In Re Application of Charles M.

COLE, Judge. In this case we are asked to decide whether the petitioner, C.M., has satisfied his burden of proving present good moral character which is a condition precedent to his admission to the Maryland Bar. 1 C.M. filed his application for admission to the Maryland Bar on March 30, 1984. The application revealed that he had been arrested in 1977 on a charge of fraud by check, was involved in several lawsuits, and had filed for personal bankruptcy in 1982. On May 14, 1984, the State Board of Law Examiners (Board) received a letter from Jerome A. Kuta, Esq., advising the Board of alleged improprieties committed by C.M. in ¹⁷¹ the United States Bankruptcy Court for the District of Maryland.

Mr. Kuta attached a copy of a memorandum opinion authored by Judge Paul Mannes which stated that C.M. “appears to have a good grasp of accomplishing delay through bankruptcy filings.” Moreover, the judge found that C.M.’s “Chapter 7 [bankruptcy] filing was abusive and in bad faith.” Contemporaneously, the Board notified the Character Committee for the Seventh Judicial Circuit of C.M.’s application and the Character Committee assigned Ronald Willoner, Esq., to interview him. Mr. Willoner, however, promptly notified the Character Committee of a conflict of interest. Specifically, a partner in his law firm currently represented a client, Steinar Marteinsson, who had filed suit against C.M. Accordingly, the Character Committee selected Carlton Green, Esq., to interview C.M. on July 23, 1984. Mr. Green advised the Character Committee that he had reservations about recommending the admission of C.M. to the Bar and requested that the matter be considered by the Character Committee as a whole.

A Character Committee panel consisting of David A. McNamee (Chairman), Mr. Willoner, Mr. Green, and John H. Briscoe, convened on September 6, 1984. C.M. appeared without counsel and was questioned in regard to three areas of particular concern: (1) the criminal case pending in Howard County against C.M. for fraud by check; (2) the bankruptcy matter brought to the Character Committee’s attention by Mr. Kuta; and (3) the civil suit filed against C.M. by Mr. Steinar Marteinsson alleging the conversion of $25,000. In regard to his arrest for fraud by check, C.M. explained that in 1975 he had purchased carpet for installation in a house he was constructing in Howard County. When he arrived at the house the day after installation, the carpet had been removed and he suspected that the installers had come back the previous evening and stolen the carpet.

He then issued a check to the same carpet company to purchase replacement carpet and stopped payment on the check after ¹⁷² receiving delivery of the new carpet. C.M. admitted that he was not certain who had removed the carpet and that he had stopped payment on the check so as not to pay the company twice. Further questioning revealed that C.M. sold the house shortly thereafter and utilized the proceeds “to live on.” He never attempted to pay for the replacement carpet before he was arrested in 1977. At that point, he agreed to satisfy the debt by making eleven monthly installment payments.

C.M. testified that he was currently having the matter expunged from his record. The factual setting relating to C.M.’s bankruptcy was more complex. C.M. explained that in the late 1960’s several persons joined in the formation of the Metro America Corporation for the purpose of real estate development and named C.M. president. Metro America subsequently acquired a piece of property on Hill Road in Prince George’s County, Maryland.

This property was encumbered by two deeds of trust: the first deed of trust was held by Mr. and Mrs. Clarence Carroll, while the second deed of trust was held by Mr. Eugene Thomas. As the real estate market declined, Metro America ceased to operate and its charter was forfeited in 1975. In 1977, without any authorization from the other principals of Metro America, C.M. deeded the Hill Road property to himself as compensation for salary earned over the years. In 1982, C.M. fell behind on payments to the first trust and foreclosure proceedings were instituted.

At this time, C.M. and his wife filed a Chapter 13 bankruptcy petition and the foreclosure actions were stayed. In order to protect his interest in the property, the owner of the second trust, Mr. Thomas, purchased the first trust and entered into a consent order with C.M. which required that C.M. pay Mr. Thomas $653.00 per month. By November, 1983, C.M. was late in making payments to Mr. Thomas. The possibility of foreclosure notwithstanding, C.M. entered into an installment contract in December, 1983, to sell the Hill Road property to another couple.

The ¹⁷³ purchasers had given C.M. $1,000 in cash and a $1,500 promissory note as down payment and agreed to make monthly payments of $653.00 per month thereafter. In light of C.M.’s default, however, Mr. Thomas moved to have the foreclosure stay lifted, which was accomplished on January 6, 1984. A foreclosure sale was subsequently scheduled for May 4, 1984. In response, C.M., with the advice of counsel, filed a Chapter 7 bankruptcy petition on behalf of Metro America Corporation on March 2, 1984.

The Bankruptcy Court, however, lifted the foreclosure stay and imposed sanctions against C.M.’s attorney, Richard McGill, Esq. During questioning before the Character Committee, C.M. admitted that this bankruptcy petition was filed to delay foreclosure on the Hill Road property. Finally, C.M. was questioned as to the substance of allegations in the Marteinsson suit that he had converted $25,000. C.M. denied the allegations in toto.

Following this hearing, the Character Committee unanimously agreed that C.M. should not be recommended for admission to the Maryland Bar. The Character Committee filed a formal report to this end on October 30, 1984. This same panel held a supplementary hearing on November 21, 1985, to allow C.M. to present additional information in regard to the issues raised in the previous hearing and to consider a new matter that had come to the Character Committee’s attention in the interim. Albert Wynn, Esq., represented C.M. at this hearing.

The Character Committee had learned that C.M. had filed suit seeking damages for injuries he had received in an automobile accident which occurred in September, 1977. The trial in that matter had been held in September, 1985, and while under oath during those proceedings C.M. admitted that he had given false testimony in a deposition in 1984. A transcript of the trial proceedings revealed that C.M. made no attempt to explain why the 1984 deposition testimony was false. ¹⁷⁴ The false testimony related to whether C.M. had sustained original injuries in the accident of September, 1977, or whether those injuries were aggravations of pre-existing conditions. C.M.’s testimony before the Character Committee revealed that C.M. had been involved in an accident in 1974 in which he injured his left shoulder and back.

During the 1984 deposition, however, C.M. testified that he had only injured his left shoulder in this accident. C.M. admitted this inconsistency during the 1985 trial. In addition, C.M. injured his right knee, neck, right shoulder, and back in an accident in June, 1977. These injuries were the subject of litigation in 1981.

During the 1984 deposition C.M. testified that he sustained injuries to his right knee, neck, right shoulder, and back in the accident of September, 1977. C.M. specifically denied ever having injured his right shoulder and back prior to September, 1977. At the 1985 trial, however, C.M. admitted that this testimony was false; the injuries to his right shoulder and back were aggravations of injuries sustained in 1974 and June, 1977. The Character Committee was concerned that C.M. had committed perjury during the 1984 deposition and sought an explanation for the false testimony.

C.M. began by explaining that he was not prepared for the 1984 deposition because he had failed to review the pertinent medical records beforehand. C.M. advised the Character Committee that the deposition testimony was not false but only incomplete. When questioned as to why he did not explain the reason for the inconsistencies during the 1985 trial, C.M. responded that although he did not know it at the time, he was ill as the result of consuming contaminated drinking water prior to the trial and was unable to think clearly. Next, the Character Committee reviewed the issues discussed at the previous hearing.

At this time, counsel for C.M. asserted that Mr. Willoner should remove himself from the Character Committee panel in light of his firm’s involvement in the Marteinsson case. Mr. Willoner apparently refused to disqualify himself. Later, Chairman McNamee ruled that since Mr. Willoner did not participate ¹⁷⁵ directly in the Marteinsson litigation he would not be disqualified. C.M. presented evidence demonstrating that- expungement proceedings in regard to his arrest for fraud by check had been completed on October 5, 1984.

Counsel asserted that C.M. stopped payment because of a disagreement with the supplier of the carpet. In regard to the bankruptcy proceedings, C.M. argued that he was acting under advice of counsel in regard to both his personal bankruptcy (Chapter 13) and the bankruptcy of Metro America (Chapter 7). Therefore, any abuse of those proceedings was solely the responsibility of his counsel. C.M. also took the position that his personal bankruptcy should not reflect negatively on his integrity but was simply a hazard associated with the real estate development business.

In