Attorney Grievance Commission of Maryland v. Kahn, Docket No. 15

Citation290 Md. 654,431 A.2d 1336
Decision Date15 July 1981
Docket NumberDocket No. 15
PartiesATTORNEY GRIEVANCE COMMISSION OF MARYLAND, Petitioner, v. Richard Stephen KAHN, Respondent. Misc.
CourtCourt of Appeals of Maryland

Joseph F. Murphy, Jr., Towson, for respondent.

Walter D. Murphy, Jr., Asst. Bar Counsel, Annapolis, for petitioner.

Argued before MURPHY, C. J., and SMITH, DIGGES, ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ.

MURPHY, Chief Judge.

The Attorney Grievance Commission, acting through Bar Counsel, filed a Petition for Disciplinary Action against Richard Stephen Kahn, alleging violations of the following provisions of the Disciplinary Rules of the Code of Professional Responsibility:

"DR 1-102 Misconduct.

(A) A lawyer shall not:

(1) Violate a Disciplinary Rule.

(3) Engage in illegal conduct involving moral turpitude.

(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.

(5) Engage in conduct that is prejudicial to the administration of justice.

(6) Engage in any other conduct that adversely reflects on his fitness to practice law.

"DR 1-103 Disclosure of Information to Authorities.

(A) A lawyer possessing unprivileged knowledge of a violation of DR 1-102 shall report such knowledge to a tribunal or other authority empowered to investigate or act upon such violation.

"DR 2-103 Recommendation of Professional Employment.

(B) A lawyer shall not recommend employment, as a private practitioner, of himself, his partner, or associate to a non-lawyer who has not sought his advice regarding employment of a lawyer.

(C) A lawyer shall not compensate or give anything of value to a person or organization to recommend or secure his employment by a client, or as a reward for having made a recommendation resulting in his employment by a client, except that he may pay the usual and reasonable fees or dues charged by any of the organizations listed in DR 2-103(E).

(D) A lawyer shall not request a person or organization to recommend or promote the use of his services or those of his partner or associate, or any other lawyer affiliated with him or his firm, as a private practitioner, except that:

(1) He may request referrals from a lawyer referral service operated, sponsored, or approved by a bar association and may pay its fees incident thereto.

(2) He may cooperate with the legal services of any of the offices or organizations enumerated in DR 2-103(E)(1) through (4) and may perform legal services for those to whom he was recommended by it to do such work if:

(a) The person to whom the recommendation is made is a member or beneficiary of such office or organization; and

(b) The lawyer remains free to exercise his independent professional judgment on behalf of this client.

"DR 6-101 Failing to Act Competently.

(A) A lawyer shall not:

(3) Neglect a legal matter entrusted to him.

"DR 7-101 Representing a Client Zealously.

(A) A lawyer shall not intentionally:

(1) Fail to seek the lawful objectives of his client through reasonably available means permitted by law and the Disciplinary Rules, except as provided by DR 7-101(B). A lawyer does not violate this Disciplinary Rule, however, by acceding to reasonable requests of opposing counsel which do not prejudice the rights of his client, by being punctual in fulfilling all professional commitments, by avoiding offensive tactics, or by treating with courtesy and consideration all persons involved in the legal process.

(2) Fail to carry out a contract of employment entered into with a client for professional services, but he may withdraw as permitted under DR 2-110, DR 5-102, and DR 5-105.

(3) Prejudice or damage his client during the course of the professional relationship, except as required under DR 7-102(B).

"DR 7-102 Representing a Client Within the Bounds of the Law.

(A) In his representation of a client, a lawyer shall not:

(3) Conceal or knowingly fail to disclose that which he is required by law to reveal.

(4) Knowingly use perjured testimony or false evidence.

(5) Knowingly make a false statement of law or fact.

(6) Participate in the creation or preservation of evidence when he knows or it is obvious that the evidence is false.

(7) Counsel or assist his client in conduct that the lawyer knows to be illegal or fraudulent.

"DR 9-102 Preserving Identity of Funds and Property of a Client.

(B) A lawyer shall:

(3) Maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his client regarding them."

A.

We referred the matter, pursuant to Maryland Rule BV9 b, to J. Harold Grady, the Chief Judge of the Supreme Bench of Baltimore City, to make Findings of Fact and Conclusions of Law. After conducting an extensive evidentiary hearing, Judge Grady filed detailed findings and conclusions as follows:

"Respondent was admitted to the practice of law in the State of Maryland in 1969. He first was employed in the offices of other attorneys until early 1972 when he started out on his own. In the fall of 1972 he learned that Morris S. Berman, Esquire, was leaving a law firm with which he had been associated for several years in order to establish his own firm specializing in the handling of personal injury cases. Respondent reached agreement with Berman and joined him as an associate on a salary plus one-half of whatever business Respondent produced. At that time Berman had one other associate, Sheila Robin, Esquire, and several clerical and secretarial personnel. During the time Respondent was with Berman other associate attorneys were employed for varying periods. Within a short time Respondent became Berman's principal associate with authority to draw checks on the office escrow bank account, charge business expenses on Berman's credit cards and generally take charge of the office when Berman was absent due to illness or vacation.

"While Respondent did some trial work, most of his time was occupied with preparation of personal injury claims for presentation to insurers for purpose of settlement. There were several hundred open cases in Berman's office at all times, probably in excess of one thousand. Respondent testified that at times he would see as many as fifty or sixty office files in one day and that many form letters were sent out over his signature which he never saw. At first all of the actual settlement discussions with insurers were conducted by Berman as were the final settlements with clients, but at the end of their association Respondent also handled these final steps in settlement. Respondent at no time had more than about a dozen of his own cases.

"Early in 1974, Respondent learned that Berman was under investigation by federal authorities for submitting false claims to insurers. In the summer of 1974 Berman entered a plea of guilty in the U.S. District Court to a charge of mail fraud and submitted his resignation from the practice of law. Respondent thought that Berman was going to turn over his law practice to Respondent but no financial terms were agreed upon. On November 8, 1974, the Court of Appeals of Maryland accepted Berman's resignation with prejudice.

"Shortly before Thanksgiving, 1974, Berman and Respondent had a violent argument over the method of Respondent's taking over Berman's practice. On the Wednesday night before Thanksgiving, Respondent and another associate in Berman's office, L. Paul Snyder, Jr., Esquire, took many office records from Berman's office to another location in the same building which Respondent and Snyder had rented. Respondent testified that these records were taken and photocopied by him in order to inventory and evaluate the open cases in the office as a basis for a financial settlement with Berman for the transfer of the practice. Such a settlement never came about. From that time on Berman has accused Respondent of all sorts of wrongdoing.

"Morris S. Berman testified that he was admitted to practice law in Maryland in November, 1961 and began active in June, 1963. He became associated with other attorneys in general trial practice and over several years acquired many clients of his own. In 1972 he suffered a heart attack and upon recovery decided to open his own offices which he did in late summer 1972. Within a short time he employed Respondent and from time to time several other associates along with necessary office personnel.

"Approximately 80% of Berman's practice consisted of automobile tort cases in which he represented plaintiffs, most of whom allegedly had soft tissue injuries. From 25% to 40% of these cases were directed to him by runners to whom he made cash payments. During the course of his representation of these clients he frequently loaned cash sums to the clients upon their request. Berman utilized a system he described as double checking in order to recoup the cash which he had paid runners or loaned clients. The vast majority of these cases were settled without trial. In order to justify the settlement of these claims he secured the collaboration of certain doctors to whom he referred clients. In many cases these doctors submitted false medical reports and medical bills falsifying the number of treatments rendered which false reports and bills Berman submitted to insurance companies in aid of settlement. Pursuant to this scheme, after settlement Berman would not forward to the doctors the full amounts claimed by them but would retain part of the stated medical expenses for himself. Berman testified that the Respondent knew of his arrangements with runners and with the doctors who submitted false medical information and that Respondent participated in these practices.

"In February, 1974 Berman was notified by U.S. Postal Inspectors that he was under investigation for mail fraud. Sometime thereafter he was indicted in the U.S. District Court for the District of Maryland. His recollection is that during the summer of 1974, he entered a plea of guilty to one count of mail...

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    ...emanates from the underlying purpose of attorney grievance proceedings, which is to "protect the public." Att'y Grievance Comm'n v. Kahn , 290 Md. 654, 684, 431 A.2d 1336 (1981). Given that the claim is designed to protect the public, "dismissal of [a] disciplinary petition for the sole rea......
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