Attorney Grievance v. Frank

Attorney Grievance Commission of Maryland v. David Elliott Frank, Misc. Docket AG No. 2, September Term 2019. Opinion by Hotten, J. ATTORNEY DISCIPLINE – SANCTIONS – DISBARMENT – The Court of Appeals disbarred David Elliott Frank from the practice of law in Maryland. The Court found that Respondent violated MARPC 19-301.1 (Competence), 19-301.15 (Safekeeping Property), 19-308.1 (Bar Admission and Disciplinary Matters), 19-308.4 (Misconduct), 19-404 (Trust Account – Required Deposits), 19-408 (Commingling of Funds), and 19-410 (Prohibited Transactions) and Md. Code.

Ann., Business Occupations & Professions § 10-306 (Trust Money Restrictions) in the misuse of his attorney trust account, operating account, and client funds. Respondent commingled personal and client funds in his attorney trust account, used the funds in his attorney trust account for personal and familial financial obligations, failed to disburse his client’s settlement funds in a timely manner, and misused his client’s settlement funds. His conduct warranted disbarment. Circuit Court for Montgomery County Case No. 466226-V Argued: May 28, 2020 IN THE COURT OF APPEALS OF MARYLAND Misc.

Docket AG No. 2 September Term, 2019 __________________________________ ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. DAVID ELLIOTT FRANK __________________________________ Barbera, C.J., McDonald, Watts, Hotten, Getty, Booth, Biran, JJ. __________________________________ Opinion by Hotten, J. __________________________________ Filed: August 26, 2020 Pursuant to Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. Suzanne Johnson 2020-11-19 13:08-05:00 Suzanne C. Johnson, Clerk The Attorney Grievance Commission of Maryland, acting through Bar Counsel (“Petitioner”), directed that charges be filed against David Elliott Frank (“Respondent”), stemming from an investigation of a claim by former client, Teresa Bernhardt (“Ms. Bernhardt”), pursuant to Maryland Rule 19-721.1 By order dated April 24, 2019, this Court designated the Honorable Kevin G. Hessler (“hearing judge”) of the Circuit Court for Montgomery County, to consider the matter against Respondent and render findings of fact and conclusions of law. On April 23, 2019, Petitioner filed a Petition for Disciplinary or Remedial Action against Respondent. Respondent filed an answer on June 21, 2019.

The circuit court conducted a hearing from November 25-27, 2019. Prior to commencement of the hearing, Petitioner withdrew allegations regarding Maryland Rule 19-301.5 (Fees).2 Upon consideration of the evidence presented, the hearing judge found, by clear and convincing evidence, that Respondent violated Maryland Attorneys’ Rules of Professional Conduct (“MARPC”)3 19-301.1 (Competence), 19-301.15 (Safekeeping Property), 19-308.1 (Bar 1 Md. Rule 19-721 provides, in pertinent part: “Upon approval or direction of the Commission, Bar Counsel, on behalf of the Commission, shall file a Petition for Disciplinary or Remedial Action in the Court of Appeals.” 2 Md. Rule 19-301.5 reads, in pertinent part: “(a) An attorney shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.” 3 Effective July 1, 2016, the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) were renamed the Maryland Attorneys’ Rules of Professional Conduct (“MARPC”) and re-codified in Title 19 of the Maryland Rules, without substantive change. Respondent’s misconduct occurred between January 2016 and March 2018. We use MARPC throughout this opinion to maintain clarity.

Admission and Disciplinary Matters), 19-308.4 (Misconduct), 19-404 (Trust Account – Required Deposits), 19-408 (Commingling of Funds), and 19-410 (Prohibited Transactions) and Md. Code. Ann., Business Occupations & Professions§ 10-306 (Trust Money Restrictions) (“Bus. Occ. & Prof.”). Both Petitioner and Respondent filed Exceptions to the hearing judge’s findings of fact and conclusions of law.

We republish the pertinent portions of those findings of fact and conclusions of law below. FINDINGS OF FACT The hearing judge rendered the following findings of facts regarding Respondent’s management of his attorney trust account and operating account from January 2016 through March 2018. [ ] Respondent [ ] was admitted to the Maryland Bar on June 22, 1970. [ ] Respondent is a sole practitioner and maintains a general practice in Montgomery County, Maryland. [ ] Respondent’s Attorney Trust Account In 1972, [ ] Respondent opened an attorney trust account at SunTrust Bank, account no. x438 (“trust account” or “attorney trust account”). He maintained the trust account until it was closed by the bank on October 18, 2016. [ ] Respondent also maintained an operating account at SunTrust Bank, account no. x130, commencing in 1971. *** After SunTrust closed the trust account in October of 2016, [ ] Respondent operated his law practice for approximately three [ ] months without an attorney trust account. In February 2017, [ ] Respondent opened a new attorney trust account at Bank of America, account no. x3297. 2 Representation of Arline Cone In or about 2013, [ ] Respondent was retained to represent Ms. Arline Cone . . . in connection with a Broadway show entitled “I Will I Can[,]” which she was working to produce.

According to [ ] Respondent, the terms of the representation provided that the majority of the fees for his services would be paid from the revenue from the production. As a part of his representation of Ms. Cone, [ ] Respondent received funds from investors, deposited the funds into his trust account, and disbursed the funds to Ms. Cone as instructed by Ms. Cone. In 2016, . . . two investors [ ] provided funds to [ ] Respondent for the benefit of Ms. Cone. At some point in time, Ms. Cone began residing in hotels in [ ] New York City and the investor funds were used to pay for Ms. Cone’s hotel charges.

In January 2016, [ ] Respondent obtained a debit card associated with the trust account. [ ] Respondent testified that he obtained the debit card to facilitate payment of Ms. Cone’s hotel expenses. . . . *** Between January 25, 2016 and April 21, 2016, the following electronic transfer payments to hotels were made from funds held in Respondent’s SunTrust Attorney Trust Account which were requested by Ms. Cone and authorized by Respondent: a. 1/25/2016 Doubletree $600.00 b. 1/25/2016 Doubletree $1,400.00 c. 2/24/2016 Doubletree $2,000.00 d. 3/11/2016 Doubletree $262.00 e. 3/11/2016 Doubletree $2,000.00 f. 3/14/2016 Doubletree $46.09 g. 3/14/2016 Doubletree $2,619.55 h. 3/24/2016 Marriott $909.00 i. 4/21/2016 Holiday Inn $195.13 j. 4/21/2016 Wellington Hotel $261.46 k. 4/21/2016 Holiday Inn $1,396.02 Respondent maintain[ed] that these payments were made from Ms. Cone’s funds that were held in his trust account. Respondent’s attorney trust account had a positive balance before such electronic payments were made. Respondent testified that Ms. Cone was not given the debit card and that he maintained possession of it. . . . 3 On May 26, 2016, at Ms. Cone’s request, Respondent provided written authorization to the Holiday Inn Midtown (New York City) hotel to charge against the attorney trust account, by providing the check card information to the hotel. Such written authorization limited the sum to be charged to his attorney trust account.

The authorization permitted the hotel to charge up to $2,800.00. At that time[,] Respondent did not have an advance payment of $2,800.00 from or on behalf of Ms. Cone in his attorney trust account. Respondent held some funds of Ms. Cone’s in his attorney trust account but less than $2,800.00. Respondent testified he did not expect the Holiday Inn to initiate the charges immediately and expected any charges from the Holiday Inn would be incremental, not a lump sum charge of $2,800.00.

However, the written authorization did not preclude the charges from being made all at once. Respondent maintained at trial that the authorization was given with the understanding the funds would be promptly deposited on behalf of Ms. Cone by wire transfer into his attorney trust account. [ ] Respondent admitted that, at the time he authorized the $2,800.00 debit, he knew that there were insufficient funds in the Cone ledger to cover the transaction. On May 31, 2016, Holiday Inn charged the trust account $2,800.00 as authorized. The charge caused a negative balance in both the Cone client ledger and the trust account.

When [ ] Respondent received his SunTrust Attorney Trust Account bank statement for the May 2016 period in mid-June 2016, he saw the $2,800.00 was charged in one lump sum five days after he provided the written authorization for the electronic transaction. For reasons unknown to Respondent, SunTrust did not report the deficit in Respondent’s attorney trust account to the Attorney Grievance Commission. The trust account balance remained negative until June 28, 2016, when [ ] Respondent deposited $17,925.74 into the account. The deposit included a settlement check from National Interstate Insurance Company in the amount of $17,500[.00] received in connection with the settlement of a personal injury matter for which he represented another client, Teresa Bernhardt, who is the complainant in the case at bar.

The [remaining] balance of the deposit was comprised of other client monies. At the end of June 2016[,] Respondent opted to leave in his attorney trust account, $2,800.00 of an attorney fee earned in connection with Ms. Bernhardt’s personal injury matter. He testified that he did so in order to correct the account deficit. This resolved the shortfall in Respondent’s Trust Account in connection with the Holiday Inn charge on May 31, 2016. 4 Respondent testified he received his June 2016 SunTrust Bank statement for his attorney trust account on or around July 10, 2016.

The June 2016 SunTrust Bank statement was reconciled by Respondent on or around July 15, 2016 and balanced. His June 30, 2016 attorney trust bank account statement showed a positive $13,097.48. In July 2016 there were more debits for Ms. Cone’s hotel stays charged to Respondent’s attorney trust account. Beginning on July 5, 2016, the following hotel charges were paid from Respondent’s attorney trust account: a. 7/5/2016 Hilton Stamford $2,436.39 b. 7/6/2016 Hilton Stamford $1,029.39 c. 7/12/2016 Hilton Stamford $1,119.76 d. 7/15/2016 Hilton Stamford $1,310.01 e. 7/19/2016 Hilton Stamford $1,018.39 f. 7/25/2016 Hilton Stamford $1,170.04 g. 7/27/2016 Hilton Stamford $1,140.65 Respondent maintain[ed] that these charges were unauthorized and that he first discovered the unauthorized charges to his attorney trust account from July 2016 to[,] on or about[,] August 12, 2016 when he opened his bank statement for reconciliation.

Respondent testified that he received his July 2016 SunTrust Bank statement for his attorney trust account on the 9[th] or 10[th] of August, 2016, and reconciled the account within a few days thereafter. The ending balance for the trust account in July 2016, after the hotel charges, was $182.87. In August of 2016 there were more debits to Respondent’s attorney trust account for Ms. Cone’s hotel charges. Beginning on August 2, 2016, the following hotel charges were paid from Respondent’s attorney trust account: a. 8/2/2016 Hilton Stamford $1,167.31 b. 8/3/2016 Hilton Stamford $1,000.68 c. 8/8/2016 Hilton Stamford $877.55 d. 8/12/2016 Hilton Stamford $1,681.96 Such charges placed Respondent’s attorney trust account in a negative balance status.

On August 12, 2016, after the last hotel charge, the trust account had a balance of negative $4,448.01. Respondent testified he learned of these hotel charges upon reviewing the August 2016 SunTrust Bank 5 statement for his attorney trust account which he said he received around September 10, 2016.[4] *** [ ] Respondent did not dispute the charges with SunTrust Bank or Hilton. He failed to file a police report or provide any credible explanation as to how the Hilton obtained his debit card information. [ ] Respondent did not terminate his representation of Ms. Cone. Respondent did not take any legal action against Ms. Cone to recover the funds. *** By August 2, 2016, the trust account balance was negative $985.66.

As of October 1, 2016, [ ] Respondent’s trust account balance was negative $3,937.42. [ ] Respondent’s SunTrust Attorney Trust Account was closed by the bank on October 18, 2016 after two consecutive months of negative balances. At the time the account was closed, the balance was negative $3,803.53. . . . Respondent failed to provide documentation showing that any payments of restitution had been made, claiming that he thought the bank records subpoenaed by the [Attorney Grievance Commission] would have included the restitution payments. [ ] Respondent’s Arline Cone ledger balance remained negative until the trust account was closed in October 2016. At the time the account was closed, the Cone ledger balance was negative $14,772.68.

Respondent opened a new attorney trust account with Bank of America in February 2017. The new attorney trust account with Bank of America had no check or debit card feature. During the period between October 18, 2016 and February of 2017, Respondent had no attorney trust account. 4 There was evidence that Ms. Cone indicated to Respondent that she would repay Respondent $16,789.00 to compensate for the over-charges to his attorney trust account related to her hotel stays. However, no funds were ever received.

He was not reimbursed any funds from Ms. Cone and was never repaid any of the hotel charges made in May, July, and August of 2016. Respondent testified that Ms. Cone died in June 2019. 6 Representation of Teresa Bernhardt On April 26, 2015, Teresa Bernhardt was in a car accident in Naples, Florida. The at-fault driver was insured by National Interstate Insurance Company. On or about June 3, 2015, Ms. Bernhardt, who was staying with family in Maryland, retained [ ] Respondent to represent her in connection with the accident. . . .

By June 2016, Ms. Bernhardt had completed medical treatment and [ ] Respondent received a settlement offer from National Interstate Insurance Company in the amount of $17,500.00. At the time, Ms. Bernhardt was out of the country and had executed a Power of Attorney authorizing her son, Nuno Passarino, to resolve the case on her behalf. On June 28, 2016, Mr. Passarino came to [ ] Respondent’s office and executed a Full and Final Release and endorsed the $17,500.00 settlement check. As part of the settlement, [ ] Respondent prepared a settlement statement providing that the funds would be disbursed as follows: Recipient Disbursement Deposit Settlement $17,500.00 Amount Respondent – $6,208.33 Attorney’s fees Respondent – $59.66 Expenses Greater $3,000.00 Washington Orthopedic Group F&S Radiology, $158.25 P.C. Notary Public $4.00 Teresa Bernhardt $8,713.12 Total $17,500.00 $17,500.00 On June 28, 2016, [ ] Respondent deposited the $17,500.00 settlement check into his trust account.

The settlement check was made payable to Respondent and Teres[]a Bernhardt. The check was deposited into the account together with $425.74 in other client monies. The total deposit was $17,925.74. At the time of the deposit, the trust account had a negative balance of $1,356.37.

Following the deposit of the settlement check, [ ] Respondent immediately disbursed a partial payment to himself of attorney’s fees in the amount of $3,048.33. On June 29, 2016, [ ] Respondent disbursed an additional $63.66 7 to himself for reimbursement of expenses. Following the disbursements to [ ] Respondent, the balance of the Bernhardt ledger was $14,091.67. However, as of June 30, 2016, the trust account had an ending monthly balance of only $13,097.48.

On July 1, 2016, [ ] Respondent issued checks to Greater Washington Orthopedic Group and F&S Radiology in the amounts reflected on the settlement sheet. On July 6, 2016, the payment to Greater Washington Orthopedic Group cleared the trust account. On July 1, 2016, [ ] Respondent mailed a check to Ms. Bernhardt’s son, Mr. Passarino, drawn on Respondent’s trust account in the amount of $8,713.12 representing Ms. Bernhardt’s share of the $17,500.00 settlement amount. On July 22, 2016, the $8,713.12 check for Ms. Bernhardt provided to her son was presented for payment.

It was dishonored due to insufficient funds in Respondent’s attorney account. That same day, July 22, 2016, the $158.25 check to F&S Radiology was presented for payment and cleared. As of July 22, 2016, the trust account balance was only $2,317.34, and the Bernhardt client ledger balance was $10,869.76. When Respondent wrote the disbursement checks in the Bernhardt case in early July 2016, there were sufficient funds in [ ] Respondent’s attorney trust account for payment of all such checks.

Notably, between July 1, 2016 when the check for Ms. Bernhardt’s matter was provided to Mr. Passarino and July 22, 2016 when it was presented to the bank for payment and dishonored, five check card withdrawals were made from the account for hotel charges for Ms. Cone, all at the [ ] Hilton [Stamford]: one on July 5, 2016 in the amount of $2,436.39, one on July 6, 2016 for $1,029.50, one on July 12, 2016 in the amount of $1,119.76, one on July 15, 2016 for $1,310.01[,] and one on July 19, 2016 for $1,018.39. These charges were the primary cause of the insufficient attorney trust account balance to cover the check provided to Mr. Passarino for Ms. Bernhardt’s share of her settlement proceeds. *** By August 2, 2016, [ ] the $17,500.00 received by Respondent for the settlement of the Bernhardt case had been fully depleted. Below is a summary of the activity in [ ] Respondent’s attorney trust account for the 8 time between his receipt of [Ms.] Bernhardt’s settlement proceeds and the time they were exhausted: 9 Of the $17,500.00 received, $10,392.05 was disbursed for the benefit of Ms. Cone, and $892.09 was disbursed to [ ] Respondent as attorney’s fees in an unrelated matter. By mid-August 2016, [ ] Respondent was aware that Ms. Bernhardt’s funds had been depleted due to the charges against his attorney trust account in connection with the hotel stays of Ms. Cone.

Between December 9, 2016 and June 29, 2017, Ms. Bernhardt, and others on her behalf, called and emailed [ ] Respondent numerous times in an effort to recover her $8,713.12. . . . Finally, on November 8, 2018, more than two [ ] years after he learned that the $8,713.12 check to her had been dishonored, and thirteen [ ] months after Ms. Bernhardt filed a complaint with [Petitioner], [ ] Respondent paid Ms. Bernhardt $8,713.12. [ ] Respondent claims that he took a loan from his retirement account to pay Ms. Bernhardt. . . . In November 2017, Respondent applied to Bank of America for a home equity loan to restore the balance in his attorney trust account and to pay Ms. Bernhardt the $8,713.12 due her, but his loan application was denied. Petitioner point[ed] out that between February 2017 and March 2018, rather than pay Ms. Bernhardt any amount, [ ] Respondent disbursed approximately $18,000.00 from his trust account to himself for attorney’s fees.

Negative Balances in Other Client Matters By August 2, 2016, the trust account balance was negative $985.66. [ ] Respondent’s trust account balance remained in the negative from August 2, 2016 through October 18, 2016. Between August 11, 2016 and October 18, 2016, [ ] Respondent continued to deposit client and third-party funds into the trust account notwithstanding the fact that the deposits caused negative ledger balances in four [ ] additional client matters. The sums were collected in connection with collection work done by [ ] Respondent for various doctors whose patients owed them money. The deposits are identified as follows: • On August 11, 2016, [ ] Respondent deposited $105.84 into the trust account for the benefit of Montgomery Gastroenterology and Dr. Weinberg.

At the time of the deposit the account had a negative balance of $2,863.89. 10 • On August 18, 2016, [ ] Respondent deposited $200.00 for the benefit of Montgomery Gastroenterology into the trust account, which at the time had a negative balance of $4,440.01. • On August 26, 2016, [ ] Respondent deposited $145.00 for the benefit of Montgomery Gastroenterology and Dr. Fossett into the trust account, which at the time had a negative balance of $4,240.01. • On September 7, 2016, [ ] Respondent deposited $167.41 for the benefit of Montgomery Gastroenterology into the trust account, which had a balance of negative $4,095.01 at the time. • On September 22, 20 l6, [ ] Respondent deposited $155.00 for the benefit of Montgomery Gastroenterology, Dr. Fossett, Dr. Roggin and Dr. Weinberg into the trust account, which had a negative balance of $4,092.42. • On October 13, 2016, [ ] Respondent deposited $133.89, which included $35.00 in payments for Montgomery Gastroenterology and Dr. Weinberg into the trust account, which had a negative balance of $3,937.42. Thus, between August 11, 2016 and October 18, 2016, [ ] Respondent caused a total of $907.14 to be deposited into his attorney trust account associated with his representation of Montgomery Gastroenterology, Dr. Fossett, Dr. Roggin, and Dr. Weinberg in debt collection matters. The [c]ourt [found] that [ ] Respondent deposited, or caused others to deposit, client and third- party funds into his attorney trust account when the account had a negative balance, knowing that the funds would immediately be applied to the negative account balance, thereby becoming unavailable to disburse to the clients to whose matters they pertained. The [c]ourt also [found] that [ ] Respondent failed to inform debtors that they could provide payments directly to medical providers and failed to take any appropriate action to ensure the safekeeping of those funds. [ ] Respondent failed to safekeep $907.14 belonging to Montgomery Gastroenterology, Dr. Fossett, Dr. Roggin, and Dr. Weinberg, or at the very least the sum of $739.73 which was net of the dishonored check received from one of the debtors.

On October 7, 2016, Respondent received a $5,000.00 wire transfer of funds from Mark Robeck, one of the investors in the Broadway play. Respondent chose to deposit these funds into Respondent’s attorney operating account instead of his attorney trust account. He then disbursed the sum of $5,000.00 from his operating account for the benefit of Ms. Cone in accordance with the instructions received from Mr. Robeck. The [c]ourt [found] that [ ] 11 Respondent deposited the $5,000.00, intended for the benefit of Ms. Cone, into his operating account because he knew at the time that any funds deposited into his trust account would be applied to the outstanding negative balance in that account.

Commingling Funds and Payment of Personal Expenses . . . Between January 2016 and March 2018, [ ] Respondent deposited his relatives’ personal funds into his attorney trust account and used the funds to pay their personal expenses as well as some of his own personal expenses. Between January 2016 and December 2017, [ ] Respondent paid the following amounts from his trust account for his relatives’ personal expenses: Date Associated Payee Amount Relative January Son Bob’s $150.00 2016 Furniture February Son Bob’s $150.00 2016 Furniture March 2016 Son Bob’s $150.00 Furniture April 2016 Son Bob’s $150.00 Furniture April 2016 Son E-ZPass $60.83 May 2016 Son Bob’s $150.00 Furniture June 2016 Son E-ZPass $45.55 December Stepdaught Home $109.00 2017 er and Son- Depot In-Law *** [ ] Respondent also paid from his attorney trust account, on behalf of his son, citations and tickets to Chevy Chase Village, Montgomery County, and Maryland Transportation Authority. [ ] Respondent admitted that he was not representing his relatives. They were not clients of his.

The [c]ourt [found] that [ ] Respondent used his attorney trust account to deposit and disburse funds, as itemized above, not associated with the representation of any client. Respondent argue[d] that Rule 19-404 12 permits him to receive funds from non-clients, deposit them into his attorney trust account, and use them as the non-client directs if he is essentially acting as an escrow agent for the non-client, which, in his testimony and proposed findings, he contend[ed] he was. The court [was] not persuaded by Respondent’s escrow argument. The court note[d] that at the trial of this matter he never called any of the third-party relatives to establish or support his escrow argument.

The court [was] also unclear as to why, if the funds provided were to pay the bills of those family members, the family members could not have paid the bills themselves instead of providing the funds to Respondent to be deposited into his attorney trust account before the bills were paid. In addition to using his trust account to pay his relatives’ expenses, [ ] Respondent used the trust account to pay his own personal expenses. At some point prior to February 2016, [ ] Respondent obtained a loan from SunTrust Bank to purchase a vehicle. The terms of the loan required a monthly payment in the amount of $424.99.

The car and loan were in [ ] Respondent’s name but, according to [ ] Respondent, his son was responsible for the payments. In February, March, and April of 2016, [ ] Respondent paid from his trust account the monthly loan payment owed to SunTrust Bank. By November 2017, [ ] Respondent sold the car associated with the SunTrust loan and purchased another vehicle, also titled in his name. The second vehicle was purchased with a loan from Ford Credit, the terms of which required a monthly payment in the amount of $463.05. [ ] Respondent made electronic transfers from his Bank of America Attorney Trust Account for the car payments in the months of November 2017, February 2018, and March 2018.

The [c]ourt [found] that, being an obligor on the loan documents, [ ] Respondent was responsible for the payment of the car notes associated with the two vehicles and that he deposited into and disbursed funds from his attorney trust account not associated with the representation of any client. On January 11, 2016, Respondent drew a $900.00 check against his attorney trust account payable to “cash.” In the memo portion of the check [was] written “withdrawal for Arli[n]e Cone.” . . . [Respondent] maintain[ed] that he cashed the check and sent the cash to Ms. Cone via federal express and accounted for it in the client ledger maintained for Ms. Cone. On January 12, 2016 there was $9,589.90 in the attorney trust account. According to the Cone “I Will I Can Ledger” $900.00 was withdrawn from the account leaving $6,310.00.

However, the [c]ourt [could not] be certain that this $900.00 corresponds to the $900.00 check as the client ledger [was] not dated and [was] oftentimes illegible. 13 [Petitioner’s] Investigation On August 10, 2017, Ms. Bernhardt filed a complaint with the Attorney Grievance Commission. On September 25, 2017, [ ] Respondent provided a written response to [Petitioner]. In his response, [ ] Respondent stated, in part: As I explained to Ms. Bernhardt, her son and the attorney who called me on her behalf, my Escrow Account was also holding funds for another client. This client requested I sign a Credit Card Authorization Form in the amount being held for her to cover her obligation to The Holiday Inn in Midtown, NY.

The Authorization was signed and I specifically provided in writing that the Authorization was limited to the sum of $2,800.00, the exact amount I was holding for this particular client, and was not to exceed that amount. The Hotel, unbeknownst to me, used this Authorization to continue to cover this client’s continuing obligation despite my having limited the amount. [Petitioner] maintain[ed] [ ] Respondent knowingly misrepresented that the Holiday Inn – Midtown was the hotel which exceeded the authorized debit and was responsible for the July and August 2016 hotel charges resulting in the misappropriation of Ms. Bernhardt’s funds. Contrary to [ ] Respondent’s representation to [Petitioner], the bank records reveal[ed] that the Holiday Inn did not charge more than the $2,800.00 authorized by [ ] Respondent. The hotel responsible for the additional charges was the Hilton.

The [c]ourt [found] that [ ] Respondent misidentified to [Petitioner] that it was the Hilton Hotel rather than the Holiday Inn which incurred charges in excess of the $2[,]800.00 amount. [ ] Respondent did not, either during [Petitioner]’s investigation or during the hearing in this matter, provide any explanation as to how the Hilton obtained his debit card information. On November 1, 2017, [Petitioner] requested that [ ] Respondent provide the following: Any and all financial records you maintained for the escrow/attorney trust account you identified in your letter of September 25, 2017 covering the period January 1, 2016 to present. These records are to include, but not be limited to: monthly bank statements, cancelled checks, deposit tickets, client ledger cards, transaction register, credit/debit memoranda, records of all electronic transfers showing the 14 identity of the depositor and/or intended recipient and reconciliation reports. [Petitioner] also requested that [ ] Respondent identify the person to whom he gave the signed credit card authorization and provide all related documents. On November 3, 2017, [ ] Respondent wrote to [Petitioner], requesting an extension of time to produce the documents requested and stated further: I am told by the client for whom these unauthorized withdrawals from my escrow account caused Ms. Bernhardt’s check to be returned by the bank that she is expecting funds from her business venture to be available to her one day next week and that she will be able to reimburse me with sufficient funds to cover the amount due Ms. Bernhardt no later than November 17, 2017.

When this money is paid to Ms. Bernhardt, will it still be necessary to provide you with the documentation you have requested or will this matter simply be closed? By letter dated November 13, 2017, [Petitioner] granted the extension request and advised [ ] Respondent that the information requested needed to be produced regardless of whether restitution was made to Ms. Bernhardt. [Petitioner] further requested that [ ] Respondent provide the name and contact information for the client for whom the unauthorized withdrawals were made. On November 16, 2017, [ ] Respondent provided a copy of the authorization for the Holiday Inn – Midtown but redacted Ms. Cone’s name. On November 28, 2017, [ ] Respondent provided additional information and documentation to [Petitioner]. [ ] Respondent continued to refuse to identify Ms. Cone, redacted any information identifying her[,] and failed to produce any client ledgers associated with Ms. Cone or “I Will I Can.” [Petitioner] assert[ed] that this constitutes a failure on the part of Respondent to fully cooperate in its investigation.

Respondent indicate[d] that he was told by Ms. Cone to keep her identity confidential. Respondent maintain[ed] that pursuant to Md. Rule 19-301.6 he had an obligation to keep Ms. Cone’s identity confidential and that pursuant to Md. Rule 19-308.1, he was not required to disclose information otherwise protected by Rule 19-301.6 in response to [Petitioner]’s inquiry. . . . (internal citations and internal footnotes omitted). 15 CONCLUSIONS OF LAW Based on the findings of facts, the hearing judge concluded, by clear and convincing evidence, that Respondent’s mishandling of his attorney trust account and subsequent actions during Petitioner’s investigation, violated the following rules of professional conduct and one statutory violation. Rule 19-301.1: Competence The hearing judge determined Respondent violated Rule 19-301.1,5 including the failure to properly maintain his attorney trust account between January 2016 and March 2018.

The hearing judge found that Respondent made several transactions with the account’s debit card, knowing there were insufficient funds in the account. Respondent failed to ensure that the charges associated with Ms. Cone did not impact other clients’ funds. The hearing judge determined “Respondent’s carelessness in creating a situation in which a client was provided access to information creating the ability to cause the withdrawal of funds from Respondent’s attorney trust account, thereby essentially relinquishing to her a measure of control over the funds contained in that account, amounts to incompetence[.]” In addition to mismanaging his attorney trust account, the hearing judge concluded that Respondent failed to safeguard client funds when he deposited funds into his attorney 5 Md. Rule 19-301.1 provides: “An attorney shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” 16 trust account, knowing it would apply to the account’s negative balance, as detailed above, in violation of Rule 19-301.1.

Finally, the hearing judge concluded Respondent also violated Rule 19-301.1 by operating his law firm without an attorney trust account for about four months, from October 2016 to February 2017. Rule 19-301.15: Safekeeping Property The hearing judge concluded Respondent violated Rule 19-301.15(a)6 by failing to properly safeguard the client funds in his attorney trust account. Respondent failed to 6 Md. Rule 19-301.15 provides, in relevant part: (a) An attorney shall hold property of clients or third persons that is in an attorney’s possession in connection with a representation separate from the attorney’s own property. Funds shall be kept in a separate account maintained pursuant to Title 19, Chapter 400 of the Maryland Rules, and records shall be created and maintained in accordance with the Rules in that Chapter.

Other property shall be identified specifically as such and appropriately safeguarded, and records of its receipt and distribution shall be created and maintained. Complete records of the account funds and of other property shall be kept by the attorney and shall be preserved for a period of at least five years after the date the record was created. (b) An attorney may deposit the attorney’s own funds in a client trust account only as permitted by Rule 19-408 (b). (c) Unless the client gives informed consent, confirmed in writing, to a different arrangement, an attorney shall deposit legal fees and expenses that have been paid in advance into a client trust account and may withdraw those funds for the attorney’s own benefit only as fees are earned or expenses incurred.

(d) Upon receiving funds or other property in which a client or third person has an interest, an attorney shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement (continued . . .) 17 safeguard Ms. Bernhardt’s and other clients’ funds by permitting the use of his attorney trust account for Ms. Cone’s expenses, without regard to whether there were sufficient funds for Ms. Cone’s disposal. The hearing judge determined that Respondent, who admitted to doing so, violated Rule 19-301.15(a) by depositing client funds into his operating account rather than his attorney trust account. The hearing judge also found that Respondent violated Rule 19-301.15(a) by paying personal financial obligations on behalf of himself and non-client family members.

In addition, the hearing judge concluded that Respondent violated Rule 19- 301.15(b) when he deposited funds into his attorney trust account to pay for his personal financial obligations. Finally, the hearing judge determined that Respondent, who admitted to doing so, violated Rule 19-301.15(d) when he failed to deliver, in a timely manner, Ms. Bernhardt’s portion of the settlement funds. He waited two years after receiving the settlement funds to disburse any amount to Ms. Bernhardt, but promptly collected attorney’s fees for his representation of Ms. Bernhardt and other clients. (. . . continued) with the client, an attorney shall deliver promptly 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 client or third person, shall render promptly a full accounting regarding such property. *** 18 Rule 19-308.1: Bar Admission and Disciplinary Matters The hearing judge concluded that Respondent violated Rule 19-308.1(a)7 by knowingly misrepresenting to Petitioner the amount of money in his attorney trust account.

In his letter to Petitioner, Respondent stated “The Authorization was signed and I specifically provided in writing that the Authorization was limited to the sum of $2,800.00, the exact amount I was holding for this particular client, and was not to exceed that amount.” (emphasis added). The hearing judge found Respondent violated Rule 19- 308.1(a), based on his knowingly maintaining an attorney trust account balance lower than $2,800.00, yet intentionally indicating the contrary.8 Additionally, the hearing judge concluded that Respondent violated Rule 19- 308.1(b) by consistently failing to disclose Ms. Cone’s identity and contact information. 7 Md. Rule 19-308.1 reads: An applicant for admission or reinstatement to the bar, or an attorney in connection with a bar admission application or in connection with a disciplinary matter, shall not: (a) knowingly make a false statement of material fact; or (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 19-301.6 (1.6). 8 Petitioner alleged Respondent violated Rule 19-308.1 by intentionally misleading Petitioner when he stated the Holiday Inn Midtown, rather than the Hilton, charged his attorney trust account more than the authorized $2,800.00. The hearing judge determined Respondent did not violate Rule 19-308.1 for this action because he unintentionally misidentified the name of the hotel. 19 Respondent attempted to defend this action by citing Maryland Rule 19-301.6,9 but the hearing judge rejected this defense, explaining that Respondent’s actions were unjustifiable. The hearing judge determined Maryland Rule 19-301.6 could be considered in mitigation, but could not be a complete bar to his actions.

Thus, the hearing judge found