Attorney Grievance Commission v. Watson

BELL, C.J. 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 ⁴⁶⁷ Disciplinary Or Remedial Action, in which it alleged that the respondent, Barry K. Watson, the respondent, violated Rules 1.4, Communication, 2 1.15, Safekeeping Property, 3 and 8.4, ⁴⁶⁸ Misconduct, 4 of the Maryland Rules of Professional Conduct, as adopted by Maryland Rule 16-812. Bar Counsel also alleged that, in addition, the respondent violated Maryland Rules 16-603, Duty to Maintain Account, 5 and 16-604, Trust Account — Required Deposits, 6 as well as Maryland Code (1989, 2000 Replacement Volume) § 10-306 7 of the Business and Occupation Article. The alleged violations were committed during the course of the respondent’s representation of ⁴⁶⁹ Darrill Winder and his minor children in their personal injury claims arising out of a motor vehicle accident. 8 We referred the case to the Honorable M. Brooke Murdock, of the Circuit Court for Baltimore City, for hearing. See Rule 16-757.

Although served with process, the respondent did not file an answer, prompting the entry of an order of default. Following a hearing on the merits, 9 at which the respondent neither appeared, nor participated and in which testimony was elicited and exhibits considered from the petitioner, the hearing court made findings of fact, see Rule 16-757(c), 10 and drew conclusions of law, as follows: “Findings of Fact “Barry K. Watson (hereinafter ‘the Respondent’) was admitted to the Maryland Bar on December 23, 1987. Throughout the period of the representation and events which are the subject of these findings, the Respondent maintained an office for the practice of law as a sole practitioner in Baltimore City.[ 11 ] ⁴⁷⁰ “In July 2001, the Respondent assumed representation of Darrill Winder and Mr. Winder’s three minor children, Quashawn, Shacora and Tyneshia, (hereinafter referred to collectively as ‘the Winders’), in connection with their personal injury claims arising from a motor vehicle accident which occurred on August 9, 2000. The Winders originally had been represented by the law firm of Hassan, Hassan & Tuchman, P.A.

(‘the Hassan firm’). Prior to July 2001, the Hassan firm had received Personal Injury Protection (PIP) payments on behalf of each of the Winders and deposited such funds for safekeeping in the firm’s attorney escrow account. After being advised in July 2001 that the Winders had retained the Respondent as their new attorney, the Hassan firm transferred the escrowed PIP funds to the Respondent by the issuance of four checks drawn on the Hassan firm’s attorney escrow account. Each of the checks was made payable to ‘Barry Watson Escrow Account.’ The four checks were issued in the following amounts.” Check No. Amount For (Client) 37852 $869.56 Quashawn Winder 37853 893.23 Tyneshia Winder 37854 682.19 Darrill Winder 37855 877.04 Shacora Winder “On or about July 17, 2001, the Respondent picked up the four checks from the Hassan firm along with the representation files for the Winders.

In July 2001 and at all times thereafter, the Respondent maintained no attorney trust or escrow account in which client funds could be appropriately safeguarded. Shortly after obtaining the four escrow account checks issued by the Hassan firm, the Respondent cashed those checks or deposited the checks in a personal bank account. In either case, the Respondent did not deposit and safeguard the funds as trust money entrusted to him to hold for the benefit of the Winders or another beneficial owner. See Maryland Code, Business Occupations and Professions Article, § 10-301(d).

The Respondent ⁴⁷¹ knowingly and willfully appropriated the Winders’ PIP monies totaling $3,322.02 for his personal use and benefit. “As of July 2001, the Respondent commenced representation of the Winders with respect to their claims against the allegedly negligent third party or parties responsible for their injuries. In October 2001, the Respondent agreed to negotiated settlements of the Winders’ claims. The claims were settled jointly with Maryland Automobile Insurance Fund (MAIF) and Safeco Insurance Company, which insured the two vehicles involved in the accident. The Winders had been passengers in the vehicle insured by MAIF. “In October 2001, the Respondent received a total of eight settlement checks, four issued by each insurance carrier.

Each of the four MAIF checks was issued October 18, 2001 and was made payable jointly to the claimant and the Respondent, as follows: Check No. Amount Claimant H10695 $1,500.00 Darrill Winder H10696 750.00 Tyneshia Winder * H10697 1,000.00 Shacom Winder * H10698 750.00 Quashawn Winder * * (The checks issued for the three minors were made payable jointly to Dana Taylor, as parent and/or guardian of each child, and Barry K. Watson, Atty.) “Each of the four Safeco checks was issued [on] October 23, 2001 and was made payable to the claimant ‘c/o Barry (or Barry Keith) Watson,’ as follows: Check No. Amount Claimant 0668152 $1,500.00 Darrill Winder 0668153 750.00 Tyneshia Winder 0668154 1,000.00 Sharma Winder 0668155 750.00 Quashawn Winder “The combined total amount of the eight settlement checks was $8,000.00. The Respondent forged the endorsements of his clients in order to negotiate all eight checks and retained all of the proceeds therefrom for himself. The Respondent did not deposit and safeguard the Winders’ settlement funds as trust money. He knowingly and willfully appropriated such funds for his personal use and benefit. ⁴⁷² “For a considerable period of time following the settlements, extending into mid-2002, the Respondent tried to conceal his actions by misrepresenting to Darrill Winder and Mr. Winder’s wife, Dana Winder (a/k/a Dana Taylor), that he had not received any of the settlement checks.

In September 2002, the Respondent turned over the Winders’ representation files to Darrill and Dana Winder and admitted to cashing the insurance settlement checks issued by MAIF and Safeco. “The Respondent has not repaid any of the misappropriated PIP monies and settlement funds. “Conclusions of Law “This court concludes that the Respondent, upon being retained in July 2001 to represent Darrill Winder and Mr. Winder’s three minor children, Quashawn, Shacora and Tyneshia, and while representing them thereafter, engaged in professional misconduct as defined in Maryland Rule 16-701(i) and Rule 8.4 of the Maryland Rules of Professional Conduct (MRPC), as adopted by Maryland Rule 16-812. The Respondent failed to keep the clients reasonably informed about the status of the representation and in fact knowingly misled Mr. and Mrs. Winder about the status in order to conceal his misappropriation/theft of client funds. The Respondent’s actions violated the communication requirements of MRPC 1.4, as well as the prohibition against engaging in conduct involving dishonesty, fraud, deceit or misrepresentation, MRPC 8.4(c). “By receiving and accepting funds for the benefit of clients or third persons when he did not maintain an attorney trust account for the deposit of such funds, the Respondent violated the following Maryland Rules set forth in Title 16, Chapter 600: “Rule 16-603 Duty to Maintain Account. “An attorney or the attorney’s law firm shall maintain one or more attorney trust accounts for the deposit of funds received from any source for the intended benefit of ⁴⁷³ clients or third persons. The account or accounts shall be maintained in this State, in the District of Columbia, or in a state contiguous to this State, and shall be with an approved financial institution.

Unless an attorney maintains such an account, or is a member of or employed by a law firm that maintains such an account, an attorney may not receive and accept funds as an attorney from any source intended in whole or in part for the benefit of a client or third person. “Rule 16-604 Trust Account — Required Deposits. “Except as otherwise permitted by rule or other law, all funds, including cash, received and accepted by an attorney or law firm in this State from a client or third person to be delivered in whole or in part to a client or third person, unless received as payment of fees owed the attorney by the client or in reimbursement for expenses properly advanced on behalf of the client, shall be deposited in an attorney trust account in an approved financial institution. This Rule does not apply to an instrument received by an attorney or law firm that is made payable solely to a client or third person and is transmitted directly to the client or third person. “The Respondent violated MRPC 1.15(a) by not holding the Winders’ PIP monies and settlement funds separate from his own property and by not otherwise safeguarding the Winders’ client funds. He violated MRPC 1.15(b) by faffing to notify his clients upon receiving funds in which they had an interest, by failing to deliver to the clients funds to which they were entitled and by not rendering a full accounting of all client funds he obtained as the Winders’ attorney. “The Respondent knowingly and willfully misused trust money entrusted to him for the benefit of the Winders. Such conduct violated § 10-306 of the Business Occupations and Professions Article.

The Respondent engaged in criminal acts reflecting adversely on his honesty, trustworthiness or fitness as a lawyer in other respects, in violation of MRPC 8.4(b). The Respondent’s criminal acts include, but ⁴⁷⁴ are not necessarily limited to, theft (Md.Code, Criminal Law Article, § 7-104), fraudulent misappropriation by a fiduciary (§ 7-113) and counterfeiting of private instruments and documents (§ 8-601). The Respondent’s criminal activities also establish violations of MRPC 8.4(c) & (d).” Neither the petitioner nor the respondent filed exceptions to the findings and conclusions of the hearing court. As we have seen, the respondent did not participate in these proceedings.

The petitioner has filed Petitioner’s Recommendation for Sanction, in which it urges the respondent’s disbarment. In support of that recommendation, it references the hearing court’s finding that the respondent “misappropriated funds he obtained in his capacity as an attorney entrusted with clients’ personal injury settlement checks,” as well as personal injury protection funds transferred to him by prior counsel, forging the clients’ endorsements to accomplish that result, and relies on Attorney Griev. Comm’n v. Vlahos, 369 Md. 183, 186 , 798 A.2d 555, 556 (2002); Attorney Griev. Comm’n v. Mininsohn, 380 Md. 536, 571-572 , 846 A.2d 353, 375 (2004); Attorney Griev.

Comm’n v. Herman, 380 Md. 378, 399-400 , 844 A.2d 1181, 1194-1195 (2004). Following oral argument, aware that the respondent was then not eligible to practice law, having been decertified by this Court for failure to pay his annual attorney