Attorney Grievance Comm. v. Zakroff, Misc. Docket AG No. 19

• Decision Date: 23 June 2005
• Docket Number: Misc. Docket AG No. 19
• Citation: 876 A.2d 664,387 Md. 603
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Robert Joel ZAKROFF.
• Court: Maryland Court of Appeals

876 A.2d 664

387 Md. 603

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Robert Joel ZAKROFF.

Misc. Docket AG No. 19, September Term, 2003.

Court of Appeals of Maryland.

June 23, 2005.

Delores O. Ridgell, Asst. Bar Counsel (Melvin Hirshman, Bar Counsel, Atty. Grievance Com'n of MD), for Petitioner.

Barry H. Helfand, Rockville, for Respondent.

Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ.

GREENE, Judge.

Pursuant to Maryland Rule 16-751¹ of the Maryland Rules of Professional Conduct (MRPC), the Attorney Grievance Commission (petitioner), acting through Bar Counsel, filed a petition for disciplinary or remedial action against Robert Joel Zakroff (respondent). The petition alleges that respondent violated Maryland Rule 1.3 (Diligence);² 1.15(a), (b), (c) (Safekeeping Property);³ 3.3 (Candor Toward the Tribunal);⁴ and 8.4(a), (b), (c), (d) (Misconduct)⁵ of the MRPC, Md.Code (1989, 1995 Repl.Vol.); §§ 10-306 (Misuse of Trust Money)⁶ and 10-606(b) (Penalties)⁷ of the Bus. Occ. Prof. Article; and Md. Rule §§ 16-607⁸ and 16-609.⁹

Pursuant to Maryland Rule 16-752(a),¹⁰ we referred the matter to Judge Durke G. Thompson of the Circuit Court for Montgomery County to make findings of fact and conclusions of law in accordance with Maryland Rule 16-757(c).¹¹ Following an evidentiary hearing, Judge Thompson found that respondent violated MRPC Rules 8.4(a), (b), (c), (d), 1.15(a), (b), 3.3(a) and BOP §§ 10-306 and 10-606, but concluded that respondent did not violate Rule 1.3. Respondent and petitioner filed exceptions to Judge Thompson's findings.

I.

After an evidentiary hearing, Judge Thompson made the following factual findings and conclusions of law:

"FINDINGS OF FACT AND CONCLUSIONS OF LAW

"By order of the Court of Appeals of Maryland dated July 29, 2003, pursuant to Maryland Rule 16-752(a), the Petition for Disciplinary or Remedial Action in this matter was transmitted to this Court for determination of findings of facts and conclusions of law. After an extension of time granted by the Court of Appeals, this Court heard evidence on May 17-19, 2004; July 15, 2004; and September 13, 2004, and final arguments on October 27, 2004.

I. The Allegations.

"In this matter, the Attorney Grievance Commission alleges that the Respondent, Robert Zakroff violated Rules 1.3, 1.15(a), (b), (c), 8.4(a), (b), (c), (d), Md.Code Ann., Bus. Occ. Prof. §§ 10-306 and 10-606, and Maryland Rules § 16-607 and § 16-609.

II. Findings of Fact.

"Upon the testimony heard and the exhibits admitted, this Court, by clear and convincing evidence, makes the following findings of fact:

"1. The Respondent was admitted to the practice of law on June 21, 1973.

"2. The Respondent was also admitted to the Bar of the District of Columbia in 1973 and to the Bar of the State of Virginia in 1986.

"3. During the period 1986 to the present, the Respondent maintained an office for the practice of law in the State of Maryland in Bethesda, Maryland under the practice name of Zakroff & Associates, P.C. with concentrations in personal injury, bankruptcy, and collection matters.

"4. The Respondent was the sole stockholder of Zakroff & Associates, P.C., but employed both professional and non-professional staff and associates.

"5. When a client retained the firm for representation in a personal injury matter, it was the policy of the firm to require a retainer agreement to be signed. This retainer agreement granted to the Respondent and other attorneys in the firm a power of attorney to negotiate checks or drafts paid in satisfaction of personal injury claims.

"6. Once a case was ripe for resolution, the Respondent or other attorneys would negotiate with the tortfeasor's representative and obtain a commitment to a settlement of the client's claim.

"7. The Respondent met regularly with members of his staff to discuss the status of personal injury cases and their actual or potential resolution.

"8. When a personal injury case was settled and the firm received settlement proceeds, a photocopied record of the check was made and kept in the file. The check was deposited in the firm's required trust account by using the power of attorney to endorse on behalf of the client.

"9. Clients were generally not notified when a settlement check was received, but if a client called and inquired about the status of settlement, the client would be told that a settlement had been reached. The amount of time between the receipt of settlement proceeds and informing the client of the payment varied from matter to matter.

"10. As necessary, the Respondent determined when a settlement statement containing amounts received, amounts payable to the client and medical care providers, as well as reimbursement of costs and expenses advanced by the law firm would be prepared for the client. The Respondent, other attorneys, or certain staff then presented the settlement statement to the client, and the client was asked to sign to show approval. No information was provided to the client as to the date of the actual receipt of the settlement proceeds by the law firm.

"11. The Respondent employed Deborah MacDonald from September 1996 until December 2001. Her duties included handling the personal injury files for the law firm. MacDonald supervised other clerical employees in connection [with] the management of the personal injury files. MacDonald was a fulltime employee, except for a period from June 1999 through February 2000. MacDonald and the Respondent regularly met to discuss the status of personal injury files. On occasion, MacDonald would make deposits of personal injury checks and drafts, but this was generally the function of the law firm bookkeeper. MacDonald was able to retrieve for the Respondent those personal injury files, as needed which had been created after she began her employment with the law firm.

"12. The personal injury files contained information about the case including, inter alia, information about the receipt of funds, a photocopy of the check, and deposit slips of the amount put into the escrow account.

"13. The escrow account checks were kept in a binder in the Respondent's office. MacDonald prepared the disbursement checks by completing the date, the amount, and the name of the payee. Sometimes the Respondent or other employees of the law firm would prepare checks, but only the Respondent could sign checks.

"14. On several occasions, MacDonald prepared checks for disbursement and presented the checks to the Respondent for his signature, but the Respondent failed to sign them. On other occasions, the checks would not be signed for periods of six months or more, causing MacDonald to have to prepare new checks for disbursement.

"15. It was the practice of the Respondent and his law firm to provide Assignment and Authorization forms to medical care providers involved in the treatment of a client in a personal injury case. Records of the assignment were kept in the clients' files.

"16. It was a common practice for the members of the law firm, principally MacDonald, to undertake a negotiation with medical care providers in an effort to reduce medical charges that were subject to the assignment and authorization. When such reductions were agreed upon by the provider, this information was entered in the settlement sheet and the benefit was given to the client. MacDonald negotiated on a number of occasions with Phillips & Green, an orthopedic practice treating some of the firm's clients. MacDonald would receive telephone inquiries from representatives of Phillips & Green several times a week, regarding the receipt of proceeds by the law firm for medical services provided to the client, for which the law firm had received an assignment and authorization form. Upon inquiry to the Respondent on how to respond to these calls, the Respondent would either authorize or not authorize the disbursement of funds. On some occasions, the Respondent instructed MacDonald to tell Phillips & Green that a case had not settled when, in fact, settlement proceeds had been received. MacDonald followed these instructions and the Respondent was aware that MacDonald was giving false information. Such communications with Phillips & Green occurred on more than twenty occasions.

"17. MacDonald also carried on communications with the Washington Orthopedic Group, another medical provider to the law firm's personal injury clients. As with Phillips & Green, MacDonald, acting in accordance with the Respondent's instructions, gave false and misleading information to Washington Orthopedic Group personnel about whether cases in which they were involved had settled. In some cases, more than a year passed from the time of the receipt of the settlement funds to the date of disbursement to Washington Orthopedic.

"18. MacDonald became aware that the balance in the escrow account was low and there did not appear to be sufficient funds to cover the obligations due from the account. She informed the Respondent about this belief and Respondent neither confirmed nor denied this status.

"19. MacDonald also received calls from the clients of the firm about the settlement of their cases. As with the medical providers, the Respondent told MacDonald to provide the client with misleading information, which instruction MacDonald followed.

"20. MacDonald wrote approximately 25% of the checks disbursing fees to the law firm, which were deposited from the escrow account into the firm checking account with Sun Trust. In the other approximately 75% of the cases, when MacDonald wrote the disbursement checks, the Respondent advised her that he had already paid the firm from the escrowed proceeds. Prior to such disbursements, the Respondent did not ask MacDonald to confirm that monies were owed the firm from the escrow account, nor did Respondent check records.

"21. The clients were aware that the firm was seeking a reduction in the amounts that medical providers were charging the clients. Some

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