Attorney Grievance Comm'n of Md. v. Yates

• Decision Date: 28 February 2020
• Docket Number: Misc. Docket AG No. 53, Sept. Term, 2018
• Citation: 467 Md. 287,225 A.3d 1
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Charles Darrow YATES
• Court: Court of Special Appeals of Maryland

467 Md. 287

225 A.3d 1

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND

v.Charles Darrow YATES

Misc. Docket AG No. 53, Sept. Term, 2018

Court of Appeals of Maryland.

February 28, 2020

Argued by Michael W. Blow, Jr., Sr. Asst. Bar Counsel (Lydia E. Lawless, Bar Counsel Atty. Grievance Commission of Maryland), for Petitioner.

Argued by Irwin R. Kramer (Reisterstown, MD), for Respondent.

Argued before: Barbera, C.J., McDonald, Watts, Hotten, Booth, Biran, Lynne A. Battaglia (Senior Judge, Specially Assigned), JJ.

McDonald, J.

In 1789, Benjamin Franklin saluted the new United States Constitution with the observation that "everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes."¹ The certainty of taxes makes it among the best known legal and civic obligations. As "an officer of the legal system,"² an attorney has a special responsibility to comply with such an obligation.

Respondent Charles Darrow Yates by all accounts has been a well-respected attorney who has primarily practiced immigration law. Fifteen years ago, he and his wife purchased a farm in Carroll County with the intention that he would leave the practice of law and that they would devote themselves to the business of raising pure bred horses. That plan apparently went awry for several reasons, including the general economic downturn during the Great Recession, a decline in the market for pure bred horses, and his wife's multiple serious health issues. As a result, Mr. Yates returned to the practice of law while simultaneously attempting to operate the farm on his own for approximately seven years. In the meantime, he stopped filing timely income tax returns and paying taxes that would be due.

Although not directly related to the practice of law, an attorney's willful failure to file income tax returns and timely pay the tax due violates the rules of professional conduct. As a sanction, we suspend Mr. Yates from the practice of law. In light of various mitigating factors, including Mr. Yates' disclosure of his tax delinquency to Bar Counsel, his significant efforts to file returns and pay all back taxes, interest, and penalties, his remorse, and his otherwise good character and reputation, the suspension shall be 60 days. As a special condition for reinstatement, he must provide Bar Counsel with confirmation that he is current on required tax filings and, to the extent that any past tax liability remains, that he is current on payment plans with the Internal Revenue Service and the Maryland Comptroller to eliminate that liability.

IBackground

A. Procedural Context

On January 16, 2019, the Attorney Grievance Commission, through Bar Counsel, filed a Petition for Disciplinary or Remedial Action against Mr. Yates, alleging that he had failed to file timely State and federal income tax returns and to pay income tax for tax years 2011 through 2017 inclusive and thereby violated Rule 8.4(a)-(d) (Misconduct) of the ethical rules governing lawyers in Maryland.³ Pursuant to Rule 19-722(a), we designated Judge Thomas F. Stansfield of the Circuit Court for Carroll County to conduct a hearing concerning the alleged violations and to provide findings of fact and conclusions of law.

The hearing judge conducted an evidentiary hearing in July 2019 and, on August 29, 2019, issued an opinion containing his findings of fact and conclusions of law.⁴ The hearing judge concluded that there was clear and convincing evidence that Mr. Yates violated Rule 8.4(a) & (d), but not that Mr. Yates had violated Rule 8.4(b) & (c). The hearing judge also made findings of fact related to aggravating and mitigating circumstances for this Court's consideration in devising an appropriate sanction.

Mr. Yates did not except to any of the hearing judge's findings or conclusions. Bar Counsel excepted to the hearing judge's conclusion that Mr. Yates had not violated Rule 8.4(b) & (c) and to one of the hearing judge's fact findings concerning mitigation. On January 6, 2020, we heard oral argument concerning those exceptions and the parties' recommendations as to an appropriate sanction.

B. Facts

At the evidentiary hearing in this case, the parties submitted various documentary exhibits by stipulation. Mr. Yates and his wife testified on his behalf. Mr. Yates also presented the testimony of his former accountant, two character witnesses, and a clinical psychologist who had diagnosed him as suffering from an attention deficit disorder

. We summarize below the hearing judge's findings of fact and other undisputed matters in the record, as they relate to the alleged violations.

1. Education and Early Legal Career

Mr. Yates is 60 years old. He grew up in Wiltz, Luxembourg, and in New Jersey. In 1982, he graduated from Stevens Institute in Hoboken, New Jersey, with a B.S. in chemistry. In 1988, he received a J.D. from Western New England College School of Law, and was admitted to the Massachusetts Bar later that same year. Mr. Yates was admitted to the Maryland Bar in 1989.

Shortly after he became an attorney, Mr. Yates began volunteering with a pro bono project sponsored by a bar association in which he represented immigration clients seeking asylum in the United States. As a result, he became interested in immigration law and, in September 1990, opened a private practice in Maryland devoted to that area of the law. The practice grew and, at its height during the next decade, he had a staff of seven to 10 employees, including a bookkeeper. During that period, he retained a certified public accountant to assist with the preparation and filing of his tax returns.

2. Transition from Law Practice to Horse Farm

According to Mr. Yates, he began to lose his zeal for his law practice during the early 2000s. He cited a number of factors: changes in immigration law and the flow of immigrants from Central America that affected the practice, the sudden death of a psychiatrist who was treating him for attention deficit disorder

, and a fall from a horse that resulted in a significant concussion and memory loss. He also noted that, in 2003, he had missed a significant deadline in an immigration case with adverse consequences for the client – an incident for which he later agreed to a reprimand by this Court. See Attorney Grievance Comm'n v. Yates , 391 Md. 287, 892 A.2d 578 (2006).

According to Mr. Yates, he became concerned that he would be placing clients at risk and reassessed his career path. In 2004, he and his wife, Susan Yates, purchased an 83-acre farm in Carroll County which they called the Tully Cross Farm and where they planned to raise prize-winning Irish Draught horses, sheep, goats, and other livestock. After discussing his future in the legal profession with an immigration judge whom he regarded as a mentor, Mr. Yates transitioned his remaining clients to other counsel and closed his law firm in June 2005.

Neither Mr. Yates nor his wife had prior experience in operating a farm. His accountant opined, in retrospect, that Mr. Yates did not understand the risks involved in entering the pure bred horse industry.

3. Hard Times and Return to Law Practice

Mr. Yates' wife had planned to continue to earn income as a nurse while she assisted Mr. Yates with the farm. However, she soon encountered several very serious health issues. By May 2010, her declining health prevented her from contributing to the household income and assisting with the farm as they had planned. She stopped driving for two and a half years, relying on Mr. Yates for transportation to doctor's appointments and elsewhere. At the same time, according to Mr. Yates, the 2008 recession had gutted the market for pure bred foals, eliminating their main source of revenue from the farm.

In response to this financial distress, Mr. Yates laid off the employees of the farm, including its part-time bookkeeper, and attempted to do the work himself. He also returned to the practice of law in September 2010 to generate some income. He developed a niche practice of "standing in" for other counsel in immigration court. However, his court obligations made it difficult for him to also operate the farm. According to Mr. Yates, his days often began at 5 a.m. and lasted until midnight in order to do what needed to be done to tend to the farm and livestock – more than 30 horses and hundreds of sheep – while spending the middle of the day at immigration court.

4. Failure to File Returns and Pay Taxes

Mr. Yates failed to file income tax returns for most of the decade during which he simultaneously operated the farm and practiced law. During that period, Mr. Yates made some payments toward his tax liabilities, before his tax delinquency came to the attention of Bar Counsel. Mr. Yates testified that he sent $7,500 to the IRS along with a request for an extension in 2015,⁵ and entered into a payment plan with the Comptroller under which he made monthly payments of approximately $900 per month. Otherwise, he and his wife did not make tax filings or pay federal or State income tax for the period 2011-2017, inclusive – the period charged in the Petition for Disciplinary or Remedial Action.⁶ Mr. Yates eventually filed late returns for those tax years during the summer of 2018. Bar Counsel also introduced evidence that Mr. Yates had failed to file returns and timely pay income taxes for the 2009 tax year.

5. Disclosure of Tax Issues to Bar Counsel during Deposition

In the meantime, one of the immigration attorneys for whom Mr. Yates functioned as substitute counsel came under investigation by Bar Counsel for neglect of some of her clients. Mr. Yates appeared as a witness in the matter. See Attorney Grievance Comm'n v. Aita , 458 Md. 101, 111, 115, 117, 181 A.3d 774 (2018). In June 2017, Mr. Yates was deposed by Bar Counsel in connection with that matter. In response to routine questions concerning his own involvement in litigation, he disclosed that he was "slightly behind in filing tax returns" because his records were "a mess."

That disclosure...