Attorney Grievance Com'n of Maryland v. Adams

• Citation: 706 A.2d 1080,349 Md. 86
• Decision Date: 01 September 1996
• Docket Number: No. 43,43
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Lester A.D. ADAMS. Misc. (Subtitle BV),
• Court: Court of Appeals of Maryland

Page 86

349 Md. 86

706 A.2d 1080

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Lester A.D. ADAMS.

Misc. (Subtitle BV) No. 43, Sept. Term, 1996.

Court of Appeals of Maryland.

March 12, 1998.

Melvin Hirshman, Bar Counsel, and Raymond A. Hein, Assistant Bar Counsel, for Attorney Grievance Commission, for petitioner.

Melvin G. Bergman, Beltsville, for respondent.

Argued before BELL, C.J., ELDRIDGE, RODOWSKY, CHASANOW, RAKER and WILNER, JJ., and DALE R. CATHELL, Judge (Specially Assigned).

DALE R. CATHELL, Judge, Specially Assigned.

Petitioner Attorney Grievance Commission filed, by Bar Counsel, a Petition for Disciplinary Action in this Court against respondent Lester A.D. Adams on October 30, 1996. The petition alleged violations of Rules 1.15, 4.1, 8.1, and 8.4 of the Maryland Rules of Professional Conduct, a violation of Maryland Rule 16-604, and a violation of Md.Code (1989, 1995 Repl.Vol.), § 10-306 of the Business Occupations & Professions Article (BOP). Pursuant to Rule 16-709 b, ¹ this Court referred the matter to the Honorable Sheila R. Tillerson-Adams of the Circuit Court for Prince George's County for a hearing on the matter.

Upon conducting a hearing on the matter on May 15, 1997, Judge Tillerson-Adams found that Bar Counsel did not prove by clear and convincing evidence that respondent had violated Rules 8.4(c) or (d), 4.1, 8.1(b), or BOP § 10-306. She did find by clear and convincing evidence, however, that respondent had violated Maryland Rule 16-604 ² and Rule 1.15 ³ of the Maryland Rules of Professional Conduct.

Bar Counsel excepted only to Judge Tillerson-Adams's conclusion that respondent did not violate BOP § 10-306. ⁴ Although he did not dispute her factual findings, respondent excepted to Judge Tillerson-Adams's conclusion that he violated Maryland Rule 16-604 and Professional Conduct Rule 1.15.

I.

Judge Tillerson-Adams made findings of fact and conclusions in her Report and Recommendations, filed in this Court on October 21, 1997, as follows:

1. The Respondent has been admitted to the Practice of Law since June 17, 1992.

2. The Respondent and Merlyn G. Walker (also known as Merlyn G. McPherson) hereinafter referred to as "the Client," have been personal friends since 1980.

3. March 7, 1994, the Respondent accompanied the Client to the Office of the Director of Compliance for the Comptroller of the Treasury to secure approval for the client to reopen her restaurant, which operated under the name of "Sweet 'n Spicy."

4. March 7, 1994, the Respondent and the Client had a fortuitous meeting with Stephen M. Cordi, the Director of the Compliance Division for the Comptroller of the Treasury to negotiate the outstanding tax delinquency in an effort to keep the restaurant open.

5. The Respondent and the Client were informed by Mr. Cordi that the Comptroller needed to receive a payment of $2,000 toward the Client's delinquent taxes before the Comptroller would approve the reopening of the Client's restaurant.

6. March 7, 1994, the Respondent tendered a check to Mr. Cordi drawn on his law office operating account at Nations Bank, in the amount of $2,000, payable to the Comptroller of the Treasury.

7. The check was tendered on behalf of the Client to be applied toward her delinquent taxes.

8. The Respondent did not know whether or not he had sufficient funds in his law office operating account to cover the tendered check at the time it was written.

9. It was understood that the Client was to give the Respondent $2,000 to deposit into his operating account immediately upon her return to the restaurant on March 7, 1994.

10. On March 10, 1994 and March 16, 1994, Mr. Cordi tried to cash the $2,000 check and on both occasions the check was returned [for] insufficient funds.

11. March 14, 1994, the Respondent received a total of $1,900 ($1,880 in cash, plus a $20 traveler's check) from the Client to reimburse him for the check he wrote on her behalf to the Comptroller. The Client never paid the balance and still owes the Respondent $100 to cover the check.

12. March 14, 1994, the Respondent deposited the Client's funds along with other monies for a total deposit of $2,100 into his law office operating account. This deposit raised Respondent's account balance out of an overdraft balance which existed since February 28, 1994.

13. The Respondent [, however,] still did not have sufficient funds in his operating account after the deposit to cover the check.

14. The Respondent used the Client's funds, intended for reimbursement of the payment to the Comptroller of the Treasury, to cover checks written on his law office operating account for expenses and other matters unrelated to his representation of the Client.

15. May 25, 1994, the Respondent was contacted by Mr. Cordi to discuss the bad check that was written and the continued delinquency of the Client's tax account. The Respondent pledged to deliver a cashier's check to Mr. Cordi the next day to replace the bad check.

16. June 15, 1994, the Respondent purchased a cashier's check but it was not hand delivered by the Respondent to Mr. Cordi until July 6, 1994[,] under a cover letter dated June 20, 1994.

17. The Respondent received a letter dated March 13, 1995, from Raymond A. Hein, Assistant Bar Counsel.

18. The Respondent did not respond in writing to the requests for information and records set forth in Mr. Hein's letter. However, the Respondent responded to everything eventually through subpoena request and his subsequent interview with Bar counsel's investigator.

II.

This Court has original and complete jurisdiction over attorney disciplinary proceedings. Md. Rule 16-709 b; Attorney Grievance Comm'n v. Glenn, 341 Md. 448, 470, 671 A.2d 463, 473 (1996); Attorney Grievance Comm'n v. Kent, 337 Md. 361, 371, 653 A.2d 909, 914 (1995); Attorney Grievance Comm'n v. Powell, 328 Md. 276, 287, 614 A.2d 102, 108 (1992). Under an independent review of the record, we must determine whether the findings of the hearing judge are based on clear and convincing evidence. "If they are, and if the conclusions of law are not erroneous, we accept them and limit our discussion to any exceptions and the appropriate sanction." Attorney Grievance Comm'n v. Breschi, 340 Md. 590, 599, 667 A.2d 659, 664 (1995). Accordingly, this Court will make the "ultimate decision as to whether a lawyer has violated professional rules." Id. at 599, 667 A.2d at 663. See also Attorney Grievance Comm'n v. Garland, 345 Md. 383, 392, 692 A.2d 465, 469 (1997).

The hearing judge concluded that Bar Counsel did not prove by clear and convincing evidence that respondent violated Rules 8.4(c) or (d), 4.1, or 8.1(b) of the Rules of Professional Conduct, or section 10-306 of the Business Occupations and Professions Article, primarily because respondent made no intentional misrepresentations in his transactions. While respondent was unsure at the time he issued the check to Mr. Cordi on his general operating account whether that account contained funds sufficient to cover the $2,000 "loan," he believed the client would reimburse him for the check later that same day. When he finally did receive from the client her partial repayment of $1,900, respondent deposited the repayment into his general operating account. Respondent's error, Judge Tillerson-Adams noted, was "when he wrote checks to other individuals using the $1,900 before the money was properly paid to the Comptroller of the State of Maryland."

Consequently, she found that respondent violated Maryland Rule 16-604 and Professional Conduct Rule 1.15(a). The judge stated that as soon as respondent realized the check to the Comptroller would not be honored because of insufficient funds, he should have transferred the client's repayment into a trust account to avoid the funds' use in covering later-written checks. In the alternative, respondent could have forwarded directly to the Comptroller the client's partial repayment, notwithstanding that the client had not fully repaid respondent. Respondent's failure to exercise either of these options, the judge concluded, "allowed [c]lient funds to be converted and commingled with other monies in the firm's operating account."

A. Maryland Rule 16-604

Rule 16-604 requires that all funds received by a lawyer from a client or third person, and designated to be delivered to a client or third person, be deposited in a trust account. Ordinarily, funds received by a lawyer that constitute the payment of attorney's fees for past services rendered or funds for "reimbursement for expenses properly advanced on behalf of the client," may not need to be deposited into a trust account. Md. Rule 16-604. But see Attorney Griev. Comm'n v. Milliken, 348 Md. 486, 517, n. 14, 704 A.2d 1225, 1240, n. 14 (1998), for a further discussion of the issue of "fees." As in Milliken, we need not resolve this issue. The funds involved in the case sub judice were not fees.

Respondent excepts to Judge Tillerson-Adams's conclusion that his failure to transfer the client's repayment to a trust account was a disciplinary violation. While what he did may not have been wise, respondent argues, it did not violate any rule of professional conduct because the transaction was an exception to Maryland Rule 16-604 as "expenses" loaned on the client's behalf.

Petitioner, on the other hand, asserted at oral argument that respondent's actions did not amount to an "advancement" of funds because his account did not contain sufficient funds to cover the check in the first place. Accordingly, when the client gave respondent her "repayment," it actually was trust money, or should have been deposited into a trust account, because it was designated by the client to reimburse what she thought was a good check that, in fact, respondent had yet to pay.

Although we found no cases in Maryland squarely addressing the issues here presented, we are not persuaded by respondent that this transaction constituted an exception to Rule...