Attorney Grievance v. Zuckerman

• Decision Date: 17 March 2008
• Docket Number: Misc. Docket AG No. 7 September Term, 2007.
• Citation: 403 Md. 695,944 A.2d 525
• Parties: ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Charles ZUCKERMAN.
• Court: Court of Special Appeals of Maryland

944 A.2d 525

403 Md. 695

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Charles ZUCKERMAN.

Misc. Docket AG No. 7 September Term, 2007.

Court of Appeals of Maryland.

March 17, 2008.

Fletcher P. Thompson, Asst. Bar Counsel (Melvin Hirsnman, Bar Counsel, Atty. Grievance Com'n of MD), for Petitioner.

M. Gordon Tayback, Baltimore, for Respondent.

ARGUED BEFORE BELL, C.J., HARRELL, BATTAGLIA, GREENE, JJ., ALAN M. WILNER and DALE R. CATHELL, JJ. (retired, specially assigned).

DALE R. CATHELL Judge (retired, specially assigned).

Pursuant to Maryland Rule 16-751,¹ the Attorney Grievance Commission (the "Commission" or "Bar Counsel"), acting through Bar Counsel, filed a petition for disciplinary action or remedial action against Charles Zuckerman ("respondent") on April 26, 2007. He is charged with professional misconduct, as defined by Maryland Rule 16-701(i),² through violations of the Maryland Rules of Professional Conduct ("MRPC"), specifically, Rule 1.1 (Competence),³ 1.3 (Diligence),⁴ 1.15(d) (Safekeeping Property),⁵ 5.3 (Responsibilities Regarding Nonlawyer Assistants),⁶ and 8.4(d) (Misconduct).⁷ He is additionally charged with violating Maryland Code (1989, 2004 Repl. Vol.), § 10-306 of the Business Occupations and Professions Article ("BOP").⁸

Pursuant to Maryland Rule 16-752(a),⁹ we referred the matter to Judge John N. Prevas, of the Circuit Court for Baltimore City, for an evidentiary hearing and to make findings of fact and conclusions of law in accordance with Maryland Rule 16-757(c).¹⁰ On September 10, 2007, Judge Prevas held a hearing and, on October 24, 2007, issued findings of fact and conclusions of law, in which he found by clear and convincing evidence that respondent had violated MRPC 1.1, 1.3, 1.15(d), 8.4(d) and Md. BOP, § 10-306. Neither respondent nor petitioner filed exceptions to these findings. The Hearing Judge's findings of fact and conclusions of law are as follows:

"The respondent has been a member of the Maryland Bar since June 20, 1974. He served for about five and a half years as an Assistant State's Attorney in Baltimore City and as an Assistant Attorney General assigned to the Public Service Commission for about a year and a half. For the last twenty-four years the respondent has conducted a private law office in Baltimore City. His cases consisted of a high volume of small personal injury cases (settlements averaging under $10,000) and few family law and criminal cases as well.

"This is the second instance in which such a violation has taken place. During the September Term of 2004, the Maryland Court of Appeals held that respondent violated Maryland Rules of Profession Conduct 1.1, 1.3, 1.4(a), 1.15(a), 5.3(a) and (b), 8.4(d), BOP [Business Occupations and Professions Article of the Maryland Code] § 10-306, and § 10-307, and Maryland Rules 16-604 and 16-607. Attorney Grievance Commission v. Zuckerman, 872 A.2d 693 (Md.2005). This decision arose from events that transpired beginning in the spring of 2002 onward.

"In April of 2005, the respondent was suspended indefinitely for these violations. The Court of Appeals found the respondent violated Maryland Rules of Professional Conduct 1.1, 1.3, 1.4(a), 1.15(a), 5.3(a) and (b), 8.4(d), Business Occupations and Professions Article § 10-304 and § 10-306 and Maryland Rules 16-607. Id. After respondent was suspended, he was given the right to apply for reinstatement within thirty days. Respondent subsequently applied for reinstatement and was reinstated on June 2, 2005.

"I. Rule 5.3(a) and (b) (Responsibilities Regarding NonLawyer Assistants).

"A. Findings of Fact

"In May of 2002, respondent hired a new employee, Shannon Becker, as an office assistant. Within a couple days of hiring her, respondent gave Ms. Becker signatory authority over his trust account. Shortly after she was hired, Ms. Becker devised a scheme to steal money from respondent's trust account by writing checks to friends who would then cash them for her and give her the money while concealing her actions by creating fictitious check stubs. In less than two months, she was able to steal approximately $144,000 from respondent's trust account.

"During Bar Counsel's investigation of the initial matter, respondent explained that he had allowed this money to accumulate in his trust account over a period of years because he was not paying medical providers in personal injury settlement cases. He retained the money because he thought that the clients' personal injury protection policy would pay the money. However, he never followed up to see if that had occurred. The result was that he paid restitution of approximately $144,000 to various medical providers and clients over a two-year period. When Bar Counsel reviewed respondent's trust account in that investigation, Bar Counsel's office learned that respondent had routinely failed to deposit personal injury settlement checks in a timely fashion, although he disbursed funds in the settlements on a timely basis. On one occasion his trust account had a negative balance as a result of respondent's practice of advancing payments that he had not deposited in his trust account. Respondent learned of Ms. Becker's thefts when he received an anonymous telephone call in the middle of July, 2002. . . .

"Respondent subsequently brought in another employee, Ms. Rhonda Elkins, in an attempt to straighten out the fraud committed by Ms. Becker. Ms. Elkins was a certified paralegal that had obtained her paralegal degree from Baltimore County Community College, Dundalk Campus. Upon recommendation of Baltimore County Community College, Ms. Elkins was brought into the respondent's office to replace Ms. Becker, originally as an unpaid intern, where she assisted Ms. Kohler, another paralegal on PIP claims. . . .

"In 2002, when an opening became available for a paralegal position, Ms. Elkins was offered the position and accepted it. Ms. Elkins had a prior felony theft conviction, which Mr. Zuckerman claimed to be unaware of. Out of the five days a week Ms. Elkins worked, she would spend approximately one to two days dealing with the prior theft by Ms. Becker and three to four on her other duties. During the course of her employment, Ms. Elkins was able to steal approximately $124,000 from the respondent's trust account.

"It became Ms. Elkins' job to manage the day-to-day operations of respondent's trust account. . . . Ms. Elkins devised a scheme in March of 2003 to steal funds respondent was placing in his trust account to repay the individuals whose funds Ms. Becker had stolen. After she had written out checks and respondent had signed the checks, she or her husband forged the payee's endorsement and her husband cashed the check after placing his endorsement on it. . . . Respondent did not detect this theft because he never looked at the backs of the checks to see if the payee had endorsed them. . . . When Ms. Elkins stopped stealing money from the clients whom respondent was attempting to repay, she started stealing from respondent's trust account by making out checks to the estate of James Hilling, for which she had been personal representative, Anthony Elkins, her husband, or herself. . . . In January, 2006, respondent learned that Ms. Elkins had taken out a credit card in his name. . . . When he spoke to her about it, she admitted that she had done so.

"Respondent told her that she could work through the rest of the pay period. . . . A few days later, Ms. Elkins admitted that she had been stealing from respondent's trust account. Respondent immediately terminated her employment. . . . Respondent then reviewed his trust account and found out about the forgeries and checks she had written to herself, her husband, and the estate. . . . Respondent concluded that he had not detected the checks that Ms. Elkins had made out to herself or somebody associated with her because she had removed them from the statements. . . . On March 21, 2006, respondent, through counsel, reported Ms. Elkins' thefts from [his] trust account to Bar Counsel. . . . Respondent calculated the total amount of the thefts to be $124,041.20. . . . Of this amount, $16,804.54 were client funds, $69,118.43 were respondent's fees and approximately $38,000 was for medical providers. . . . John DeBone, petitioner's trust account paralegal, calculated that $43,262.13 belonged to clients from whom Shannon Becker had also stolen. . . .

"B. Conclusions of Law

"Respondent violated Rules 5.3(a) and 5.3(b). Maryland Rule of Profession Conduct 5.3(a) provides that `a partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person's conduct is compatible with the profession obligations of the lawyer.' Rule 5.3(b) provides that `a lawyer having direct supervisory authority over the non-lawyer shall make reasonable efforts to ensure that the person's conduct is compatible with the professional obligations of the lawyer.'

"Respondent violated Rule 5.3(a) by failing to have in place procedures to ensure Ms. Elkins' compliance with the Rules of Professional Conduct and Rule 5.3(b) by failing to supervise her activities. The fact that he continued the practice of failing to disburse funds promptly shows that he did not put into place any system to make sure that funds were promptly disbursed. It was this failure, which allowed Shannon Becker to steal over $140,000 from his trust account.

"Respondent cannot claim that Ms. Elkins' theft of checks made out to clients led him to believe that he had disbursed funds when he really had not. Petitioner's exhibit 14 shows that only three of the checks Ms. Elkins stole can be connected with clients who had funds in his trust account at the time of the theft. The remaining positive balances would have been discovered had respondent conducted a proper reconciliation of his account even if he had not detected the forged endorsements. The total of positive balances...