respondent’s ability to maintain his practice in the future, thereby severely punishing him for his unintentional actions.” The respondent believes, and therefore recommends that he, once again, be reprimanded, despite his history of three prior disciplinary matters. He submits that the three reprimands he received in those matters are either too remote, (one was issued more than twenty (20) years ago), or not sufficiently similar to the present violation, as to require a different, more severe sanction. Regarding his argument that the present violation lacks similarity to his prior reprimands, the respondent asserts that the reprimands issued in 1998 and 1999, involving the timeliness of the payment of funds held in his trust account to lienholders following settlement of a case, “resulted from conduct completely unrelated to the adminis ¹⁸⁹ tration and management of the account as was involved in the present case.” In support of his sanction recommendation, the respondent directs our attention to “several unique aspects of the facts of this case that are relevant to the determination of an appropriate sanction, and that weigh in favor of a lesser sanction than this Court has historically imposed in cases involving trust account violations.” He identifies five such facts.

The first is the absence of any evidence of theft, by the respondent or anyone else, of the trust funds and, the respondent adds, the petitioner “did not even allege or charge [him] with any dishonest act or conduct.” Second, the respondent points to the absence of any evidence that he had ever engaged in any improper commingling of personal and trust funds or that he had personally benefitted from the shortage in the trust account. That no complaints have been made against him by a client or a third person for whom the respondent was holding funds and, so far as the record reveals, no one has suffered a loss as a result of the shortage, is to the respondent, yet another of the facts in his favor. Also relevant to the sanction, the respondent submits, is the fact that the shortfall could have been the result of as little as one isolated incident, occurring prior to January 1, 2001, that went undetected until after the events of September 11, 2001. Finally, the respondent reminds us that the hearing court determined that “the errors made by the Respondent in his administration and oversight of his trust account were due to his lack of education, training and understanding regarding the proper manner of performing those tasks,’’and not willful sloppiness in account management.

Addressing the other factors that this Court has identified as appropriate considerations when deciding what sanction to impose in an attorney discipline case, see Seiden, 373 Md. at 422 , 818 A.2d at 1115-16 ; 14 DiCicco, 369 Md. at 686 , 802 A.2d ¹⁹⁰ at 1028, 15 the respondent urges this Court to give ample weight to the hearing court’s findings that: he was remorseful for, and regrets the errors he made in administering and overseeing his trust account; the respondent has taken steps to address the deficient administration and oversight of the trust account, concluding that, with those steps in place, recurrence is unlikely and discovery, in any event, will be more timely; the respondent made up the shortfall; the respondent provided full cooperation with the petitioner and its investigation; the respondent’s knowledge concerning the administration and oversight of trust accounts was self taught; and the respondent maintains strong ties to the local legal community and the local community-at-large and contributes substantial pro bono assistance. The steps that the respondent has taken to prevent a recurrence of the trust account deficiency also is viewed, by the respondent, as interim rehabilitation, another of the factors that this Court has indicated mitigates a disciplinary sanction. Our task is to determine the appropriate sanction to be imposed in this case, there being no issue as to whether the respondent violated the rules charged. We approach that task ¹⁹¹ with the purpose served by imposition of a sanction in an attorney discipline case firmly in mind: to protect the public rather than to punish the erring attorney, as well as to promote general and specific deterrence.

Awuah, supra, 346 Md. at 435, 697 A.2d at 454 (1997); Attorney Grievance Comm’n of Maryland v. Myers, 333 Md. 440, 446-47 , 635 A.2d 1315 , (1994); Attorney Grievance Comm’n v. Protokowicz, 329 Md. 252, 262-63 , 619 A.2d 100, 105 (1993). We have elaborated: “We have recognized that the public interest is served when this Court imposes a sanction which demonstrates to members of the legal profession the type of conduct that will not be tolerated.... Moreover, such a sanction represents the fulfillment by this Court of its responsibility ‘to insist upon the maintenance of the integrity of the bar and to prevent the transgression of an individual lawyer from bringing its image into disrepute.’ ... Therefore, the public interest is served when sanctions designed to effect general and specific deterrence are imposed on an attorney who violates the disciplinary rules....

Of course, what the appropriate sanction for the particular misconduct is, in the public interest, generally depends upon the facts and circumstances of the case.... The attorney’s prior grievance history, as well as facts in mitigation, constitute part of those facts and circumstances.” Myers, 333 Md. at 447 , 635 A.2d at 1318 , quoting Maryland St. Bar Ass’n v. Agnew, 271 Md. 543, 549 , 318 A.2d 811, 814 (1974) (citations omitted). In this State, it is well settled that the sanction for misappropriation of client funds or funds entrusted to a lawyer is, in the absence of compelling extenuating circumstances justifying a lesser sanction, disbarment, because misappropriation “is an act infected with