Attorney Grievance Com'n of Maryland v. Eisenstein

• Decision Date: 01 September 1992
• Docket Number: No. 25,25
• Citation: 635 A.2d 1327,333 Md. 464
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Myles R. EISENSTEIN. Misc. (Subtitle BV),
• Court: Maryland Court of Appeals

Page 464

333 Md. 464

635 A.2d 1327

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Myles R. EISENSTEIN.

Misc. (Subtitle BV) No. 25, Sept. Term, 1992.

Court of Appeals of Maryland.

Jan. 27, 1994.

Melvin Hirshman, Bar Counsel, and Glenn M. Grossman, Asst. Bar Counsel, for Atty. Grievance Com'n of MD, for petitioner.

Benjamin Lipsitz, Baltimore, for respondent.

Argued before MURPHY, C.J., ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI and ROBERT M. BELL, JJ., and JOHN F. McAULIFFE, ^* Associate Judge of the Court of Appeals (retired).

JOHN F. McAULIFFE, Judge (Retired).

The Attorney Grievance Commission (the Commission) charges that Myles R. Eisenstein, respondent, violated a number of the Maryland Rules of Professional Conduct by the manner in which he collected fees and handled the funds of William C. Taylor (the claimant) in connection with a claim brought against ITO Corporation (ITO) under the Longshore and Harbor Workers' Compensation Act (hereinafter "LHWCA" or "the Act") and by advancing certain living expenses to the claimant during the pendency of the litigation. Pursuant to Maryland Rule BV 9(b), this Court directed that the charges be heard by Judge Ellen M. Heller of the Circuit Court for Baltimore City. Respondent filed a motion to dismiss certain of the charges, contending that they were not authorized by the Review Board. That issue is preserved by respondent's exceptions, and therefore the motion is moot. Respondent also moved to dismiss the proceedings, or in the alternative for recusal of Bar Counsel, claiming violations of confidentiality and lack of objectivity. This motion is without substance, and is denied.

Judge Heller held hearings on 13 November and 3 December, 1992, and filed written findings of fact and conclusions of law. Exceptions have been filed by Bar Counsel on behalf of the Commission and by respondent.

I.

Judge Heller made the following findings of fact: ¹

"Myles R. Eisenstein, Esquire, has been a member of the Bar of Maryland since 1957 and maintains an office for the practice of law at 110 Saint Paul Street, Suite 500, in Baltimore. The monies kept by Mr. Eisenstein, which are the subject of the charges in this case, all relate to his representation of William Curtis Taylor in claims arising under the LHWCA. Mr. Eisenstein began representing Mr. Taylor in connection with these claims shortly after an accident of November 25, 1981. However, Mr. Eisenstein had represented Mr. Taylor in other matters, and he and Mr. Taylor had what he characterized at one time as 'a close personal relationship.' In fact, although Mr. Taylor's complaint initiated these proceedings, Mr. Eisenstein continues to represent him in other matters.

"In regard to the claims under consideration in this matter, Mr. Taylor, because of the 1981 accident, remained out of work and received regular compensation checks until August 1, 1983, when he was convicted in federal court of the illegal possession of firearms and served a two-month sentence in the United States Penitentiary in Lexington, Kentucky. When he went to jail in August 1983, his compensation benefits ceased. He was released in October, 1983 and at that time, Mr. Eisenstein referred him back to Dr. G. Edward Reahl who did a disability evaluation. Dr. Reahl discharged Mr. Taylor but found he had a minimal permanent disability of both legs due to the accident. He also expressed an opinion that Mr. Taylor could not continue to perform unrestricted work as a longshoreman and should be rehabilitated for a different type of employment. In fall 1983, an informal conference was held by a deputy commissioner of Labor without resolution of the issues. The matter then proceeded to a formal hearing before an administrative law judge ("ALJ") in spring 1984. On December 7, 1984, an Order of Compensation was issued by the ALJ who determined that Mr. Taylor was entitled to receive $20,250.07 in benefits from the employer-self-insurer because he had sustained a 10% permanent partial disability of the left knee and a 5% permanent partial disability of the right knee.

"Mr. Taylor requested Mr. Eisenstein file an appeal from the decision of the ALJ to the Benefits Review Board. While this appeal was pending, on February 11, 1985, the ALJ approved attorneys' fees for Mr. Eisenstein in the amount of $7,456.85. This amount included expenses of $636.85. In addition, on May 16, 1985, a deputy commissioner approved an attorneys' fees award for Mr. Eisenstein in the amount of $5,000.00. Both of these fees were ordered to be paid by the employer. Payment of these fees does not have to be made until an award of compensation is deemed final which occurs when possibilities for review have been exhausted. U.S.C. § 928(a) (1988); Wells v. Intern. Great Lakes Shipping Co., 693 F.2d 663, 665 (7th Cir.1982). As of this date, although these fees have been approved, they have never been paid to Mr. Eisenstein.

"In spring 1988, while the appeal was pending from the decision of the ALJ, Mr. Taylor advised Mr. Eisenstein that he had been working as a long distance truck driver for nearly two years and had been involved in another accident in June, 1987. Mr. Eisenstein stated that he told Mr. Taylor he could not represent him because, if the employer-insurer could show the availability of suitable alternative employment (being a truck driver), then the employer could avoid liability for a permanent total disability award which was the subject of the appeal. Mr. Eisenstein recommended that Mr. Taylor withdraw the appeal since he was earning an equal or greater rate of pay than that of a longshoreman. However, according to Mr. Eisenstein, he made an agreement with Mr. Taylor that if Mr. Eisenstein would continue his representation, Mr. Taylor would see to it that Mr. Eisenstein would be paid 'first' out of any future award of compensation.

"On June 27, 1988, the Benefits Review Board issued an order reversing the initial award of the ALJ and remanded the matter for a further hearing in conformity with its decision. A second hearing was held by the ALJ which resulted in a March 10, 1989 order determining that Mr. Taylor was entitled to additional temporary total disability benefits and that he was permanently totally disabled as a result of the 1981 accident and a preexisting disability. As a result, Mr. Taylor was deemed to be entitled to weekly compensation benefits for the rest of his life from August, 1983, which included cost of living increases. On June 7, 1989, Mr. Taylor received a check from the United States Treasury Special Fund in the amount of $984.00, and on June 19, 1989, he received a second check from the Special Fund in the amount of $121,897.03. On June 19, 1989, Mr. Taylor and Mr. Eisenstein deposited this latter check in Mr. Eisenstein's escrow account in the NationsBank. The placement of these monies in the escrow account is at the heart of this matter. Monies retained from June 19, 1989 award

"Of the $121,897.03, Mr. Eisenstein retained $59,025.00 in his escrow account and gave the remainder to Mr. Taylor. According to a receipt signed by Mr. Eisenstein, the sum of $59,025.00 represented the following:

'Funds advanced on behalf of William C. Taylor $ 7,225.00

Harold Glaser, attorneys' fees 1,500.00

Myles R. eisenstein [sic], attorneys' fee (as of this date) 51,800.00'

That receipt also stated the following:

'IT IS UNDERSTOOD that if attorneys fees in this amount are not approved by the Benefits Review Board, The Deputy Commissioner, Administrative Law Judge, and the U.S. District Court, all funds due will be refunded.

'In addition, when ITO Corporation of Baltimore pays Myeles [sic] R. Eisenstein attorneys fees now pending and approved, these funds will be refunded to William C. Taylor.' "

This receipt was not signed by Mr. Taylor who testified before the Inquiry Panel that he can only read and write 'a little' and did not go beyond the third grade. Despite his limited education, however, this Court finds that Mr. Taylor did agree to Mr. Eisenstein's retention of part of the compensation award in June, 1989.

"On the receipt, $7,225.00 is entitled 'funds advanced' on behalf of Mr. Taylor, and that amount was explained as follows. Three thousand dollars were for representing Mr. Taylor in a 1983 criminal case in the U.S. District Court for Maryland; fifteen hundred were monies for representation of two uncontested divorces involving Mr. Taylor's son and daughter, as well as a custody proceeding for another daughter; and twenty-six hundred dollars were for a personal loan Mr. Eisenstein had made to Mr. Taylor. That totals $7,100.00. There remains $125.00 that Mr. Eisenstein believes was for court costs in one of the proceedings. In addition, $1,500.00 were paid to Harold Glaser, Esquire, as attorneys' fees for another matter.

"Therefore, of the $121,897.03 award received by Mr. Taylor on June 19, 1992, he took home only $62,872.03. Mr. Eisenstein retained the remainder except for the $1,500.00 fee paid to Mr. Glaser. Specifically, $51,800.00 was placed in Mr. Eisenstein's escrow account. Of this, he explains, $12,500.00 represented the attorneys' fees which had been approved in February and May 1985 but not yet paid. In addition, $11,800.00 was an estimate of an application for a fee pending for a claim before a second ALJ, and $27,500.00 was an estimate of an application for a fee pending before the Benefits Review Board. ² Mr. Eisenstein testified that the June 1989 receipt covered only work done for Mr. Taylor before that date.

Events after June, 1989

"On July 31, 1989, Mr. Eisenstein received a check from ITO in the amount of $9,775.00 for attorneys' fees. This check was endorsed by him and paid over to Mr. Taylor on the same date. Therefore, as of that date, there was remaining in the escrow account $40,025.00. Of significance, Mr. Eisenstein did not repay to Mr. Taylor the difference between the $11,800.00 he had estimated and the actual $9,775.00...