Attorney Grievance v. Hayes

• Decision Date: 18 January 2002
• Docket Number: No. 48,48
• Citation: 789 A.2d 119,367 Md. 504
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. John A. HAYES, Jr.
• Court: Maryland Court of Appeals

789 A.2d 119

367 Md. 504

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. John A. HAYES, Jr.

No. 48, Sept. Term, 2000.

Court of Appeals of Maryland.

January 18, 2002.

Melvin Hirshman, Bar Counsel and James P. Botluk, Asst. Bar Counsel for the Atty. Grievance Com'n of Md., for petitioner.

Norman L. Smith, Esq. (Fisher & Winner, LLP), Baltimore, for respondent.

Argued Before BELL, C.J., and ELDRIDGE, RAKER, WILNER, CATHELL, HARRELL and BATTAGLIA, JJ.

BELL, Chief Judge.

The only issue to be decided in this Attorney discipline case is the appropriate sanction to be imposed on the respondent, John A. Hayes, Jr., for violation of certain of the Rules of Professional Conduct, Maryland Rule 16-812,¹ Maryland Code (1989, 2000 Replacement Volume) § 10-306 of the Business Occupations and Professions Article,² commingling of funds,³ and drawing a check made payable to cash on his escrow account⁴ on 4 occasions.⁵ The petitioner recommends that the respondent be disbarred from the practice of law. The respondent counters that the violations merit only a reprimand, but if a greater sanction is warranted, no more than a short period of suspension should be imposed.

The facts out of which these violations arose are not in dispute and, in fact, were stipulated. They involve the respondent's handling of client funds in his possession as a result of the settlement of a medical malpractice action he and James K. Fowley, whom the respondent enlisted for the purpose, handled on behalf of Gerald Graybill, a homeless person.⁶ After deducting the one-third contingent attorney's fee, Mr. Fowley forwarded the client's share of the proceeds, $30,000.00, to the respondent,⁷ which he deposited in his attorney trust account at First Union National Bank on January 27, 1999. On the same day, the respondent drew a check, in the amount of $23,500.00 and payable to the client, on that account, which he forwarded to the client. At the request of the client, who, "[a]nticipating a settlement... asked Respondent to negotiate payments to several of [his] creditors whose claims were unrelated to the litigation," the respondent retained $6500.00 of the client's monies for the purpose of paying certain of the client's creditors.

When the check to the client cleared on February 2, 1999, the balance in the respondent's attorney trust account was reduced to $6232.90, $267.10 less than the amount he retained.⁸ Thereafter, during that month, the respondent wrote checks on the trust account for personal and business expenses, with the result that the account had a negative balance of $81.78 on February 26, 1999.

Before paying the client's creditors, the respondent negotiated with each one, resulting in a compromise of the claims by appropriately 50 per cent. Payments on behalf of the client, to discharge the client's financial obligation to his creditors were made on March 15th and 16th to Union Hospital of Elkton and CRA Collections, respectively. A $500.00 check written on January 27th to Timothy Grayson for advances made on behalf of the client was paid on May 5, 1999. After deducting the bonus, $100.00, that the client insisted that the respondent take, on that date, the amount of client funds in the respondent's possession after May 5 was $3500.00. That amount was paid over to the client between August and October. Before that could be accomplished, however, the respondent had to locate the client, with whom he had lost contact, and he expended some effort in doing so.

At the end of June, 1999, while the respondent was still holding the $3500.00 for the client, the respondent's attorney trust account again showed a negative balance. The account reflected, as it had leading up to the earlier negative balance, that the respondent had written a number of checks for personal and business purposes.

The hearing judge found, as the respondent readily admitted, that the respondent commingled client funds with his own funds in the First Union attorney trust account and used that account as a general and personal account, depositing client funds as well as his own funds into the account "and using all money in the account to pay bills." In addition, he found that the respondent drew checks payable to cash on the attorney trust account on four occasions. The hearing judge also found that there were mitigating factors: the respondent's candor in acknowledging his misuse of the attorney trust account; only one client was involved in the misconduct; the misconduct occurred while the respondent was attempting to assist the client, without compensation, in a matter unrelated to the matter in which he represented the client; the fact that, when he lost track of him, the respondent undertook to locate the client so that funds belonging to him could be returned; the respondent's participation in the Maryland Volunteer Lawyers Services and willingness to handle pro bono cases and the respondent's good character, as attested to by a number of character witnesses, including two former Circuit Court judges. In addition, the hearing judge credited the testimony of Dr. Wendy Zimmerman, a licensed psychologist. She testified that the respondent suffers from attention deficit disorder, which "manifests itself in Respondent's lack of success at the business end of his law practice ... causing him to be `not good with monetary matters'... and to have trouble collecting money for his legal services."

In arguing that disbarment is the appropriate sanction, the petitioner reminds us of our consistent and repeated admonition that "[m]isappropriation of funds by an attorney is an act infested with deceit and dishonesty and ordinarily will result in disbarment in the absence of compelling extenuating circumstances justifying a lesser sanction." Attorney Griev. Comm'n v. Bakas, 323 Md. 395, 403, 593 A.2d 1087, 1091 (1991). It relies on Attorney Griev. Comm'n of Maryland v. Bernstein, 363 Md. 208, 226, 768 A.2d 607, 617 (2001); Attorney Griev. Comm'n v. Tomaino, 362 Md. 483, 498, 765 A.2d 653, 661 (2001); Attorney Griev. Comm'n v. Sheridan, 357 Md. 1, 27, 741 A.2d 1143, 1156 (1999). Rejecting any suggestion that the attention deficit disorder from which the respondent suffers should suffice as a compelling extenuating circumstance, the petitioner points to our decision in Attorney Griev. Comm'n v. Vanderlinde, 364 Md. 376, 413-14, 773 A.2d 463, 485 (2001), which is the latest word on when a mental condition can be so considered, when it is "most serious and debilitating," the "`root cause,' of the misconduct," and "result[s] in [the] attorney's utter inability to conform his or her conduct in accordance with the law and with the MRPC."

Stressing the mitigating factors found by the hearing judge, the purpose of disciplinary proceedings, see Attorney Griev. Comm'n v. Jeter, 365 Md. 279, 289, 778 A.2d 390, 396 (2001) ("to protect the public rather than to punish the attorney who engages in misconduct") and the fact that the hearing judge did not make findings as to the respondent's intent, at the same time acknowledging that "his general intent to deposit and commingle client and personal funds in a trust account is sufficient to sustain the violations," the respondent argues that "the acts to which he has readily admitted, while wrong and inexcusable, reflect no intentional fraud, deceit, or dishonesty." That this is so, he maintains, is shown by the fact that he sought the client out to return the portion of the monies he had saved for him by negotiating a reduced settlement amount, rather than simply doing nothing when he lost track of him. The lack of an intent "to deprive his client of money" or that his conduct was not consciously done for an unlawful purpose is, the respondent submits, the logical conclusion of the finding that the hearing judge made. It is also of significance to the respondent that the petitioner did not charge him, pursuant to Maryland Rule of Professional Conduct 8.4(c), which proscribes conduct involving dishonesty, fraud, deceit or misrepresentation.

The respondent also relies on his attention deficit disorder as a compelling extenuating circumstance, in that, as Dr. Zimmerman testified, it caused him to have problems with the business aspects of his law practice. Other witnesses confirmed, and the respondent admitted, that the respondent had had such problems. In addition, the respondent points to his thirty years of practice, without any prior disciplinary complaint, as a further mitigator.

Thus, the respondent contends the misappropriation rule does not apply. He believes, moreover, that disbarment is unwarranted, that, at most, a short period of suspension would be sufficient to protect the public.

Standard 5.11 of the American Bar Association Standards for Imposing Lawyer Sanctions (1986), provides that:

"Disbarment is generally appropriate when:

"(a) a lawyer engages in serious criminal conduct a necessary element of which includes intentional interference with the administration of justice, false swearing, misrepresentation, fraud, extortion, misappropriation, or theft; or the sale, distribution or importation of controlled substances; or the intentional killing of another; or an attempt or conspiracy or solicitation of another to commit any of these offenses; or

"(b) a lawyer engages in any other intentional conduct involving dishonesty, fraud, deceit, or misrepresentation that seriously adversely reflects on the lawyer's fitness to practice."

Our cases, in which the Court states the general rule, that disbarment will inevitably follow any unmitigated misappropriation of client, or any third party's funds, are consistent, especially as relates to misconduct of the kind proscribed by subsection (b). See e.g. Attorney Griev. Comm'n v. Vanderlinde, 364 Md. 376, 413-14, 773 A.2d 463, 485 (2001); Attorney Griev. Comm'n v. Bernstein, 363 Md. 208, 768 A.2d 607, (2001); Attorney Griev. Comm'n v. Tomaino, 362 Md. 483, 498, 765 A.2d 653, 661 (2...