Attorney Grievance Comm'n of Md. v. Smith-Scott

• Decision Date: 29 June 2020
• Docket Number: No. 64 Sept. Term, 2018,64 Sept. Term, 2018
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Arlene Adasa SMITH-SCOTT
• Court: Court of Special Appeals of Maryland

469 Md. 281

230 A.3d 30

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND

v.Arlene Adasa SMITH-SCOTT

No. 64 Sept. Term, 2018

Court of Appeals of Maryland.

June 29, 2020

Jennifer L. Thompson, Asst. Bar Counsel (Lydia E. Lawless, Bar Counsel Attorney Grievance Commission of Maryland), for Petitioner.

Nicholas Madiou and William C. Brennan, Jr. (Brennan, McKenna, Manzi, Shay, Chartered), Greenbelt, MD, for Respondent.

Argued before: Barbera, C.J., McDonald, Watts, Hotten, Getty, Booth, Biran, JJ.

Getty, J. "A person who represents himself [or herself] has a fool for a client."¹

The instant attorney discipline case fortifies the import of this age-old adage often attributed to President Lincoln. Regrettably, the underlying conduct involves an attorney's overzealous self-representation in a voluntary bankruptcy proceeding in the United States Bankruptcy Court for the District of Maryland ("Bankruptcy Court"). Over the course of the nearly three-year bankruptcy proceeding, among other things, the attorney filed countless frivolous pleadings, motions, and appeals, intentionally hindered the court-appointed trustee's ability to administer the case, and knowingly made false statements of fact in filings and appeals before the Bankruptcy Court and United States District Court for the District of Maryland ("U.S. District Court").

Moreover, this attorney represented several clients in Maryland's circuit courts, the Court of Special Appeals, and the Bankruptcy Court. In these instances, among other things, the attorney misappropriated client funds, made knowing misrepresentations to and intentionally concealed information from clients, and failed to prosecute clients’ motions and appeals.

This attorney's conduct violated sixteen separate provisions of the Maryland Attorneys’ Rules of Professional Conduct ("MARPC"). For the reasons that follow, we hold that this attorney's conduct merits disbarment.

BACKGROUND

Procedural Context

On June 27, 2018, the Attorney Grievance Commission of Maryland (the "Commission"), acting through Bar Counsel, filed a Petition for Disciplinary or Remedial Action ("Petition I") with this Court alleging that Arlene Smith-Scott had violated the Maryland Lawyers’ Rules of Professional Conduct ("MLRPC" or "Rules").² See Md. Rule 19-721. On February 21, 2019, the Commission, acting through Bar Counsel, filed a second Petition for Disciplinary or Remedial Action ("Petition II") with this Court alleging that Ms. Smith-Scott violated the MLRPC by conduct unrelated to Petition I.

Petition I, which related to Ms. Smith-Scott's actions during a nearly three-year long personal bankruptcy case, and Petition II, which concerned Ms. Smith-Scott's unrelated representation of seven clients, together alleged that Ms. Smith-Scott violated the following Rules: 1.1 (Competence); 1.2 (Scope of Representation and Allocation of Authority); 1.3 (Diligence); 1.4 (Communication); 1.5 (Fees); 1.6 (Confidentiality of Information); 1.15 (Safekeeping Property); 1.16 (Declining or Terminating Representation); 3.1 (Meritorious Claims and Contentions); 3.2 (Expediting Litigation); 3.3 (Candor Toward the Tribunal); 3.4 (Fairness to Opposing Party and Attorney); 4.1 (Truthfulness in Statements to Others); 8.1 (Bar Admission and Disciplinary Matters); 8.4 (Misconduct); 19-403 (Duty to Maintain Account);³ and 19-404 (Trust Account—Required Deposits).

We designated Judge Peter K. Killough (the "hearing judge") of the Circuit Court for Prince George's County by Order dated June 28, 2018 to conduct a hearing concerning the alleged violations and to provide findings of fact and recommended conclusions of law. See Md. Rule 19-722(a). In relation to Petition I, Ms. Smith-Scott was personally served with process on July 30, 2018 and filed her Answer to Petition I on September 4, 2018. Bar Counsel filed a Motion to Consolidate Petition I and Petition II on February 21, 2019. We consolidated the two Petitions on March 6, 2019 and referred Petition II to the hearing judge. In relation to Petition II, Ms. Smith-Scott was personally served with process on April 1, 2019 and filed her Answer to Petition II on April 24, 2019.

The evidentiary hearing spanned five days: June 17, 18, 19, 20 and 28, 2019. In this Court, Bar Counsel filed exceptions to the hearing judge's findings of fact and recommended conclusions of law on November 13, 2019. Likewise, Ms. Smith-Scott filed exceptions to the same on November 15, 2019. This Court heard oral argument in this matter on January 10, 2020. We disbarred Ms. Smith-Scott and awarded costs against her by per curiam order dated January 10, 2020. See Attorney Grievance Comm'n v. Smith-Scott , 466 Md. 543, 543–44, 222 A.3d 1069 (2020). We explain in this opinion the reasons for the per curiam order.

Factual Findings

We begin with a summary of the hearing judge's factual findings. Ms. Smith-Scott was admitted to the Bar of the State of Maryland on February 2, 2012. Since then, she has maintained a law office—Strategic Law Group, LLC—in Prince George's County, Maryland and has focused on representing individuals in Chapter 7 and Chapter 13 bankruptcy proceedings. The instant matter involves Ms. Smith-Scott's wrongdoing in her own personal bankruptcy case and multiple instances of misconduct spanning several different bankruptcy clients.

Personal Bankruptcy Case

Ms. Smith-Scott filed a voluntary bankruptcy petition under Chapter 11 of Bankruptcy Code in the Bankruptcy Court on September 28, 2014. See In re: Arlene Smith-Scott, Case No. 14-25022. The case was assigned to the Honorable James F. Schneider.⁴

At the time of the bankruptcy petition, Ms. Smith-Scott held title to three investment properties: (1) 367-371 Main Street, Laurel, Maryland (mortgage held by Patapsco Bank) ("367 Main Street");⁵ (2) 511 Main Street, Laurel, Maryland (mortgage held by Patapsco Bank) ("511 Main Street," together with 367 Main Street the "Laurel Properties") ; and (3) 10 Stanley Drive, Catonsville, Maryland (mortgage held by U.S. Bank) ("10 Stanley Drive"). All three properties had multiple residential tenants; the Laurel Properties also had commercial tenants. Ms. Smith-Scott maintained her law office at 367 Main Street.

In March 2014, before Ms. Smith-Scott filed for bankruptcy, U.S. Bank exercised its contractual rights under an assignment of rents clause contained in its loan documents with Ms. Smith-Scott to collect rental income directly from the 10 Stanley Drive tenants. U.S. Bank's attorney, Bradley Swallow, contacted the tenants and instructed them to pay rent to U.S. Bank directly. Two days later, Ms. Smith-Scott wrote the tenants and instructed them to send rent to her directly or face eviction. In the letter, Ms. Smith-Scott claimed that U.S. Bank did not have a legal basis to collect the rent and instructed the tenants to file complaints against Mr. Swallow with the Commission.

On April 10, 2014, Ms. Smith-Scott filed a lawsuit against U.S. Bank and Mr. Swallow in the U.S. District Court (the "U.S. Bank Action") claiming violations of the Fair Debt Collection Practices Act. See Smith-Scott v. U.S. Bank, Case No. 1:14-cv-01157-JFM. In response, U.S. Bank filed a counterclaim to foreclose on the property at 10 Stanley Drive. The U.S. District Court appointed a receiver to collect the rental income based on Ms. Smith-Scott's interference with U.S. Bank's rent collection efforts (the "August 26 Order I"). In a separate order, the U.S. District Court ruled that "[Mr. Swallow] acted entirely within his rights and the rights of his client in sending the letter" regarding the collection of rent to Ms. Smith-Scott's tenants (the "August 26 Order II," together with August 26 Order I the "August 26 Orders").

Along with Ms. Smith-Scott's personal bankruptcy petition, filed on September 28, 2014, Ms. Smith-Scott filed a Motion to Use Cash Collateral. Ms. Smith-Scott sought authorization to use the rental income from the three properties for maintenance expenses. In the motion, Ms. Smith-Scott represented to the Bankruptcy Court that she was receiving rental income from all three properties. Ms. Smith-Scott failed to mention the U.S. District Court's August 26 Orders.

Two days later, on September 30, 2014, Ms. Smith-Scott informed the U.S. District Court in the U.S. Bank Action of her bankruptcy filing. That same day, U.S. Bank filed an opposition to Ms. Smith-Scott's Motion to Use Cash Collateral. Ms. Smith-Scott filed a reply, in which she argued that U.S. Bank was not the mortgage holder of the 10 Stanley Drive property because of a defect in the chain of title. This argument was unsupported by any facts and belied by the August 26 Orders. Nevertheless, Ms. Smith-Scott continued to assert this claim throughout her bankruptcy proceedings. The U.S. District Court administratively closed the U.S. Bank Action without prejudice on October 2, 2014.

On October 9, 2014, Patapsco Bank also filed a motion to oppose Ms. Smith Scott's Motion to Use Cash Collateral. The Bankruptcy Court denied Ms. Smith-Scott's motion by order dated October 29, 2014 ("October 29 Order") and barred her from using cash collateral—i.e., rental income—from the Laurel Properties without the consent of Patapsco Bank or the court.

In January 2015, Patapsco Bank filed Motions for Relief from Stay⁶ asserting that Ms. Smith-Scott had defaulted on her loans and had failed to file monthly operating reports demonstrating that she had not used the rental income for any unauthorized purpose.⁷ Ms. Smith-Scott filed an opposition to Patapsco Bank's motions on January 30, 2015. Ms. Smith-Scott provided operating reports for October, November and December 2014 on February 18, 2015. Bank statements attached to the report showed that Ms. Smith-Scott ignored the October 29 Order and routinely used cash collateral for personal expenses without the permission of the court or Patapsco Bank during the reporting periods.

Patapsco Bank filed a motion on February 24, 2015 to dismiss Ms. Smith-Scott's Chapter...