Attorney Grievance Commission v. Zakroff

GREENE, Judge. Pursuant to Maryland Rule 16-751 1 of the Maryland Rules of Professional Conduct (MRPC), the Attorney Grievance Commission (petitioner), acting through Bar Counsel, filed a petition for disciplinary or remedial action against Robert Joel Zakroff (respondent). The petition alleges that respondent violated Maryland Rule 1.3 (Diligence); 2 1.15(a), (b), (c) (Safekeeping Property); 3 3.3 (Candor Toward the Tribunal); 4 and ⁶⁰⁸ 8.4(a), (b), (c), (d) (Misconduct) 5 *⁵ of the MRPC, Md.Code (1989, 1995 Repl.Vol.); §§ 10-306 (Misuse of Trust Money) 6 and 10-606(b) (Penalties) 7 of the Bus. Occ.

Prof. Article; and Md.Rule §§ 16-607 8 and 16-609. 9 ⁶⁰⁹ Pursuant to Maryland Rule 16-752(a), 10 we referred the matter to Judge Durke G. Thompson of the Circuit Court for Montgomery County to make findings of fact and conclusions of law in accordance with Maryland Rule 16-757(c). 11 Following an evidentiary hearing, Judge Thompson found that respondent violated MRPC Rules 8.4(a), (b), (c), (d), 1.15(a), (b), 3.3(a) and BOP §§ 10-306 and 10-606, but concluded that respondent did not violate Rule 1.3. Respondent and petitioner filed exceptions to Judge Thompson’s findings. I. After an evidentiary hearing, Judge Thompson made the following factual findings and conclusions of law: “FINDINGS OF FACT AND CONCLUSIONS OF LAW “By order of the Court of Appeals of Maryland dated July 29, 2003, pursuant to Maryland Rule 16-752(a), the Petition for Disciplinary or Remedial Action in this matter was transmitted to this Court for determination of findings of ⁶¹⁰ facts and conclusions of law.

After an extension of time granted by the Court of Appeals, this Court heard evidence on May 17-19, 2004; July 15, 2004; and September 13, 2004, and final arguments on October 27, 2004. I. The Allegations. “In this matter, the Attorney Grievance Commission alleges that the Respondent, Robert Zakroff violated Rules 1.3, 1.15(a), (b), (c), 8.4(a), (b), (c), (d), Md.Code Ann., Bus. Occ. Prof. §§ 10-306 and 10-606, and Maryland Rules § 16-607 and § 16-609.

II

Findings of Fact. “Upon the testimony heard and the exhibits admitted, this Court, by clear and convincing evidence, makes the following findings of fact: “1. The Respondent was admitted to the practice of law on June 21,1973. “2. The Respondent was also admitted to the Bar of the District of Columbia in 1973 and to the Bar of the State of Virginia in 1986. “3. During the period 1986 to the present, the Respondent maintained an office for the practice of law in the State of Maryland in Bethesda, Maryland under the practice name of Zakroff & Associates, P.C. with concentrations in personal injury, bankruptcy, and collection matters. “4.

The Respondent was the sole stockholder of Zakroff & Associates, P.C., but employed both professional and nonprofessional staff and associates. “5. When a client retained the firm for representation in a personal injury matter, it was the policy of the firm to require a retainer agreement to be signed. This retainer agreement granted to the Respondent and other attorneys in the firm a power of attorney to negotiate checks or drafts paid in satisfaction of personal injury claims. “6. Once a case was ripe for resolution, the Respondent or other attorneys would negotiate with the tortfeasor’s repre ⁶¹¹ sentative and obtain a commitment to a settlement of the client’s claim. “7.

The Respondent met regularly with members of his staff to discuss the status of personal injury cases and their actual or potential resolution. “8. When a personal injury case was settled and the firm received settlement proceeds, a photocopied record of the check was made and kept in the file. The check was deposited in the firm’s required trust account by using the power of attorney to endorse on behalf of the client. “9. Clients were generally not notified when a settlement check was received, but if a client called and inquired about the status of settlement, the client would be told that a settlement had been reached.

The amount of time between the receipt of settlement proceeds and informing the client of the payment varied from matter to matter. “10. As necessary, the Respondént determined when a settlement statement containing amounts received, amounts payable to the client and medical care providers, as well as reimbursement of costs and expenses advanced by the law firm would be prepared for the client. The Respondent, other attorneys, or certain staff then presented the settlement statement to the client, and the client was asked to sign to show approval. No information was provided to the client as to the date of the actual receipt of the settlement proceeds by the law firm. “11.

The Respondent employed Deborah MacDonald from September 1996 until December 2001. Her duties included handling the personal injury files for the law firm. MacDonald supervised other clerical employees in connection [with] the management of the personal injury files. MacDonald was a fulltime employee, except for a period from June 1999 through February 2000.

MacDonald and the Respondent regularly met to discuss the status of personal injury files. On occasion, MacDonald would make deposits of personal injury checks and drafts, but this was generally the function of the law firm bookkeeper. MacDonald was able to retrieve for the Respondent those personal injury ⁶¹² files, as needed which had been created after she began her employment with the law firm. “12. The personal injury files contained information about the case including, inter alia, information about the receipt of funds, a photocopy of the check, and deposit slips of the amount put into the escrow account. “13.

The escrow account checks were kept in a binder in the Respondent’s office. MacDonald prepared the disbursement cheeks by completing the date, the amount, and the name of the payee. Sometimes the Respondent or other employees of the law firm would prepare checks, but only the Respondent could sign checks. “14. On several occasions, MacDonald prepared checks for disbursement and presented the checks to the Respondent for his signature, but the Respondent failed to sign them.

On other occasions, the checks would not be signed for periods of six months or more, causing MacDonald to have to prepare new checks for disbursement. “15. It was the practice of the Respondent and his law firm to provide Assignment and Authorization forms to medical care providers involved in the treatment of a client in a personal injury case. Records of the assignment were kept in the clients’ files. “16. It was a common practice for the members of the law firm, principally MacDonald, to undertake a negotiation with medical care providers in an effort to reduce medical charges that were subject to the assignment and authorization.

When such reductions were agreed upon by the provider, this information was entered in the settlement sheet and the benefit was given to the client. MacDonald negotiated on a number of occasions with Phillips & Green, an orthopedic practice treating some of the firm’s clients. MacDonald would receive telephone inquiries from representatives of Phillips & Green several times a week, regarding the receipt of proceeds by the law firm for medical services provided to the client, for which the law firm had received an assignment and authorization form. Upon inquiry to the Respondent on how to respond to these calls, ⁶¹³ the Respondent would either authorize or not authorize the disbursement of funds.

On some occasions, the Respondent instructed MacDonald to tell Phillips & Green that a case had not settled when, in fact, settlement proceeds had been received. MacDonald followed these instructions and the Respondent was aware that MacDonald was giving false information. Such communications with Phillips & Green occurred on more than twenty occasions. “17. MacDonald also earned on communications with the Washington Orthopedic Group, another medical provider to the law firm’s personal injury clients.

As with Phillips & Green, MacDonald, acting in accordance with the Respondent’s instructions, gave false and misleading information to Washington Orthopedic Group personnel about whether cases in which they were involved had settled. In some cases, more than a year passed from the time of the receipt of the settlement funds to the date of disbursement to Washington Orthopedic. “18. MacDonald became aware that the balance in the escrow account was low and there did not appear to be sufficient funds to cover the obligations due from the account. She informed the Respondent about this belief and Respondent neither confirmed nor denied this status. “19.

MacDonald also received calls from the clients of the firm about the settlement of their cases. As with the medical providers, the Respondent told MacDonald to provide the client with misleading information, which instruction MacDonald followed. “20. MacDonald wrote approximately 25% of the checks disbursing fees to the law firm, which were deposited from the escrow account into the firm checking account with Sun Trust. In the other approximately 75% of the cases, when MacDonald wrote the disbursement checks, the Respondent advised her that he had already paid the firm from the escrowed proceeds.

Prior to such disbursements, the Respondent did not ask MacDonald to confirm that monies were owed the firm from the escrow account, nor did Respondent check records. ⁶¹⁴ “21. The clients were aware that the firm was seeking a reduction in the amounts that medical providers were charging the clients. Some providers did not promptly respond and in some cases the clients disputed the amounts claimed as owed by the medical providers. Other delays in disbursements were caused by efforts to obtain payment from health insurers. “22.

Leslie Swartzwelder, sister of MacDonald, was an employee of the firm from 1998 until early 2001. Although not being trained as a bookkeeper, Swartzwelder performed this function during her tenure. The books of the firm were kept in a safe in Respondent’s office. The firm had five bank accounts in two banks, Sun Trust and Provident.

The checkbook for the escrow account utilized stubs on which the name of the payee, the amount of the check and the date was entered. Swartzwelder used her computer system and bank statements to reconcile the., bank accounts. During this process, Swartzwelder discovered that the former bookkeeper had written unauthorized checks. “23. Among the duties of Swartzwelder was the payment of accounts payable.

Since she had no check signing authority, Swartzwelder would prepare the check payable and attach the invoice and leave them for the Respondent to sign. On occasion, only with Respondent’s approval, she would use a stamp bearing Respondent’s signature on a check. During her employment, Swartzwelder would receive telephone calls from the banks indicating that an account was low which would prompt her to contact the Respondent. The Respondent would direct her to draw monies from certain accounts and pay them into the accounts that were low.

This was usually done in person, however, on occasion Swartzwelder would endorse the checks by means of the stamped signature over the telephone. Swartzwelder prepared checks numbered 2049, 2053, and 2066 through 2070 and was instructed by the Respondent to deposit these checks from the escrow account to the regular checking or other accounts. The Respondent did not ask Swartzwelder to check files or ⁶¹⁵ balances when such transfers were made, or tell her that the withdrawals from the escrow account were due [to] an entitlement to a fee. Swartzwelder was aware that the Respondent was depositing personal funds in the escrow account from time to time because it was necessary for her to record the transaction. “24.

At all times relevant, the Respondent had full and complete access to the financial records of the escrow [account], other accounts, and the books of the firm. “25. In response to a complaint received by Petitioner’s office, an investigator of the Petitioner’s office, John DeBone, performed a spot audit of Respondent’s books. The spot audit began on May 8, 2002 and included an inspection and audit of the attorney trust (escrow) account used for personal injury cases held at Sun Trust, formerly Crestar Bank. The Respondent, with the exception of one case file, produced all records requested by DeBone.

The materials produced included a receipts journal that reflected deposits made to the trust account. Using an acceptable methodology, DeBone calculated that on January 4, 2002, the trust account should have contained at least $59,000.00 owed to five separate clients, but that the balance of the account on that date was $4,341.54. Among the deposits evidenced by the receipts journal were two deposits made by the Respondent from personal funds. Respondent claimed that the deposits were for payment of payroll and expenses and that the money would be passed through the trust account and into the payroll account and then paid out.

Respondent indicated to DeBone that he made such deposits five or six times a year. “26. During the spot audit examination period, notwithstanding the deposit of $60,000.00 from personal accounts and a $15,000.00 check for fees, the audit revealed a shortfall of approximately $54,000.00 in the account. “27. As a result of the spot audit, DeBone requested bank records for the years 2000, 2001 and part of 2002 from which he prepared an analysis for the period from January 2, 2000 through July 31, 2002. During the larger audit ⁶¹⁶ period, DeBone discovered that the trust had a short fall ranging from a low of $174,000.00 to a high of approximately $421,000.00. “28.

DeBone also calculated the length of time between deposits of settlement proceeds and disbursement to third parties and clients. In twenty-four cases the time difference was more than six months; in seventeen cases the delay was more than twelve months. Additionally in the Mohalyi case the delay was eighteen months; in the Biscoe case it was sixteen months; and in one case, Bowers, settlement funds had been received on September 5, 2000 and had not yet been disbursed as of July 31, 2002. “29. DeBone examined the Alicia Czorny case.

Czomy was a personal injury case, which was settled. Proceeds had been received prior to January 3, 2000. The settlement statement prepared for the case bears Czorny’s signature dated April 26.2000. Sums shown on the settlement statement as payable to third parties were not paid until March 16, 2001 and June 27, 2001.

The trust balance on May 11, 2000, following the disbursement of Czorny’s share of the settlement proceeds was $673.56. “30. The Respondent deposited sums from his personal funds into the trust account, including the proceeds from a life insurance loan in the amount of $80,000.00, which was deposited on January 29, 2002, as well as sums from a Fidelity Investment account in the joint name of the Respondent and his wife. Four of the deposits made by the Respondent from personal funds occurred after the beginning of the Petitioner’s investigation in March 2002. The personal funds deposited were necessary in order to clear checks written in disbursement of the Czorny, Hohalyi, Briscoe and Mitchell cases.

If the deposits had not been made, there would have been inadequate funding of the checks. “31. Petitioner’s investigation revealed that the balance of the trust account on May 11, 2000 was $673.56 On May 12, 2000, a settlement of the Diaz case resulted in the deposit of $22,600.00. The Respondent disbursed $9,500.00 to four ⁶¹⁷ other clients utilizing the monies received from the Diaz settlement causing insufficient funds to be available to satisfy the needs for the Diaz disbursement. “32. The pattern of the Respondent was to withdraw from the trust account lump sums payable to Zakroff & Associates.

Only rarely did the withdrawals represent sums properly earned as fees and costs advanced. “33. The financial pattern examined by the Petitioner’s investigator, DeBone, shows that other accounts utilized by the Respondent for a variety of functions including his bankruptcy and collection practice, trust account, management of the law firm account, and the mortgage account all showed negative balances on frequent occasions. “34. The Respondent was the sole signatory on all office accounts. Before disbursements could be made in cases handled by associates, the Respondent had to authorize the disbursement. “35.

One associate of the firm, Jonathan Silverman, noticed the banking irregularities, but did not question them. Silverman was entitled to a portion of the fee earned from cases on which he worked. Sometimes the fee portion was paid to Silverman before the case settled, or long after-wards. Silverman also represented the firm in negotiations with Washington Orthopedic Group for the extended payout of monies due to that organization for which immediate funds were not available in order to satisfy the law firm’s obligations. “36.

There was a pattern of long delay in the management of monies legitimately due to the medical providers. While some of the delay is accountable to a variety of possibilities, the pattern of delay together with the established balances in the trust account, demonstrate that the Respondent, who was the sole signatory for the accounts of the firm, knew there were insufficient balances to satisfy clients, medical and third party service providers because the Respondent had withdrawn money from the trust account and paid it into the firm business accounts in order to satisfy financial needs. The reason for the financial needs was, in part, due ⁶¹⁸ to the appropriation of monies from the business accounts to the Respondent personally. “37. During the period 1999-2000, the Respondent encountered marital problems, which led to the Respondent seeking therapy for those problems.

The Respondent consulted with Linda Hurwitz, L.C.S.W. on the marital problems for approximately eighteen months during which time he was prescribed and began to take Zoloft. When Hurwitz first consulted with the Respondent, she noted some depression effects, which he denied, and suggested medication, which the Respondent declined to take. Hurwitz also diagnosed the Respondent as having a personality disorder which she believed was very self destructive and masochistic. Hurwitz’s current diagnosis is that Respondent was more than mildly depressed.

Respondent rarely brought up work issues with Hurwitz during his therapy, but his wife regularly complained about his office. To the extent opinions were expressed by Hurwitz, she concluded that the Respondent felt abused by his employees and that he felt compelled to forge ahead with work, no matter the obstacles. This tendency she referred to as the “Superman Complex.” It is Hurwitz’s belief that his depression interfered with Respondent’s ability to think clearly and the depression interfered with the analysis of whether taking money from the trust account was more than a means to an end of solving some immediate problem. She opined that the Respondent did not think in terms of using the trust account monies as a wrongful act and had no opinion whether Respondent knew that taking monies was wrongful. “38.

The Respondent had experienced a dysfunctional family upbringing. His father raised him in Philadelphia with his brother and sister. The Respondent’s mother died from cancer when the Respondent was quite young. . The Respondent thought highly of his father and describes him as unique, but his father was abusive to Respondent and his older brother, who, in turn, was abusive to Respondent.

Respondent also describes his father as a depressed individual who would literally ship the Respondent off to camp, ⁶¹⁹ sometimes prematurely, during the summer months when the Respondent was age three until he was eighteen. “39. The Respondent succeeded in school, but by the time he reached college, he reports that he suffered blackout spells and, on one occasion, the dizzy spells and disorientation lasted through the finals period. “40. Respondent married his childhood sweetheart, but the marriage has had its turmoil. Respondent’s daughter was apparently suffering depression and became a recluse in the family home.

Respondent’s wife blamed him for the situation and it triggered marital problems. This caused the Respondent to seek counseling. Because his wife is a trained “healer” utilizing holistic treatment for ills, the Respondent initially eschewed medication. “41. The Respondent, who had served as a U.S. Bankruptcy Court trustee for a period from shortly after being admitted to the bar, decided in 1984 to move his office to a detached house and to begin to specialize in personal injury claims.

At the time of the instant hearing, the Respondent described his practice as involving collections, bankruptcy and personal injury cases. The volume of cases was approximately 250 bankruptcy, 320-400 personal injury, and 1500-2000 collection matters. The law firm grossed $890,000.00 in 1999, $960,000.00 in 2000, and $1,020,000.00 in 2001, with a drop of income in 2002. The Respondent operated his practice with a high degree of delegation, but was constantly troubled by the inability to retain staff and associate attorneys.

By his account, the Respondent believes he has hired approximately forty associate attorneys over the years. The Respondent paints a picture of the practice as a chaotic affair with periodic crises occurring into which he was required to become enmeshed. The Respondent assigns as reasons for his practice being in such a state to his own depression and his unwillingness to disappoint potential clients causing him to take on improvident cases. Respondent also felt victimized by a bookkeeper who stole $20,000.00 from him.

Respondent asserts he never intended nor did he steal any monies from any client. ⁶²⁰ He states that everyone who is due any monies have been paid in full. The Respondent owns the house from which the firm practices jointly with his wife and the mortgage on ■the house is serviced by a dedicated account at Sun Trust. “42. The Respondent states that he rarely failed to go to the office and put in long hours described as seventy to eighty hours per week. For recreation, the Respondent played tennis and ran.

He describes exercise as therapeutic, allowing him to focus on practice matters. He kept all trial and court dates. “43. The Respondent does not deny the status of his trust account, but pleads ignorance to the precise balances and believed there were sufficient monies to cover the checks he directed his subordinates to write. He acknowledges depositing $40,000.00 of personal monies to fund the Czomy settlement.

He professes ignorance of deposits of other personal funds, which is not credible. He also claimed to be ignorant of the minimal balance of approximately $600 in the trust account, which is also not a credible statement. The Respondent made no effort to audit his trust account until after the Petitioner’s investigation had commenced. Only then, he asserts, did he know of the deficiencies in the trust account.

Additionally, this assertion is not credible. “44. Evidence was presented on the Wardley Patterson matter. Wardley Patterson was a former client of the Respondent. In April 2000, Patterson consulted the Respondent about filing for bankruptcy. “45.

Shortly thereafter, in May 2000, Patterson’s home was sold at foreclosure sale. In early July 2000, Jonathan Silverman, Esq., as associate attorney with the Respondent’s firm, filed exceptions to the Report of Sale on behalf of Patterson. On this matter, the firm was unsuccessful and the exceptions were denied. “46. In October, Patterson returned to the Respondent’s offices and met again with Silverman and complained that the promised bankruptcy filing had not occurred. ⁶²¹ “47.

In November 2000, Patterson was in dire financial straits, and with the assistance of the Respondent’s firm, filed for bankruptcy. Jonathan Silverman, Esq. was the attorney of record for the firm. Silverman testified that he did not know of the Little agreement. Patterson was difficult to understand because of the level of medication he was taking. “48.

At the October meeting with Silverman, the Respondent was not present nor in the offices. However, there was a file from the previous meeting between Patterson and the Respondent containing rudimentary schedules for filing bankruptcy. Silverman briefly discussed these schedules with Patterson. “49. Subsequently, Patterson returned to the offices and signed the schedules in early November 2000. “50.

Patterson also had an arrangement entered upon with the assistance of the Respondent where Patterson was to care for another individual by the name of Little in return for the use of a residence and payment of cash monies. Little died on November 18, 2000. Patterson was no longer paid what he felt was due to him and he wanted to make a claim against the estate. By letter dated December 7, 2000, Respondent wrote to the attorney for the estate, Richard Chisholm, Esq. demanding payment for services rendered in the amount of $6,000 per month plus a lump sum of $50,000.00. “51.

At a meeting of creditors, under § 341 of the U.S. Bankruptcy Code, which was attended by Patterson and Joseph Langone, Esq., who was an associate attorney of the Respondent, the required schedules were presented to Patterson, with his daughter present, for Patterson’s signature. Langone attended the meeting at the request of the Respondent who was otherwise occupied on another matter. The claim of Patterson for services provided was not included within the schedule of assets belonging to Patterson. At the § 341 meeting, the bankruptcy trustee, Cheryl Rose, was critical of the manner in which the schedules were prepared and chastised Langone who did not know answers ⁶²² on specific matters.

Rose testified that she specifically asked whether Patterson, as a debtor, had claims against anyone else. “52. After the meeting, Langone inquired about the Little Estate claim and was reassured by Respondent that it was not a problem. “58. Rose made a trustee’s report on the matter. The case proceeded to discharge on February 21, 2001 and closed with notices sent of the court’s actions. “54.

Silverman testified that he received a call from an associate of Richard Chisholm, Esq. who sought the return of keys to the Little residence. It was during this dialogue that Silverman learned of the claim upon the Little estate being made by Patterson. “55. On March 5, 2001, Chisholm called Silverman. He was already aware of the claim against the Little estate from other conversations and advised Silverman.

After the phone call, Silverman conferred with the Respondent on the matter. “56. Negotiations then proceeded with the Respondent demanding from the estate on behalf of Patterson a cash payment of $40,000.00 to settle the matter and the claim. This negotiation never came to fruition and suit was filed to enforce the agreement on May 16, 2001. “57. Chisholm and Silverman called to advise Rose of the claim against the Little estate.

Ultimately the bankruptcy case was reopened and Rose took over the claim against the estate and settled it for $20,000.00, which was significantly less than the amount for which the Respondent believed he could settle the case. Rose felt that the case was weak because of the potential application of the Dead Man’s Statute and because Patterson would make a poor witness. By this time, Patterson had retained counsel other than the Respondent. “58. Ultimately, the bankruptcy court sanctioned the Respondent for the improper claim of an exemption and filing a frivolous motion.

The exemption claim used by the Re ⁶²³ spondent was for pain and suffering caused by the breach of contract. Eventually, Respondent paid $47,000.00 in settlement with Wardley Patterson, $1000.00 in sanctions, which when coupled with the recovery of $20,000.00 against the Little estate, resulted in a 98% recovery on claims of creditor in the Patterson bankruptcy. The sanctions in the matter were visited upon the Respondent and not on the firm. The entire matter was referred to the Petitioner for investigation. “59.

After Petitioner’s investigation was commenced, several mental health professionals saw Respondent. Kristin Tellefsen, M.D. was asked by Respondent’s former counsel to evaluate Respondent in September 2002. Dr. Tellefsen is a highly experienced psychiatrist who has had 80-40 testimonial opportunities in attorney discipline matters. She is also the former director of the Clifton T. Perkins State Hospital and is boarded in forensic psychiatry.

At the time of the examination, no petition had yet been filed and Dr. Tellefsen was not familiar with any allegations of wrongful conduct. Dr. Tellefsen found the Respondent to be under a mood disorder, depression with elements of mania and that the conditions were static for the entire adult life of the Respondent. She also found a personality disorder that was persistent, permanent, and consistent. The Respondent was seen to be dependent and avoidant in a passive-aggressive manner coupled with a self-defeating masochism.

Physically, the Respondent was evidencing depression and some attention deficit. Dr. Tellefsen opined that Respondent walled off problems, which was a reflection of his relational problems that existed his entire life. As a result, Respondent tended to not pay attention to problems until they became a crisis and then Respondent provided a quick fix but did not address the root of the problem. Notably, Dr. Tellefsen opined that there was no deliberate intent to violate rules, but only to cope.

Respondent probably knew that taking the trust monies for his own use was wrong and that he felt badly about it. This dynamic only created more stress and more depression. ⁶²⁴ “60. Michael K. Spodak, M.D., a forensic psychiatrist trained at Johns Hopkins University and who spent fifteen years working at the Perkins Hospital, also examined the Respondent. Dr. Spodak focused on symptoms, which were numerous.

Dr. Spodak identified disorganization, sleeplessness, .irritability, stress, detachment, lack of emotion, procrastination, dishevelment, late payment of bills, expenditure of $40,000 for a pool to please his wife and then burying it, selling property at a loss, too much work, bad employees, late taxes, and the refusal to confront his daughter about remaining reclusive in the house. Dr. Spodak noted that the mental difficulties evidenced themselves in everyday life and not just in his practice. Dr. Spodak believed there was a debilitative mental condition that was the cause of the conduct in the allegations facing the Respondent. Dr. Spodak does not believe that the Respondent intended to steal money and his acts were not a total moral breakdown.

Rathei", Respondent wanted to help clients and others. Financially, Respondent did not need the money from the trust account because he had sufficient monies for his needs. Dr. Spodak also felt that the Respondent had the ability to control his behavior, even though it was somewhat impaired. In essence, the Respondent’s depression caused the Respondent to not care about consequences and to not consider ethical responsibilities, although he did not let everything go to pieces.

Dr. Spodak was in agreement with Dr. Tellefsen that the Respondent utilized quick fixes to meet his crises. “61. [Jeffrey S.] Janofsky, M.D., also a forensic psychiatrist, who had the benefit of the views of the other mental health professionals as part of the assessment workup, also examined the Respondent at the request of the Petitioner. Janofsky agrees that the Respondent suffers from depression, which is both a symptom and diagnosis. However, Janofsky disagrees in the severity and impairment caused by the depression. Janofsky believes it was much less than a major depression.

Janofsky also agrees that the Respondent suffers from a mood disorder that was probably caused by his childhood and rearing. He believes that the mood ⁶²⁵ disorder is persistent, consistent and permanent, but that the mood disorder did not cause the Respondent to commit unethical acts. In support of this view, Janofsky cites to the Respondent’s ability to restore the trust account by repayment, develop a methodology to cover shortages in the trust account, and undertook a determined assault on the medical insurers and medical providers for his clients. Janofsky acknowledges that the circumstances of the Respondent during the subject time period was stressful, anxiety producing, depressing, and the cause of physical symptoms.

Finally, Janofsky believes that the Respondent is much improved as a result of the Zoloft prescription and is grateful to be relieved of the worry and anxiety of his bank accounts. “62. It was stipulated by the parties that the Respondent was seen and counseled by Carol Waldhauser of the Maryland State Bar Association Lawyer Assistance Program. The contact with the program began after Petitioner undertook its investigation. “63. In sum total, taking into account all of the testimony of the forensic psychiatrists and Hurwitz’s testimony, it is clear that the Respondent has been suffering from a mood disorder all his life.

Additionally, the Respondent suffered from significant depression and the depression affected both his personal and professional relationships and lifestyle. The depression interfered with Respondent’s ability to think through the problems he perceived were plaguing him and to develop acceptable solutions and to implement them. As a result, Respondent was crisis driven which caused him to abuse his trust account and utilize monies deposited therein for others for his personal use. Respondent took these actions in a determined and knowing manner, but without real need and without malice toward clients or with intent to steal.

The sheer magnitude of the imbalance of the trust account, the repeated conduct of drawing upon it, the methodology used by the Respondent, and his apparent appreciation of the wrongfulness, albeit rationalized away contradicts his claims of ignorance. The Respondent placed the ⁶²⁶ property of others at significant risk even though no client or medical assignee experienced any actual loss. “64. The Respondent testified to several remedial actions undertaken in the operation of his practice. As mentioned above, the Respondent is now taking medication for depression and has consulted with the M.S.B.A. Lawyer Assistance Program.

Evidence was also received .that Respondent would submit to a monitor of his practice by Alan Feld, Esq. Mr. Feld is known to the Court as an attorney in good standing and sound reputation with experience, competence and a successful law practice. This Court finds that Mr. Feld is fully capable of monitoring Respondent’s practice if properly compensated for his time and if he is given full access to Respondent’s practice. “65. Respondent testified that Mark Shupe, Esq. had agreed to mentor the Respondent on ethical issues that he might confront in the future.

Mr. Shupe is an attorney of good standing and of sound reputation and is capable of assisting the Respondent on the resolution of ethical issues.

III

Conclusions of Law. Management of Trust Account “In regards to the alleged violations of statutory provisions in the handling of trust funds by the Respondent, this Court concludes: BOP §§ 10-806 and 10-606 “BOP §§ 10-306 and 10-606 provide that a lawyer may not use trust money for any purpose other than the purpose for which the trust money is entrusted to the lawyer. There is clear and convincing evidence that the Respondent knowingly used client funds for unauthorized purposes. This finding is based on the factual finding that the trust balances fell far below that necessary to protect and safeguard client funds.

Respondent, by his pattern of conduct, knew that there were insufficient monies in the trust account, but persisted in taking the monies for his personal ⁶²⁷ use. Respondent withdrew for his use, funds, which he eventually repaid from personal funds. These actions were undertaken by the Respondent who committed the acts willfully and knew they were wrongful. “It is not necessary to recount all of the instances contained within the record that demonstrate the actions of the Respondent. In fact, he does not deny his actions, but asserts the violations were not willful due to his ignorance of account balances.

This position is belied by the Respondent’s careful methodology and his sole control over the funds in question. 12 As stated above, this Court concludes that the testimony of the Respondent on this point is not credible and that he was well aware of what occurred at the firm. What is credible is that clients and other third parties demanding payment confronted the Respondent periodically. The reason these demands created a crisis was because the funds necessary had been previously withdrawn and used by the Respondent for unauthorized purposes. “The fact that these monies were eventually repaid and that no one suffered a loss goes only to mitigation of the sanction for the violation of these sections of the law. Attorney Grievance Commission v. Owrutsky, 322 Md. 334, 351 , 587 A.2d 511, 519 (1991).

While it might be viewed by Respondent as conscious indifference to the management of his trust account, this Court concludes that his actions were understood and purposeful. By clear and convincing evidence, this Court finds the Respondent to be in violation of these statutes. ⁶²⁸ Maryland Rules of Professional Conduct 8.4(a)(b)(c) and (d). “Rule 8.4(a) requires a finding that the Respondent has violated other rules. As seen below, the Respondent is in violation of the other subsections of Rule 8.4 and thus has violated 8.4(a). “Rule 8.4(b) is violated if it is shown that BOP § 10-306 was violated by clear and convincing evidence. Petitioner has provided an abundance of evidence in this regard and the Respondent has not rebutted it.

As outlined above, the Respondent is in violation of this subsection. “Rule 8.4(c) was violated when the Respondent misappropriated monies from his trust account and then directed others to lie about the fact. The Respondent also misrepresented to the Petitioner’s investigator the use of $50,000.00 deposited into the trust account purportedly to cover payroll when, in fact, it was used to pay proceeds to a client on a personal injury matter which could not be covered by existing balances. “The prolonged delay in paying third party assignees those monies due the assignees after a settlement was reached in a personal injury matter was also proven by clear and convincing evidence. Such conduct is prejudicial to the administration of justice. Those directly affected and others who learn of attorney conduct of this type will not cooperate with attorneys in the future, or if they do, the cooperation will require safeguards for the assignees that should not be necessary when dealing with a professional.

The Respondent is in violation of this rule. Maryland Rule of Professional Conduct 1.15 “Violation of this rule occurs if the balance in an attorney trust account falls below the total amounts held in trust and such deficiency does not have a satisfactory explanation. The fact that there was an insufficient balance is prima facie evidence of a violation. As outlined in the finding of facts, it is likely that the balance of the trust account was ⁶²⁹ insufficient for much, if not all, of the period examined by the Petitioner’s investigator, DeBone. “Subsection 1.15(a) was violated repeatedly when the Respondent commingled funds by depositing his personal funds on nineteen separate occasions from April 2000 until July 30, 2002. “The Respondent violated subsection 1.15(b) when he directly or through those he directed, failed to promptly notify clients or other interested parties of the receipt of funds to which they were lawfully entitled.

Not only was there a failure to promptly notify clients and assignees on many occasions, there was a deliberate pattern undertaken to deny the medical providers the use of their lawful monies while Respondent “kited” other settlements or supplied funds from his personal accounts to cover shortfalls. The Respondent is in violation of this rule. Wardley Patterson Matter “The central issue in the Patterson case is whether the Respondent directly or indirectly attempted to circumvent the bankruptcy laws in an effort to recover monies for Patterson and for which the Respondent would earn a substantial fee. It is clear the Respondent personally discussed the claim against the Little Estate with an attorney representing the personal representative and the estate on March 5, 2001.

The testimony of Richard Chisholm, Esq. about the conversation is bolstered by contemporaneous notes and is entirely credible. Respondent was also fully aware of the Patterson bankruptcy proceedings even though he did not personally handle the matter. He had referred Patterson to Silverman, but when neither could attend the § 351 meeting, it was the Respondent who directed Langone to attend. Further, Langone reported back to the Respondent on the matter.

When the Respondent filed a lawsuit in an effort to recover the claimed monies for Patterson on May 17, 2001, he made no effort to notify the bankruptcy trustee, Cheryl Rose, nor did he include her in the filing. The only conclusion that can be drawn is that the ⁶³⁰ Respondent, being knowledgeable of the bankruptcy rules and laws, and knowledgeable of the Patterson Chapter 7 petition, and the period it covered, deliberately withheld information from the bankruptcy schedules, and made no effort to inform the trustee of the claim on the Little estate. The Respondent compounded his violation of the bankruptcy rules by attempting to actively recover the claim through negotiation and by filing a lawsuit. In fact, the bankruptcy court must approve such activity before counsel other than the trustee can take these actions.

Undoubtedly, such a rule is designed to control costs expended in recovering assets, but it also reins in unauthorized representations. Maryland Rule of Professional Conduct 1.3 “The allegation that the Respondent failed to act diligently on behalf of Wardley Patterson is not supported by clear and convincing evidence. While there were initial delays in getting the bankruptcy underway, they do not rise to a level constituting a violation of Rule 1.3. Nor is there sufficient evidence that the Respondent was not diligent when he failed to amend the bankruptcy schedules, which caused the bankruptcy to be dismissed.

Maryland Rule of Professional Conduct 3.3(a) “This Court concludes that it was not a lack of diligence but an intentional act to omit the Little claim from the bankruptcy schedules and by doing so the Respondent violated Rule 3.3(a). This Court does not accept the testimony as credible that the Respondent’s actions were taken to protect the claim on behalf of the trustee. Accordingly, the Respondent is found in violation of this rule. Maryland Rule of Professional Conduct 84(c) “Violation of this rule requires that this Court find by clear and convincing evidence, dishonesty, fraud, deceit, or misrepresentation in the actions of the Respondent.

The actions of the Respondent meet the criteria for violation of this rule and he is so found to be in violation. ⁶³¹ Maryland Rule of Professional Conduct 84(d) “This Court agrees with Petitioner’s contention that the actions of the Respondent in the concealment of the Little estate claim.from the attention of the bankruptcy trustee and his further deception of the