Attorney Grievance Comm'n of Md. v. O'Neill
| Decision Date | 09 March 2022 |
| Docket Number | Misc. Docket AG No. 41, Sept. Term, 2020 |
| Citation | 477 Md. 632,271 A.3d 792 |
| Parties | ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Lawrence Daniel O'NEILL |
| Court | Court of Special Appeals of Maryland |
Argued by Erin A. Risch, Deputy Bar Counsel, Lydia E. Lawless, Bar Counsel (Attorney Grievance Commission of Maryland), for Petitioner
Argued by Lawrence Daniel O'Neill, New York, NY, for Respondent
Argued before: Getty, C.J.,* McDonald, Watts, Hotten, Booth, Biran, Gould, JJ.
Hotten, J. Attorneys have professional obligations to place client funds in a trust account until earned, to avoid commingling client, operational, and personal funds, and to maintain accurate financial records. These obligations protect client funds from an attorney's creditors, "provide peace of mind and order to disputing parties," and generally "reinforce[ ] the public's confidence in our legal system." Attorney Grievance Comm'n v. Calhoun , 391 Md. 532, 574, 894 A.2d 518, 543 (2006) (citations omitted). "Establishing and maintaining an attorney trust account requires devoting time and attention to minute details[,]" which can "be dull and monotonous[,] ... but is fundamental to complying with the Maryland Attorneys’ Rules of Professional Conduct [("MARPC")]." Attorney Grievance Comm'n v. Johnson , 472 Md. 491, 502, 247 A.3d 767, 774 (2021).
The fundamental obligation to safeguard client funds applies regardless of where or how an attorney practices law. In the case at bar, Lawrence Daniel O'Neill ("Respondent") maintained a law office in New York City, but was licensed to practice law in Maryland.1 Respondent repeatedly generated a negative balance on his attorney trust account by withdrawing client funds for personal use, commingled client and personal funds, and failed to maintain accurate accounting records. The Attorney Grievance Commission of Maryland, acting through Bar Counsel ("Petitioner"), filed a Petition for Disciplinary or Remedial Action ("the Petition") with this Court pursuant to Md. Rule 19-721.2
By order dated October 21, 2020, this Court designated the Honorable Elizabeth S. Morris ("hearing judge") of the Circuit Court for Anne Arundel County to consider the matter against Respondent and render findings of fact and conclusions of law. Following a hearing on July 26, 2021, and upon consideration of the evidence presented, the hearing judge found, by clear and convincing evidence, that Respondent violated each rule of professional conduct as alleged by Petitioner: MARPC 19-301.1 (Competence), 19-301.15 (Safekeeping Property), 19-308.1 (Bar Admission and Disciplinary Matters), 19-308.4 (Misconduct), 19-407 (Attorney Trust Account Record-Keeping), 19-408 (Commingling of Funds), and 19-410 (Prohibited Transactions).
We agree with the conclusions reached by the hearing judge and, for the following reasons, we disbar Respondent from the practice of law in Maryland.
We summarize the hearing judge's findings of fact and the exhibits submitted at the hearing. At all times relevant hereto, Respondent maintained an office for the practice of law in New York City, but was not licensed to practice law in New York. Respondent provided consulting services to international corporations regarding corporate affairs, tax issues, mergers, and acquisitions. The failure to abide by attorney accounting practices in New York eventually triggered Petitioner's investigation of Respondent.
Following several failed service attempts, Respondent was served on March 26, 2021 with the Petition, Writ of Summons issued by the circuit court, Order of the Court of Appeals dated October 21, 2020, Petitioner's First Request for Admissions of Fact and Genuineness of Documents, Petitioner's First Set of Interrogatories, and Petitioner's First Request for Production of Documents.
Respondent filed a Motion to Dismiss with the erroneous expectation that it stayed the time to answer the Petition. Maryland Rule 19-725(c) prohibits a motion to dismiss during attorney grievance proceedings.3 Respondent failed to file an answer in compliance with Md. Rule 19-724(a).4 The hearing judge treated the failure to timely file an answer as a default pursuant to Md. Rule 19-724. Petitioner filed a Motion for Order of Default on April 29, 2021, and Respondent filed an opposition on May 3, 2021. The hearing judge issued an Order of Default against Respondent, and the clerk of the circuit court provided notice of the Order of Default to Respondent on June 24, 2021.
On July 20, 2021, Respondent moved to vacate the Order of Default, but failed to state a legal or factual basis as required by Md. Rule 2-613(d).5 On July 25, 2021, Respondent filed a Motion for Continuance stating he was "currently out of the country attending to a family emergency and [was] unable to return to Maryland until the first week of August." Respondent simultaneously filed a response to Petitioner's Proposed Findings of Fact and Conclusions of Law, but the hearing judge did not consider the response due to the Order of Default.
Respondent neither appeared nor participated during the hearing on July 26, 2021. Petitioner appeared and presented evidence. Pursuant to Md. Rule 2-424(b),6 Petitioner's Request for Admissions were deemed admitted and received into evidence. The hearing judge denied Respondent's motion to vacate the Order of Default on August 3, 2021.
The hearing judge found the following facts to have been established by clear and convincing evidence.
Respondent maintained an attorney trust account at JPMorgan Chase Bank ("Chase Bank") at all times relevant hereto. On July 12, 2018, Respondent deposited a $1,000 check into the attorney trust account. The check was drawn from his personal checking account and made payable to "cash." On July 13, 2018, the deposit was denied for insufficient funds leaving $1.96 in the attorney trust account. That same day, Respondent made an electronic payment of $300 from his attorney trust account to pay personal expenses. This transfer caused an overdraft of -$300 from the attorney trust account.7
The hearing judge found that Respondent repeated this process and subsequently caused additional overdrafts on his attorney trust account on numerous occasions. On July 18, 2018, Respondent deposited a check in the amount of $900 dollars into his attorney trust account from his personal account, which was returned the next day for insufficient funds causing an overdraft of -$198.04 from the attorney trust account. On July 19, 2018, Respondent made two electronic transfers from the attorney trust account to his operating account in the amounts of $200 and $150, which caused an overdraft of $-548.04.
On September 4, 2018, Respondent deposited a check in the amount of $900 into his attorney trust account from his personal account. The check was returned for insufficient funds on September 5, 2018. That same day, Respondent made two electronic transfers from his attorney trust account to his operating account and Chase credit card totaling $1,000, which caused an overdraft of -$195.30.
On September 25, 2018, Respondent deposited a check in the amount of $800 into his attorney trust account, drawn from his personal account. On September 26, 2018, the check was returned for insufficient funds, and Respondent made two transfers from his attorney trust account causing an overdraft in the amount of -$199.77.
In total, the hearing judge found that Respondent's attorney trust account had a negative balance on ten different occasions between July 1, 2018 and September 30, 2019.
During this same time period, Respondent deposited personal funds into his attorney trust account on seventeen different occasions. Respondent also paid personal and business expenses from his attorney trust account. Respondent directed Chase Bank to automatically debit funds from his attorney trust account to pay monthly personal credit card bills.
On July 25, 2018, Chase Bank notified the Lawyers’ Fund for Client Protection of the State of New York ("NY Client Protection Fund") of Respondent's overdraft arising on July 13, 2018.8 The NY Client Protection Fund informed the Attorney Grievance Committee of the State of New York ("NY AGC") of each overdraft notice that it received from Chase Bank pursuant to N.Y. Ct. R. § 1300.1.9 On October 15, 2018, the NY AGC wrote to the NY Client Protection Fund explaining that because Respondent had an office located in neither Manhattan nor the Bronx,10 nor was a member of the New York bar, the matter did not come within its jurisdiction. The NY AGC advised the NY Client Protection Fund that it was forwarding its correspondence to Petitioner.
Bar Counsel received the first overdraft notice from the NY AGC on October 22, 2018.11 Approximately a month later, Bar Counsel wrote to Respondent to the business address on file with the Client Protection Fund of the Bar of Maryland, enclosing the overdraft notices and requested a written response including "copies of client ledgers, deposit slips, canceled checks ... and monthly bank statements for the period of June 2018 through August 2018." On December 12, 2018, the letter was returned "not deliverable as addressed" and "unable to forward." Bar Counsel sent a second letter to the address associated with Respondent's attorney trust account, but it was returned as "not deliverable as addressed" and "unable to forward." On January 3, 2019, Bar Counsel wrote to Respondent at his home address on file with the Client Protection Fund of the Bar of Maryland, enclosed the overdraft notices, and requested a written response within ten days, including "copies of client ledgers, deposit slips, cancelled checks ... and monthly bank statements from October 2018 through January 2019."
On January 17, 2019, Respondent wrote to Bar Counsel and stated that the overdrafts occurred when "several checks presented by clients in payment of fees...
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