Attorney Grievance v. Stolarz

• Citation: 379 Md. 387,842 A.2d 42
• Decision Date: 11 February 2004
• Docket Number: Misc. AG No. 96
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. John B. STOLARZ.
• Court: Court of Appeals of Maryland

842 A.2d 42

379 Md. 387

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. John B. STOLARZ.

Misc. AG No. 96, Sept. Term, 2002.

Court of Appeals of Maryland.

February 11, 2004.

Melvin Hirschman, Bar Counsel for Atty. Grievance Com'n, for petitioner.

Andrew Jay Graham, Baltimore, for respondent.

Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and JOHN C. ELDRIDGE (retired, specially assigned), JJ.

HARRELL, J.

I.

John B. Stolarz, Respondent, was admitted to the Bar of this Court on 9 November 1979. Stolarz is also a member of the Bar of California and a certified public accountant. He has engaged in the active practice of law in Maryland for approximately the last 23 years. The Attorney Grievance Commission ("the Commission"), acting through Bar Counsel, filed a petition with this Court for disciplinary action against Stolarz alleging violations of the Maryland Rules of Professional Conduct (MRPC) in his representation of Stephen Kreller in connection with a personal injury case. Based on a complaint from an assignee/creditor of Kreller, the Commission charged Stolarz with violating Rules 1.15(b) (Safekeeping Property)¹ and 8.4(d) (Misconduct).² The charges stemmed from a complaint by Melina Winterton, representative of the Bank of the Commonwealth ("the bank") in Norfolk, Virginia. Pursuant to Maryland Rule 16-752(a),³ we referred the matter to Judge Thomas E. Noel of the Circuit Court for Baltimore City to conduct an evidentiary hearing and make findings of fact and conclusions of law. Judge Noel held an evidentiary hearing on 17 June 2003. Petitioner was represented by Bar Counsel and Respondent was represented by counsel. The matter was taken under advisement, and the parties submitted Proposed Findings of Fact and Conclusions of Law. On 16 July 2003, Judge Noel filed the following findings of fact and conclusions of law:

Findings of Fact

"The Court finds that the following facts have been proven by clear and convincing evidence:

"1. The Petition of Disciplinary or Remedial Action filed against Respondent, John B. Stolarz, alleges Professional Misconduct in violation of Maryland Rules of Professional Conduct 1.15(b) and 8.4(d) respectively.

"2. This claim arose from Respondent's representation of Stephen Kreller in connection with a personal injury case.

"3. Kreller obtained a loan from the Bank of the Commonwealth (`Complainant') in Norfolk, Virginia, for $300.00 by using his potential recovery in the personal injury case as collateral.

"4. Respondent had no knowledge of the transaction between Kreller and Complainant until he received an `Attorney Acknowledgement' [misspelling in original document] form via facsimile from Complainant on November 2, 2000.

"5. Stolarz executed the Attorney Acknowledgement on November 6, 2000, thereby agreeing to honor Complainant's lien out of any funds received by settlement or court order on behalf of Kreller. The acknowlegement, [sic] however, states that Respondent is not a personal guarantor of th[e] loan.

"6. The personal injury case settled on or about January 19, 2001 for $9200.00. On that date Stolarz prepared a `Settlement Disbursement Memorandum' listing all expenses to be paid from the settlement, including creditors and attorney's fees. Kreller reviewed the memorandum, which clearly stated that the client is under a duty to advise the attorney of any expenses that were not listed. The client signed the document acknowledging that he had received it, accepted the notices therein, and authorized disbursement.

"7. From the settlement Respondent made disbursements to certain medical providers on Kreller's behalf and deducted his fee for the personal injury case, as well as, for representation of the client in a prior criminal matter. All the remaining funds were released to Kreller.

"8. Stolarz admittedly neglected to list the loan from Complainant as one of Kreller's obligations to be paid out of the settlement proceeds and made no payment to them.

"9. In October of 2001, Complainant learned that the case had been settled and that settlement check had been disbursed in the names of Stolarz and Kreller. Complainant contacted Respondent to obtain payment on the lien.

"10. Respondent contacted his client and advised him to pay off the loan, to which Keller agreed, however, Kreller failed to contact Complainant or to make any payments.

"11. In December of 2001, Complainant demanded that Stolarz pay the loan. Respondent agreed to try to compromise in order to resolve the matter as he was partly responsible for the outstanding debt. Attempts at compromise failed.

"12. On February of 2002, Complainant left a phone message with Respondent advising him that a complaint would be filed against him. May 1, 2002, Complainant's representative wrote to Stolarz to reiterate that a complaint would be filed with the Attorney Grievance Commission of Maryland.

"13. In a letter dated May 2, 2002, Respondent informed Complainant that he would file suit against it should a complaint, which he considered defamatory, be filed.

"14. The Attorney Grievance Commission of Maryland received Complainant's formal complaint on May 6, 2002.

"15. On February 3, 2003, the Maryland Court of Appeals Ordered that this Court hear this matter.

Conclusions of Law

"A. Respondent is accused of violating Maryland Rule of Professional Conduct 1.15(b) which states: `Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.'

"B. After the settlement check was issued to Respondent, he admittedly failed to promptly notify Complainant, a third party with interest in the settlement funds, that a settlement had been received. Respondent, while paying other creditors on Kreller's behalf out of the settlement proceeds, admits to failing to make payment to Complainant due to his own oversight.

"C. This Court finds by clear and convincing evidence that Respondent, in failing to `promptly notify' Complainant of receipt of the settlement funds and failing to `promptly deliver' Complainant's interest in those funds, violated Maryland Rule of Professional Conduct 1.15(b).

"D. Respondent is also accused of violating Maryland Rule of Professional Conduct 8.4(d), which states that it is professional misconduct to: `engage in conduct that is prejudicial to the administration of justice.'

"E. It is alleged that Respondent's letter, dated May 2, 2002, to Complainant was a threat intended to deter the filing of a complaint with the Attorney Grievance Commission of Maryland.

"F. Maryland courts have generally found two specific types of conduct as prejudicial to the administration of justice. First, conduct that impacts on the image or the perception of the courts or the legal profession and that engenders disrespect for the courts and for the legal profession. Attorney Grievance Commission v. Alison, 317 Md. 523, 565 A.2d 660 (1989). The second, conduct that is criminal in nature or conduct. Attorney Grievance Commission v. Sheinbein, 372 Md. 224, 812 A.2d 981 (2002).

"G. Respondent testified that he wrote the letter dated May 2, 2002, warning Complainant that he would sue... for defamation as a response to a phone call from Complainant's representative threatening to file a complaint that would allege that Stolarz was misusing escrow funds. That conversation was not memorialized and Complainant's representative was not present at the hearing to testify about that communication. Furthermore, Stolarz maintains that he believes the Complainant threatened to bring this action in an effort to collect his client's debt, which is certainly not a legitimate or appropriate use of the grievance procedures of this state.

Moreover, it is clear from the tenor of the letters written between the parties and to the Attorney Grievance Commission, that there was a great deal of tension between the Complainant and Respondent. Based upon the aforementioned reasons this Court finds by clear and convincing evidence that Respondent did not act unreasonably in warning Complainant that a defamation claim would be asserted when he rationally believed that Complainant would defame him.

"H. Therefore, this Court finds and does conclude that the actions of Respondent in threatening to file a defamation actions against Complainant are not so appalling or egregious as to warrant a finding of conduct prejudicial to the administration of justice. Respondent's actions have caused no negative impact on the image or perception of the legal profession nor has he engendered disrespect for the profession. Additionally, Respondent's actions were not criminal."

Bar Counsel took exception to Judge Noel's conclusion of law that Stolarz's conduct did not violate Rule 8.4(d), and further recommended a sanction of indefinite suspension with the right to reapply no earlier than thirty days. At oral argument, however, Bar Counsel, noting that Stolarz, from personal funds, had paid off the bank loan to his client, changed his sanction recommendation to a public reprimand. Stolarz took exception to six of Judge Noel's findings of fact. Stolarz also excepted to Judge Noel's conclusion of law regarding violation of Rule 1.15(b). Based on his exceptions, Stolarz suggested that we dismiss these disciplinary proceedings in their entirety.

II.

A. Standard of Review

This Court exercises original jurisdiction over attorney discipline proceedings. Attorney Griev. Comm'n v. Blum, 373 Md. 275, 293, 818 A.2d 219, 230 (2003); Attorney Griev. Comm'n v. Harris, 371 Md. 510, 539-40, 810 A.2d 457, 474-75 (2002). We conduct an...