Attorney Grievance Commission v. Zdravkovich

BATTAGLIA, J. Pursuant to Maryland Rule 16-709(a), 1 Bar Counsel, at the discretion of the Review Board and on behalf of the Attorney Grievance Commission, Petitioner, filed a Petition for Disciplinary Action against Respondent, Dushan S. Zdravkovich, who has been a member of the Bar of this Court since November 1, 1981. The Respondent had been suspended indefinitely from the active practice of law on December 4, 2000, effective thirty days thereafter. Attorney Grievance Comm’n v. Zdravkovich, 362 Md. 1 , 762 A.2d 950 (2000). 2 In his Petition, Bar Counsel alleged that, with respect to a complaint filed by Milton E. Siegert, Jr., and with respect to ¹¹³ Respondent’s representation of Charles Hunter, III, Respondent violated Maryland Rules of Professional Conduct (hereinafter “MRPC”) 1.4 (Communication) 3 , 1.15 (Safekeeping of Property), 4 8.1 (Bar Admission and Disciplinary Matters), 5 8.4 (Misconduct), 6 Maryland Code, § 10-306 of the Business Occu ¹¹⁴ pations and Professions Article (1989, 2000 Repl.Vol.,), 7 and Maryland Rule 16-607. 8 The procedural history of this matter has importance because of Respondent’s exceptions, so it will be reiterated in ¹¹⁵ detail. After the Honorable Michael E. Loney of the Circuit Court for Anne Arundel County was designated, on August 23, 2003, to hear and to determine the charges contained in the Petition for Disciplinary Action, 9 the Respondent, represented by counsel, propounded Interrogatories and a Request for Production of Documents, which were “hand-delivered” on August 29, 2002 to Bar Counsel. “Irreconcilable differences” arose between Respondent and his counsel about the appropriate way to respond to the Petition, whether by Answer or Motion for More Definite Statement. 10 Counsel for Respondent moved to withdraw their appearances on September 26 and 30, 2002.

The order striking their appearances was entered on October 4, 2002 by Judge Loney. Appended to that order was a pleading captioned, “Notice to Employ New Counsel”, which stated: 11 It appears from the record in the above entitled case that you are not presently represented by counsel. You are hereby notified this day, that your failure to have new counsel enter his appearance in this case within fifteen (15) days after service upon you of this notice shall not be grounds for postponing any further proceedings, concerning the case. You are warned that without counsel to protect your interests in the case, you risk a nonsuit or judgment by default and all court costs being ordered against you by the court.

All future notices to you will be sent to the address to which this notice is being sent. Please inform the clerk of ¹¹⁶ any change of address. Failure to do so may result in a default judgment against you. The day before the order striking appearance of counsel was entered, October 3, 2002, Bar Counsel filed a Notice with the Court, pursuant to Maryland Rule 2 — 401(d)(2), 12 that on October 1, 2000, Interrogatories and Request for Admissions of Fact addressed to Respondent were sent directly to him.

On October 18, 2002, Bar Counsel moved for an Order of Default against Zdravkovich alleging that he was served, on September 1, 2002, with a copy of the Petition for Disciplinary Action and failed to respond to the charges within 15 days of the date of service pursuant to order of the Court of Appeals dated August 13, 2002, a copy of which also had been served upon Respondent. Judge Loney granted the Motion on October 30, 2002 and entered an Order of Default against the Respondent informing him that he could move to vacate the order within 30 days after entry and further giving leave to Bar Counsel to present “such evidence as it deems necessary to allow the court to carry out its function under Maryland Rule 16-711a.” 13 A hearing was scheduled for December 18, 2002. The proceedings thereafter became more volatile when on November 8, 2002, Respondent filed a Motion for More Definite Statement, alleging that the Petition for Disciplinary Action “sets forth no facts, whatsoever, describing the mecha ¹¹⁷ nism through which these alleged violations occurred” and “no facts, whatsoever, describing the violations of the Respondent” and that, as a result, he “cannot frame an answer as required by Maryland Rule 2-323.” Bar Counsel responded with a motion to Strike, alleging that Respondent’s Motion for More Definite Statement would have been permissible under Rule 2 — 322(d) “before answering,” “[y]et the time within which the Respondent is obliged to answer has passed making his motion untimely.” Bar Counsel further alleged that the more definite statement Respondent sought to obtain “servefs] in fact to replace an attempt at discovery, a procedure which, through his default, the Respondent may have abrogated,” noting that, “Respondent had an opportunity to attend and participate in an Inquiry Panel proceedings[sic]” during which he “obtained the entire investigative file of the Petitioner, and had available to him the full measure of the subpoena powers granted under Maryland Rule, then in effect, 16-706d3(c).” Respondent, on December 9, 2002, filed an Opposition to the Motion to Strike and also moved to strike or set aside the Order of Default, ostensibly because “the procedural requirements for entry of Order of Default had not been met.” The day after these pleadings were filed, a “Blue Note” denying Respondent’s Motion for More Definite Statement was filed, which had been signed by Judge Rodney C. Warren on December 2, 2002. 14 On December 18, 2002, Judge Loney held the previously scheduled hearing in the case and concurred with Judge Warren in striking Respondent’s Motion for More Definite Statement because it was “time-barred.” Judge Loney also denied the Motion to Strike or in the Alternative to Set Aside the Order of Default, which the Respondent argued required a proof of service. Two motions also were filed by Respondent in Court that day, a Motion to Strike Petitioner’s Request for Discovery and a Motion for Order of Default based upon the alleged failure of Bar Counsel to respond to discovery, i.e., ¹¹⁸ requests for production of documents, interrogatories, and a notice of deposition, all of which had been sent by Respondent’s prior counsel on August 29, 2002.

Both of those motions were denied. After the hearing judge entered these rulings, Respondent left the proceedings. Bar Counsel introduced the unresponded to Requests for Admissions, which were admitted, the Petition for Disciplinary Action, the averments of which were admitted by operation of the default order, and proposed Findings of Fact. On January 6, 2003, the hearing judge entered the following Findings of Fact and Conclusions of Law: “This matter came before the Court on December 18, 2002, on a Petition for Disciplinary Action filed by the Attorney Grievance Commission of Maryland against Dushan S. Zdravkovich.

The Petition was filed in accordance with Maryland Rule 16-709, et seq. and an Order of Default was entered against Respondent for failing to answer the Petition. At the hearing, the Court granted the Request for Admissions of Facts and held the case sub curia. The Court having reviewed the file, as well as the request for admissions of facts, and having considered all of the case law cited and the arguments of John C. Broderick, Esquire, Bar Counsel, the Court makes the following findings of facts and conclusions of law as required by the Maryland Rules of Procedure. BACKGROUND “Respondent, Dushan S. Zdravkovich, was admitted to the Maryland Bar on November 1, 1981.

Presently, Respondent is suspended indefinitely from the active practice of law. (See Attorney Grievance Commission v. Zdravkovich, 362 Md. 1 , 762 A.2d 950 (2000)). “Petitioner, Attorney Grievance Commission of Maryland, filed a Petition for Disciplinary Action in the Court of Appeals. On August 13, 2002, the Court of Appeals ordered that the matter be transmitted to the Circuit Court for Anne Arundel County to be heard and determined. ¹¹⁹ “On September 1, Counsel for Respondent accepted service of the Petition on behalf of Respondent. On October 1, Petitioner served Respondent Interrogatories and Request for Admission of Facts.15 15 The hearing judge included a footnote 1 in his opinion that stated, "The Interrogatories and Request for Admissions of Fact were mailed directly to Respondent, not his counsel.” “On October 4, 2002, the Court granted the Motion to Strike the Appearance of Respondent’s Counsel Thomas A. Pavlinic, Esquire and Steven J. Parrott, Esquire.

On October 30, 2002, the Court entered an Order of Default for Respondent’s failure to answer the Petition. On December 18, 2002, the Court denied Respondent’s Motion for a More Definite Statement. “On December 18, 2002, the case was called in open court. Respondent was present and represented himself Pro-Se. He presented a Motion to Strike or in the Alternative Motion to Set Aside Order of Default, Motion for Order of Default, and Motion to Strike Petitioners Requests for Discovery.

The Court denied all the Motions and Respondent elected to leave the hearing. The Court granted the Request for Admissions of Facts and held the case sub curia. Complainant Milton E. Siegert, Jr. FACTS “Complainant, Milton E. Siegert, Jr., and his brothers, retained the Respondent to represent them in matters that arose as a result of the death of their father, Milton Edward Siegert, Sr. At the request of Respondent, the Siegerts paid to Respondent $300 which was to be used to retain and employ an investigator, Carl Yowell. “On March 17, 2000, Complainant notified Respondent that he was terminated of his representation. Complainant alleged several causes for the termination: Respondent failed to appear at a District Court for Anne Arundel County proceeding on February 18, 2000 in Case No. 2071000081; on March 6, 2000, Respondent incorrectly informed Complainants that a deposition on March 9, 2000 at 1:00 P.M. was cancelled; ¹²⁰ Respondent failed to appear for deposition scheduled on March 9, 2000 at 1:00 P.M. which resulted in Complainant being unrepresented at the deposition; Respondent failed to answer a Motion to Compel in Estate No. 44634 in the Orphans’ Court for Anne Arundel County.

Complainant also complained of alleged misappropriated funds. Complainant demanded Respondent return the $300 for Carl Yowell and an accounting of $1000 from Frank Bradley for rent of Complainant’s deceased father’s property located at 815 Parkwood Avenue. “On March 16, 2000, Complainant filed a complaint with Petitioner alleging the above stated misconduct. On March 24, 2000, Petitioner informed Respondent of the disciplinary investigation. Petitioner requested accounting of the alleged misappropriated funds, an accounting of all funds received from Complainant and his brother, an indication which account those funds were deposited into, and provide copies of the bank records pertaining to the safekeeping of those funds.

Petitioner also requested copies of bank statements for the period from one month prior to receipt of the funds of Complainant to the present date, copies of the front and back of all checks drawn against the account, copies of all deposited items, and any ledgers or journals maintained by him on behalf of the Complainant. Respondent was also reminded of his obligation to comply under Maryland Rules of Professional Conduct 8.1. “On April 7, 2000, Respondent answered Petitioner’s inquiry. Respondent only provided a simple denial of the accusations against him and failed to provide any factual detail or accounting. On April 12, 2000, Petitioner notified Respondent that he failed to account for the funds received in connection with the representation of the Siegerts and failed to provide the bank records requested.

On April 17, 2000, Respondent replied that ‘I have respectfully declined to comply with your request as styled.’ On May 2, 2000, Petitioner sent a third request for information regarding the matter. Respondent never answered. ¹²¹ “During the investigation of the complaint, Petitioner learned of a misappropriation of funds by Respondent in connection with his representation of Charles Hunter, III. Mr. Hunter had entrusted Respondent with $15,552.00.” “Petitioner assigned an investigator to determine if the allegations of the Complainant were true and whether there was any further misconduct in connection with Mr. Hunter. On November 22, 2000, Petitioner’s investigator sent a letter to Respondent requesting all bank records related to the Siegert and Hunter representations.

Respondent failed to answer. Because of Respondent’s failure to answer, Petitioner then subpoenaed Prince George’s Federal Savings Bank. “Petitioner discovered that on November 6, 1999, Respondent deposited a check from Charles Hunter in the amount of $15,552.00. Six days later, Respondent drew $1,000.00 upon the escrow to pay Erma Assberry, Esquire. This payment had no connection with Mr. Hunter’s representation.

Respondent also made several withdraws via electronic transfer from the escrow account to his personal account: $1,000 on November 18, $2,000 on November 29, $700 on December 27, $1,200 on January 1, $2,000 on January 24, and $1,000 on February 25. On February 25, Respondent had misappropriated $9,292.11 of Mr. Hunter’s funds. “Respondent replenished the escrow account. On April 1, Respondent deposited into the escrow account a check written to him from a Zoran Zdravkovich in the amount of $8,000.00. On April 13, 2000, Respondent deposited an additional $1,400.00 into his escrow account from his personal account.

With these deposits, the balance of the escrow account was $15,909.89 which were clearly necessary to cover check number 1046 written on April 12, 2000 to Charles Hunter in the amount of $15,552.00. CONCLUSION OF LAW “Petitioner urges the Court to find that Respondent violated Md. Ann.Code Bus. Occ. & Prof. § 10-306, which states: ¹²² A lawyer may not use trust money for any purpose other than the purpose for which the trust money is entrusted to the lawyer. “Petitioner also urges the Court to find that Respondent violated Maryland Rule 16-607, which states: a. General Prohibition.

An attorney or law firm may deposit in an attorney trust account only those funds required to be deposited in that account by Rule 16-604 or permitted to be so deposited by section b. of this Rule. b. Exceptions. 1. An attorney or law firm shall either (A) deposit into an attorney trust account funds to pay any fees, service charges, or minimum balance required by the financial institution to open or maintain the account, including those fees that cannot be charged against interest due to the Maryland Legal Services Corporation Fund pursuant to Rule 16-610 b 1(D), or (B) enter into an agreement with the financial institution to have any fees or charges deducted from an operating account maintained by the attorney or law firm. The attorney or law firm may deposit into an attorney trust account any funds expected to be advanced on behalf of a client and expected to be reimbursed to the attorney by the client. 2.

An attorney or law firm may deposit into an attorney trust account funds belonging in part to a client and in part presently or potentially to the attorney or law firm. The portion belonging to the attorney or law firm shall be withdrawn promptly when the attorney or law firm becomes entitled to the funds, but any portion disputed by the client shall remain in the account until the dispute is resolved. 3. Funds of a client or beneficial owner may be pooled and commingled in an attorney trust account with the funds held for other clients or beneficial owners. “The Court finds, by clear and convincing evidence, that Respondent has violated Business Occupations and Professions Article § 10-306 and Maryland Rule 16-607. Specifically, Respondent failed to return the $300 paid by Complainant ¹²³ for Ms. Yowell’s services, he failed to safeguard rent monies of Complainant’s father’s estate, and he comingled Mr. Hunter’s funds with his own funds. “Petitioner also urges the Court to find that Respondent has violated Maryland Rules of Professional Conduct 1.4, 1.15(a) and (b), 8.1(b), and 8.4(b), (c), and (d).

Maryland Rules of Professional Conduct 1.4 states: (a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information. (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding representation. “Based on the evidence presented by Petitioner, the Court finds by clear and convincing evidence that Petitioner violated Maryland Rules of Professional Conduct 1.4. Specifically, Respondent failed to keep Complainant informed with regards to the deposition on March 9 and he misrepresented to Complainant on March 6 that the March 9 deposition was canceled. “Maryland Rules of Professional Conduct 1.15 states in part: (a) A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in a separate account maintained pursuant to Title 16, Chapter 600 of the Maryland Rules.

Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and of other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation. (b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the ¹²⁴ client or third person, shall promptly render a full accounting regarding such property. “Based on the evidence presented by Petitioner, the Court finds by clear and convincing evidence that Respondent violated Maryland Rules of Professional Conduct 1.15.

Specifically, Respondent failed to return the $300 paid by Complainant for Ms. Yowell’s services, he failed to safeguard rent monies of Complainant’s father’s estate, and he comingled Mr. Hunter’s funds with his own funds. “Maryland Rules of Professional Conduct 8.1(b) states: An applicant for admission or reinstatement to the bar, or a lawyer in connection with a bar admission application or in connection with a disciplinary matter, shall not: (b) fail to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter; or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority, except that this Rule does not require disclosure of information otherwise protected by Rule 1.6. “Based on the evidence presented by Petitioner, the Court finds by clear and convincing evidence that Respondent violated Maryland Rules of Professional Conduct 8.1(b). Specifically, that Petitioner made request for information on March 24, 2000, April 12, 2000, May 2, 2000, and November 22, 2000, filed a Petition for Disciplinary Action, and Interrogatories and Request for Admissions. Respondent failed to comply with any of Petitioner’s requests. “Maryland Rules of Professional Conduct 8.4(b), (c), and (d) states: It is professional misconduct for a lawyer to: (b) commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects; (c) engage in conduct involving dishonesty,