Attorney Grievance Commission v. Van Nelson

BATTAGLIA, J. Adrian Van Nelson, II, Respondent, was admitted to the Maryland Bar on December 16, 1992. On April 14, 2011, the Attorney Grievance Commission (“Petitioner” or “Bar Counsel”), acting pursuant to Maryland Rule lA-YSlfa), 1 filed a “Petition for Disciplinary or Remedial Action” against Nelson stemming from a complaint filed by Ms. Latania Maise. Petitioner alleged that Respondent violated the following Rules of Professional Conduct: 1.1 (Competence), 2 1.4(a)(l)-(3) and (b) (Communication), 3 1.5(a) (Fees), 4 1.15(a), (b), and (d) (Safe ³⁴⁸ keeping Property), 5 1.16(d) (Declining or Terminating Representation), 6 8.1(b) (Bar Admission and Disciplinary Matters), 7 ³⁴⁹ and 8.4(a) and (d) (Misconduct), 8 as well as Maryland Rule 16-606.1(a), 9 related to Respondent’s representation of Ms. Maise ³⁵⁰ in an employment discrimination matter against the United States Department of Agriculture. In an Order dated April 19, 2011, this Court referred the matter to Judge Robert A. Greenberg of the Circuit Court for Montgomery County for hearing, pursuant to Rule 16-757. 10 Respondent was personally served with the Petition for Disciplinary or Remedial Action, as well as our Order, the Writ of Summons, Interrogatories, a Request for Production of Documents, and a Request for Admission of Facts and Genuineness of Documents, but did not file a response to the ³⁵¹ Petition, to the discovery requests, or to the Requests for Admission.

Subsequently, Bar Counsel filed a Request for Order of Default, which was granted; Respondent did not file a motion to vacate the Default Order. A hearing, which Respondent did not attend, was held on September 16, 2011, after which Judge Greenberg issued Findings of Fact and Conclusions of Law in which he found that Nelson did not violate Rule 1.1, 11 but that, by clear and convincing evidence, Nelson did violate Rules 1.4(a)(2), 1.4(a)(3), 1.5(a), 1.15(c), 1.15(d), 1.16(d), 8.1(b), 8.4(a), and 8.4(d), as well as Maryland Rules 16-604 12 and 16-606.1(a)(3): FINDINGS OF FACT The court finds the following facts to have been established by testimony and documentary evidence, including Petitioner’s “Request for Admission of Facts and Genuineness of Documents,” to which no response was filed. Respondent was admitted to practice law in Maryland on December 16, 1992. Most recently he had an office at 600 East Jefferson Street, Suite 316, Rockville, Maryland 20852, but has apparently discontinued his practice.

Ms. Maise is a resident of Bowie who is employed by the United States Department of Agriculture (USDA). She met with Respondent regarding a discrimination charge she wished to pursue against her employer, resulting from an unsatisfactory work appraisal she had received for the years 2006-07. She paid $250.00 to Respondent on May 5, 2008, apparently for her initial consultation. A Retainer Agreement, dated August 7, 2008, outlined the terms of Respondent’s representation, by which Maise was to pay a retainer ³⁵² fee of $1,500.00, against an hourly rate of $250.00.

The retainer fee was paid by check on the same day. Maise paid an additional $2,500.00 to Respondent on or about February 9, 2009. As the matter had not progressed to the hearing stage, Respondent prepared another Retainer Agreement, “to advise and represent [Maise] in an administrative EEO hearing [against USDA].” A new “non-refundable” retainer of $2,500.00 was requested, which was apparently the fee evidenced by Exhibit 5. Further, a $500.00 payment, representing costs for a deposition transcript, was deposited with Respondent on March 19.

The $500.00 was not used to pay any costs, however, because the transcript was never ordered. No hearing took place because, ultimately, Maise settled her claim against USDA, pursuant to the terms of an agreement she signed on July 29, 2009. Additional fees of $5,075.00 were generated prior to the settlement, however, which were described in an invoice covering the period from April 1 to July 13. By check dated July 17, 2009, Maise paid Respondent in that amount.

Under the terms of the settlement agreement, among other considerations, USDA was to pay $10,000.00 to Maise, representing her attorneys’ fees and costs. The check representing that amount, however, was made payable only to Respondent, pursuant to the terms of the settlement negotiated by him. Respondent also knew that he had defaulted on student loans owed to the United States Department of Education (“USDE”). Based upon Maise’s previous payments, a total of $9,825.00 in fees was owed by Respondent to Maise.

Thereafter, despite repeated requests, Respondent did not respond to Maise’s inquiries regarding disposition of the settlement funds. She subsequently learned directly from USDA’s attorney that the $10,000.00 payment had been applied to an outstanding student loan debt owed by Respondent to USDE. ³⁵³ Eventually, Maise was contacted by Respondent. By email dated October 23, 2009, he promised to try and recover the money, and claimed that he thought the settlement check would be payable to him and Maise. Since February, 2010, when she received an email in response to further inquiries, Maise has heard nothing from Respondent, and the money owed to her has not been paid.

Eventually, she filed suit against Respondent in the District Court for Prince George’s County, and recovered a judgment against him which has not been satisfied. After Maise filed her complaint with the Petitioner on May 11, 2010, an investigation was commenced. Letters of inquiry from Petitioner to Respondent, dated June 21 and July 6, 2010, have been ignored. Respondent refused to meet with Edwin Karr, Bar Counsel Investigator, canceling an interview scheduled for August 19, 2010.

Respondent has not participated in this judicial proceeding, and his current whereabouts are unknown to the court. As such, the court heard no evidence of any relevant remedial action taken by Respondent, nor any mitigation, and the court finds none. Such other facts as may be necessary to the court’s decision are set forth, below. CONCLUSIONS OF LAW A. Maryland Lawyers’ Rule of Professional Conduct 1.1 (Competence) Rule 1.1 requires that an attorney exhibit “the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Petitioner contends that it was incumbent upon Respondent to ensure that Maise receive the proceeds settlement check, representing attorneys’ fees she expended.

Instead, knowing that he owed money to another agency of the federal government, Respondent failed to ensure that Maise be named as at least one of the payees on the settlement check. As a result of his negligent act, Maise never received a dime, because the ³⁵⁴ settlement proceeds were seized by the government to satisfy Respondent’s pre-existing obligation to USDE. While the court believes it is standard practice in most eases for settlement checks to be made payable to attorney and client, it knows of no requirement that this be done. There was no testimony at trial as to the negotiations between Respondent and the UDSA that ultimately resulted in the issuance of a check made payable solely to Respondent.

The court is not prepared to hold that Respondent should have known that one agency of the federal government would effectively seize a check issued by another agency, without notice, to satisfy a purported debt. There was no evidence to suggest that Respondent intended to appropriate the $10,000.00 for his own use, had he received a check payable to him in that amount. A single mistake may constitute negligence, but is not necessarily misconduct under this rule. See Attorney Grievance Commission v. Thompson, 376 Md. 500, 512 [ 830 A.2d 474 ] (2003).

In short, the court cannot find, by clear and convincing evidence, that Respondent’s failure to insist that the settlement check be made payable to Maise, only, or with him jointly, was incompetent within the meaning of the rule. B. Maryland Lawyer’ Rule of Professional Conduct 1.4 (Communication) Paragraphs (a)(2) and (3) of this rule, respectively, require a lawyer to keep his client “reasonably informed” about the status of the case, and to promptly respond to reasonable requests for information from the client. Respondent failed to return Maise’s persistent telephone calls and email requests throughout late 2009 until February 2010. Maise learned that the $10,000.00 payment had been seized by the federal government from USDA counsel, and not from Respondent, only by virtue of her own efforts to secure information.

Respondent did not keep Maise reasonably informed, and certainly was not prompt in responding to her requests regarding the status of her settle ³⁵⁵ ment check. The court finds by clear and convincing evidence that Respondent violated Rule 1.4(a)(2) and (3). C. Maryland Rule of Professional Conduct 1.5 (Fees) Subsection (a) of this rule prohibits, among other things, the collection of “an unreasonable fee.” Respondent received the benefit of $10,000.00 in attorneys’ fees when the USDE effectively appropriated the settlement check and credited it to his delinquent student loan account. He therefore received $19,875.00 in attorneys’ fees, none of which was refunded to Maise.

Since it was never contemplated by the parties that Respondent would receive more than twice the agreed-upon fee, the court finds by clear and convincing evidence that Respondent violated Rule 1.5(a). D. Maryland Rule of Professional Conduct 1.15 (Safekeeping Property) Rule 1.15(a) requires an attorney to hold property of clients separately from the lawyer’s own property. If money, the attorney must hold such property in a separate account, and complete records pertaining to the account must be kept and preserved for at least five years. This professional conduct rule is implemented by Maryland Rule 16-604, regarding trust account requirements, and 16-606.1(a)(3), which addresses attorney trust account record-keeping.

In general, Rule 1.15(c) permits a lawyer to withdraw legal fees and expenses from the account only when earned. In this case, Maise paid Respondent $500.00, by check dated March 19, 2009, for the transcript of a deposition. The deposition transcript was never ordered, purportedly because of the impending settlement of the case, but Respondent did not deposit the check in a trust account, as required by law, and never refunded the amount to his client. Respondent also failed to deposit unearned attorneys’ fees in a trust account, including payments of $1,500.00 (August 7, 2008) and $2,500 (February 9, 2009).

On or about Febru ³⁵⁶ ary 18, 2009, Maise paid another $2,500.00, which represented a “non-refundable fee.” Arguably, the $250.00 check (May 5, 2008) had been earned at the time it was paid by Maise. The court finds by clear and convincing evidence that the failure to deposit Maise’s retainer checks in a separate trust account is a violation of Rules 1.15(c) and 16-604. Since the checks were not deposited in a separate trust account, it follows that there was a violation of Rule 16-606.1(a)(3), requiring the attorney to keep a record of each attorney trust transaction. Rule 1.15(d) requires a lawyer to deliver promptly to his client any funds belonging to that person, and render a prompt accounting.

Here, because an agency of the federal government appropriated the settlement proceeds to benefit the Respondent, and Maise received none of her settlement, the court finds by clear and convincing evidence that Respondent has violated the rule. E. Maryland Rule of Professional Conduct 1.16(d) (Declining or Terminating Representation) This rule requires a lawyer to take reasonable steps, upon terminating representation, to protect his client’s interests, including surrendering property belonging to the client. This includes the refund of any payment made by the client to which she is entitled. Here, Respondent, after many months of ignoring Maise’s requests, failed to transmit to her the proceeds of that portion of the settlement check to which she was entitled, and the $500.00 advanced as costs.

The court agrees with Petitioner that Respondent’s apparent refusal to communicate was a de facto termination of representation. It was therefore incumbent upon Respondent, after his effective withdrawal from the case, to turn over to Maise the attorneys’ fees and costs she had advanced. That this was not done constitutes clear and convincing evidence of the violation of this rule. ³⁵⁷ F. Maryland Rule of Professional Conduct 8.1 (Bar Admission and Disciplinary Matters) Subsection (b) of this rule prohibits a lawyer from knowingly failing to respond to a lawful demand for information from a disciplinary authority. Respondent in this case failed to respond to Bar Counsel’s requests for information by ignoring two letters, and refusing to be interviewed by an investigator for the Attorney Grievance Commission.

By clear and convincing evidence, this court finds a violation of this rule. G. Maryland Rule of Professional Conduct 8.4 (Misconduct) Rule 8.4(a) makes it professional misconduct to violate or attempt to violate the Rules of Professional Conduct, and subsection (d) prohibits engaging in conduct that is prejudicial to the administration of justice. The court agrees with Petitioner, and finds by clear and convincing evidence, that the above-cited violations of the Rules of Professional Conduct constitute misconduct under subsection (a). Furthermore, Respondent’s disregard for his client, refusal to pay her the fees and expenses she had advanced, and refusal to cooperate in the investigation of this matter constitute a violation of subsection (d), by clear and convincing evidence.

Failure to respond to Bar Counsel’s demand for information is, by itself, a violation of this rule. Attorney Grievance Commission v. Oswinkle 364 Md. 182 [ 772 A.2d 267 ] (2001). (alterations in original) (internal citations to evidentiary exhibits omitted). Bar Counsel has not filed any exceptions to Judge Green-berg’s Findings of Fact and Conclusions of Law and recommends disbarment.

Nelson also has not filed any exceptions, but he did appear at oral argument before this Court on February 3, 2012 to argue for a lesser sanction. On February 6, 2012, however, we entered a per curiam order disbarring Respondent, which stated: ³⁵⁸ For reasons to be stated in an opinion later to be filed, it is this 6th day of February, 2012, ORDERED, by the Court of Appeals of Maryland, that the respondent, Adrian Van Nelson, II, be, and he is hereby, disbarred, effective immediately, from the practice of law in the State of Maryland; and it is further ORDERED that the Clerk of this Court shall strike the name of Adrian Van Nelson, II from the register of attorneys, and pursuant to Maryland Rule 16-760(e), shall certify that fact to the Trustees of the Client Protection Fund and the clerks of all judicial tribunals in the State; and it is further ORDERED that respondent shall pay all costs as taxed by the Clerk of this Court, including the costs of all transcripts, pursuant to Maryland Rule 16 — 761(b), for which sum judgment is entered in favor of the Attorney Grievance Commission of Maryland against Adrian Van Nelson, II. Accordingly, we shall now explain our reasons. “This Court has original and complete jurisdiction over attorney discipline proceedings in Maryland.” Attorney Grievance v. Stern, 419 Md. 525, 556 , 19 A.3d 904, 925 (2011), quoting Attorney Grievance v. Nwadike, 416 Md. 180, 192 , 6 A.3d 287, 294 (2010). “[W]e accept the hearing judge’s findings of fact as prima facie correct unless shown to be clearly erroneous.” Id. at 556, 19 A.3d at 925 , citing Attorney Grievance v. Palmer, 417 Md. 185, 205 , 9 A.3d 37, 49 (2010). Under Maryland Rule 16-759(b)(2)(A), this Court may treat the trial judge’s findings of fact as established by clear and convincing evidence, if no exceptions are filed. 13 We review the Circuit Court judge’s conclusions of law de novo, pursuant to Maryland Rule 16-759(b)(l). 14 ³⁵⁹ Because no exceptions were filed, we accept Judge Green-berg’s findings of fact as proven by clear and convincing evidence.

With respect to the various legal conclusions, we agree that the facts prove Respondent violated Maryland Rules of Professional Conduct 1.4(a)(2) and (a)(3), 1.5(a), 1.15(c) and (d), 1.16(d), 8.1(b), 8.4(a) and (d), as well as Maryland Rules 16-604 and 16-606.1(a)(3). We have previously held that “the failure to keep a client reasonably informed about the progress of his representation is a violation of [Rule] 1.4.” Attorney Grievance v. Lawson, 401 Md. 536, 578 , 933 A.2d 842, 867 (2007). In Lawson , we held that an attorney’s failure to respond to his client’s request for information about a hearing on a Motion to Dismiss and to inform his client regarding the outcome of the hearing, was a violation of Rule 1.4. Id. at 577 , 933 A.2d at 866 (“[The client] was still entitled to a timely response to his specific question.”).

In this case, Respondent failed to communicate with Ms. Maise regarding the disposition of the $10,000 check from the time of settlement, July 2009, until October of 2009, despite numerous phone calls from Ms. Maise requesting this information; Ms. Maise eventually had to contact the attorney for the Department of Agriculture to learn the fate of the $10,000 settlement check. Respondent then failed to respond to Ms. Maise’s repeated attempts to reach him in the latter part of 2009 about that which he intended to do regarding her loss of the $10,000. We agree with Judge Greenberg that Nelson’s conduct violates Rules 1.4(a)(2) and (3), which require an attorney to “promptly comply with reasonable requests for information.” As to Rule 1.5(a), which prohibits the collection of an unreasonable fee, we have stated that, “ ‘[i]n almost every case there will be a self-defined upper limit on a permissible fee charge — the amount to which the lawyer and client have ³⁶⁰ agreed. Any charge by a lawyer in excess of that figure is plainly impermissible and thus excessive or unreasonable ....’” Attorney Grievance Comm’n v. Korotki, 318 Md. 646, 665 , 569 A.2d 1224, 1234 (1990), quoting Charles W. Wolfram, Modern Legal Ethics § 9.3 (1986).

The fee negotiated as set forth in the retainer agreements in this case was $250 per hour; Judge Greenberg found that the Respondent had earned $9,825 under this fee arrangement, but that Respondent also, by virtue of the Government applying the $10,000 settlement check to his outstanding student loans, obtained the benefit of $10,000 in additional fees. As a result, Respondent received a total of $19,825 in fees, none of which was refunded to Ms. Maise. As Judge Greenberg stated, almost $20,000 in fees was never contemplated by the parties and is plainly unreasonable under the principle we enunciated in Korotki . Thus, Respondent violated Rule 1.5(a).

Rules 1.15(c) requires a lawyer to deposit all legal fees and expenses into a trust account until earned. Judge Green-berg found that the Respondent failed to deposit four separate checks into escrow as required by this Rule, including: a $1,500 retainer check on August 7, 2008, a $2,500 retainer check on February 9, 2009, a $2,500 retainer check on February 18, 2009, and a $500 check representing the cost of a deposition transcript on March 19, 2009. 15 Each of these instances is a violation of Rule 1.15(c). We also agree that Respondent’s failure to deposit Ms. Maise’s checks into a trust account and make a