Attorney Grievance Commission v. Willemain

Smith, J., delivered the opinion of the Court. As we did in Attorney Griev. Comm’n v. Finlayson, 293 Md. 156 , 442 A.2d 565 (1982), among other cases, we shall attempt in this attorney disciplinary proceeding to use procedures directed at rehabilitation of the attorney. Bar Counsel, acting pursuant to the provisions of Maryland Rule BV9, filed a petition with us on behalf of the Attorney Grievance Commission seeking disciplinary action against David Grant Willemain, a member of the Maryland Bar since June 20, 1974.

The main thrust of the charges grew out of his representation of a client, Helen H. Shaw, who entrusted the sum of $42,500 to him to be invested in loans secured by second mortgages. It was alleged that he failed to advise Mrs. Shaw that two borrowers were clients of his and that over half of the loan to one individual would be applied to a legal fee due from that individual to Willemain. It was further alleged that Mrs. Shaw entrusted to Willemain collection of the monthly payments on these mortgages and that Willemain failed to remit promptly to Mrs. Shaw the sums due her. It was charged that Willemain "knowingly misappropriated and converted to his own personal use funds from mortgage payments which he had received on behalf of Mrs. Shaw,” that he "commingled with his own funds [] funds from [such] mortgage payments,” that at various times he "used portions of the funds from [these] mortgage payments ... for purposes unrelated to the purposes for which the said funds had been entrusted to him,” and that "in the course of his practice of law generally [Willemain] presented to Clerks of Maryland Courts checks ³⁸⁸ drawn by him for filing fees, recording costs or court costs which checks were returned for insufficient funds on at least seven occasions.” Pursuant to Rule BV9 b we referred the matter for hearing to a judge of the Circuit Court for Baltimore County.

He heard live testimony and considered a number of exhibits together with the transcript of the hearing before the inquiry panel which was admitted into evidence by stipulation. The trial judge summarized the evidence in his report to us: "The evidence clearly shows that the Respondent represented Helen H. Shaw in numerous legal matters and she was well satisfied with the services rendered to her up until her sale of various real estate parcels. As a result of the sale, Helen Shaw had an excess of funds from which she decided to place $42,500.00 as loans for second mortgages after discussions with her personal advisors and the Respondent. The Respondent arranged for these loans with the following borrower-mortgagors, Mr. Nelson Lee Gamber, Mr. and Mrs. Peter Lodgen, Mr. and Mrs. Ronald Der Motta, and Mr. and Mrs. R. Joseph Cason.

"At the time that Mrs. Shaw actually made the loans, Mr. Nelson Lee Gamber, and Mr. and Mrs. Ronald Der Motta were clients of the Respondent in other matters. After discussion with Mrs. Shaw as to the collection of the mortgage payments, Respondent volunteered that he could make the collections and Mrs. Shaw agreed for him to collect the mortgage payments and remit them to her monthly for a fee. "The Respondent collected and remitted the mortgage payments promptly from January 1978 through February 1979, but thereafter substantial gaps resulted in the remitting of the mortgage payments to Mrs. Shaw to the extent that she was required to make appointments with him to obtain ³⁸⁹ the payments. Mrs. Shaw testified that at each conference with the Respondent, he would assure her that payments would be remitted promptly, although these representations were not complied with.

Further Respondent does not deny making the representations. "Testimony also indicates that Mrs. Shaw had knowledge of the relationship of the mortgagors with the Respondent and that she was aware that part of the mortgage proceeds borrowed by Mr. Gamber were to be used to pay his divorce expenses, but she testified that she did not know that the funds were for attorney’s fees, payable to the Respondent. She testified that she would have acted differently had she so known. The Respondent stated that the use of a portion of the funds to support the litigation costs was explicitly disclosed to Mrs. Shaw.

"A review of the transcript of testimony at the Inquiry Panel level discloses that Mr. Nelson Gamber, and Mr. and Mrs. Ronald Der Motta, and Mr. and Mrs. Peter E. Lodgen, mortgagors of Mrs. Shaw, testified concerning the circumstances regarding the placement of their mortgages. According to the transcript Mr. and Mrs. Der Motta were very well satisfied with the services rendered to them by the Respondent; however, Mr. Gamber complained of the service performed by him and the end result was a fee dispute with the Respondent supported by confusing and conflicting testimony of Mr. Gamber, suggesting Mr. Gamber’s lack of understanding of the nature of the Respondent’s services. "The evidence further discloses that Mr. and Mrs. Peter E. Lodgen filed for bankruptcy in the United States District Court for the District of Maryland and the resolution of their debt to Mrs. Shaw is still pending. ³⁹⁰ "The transcript also disclosed the testimony of two character witnesses, Carolyn Featherstone, a client, and Betty Alperstein, former secretary. Their respective testimony discloses that the Respondent was a capable and hard-working attorney, but he had a substantial deficiency in bookkeeping requirements and law office management.

The bookkeeping and management deficiencies were also substantiated by other witnesses, including the Respondent. "During the period of the mortgage loans, Respondent’s able bookkeeper, Ms. Terry Wheeler, resigned and he was unable to hire another with the competence of the former although he tried several. "The evidence disclosed that the mortgage payments were paid into an escrow account which said account also included retainers and payments from other clients. The evidence disclosed that the Respondent withdrew counsel fees that were earned by him and there was no testimony that these monies were deposited into a separate trust account for the deposit of funds belonging essentially to his clients only.

"On April 9, 1980, the Respondent received a check in the amount of $267.08 from Mr. and Mrs. Der Motta which said check was charged against the Der Motta’s checking account on April 11,1980. The bank statements of the Respondent’s escrow account do not reflect that the check was deposited therein. Although the Respondent has insisted that the check was deposited in the escrow account, but he is unable to explain why it is not reflected in his bank statement. On September 10, 1979, there was a balance of $3,431.02 in the Maryland National Bank escrow account; however, on the same date the Respondent drew check #349 in the amount of $2,000.00 from the escrow account and deposited it in the general account at Mercantile Bank and ³⁹¹ Trust Company.

On September 16, 1979, Respondent drew check #351 in the amount of $1,500.00 on the escrow account and on September 17, 1979, deposited this in the general account at the Mercantile Bank and Trust Company. By September 19, 1979, Respondent’s escrow account at Maryland National Bank was overdrawn by $73.00. . . . During the June through November 1979 period, the Respondent was withdrawing funds from the escrow account for earned fees on other cases. It is clear that the money during this period was not used for Mrs. Shaw’s purposes but for office use.

From the period of June through November 1979, the Respondent collected $3,291.20 on the mortgage payments which amount was not paid to Mrs. Shaw until December 6, 1979. "The evidence discloses that on September 17, 1980, the Respondent drew a check from the escrow account in the amount of $750.00 payable to cash. The Respondent could not explain what he did with the proceeds. "The evidence also disclosed that checks drawn by the Respondent on his general law office account at the Savings Bank of Baltimore made payable to clerks at the various courts were returned 'insufficient funds’.

These were not reconciled. "During the period between August 14,1980, and December 9, 1980, Mrs. Shaw’s balance with the Respondent was less than the amount she was entitled to receive but the Respondent is unable to adequately explain the reasons for the imbalance. "The Respondent admitted his inability to maintain his bookkeeping requirements after Mrs. Wheeler, the competent bookkeeper, left. "In mitigation, the evidence discloses that he did attempt to hire some bookkeepers who were ineffective.

During this period of time, the Respondent was ³⁹² handling an extensive case load and it is apparent that he lost control of his law office management. As another mitigating factor, the Respondent was on tranquilizers and drinking heavily. He was having personal and emotional problems with his marriage, and he did seek marriage counselling in 1980. Further, he was having physical problems with his back during 1979, and at times was unable to physically sit up.

He had the herniated disc removed in 1981. "There is no evidence that the Respondent intentionally attempted to milk his clients but it appears that he lost control. He was unable to face the problem and help to solve it during the period of time in question. "The testimony discloses that Dr..

J. Alan Lebow, a licensed clinical psychiatrist, is presently treating the Respondent as well as Dr. Charles