Attorney Grievance Com'n of Maryland v. Powell

• Citation: 328 Md. 276,614 A.2d 102
• Decision Date: 01 September 1991
• Docket Number: No. 2,2
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Robert Dominick POWELL. Misc. Docket (Subtitle BV),
• Court: Court of Appeals of Maryland

Page 276

328 Md. 276

614 A.2d 102

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Robert Dominick POWELL.

Misc. Docket (Subtitle BV) No. 2, Sept. Term, 1991.

Court of Appeals of Maryland.

Oct. 26, 1992.

John C. Broderick, Asst. Bar Counsel for the Atty. Grievance Com'n of Md., for petitioner.

David W. Erb, of Baltimore, for respondent.

Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, McAULIFFE, CHASANOW, KARWACKI and BELL, JJ.

KARWACKI, Judge.

In a petition filed with this Court on March 4, 1991, the Attorney Grievance Commission charged Robert Dominick Powell, a member of the Bars of this State, New York, and the District of Columbia, with professional misconduct. The allegations of misconduct arose out of Powell's representation of Emil P. Taxay, M.D., in a civil suit ¹ relating to the dismissal of Dr. Taxay from the staff of the Jess Parrish Memorial Hospital in Titusville, Florida. For his conduct prior to January 1, 1987, ² the petition alleged that Powell, in prosecuting the Taxay case, had violated Disciplinary Rules (DR) 2-106 and 5-103 by entering into an unreasonable and excessive fee agreement with his client. In addition, for his conduct subsequent to January 1, 1987, the petition alleged that Powell had violated Rules 1.3, 1.4, 1.5, 1.7(b), 1.8(a), 1.8(j), 1.15, 8.1(b), 8.4(c) of the Rules of Professional Conduct, Maryland Code (1989), §§ 10-302, 10-304, 10-306 of the Business Occupations and Professions Article, and various rules under Subtitle BU of the Maryland Rules, which govern attorney trust accounts. On August 30, 1991, Bar Counsel filed an amendment to the petition that withdrew the charges that Powell violated Md.Bus.Occ.Code Ann. §§ 10-302, 10-304, 10-306, any rules under Subtitle BU, and the current version of Maryland Rule of Professional Conduct 1.15(a). ³

On April 9, 1991, pursuant to Md.Rule BV9(b), we ordered that the charges be transmitted to Judge Lawrence H. Rushworth of the Circuit Court for Anne Arundel County. Following numerous procedural delays, ⁴ a hearing on the merits of the charges was conducted on November 6 and 7, 1991, on February 18 and 20, 1992, and concluded with closing arguments on March 26, 1992. Judge Rushworth's findings of fact and conclusions of law along with a record of the proceedings were filed in this Court on May 11, 1992.

I.

By written agreement, dated February 7, 1984, and executed February 9, 1984, Powell entered into a contingency fee agreement with Dr. Taxay to represent the physician in an action against the Jess Parrish Memorial Hospital because of his summary suspension as a member of the medical staff at the hospital. The record indicates that Powell was a close personal friend of both Dr. Taxay and his wife, Hester Taxay. The civil suit was expected to involve many complex issues and require extensive preparation discovery, and travel. In fact, Powell filed an eighty-three page complaint against forty defendants in March, 1985, in the federal district court.

On January 23, 1987, Dr. Taxay died. Prior to his death, Dr. Taxay made it known to his wife and Powell that he wanted the civil suit to continue, and on March 19, 1987, his wife, as personal representative of his estate, was substituted as a party-plaintiff for Dr. Taxay. Shortly thereafter, Mrs. Taxay wrote Powell in April, 1987, and again in June, 1987, stating that she had "lost the zest for pursuing" the civil suit and directing Powell to arrange for a settlement of the case. Powell told Mrs. Taxay that it would be ill-advised to simply dismiss the action, as that might leave both the estate and her open to a countersuit.

During the fall of 1987, Powell made arrangements for an aggregate settlement in the amount of $82,500.00, with four of the five groups of defendants contributing various amounts toward that total, in return for an order of dismissal with prejudice of the civil suit. ⁵ The settlement checks were received by Powell over a period of time.

During the time in which he received settlement proceeds on behalf of the estate of Dr. Taxay and Mrs. Taxay, Powell maintained two bank accounts in connection with his law practice. A firm operating account was maintained at Sovran Bank, and a second account was maintained at Fund for Government Investors, Inc. Powell intended the Fund for Government Investors account to be the sole depository of settlement proceeds in the Taxay case. Powell received a total of nine settlement checks. The first three checks that he received were deposited into the Sovran account, and the last six checks that he received were deposited into the Fund for Government Investors account.

The first settlement check in the amount of $12,500.00 ⁶ was deposited in Powell's Sovran account on November 3, 1987. Two other checks, in the amount of $50,000.00 ⁷ and 2,500.00 ⁸, were deposited in Powell's Sovran account on November 4, 1987. The other six settlement checks received by Powell were deposited in the Fund for Government Investors account. On November 20, 1987, three of these six checks, each in the amount of $2,500.00 ⁹, were deposited in the Fund for Government Investors account. Two of the remaining three checks, each in the amount of $2,500.00 ¹⁰, were deposited on December 21, 1987, in the Fund for Government Investors account. The remaining settlement check in the amount of $5,000.00 was deposited on December 28, 1987, in the Fund for Government Investors account.

Prior to the initial two deposits into the Sovran account on November 3 and 4, 1987, of settlement proceeds totaling $65,000.00, ¹¹ ]it was undisputed that the Sovran account had a balance of $2,365.52. The Sovran account ending balance was $14,420.97 on November 30, 1987, $4,762.28 on December 31, 1987, and $2,619.51 on January 29, 1988. Further, prior to the deposits into the Fund for Government Investors account on November 20, 1987, and December 21 and 28, 1987, of the remaining $17,500 ¹² in settlement proceeds, it was undisputed that the Fund for Government Investors account had a balance of $110.76. The ending balance of the Fund for Government Investors account was $5,910.16 on December 31, 1987, $363.79 on January 31, 1988, and $64.28 on February 29, 1988.

Following the dismissal with prejudice on March 17, 1988, of the civil suit, there were numerous telephone conversations and letters written between Powell and Mrs. Taxay pertaining to disbursement of the settlement proceeds. A chronology of the correspondence is summarized as follows.

On March 23, 1988, there was a 25-minute telephone conversation during which Powell and Mrs. Taxay discussed the settlement of the case and the disbursement of the funds. Having not heard from Powell, Mrs. Taxay, in a letter to Powell dated July 17, 1988, referenced their telephone call of March 23, 1988, in which she was told that an accounting would be forthcoming, and requested both disbursement of her money and an accounting. In a handwritten letter dated August 16, 1988, ¹³ Powell replied and recounted his financial, family, and health problems. In this letter, Powell referenced a letter, which contained an accounting and an unsigned promissory note, that was purportedly mailed to Mrs. Taxay on April 8, 1988, but was never received by her. Powell, reiterating his letter of April 8, 1988, that was never received, requested that payment of the amount due Mrs. Taxay from the settlement proceeds be deferred for Powell's use in the form of a personal loan. ¹⁴ Powell sent Mrs. Taxay another letter dated September 13, 1988, and enclosed a copy of his letter dated April 8, 1988, a signed promissory note, which Mrs. Taxay, in a telephone conversation occurring sometime after August 16, 1988, and before September 13, 1988, had authorized him to sign, and an accounting of the settlement proceeds. ¹⁵

In a letter dated September 18, 1988, Mrs. Taxay replied to Powell's letter of September 13, 1988, and indicated that, according to the accounting he had sent, Powell had made a $400.00 error in the amount of the promissory note for the amount which she was entitled to receive from the settlement proceeds. Powell replied to this letter by letter dated November 1, 1988. In this letter, Powell recounted the health problems of his parents and enclosed a revised promissory note for the correct amount due Mrs. Taxay from the settlement proceeds.

The principal of the promissory note was due on January 2, 1989, together with interest accruing from March 1, 1988, at the annual rate of 10%. When nothing was paid to Mrs. Taxay during January 1989, she wrote two letters to Powell during February and March of 1989. Powell replied with a letter dated April 14, 1989, which recounted his continuing financial and family health problems, including the death of his only brother in April, 1989, and enclosed a check for the interest due on the promissory note. In a letter to Powell dated May 12, 1989, Mrs. Taxay indicated that Powell's check had bounced due to insufficient funds. By letter dated May 17, 1989, Powell wrote to Mrs. Taxay that the check was drawn against uncollected funds, and he believed that the check would now be paid. In this letter, Powell told Mrs. Taxay to redeposit the check, which she did. This time the check was honored. Having not heard from Powell since receipt of the letter dated May 17, 1989, Mrs. Taxay wrote the Attorney Grievance Commission in mid-August 1989, and initiated the process which has culminated with this opinion. ¹⁶

II.

After making his findings of fact, Judge Rushworth concluded that Bar Counsel had not proved by clear and convincing evidence that Powell had violated the following rules: DR 2-106, DR 5-103, or Rules 1.3, 1.4, 1.5, 1.7(b), 1.8(a), 1.8(j), 8.1(b), and 8.4(c). Judge Rushworth did conclude that the current version of Rule 1.15(a) of the Rules of Professional Conduct, several BU Rules relating to attorney trust accounts, and §§ 10-302 and 10-306 of the Bus.Occ. Article had been violated....