In re Abbey

• Citation: 169 A.3d 865
• Decision Date: 21 September 2017
• Docket Number: No. 16-BG-700.,16-BG-700.
• Parties: IN RE Catherine E. ABBEY, Respondent.
• Court: Court of Appeals of Columbia District

169 A.3d 865

IN RE Catherine E. ABBEY, Respondent.

No. 16-BG-700.

District of Columbia Court of Appeals.

Argued April 14, 2017

Decided September 21, 2017

Amended October 19, 2017^*

Abraham C. Blitzer for respondent.

H. Clay Smith, III, Assistant Disciplinary Counsel, with whom Wallace E. Shipp, Jr., Disciplinary Counsel at the time the brief was filed, Jennifer P. Lyman and Julia L. Porter, Senior Assistant Disciplinary Counsel, were on the brief, for the Office of Disciplinary Counsel.

Before Beckwith and Easterly, Associate Judges, and Reid, Senior Judge.

Reid, Senior Judge:

In its Report and Recommendation, dated July 12, 2016, the Board on Professional Responsibility has recommended that respondent, Catherine E. Abbey, be disbarred from the practice of law in the District of Columbia because of clear and convincing evidence that she (1) engaged in reckless misappropriation of entrusted funds, in violation of Rule 1.15 (a) of the District of Columbia Rules of Professional Conduct, and (2) failed to promptly notify and/or deliver the funds to the third parties entitled to receive them, in violation of Rule 1.15 (c).¹ Ms. Abbey's main argument on appeal is that her misappropriation constituted negligent, rather than reckless, misappropriation and the sanction should be a six-month suspension. For the reasons stated below, we accept the recommendation of the Board.

FACTUAL SUMMARY

During these proceedings, Disciplinary Counsel,² an Assistant Disciplinary Counsel, Ms. Abbey, and her attorney agreed to factual stipulations, including the following. Ms. Abbey was admitted by motion to the Bar of this court in 1993. Sometime around May 2010, Guy Vouffo was injured in an automobile accident, and he retained Ms. Abbey to represent him in a personal injury lawsuit. During Ms. Abbey's representation, Mr. Vouffo executed an assignment of insurance benefits to Medtaris Rehabilitation and also signed a separate document authorizing direct payment to Medtaris Rehabilitation. Ms. Abbey executed a related document "agree[ing] to follow the aforementioned authorization and direction of my client to pay Medtaris Rehabilitation any sums due and owing from the proceeds of any settlement, judgment or insurance payments." Mr. Vouffo signed two additional medical authorizations addressed to Doctor's Community Hospital, and to Kaiser Permanente. Each of these authorizations stated: "I hereby direct and authorize [Ms. Abbey] to pay all unpaid medical and hospital bills presented to her before the distribution of any proceeds to me out of any sums of money received by her to which I may be entitled."

The stipulations of fact also indicated that the Liberty Mutual Insurance Company issued a check on December 28, 2011, in the amount of $12,500, payable to Ms. Abbey and Mr. Vouffo. Ms. Abbey deposited the check in her IOLTA account.³ In January 2012, Ms. Abbey prepared a settlement distribution sheet, showing that she withheld $4,498.83 for Mr. Vouffo's medical providers (after Medtaris Rehabilitation agreed to reduce its bill to $2,700, and Ms. Abbey agreed to reduce her fee to $3,803.86). In January 2012, she sent a check totaling $4,003.81 to Mr. Vouffo. She did not issue checks to Medtaris Rehabilitation (in the amount of $2,700) or Kaiser Permanente (in the amount of $866.44) until November 14, 2012. The remaining $932.39 (of the amount withheld for medical providers) was never distributed. On numerous occasions, between January 5, 2012, and November 1, 2012, the balance in Ms. Abbey's IOLTA account fell below the $4,498.83 that she should have retained for all of Mr. Vouffo's medical providers. By November 1, 2012, the balance, in her IOLTA account, stood at $621.26.

Based on additional evidence presented by Disciplinary Counsel, Hearing Committee No. 7 of the Board found that under the settlement distribution sheet, which Mr. Vouffo and Ms. Abbey had signed on January 10, 2012, the $4,498.83 reserved for medical providers was to be distributed as follows: $2,700 to Medtaris Rehabilitation, $625 to Kaiser Permanente,⁴ $607.83 to Doctors Community Hospital, $487 to Doctors Emergency Physicians, and $79 to Diagnostic Imaging. Despite the settlement distribution agreement, Medtaris Rehabilitation made multiple requests to Ms. Abbey for payment from February 23, 2012 through August 9, 2012; in a letter dated July 12, 2012, Medtaris Rehabilitation's representative, Mark Pappas, detailed his efforts to collect payment from Ms. Abbey and advised her that he would file a Bar complaint. Ms. Abbey continued to withhold payment to Medtaris Rehabilitation, and on October 3, 2012, Mr. Pappas filed a complaint with Disciplinary Counsel. Nevertheless, Ms. Abbey did not turn over the entrusted funds to Medtaris Rehabilitation until November 14, 2012, the date on which she also paid Kaiser Permanente.

In addition, Hearing Committee No. 7 found that Ms. Abbey withdrew funds from her IOLTA account before paying all of Mr. Vouffo's medical providers. On March 22, 2012, she made a $2,000 cash withdrawal from her IOLTA account. On November 9, 2012, she made another $2,000 cash withdrawal from the same account, even though she "was aware of her responsibility to pay all of Mr. Vouffo's medical providers."

In its Report and Recommendation, dated July 12, 2016, the Board adopted and incorporated by reference the Hearing Committee Report of March 29, 2016. The Board agreed with the Hearing Committee that there was clear and convincing evidence that Ms. Abbey acted recklessly, rather than negligently, in misappropriating entrusted funds. Consequently, in accordance with this court's case law, the Board recommended that Ms. Abbey be disbarred.

STANDARD OF REVIEW

D.C. Bar Rule XI § 9 (h)(1) provides that "the Court shall accept the findings of fact made by the Board unless they are unsupported by substantial evidence of record. ..." Similarly, "[t]he Board ... is required to accept the factual findings of the hearing committee that are supported by substantial evidence in the record, viewed in its entirety." In re Samad , 51 A.3d 486, 495 (D.C. 2012). Just as "the Board owes no deference to the hearing committee's determination of ultimate facts, which are really conclusions of law," "[t]his court reviews the Board's legal conclusions de novo. " Id.

ANALYSIS

The Waiver Issue

Disciplinary Counsel argues that "[b]y failing to take exception to the Hearing Committee Report and Recommendation and failing to file a brief to the Board, [Ms. Abbey] waived her right to litigate her issues on appeal before the [c]ourt." During oral argument in this court, Ms. Abbey's appellate counsel indicated that he was retained after the Board proceedings, but that he regarded waiver to be a question of ultimate fact. The Board stated in its Report and Recommendation that "Disciplinary Counsel took no exception to the Report and Recommendation of the Hearing Committee," but that "[o]n April 7, 2016, [Ms. Abbey] filed a Notice of Exceptions to the Hearing Committee Report and Recommendation." The Board further indicated that "no briefs were filed with the Board and there was no oral argument; [therefore under Board Rule 13.4 (a) ], the Board will decide the matter on the available record."⁵

The waiver issue presents a question of law, and our review is de novo. In re Samad , supra , 51 A.3d at 495. Our analysis is guided by the following legal principles. Because "[o]ur consideration of Board findings and recommendations is similar to our review of administrative agency decisions [,] ... we do not address objections that could have been, but were not raised prior to judicial review." In re James , 452 A.2d 163, 169 (D.C. 1982). In In re James , we recognized that "Respondent could have objected to the lack of notice during the proceedings before the Hearing Committee, or at any time thereafter." Id. at 168. In In re Holdmann , 834 A.2d 887, 889 (D.C. 2003), a reciprocal discipline case, we cited several cases, including In re James , in declaring that "we have consistently held that an attorney who fails to present a point to the Board waives that point and cannot be heard to raise it for the first time here." In re Holdmann , supra , 834 A.2d at 889.

Later, in In re Hargrove , 155 A.3d 375 (D.C. 2017), we agreed with Disciplinary Counsel that respondent had "forfeited" her appellate contentions because she "had numerous opportunities to challenge the allegations against her and to object to any procedural errors, but she failed to properly do so"—for example, she "did not timely file an answer to the specification of charges," "did not appear either at a pre-hearing conference or at the hearing before the Hearing Committee," and did not "file notice of exceptions to the Hearing Committee's findings and recommendations." Id. at 376. Furthermore, in In re Johnson , 158 A.3d 913 (D.C. 2017), we observed that the Hearing Committee heard an argument that respondent made on appeal, and the respondent took no exception to the Hearing Committee's conclusion but "let the Hearing Committee report be submitted to the Board without briefing or argument." Id. at 917. We stated that "[w]hile we re-emphasize that arguments to this court should ordinarily be presented to the Board to ensure proper appellate review, in this case the Board explicitly acknowledged the existence of the issue and concurred with the Hearing Committee's rejection of the argument"; we further said that "[i]n this posture, and to put the question to rest, we have determined to address the tardy argument." Id.

Here, Ms. Abbey participated in the disciplinary proceedings against her. In her answer to the specification of the charges, she denied the violation of Rules 1.15 (a) and (b), as alleged in the specification of charges. She (1) testified before the Hearing Committee, (2) filed "proposed finding[s] of fact[ ] and conclusions of law," in which she conceded misappropriation but stated that her misappropriation was not intentional,...