Hyland, Application of, 41

• Decision Date: 01 September 1994
• Docket Number: No. 41,41
• Citation: 339 Md. 521,663 A.2d 1309
• Parties: In the Matter of the Application of William H. HYLAND, Jr., for Admission to the Bar of Maryland. Misc.,
• Court: Maryland Court of Appeals

Page 521

339 Md. 521

663 A.2d 1309

In the Matter of the Application of William H. HYLAND, Jr. for Admission to the Bar of Maryland.

Misc. No. 41, Sept. Term, 1994.

Court of Appeals of Maryland.

Aug. 29, 1995.

William H. Hyland, Jr., pro se.

No argument on behalf of respondent.

Argued before ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI, BELL and RAKER, JJ.

RAKER, Judge.

Applicant seeks admission to the Bar of Maryland. We must decide whether the applicant presently possesses the requisite moral character to justify his admission.

The applicant filed an application for admission to the Bar on July 1, 1993, and passed the July bar examination. On his application, he disclosed that in 1986 he was convicted of fifteen counts of failure to file state sales tax returns ¹ arising from his operation of a restaurant in Philadelphia, Pennsylvania. He also disclosed that he had failed to pay Federal payroll withholding taxes in connection with the same restaurant operation.

Rule 2 of the Rules Governing Admission to the Bar of Maryland requires every applicant to file with the State Board of Law Examiners ("Board") an application that includes an authorization for release of confidential information pertaining to character and fitness for the practice of law to a Character Committee ("Committee"), the Board, and this Court. ² If the Board determines that the applicant meets the pre-legal education requirements, the Board is required to forward the character questionnaire portion of the application to a Character Committee created by Rule 17. Rule 2(d).

Upon receipt of the character questionnaire, the Character Committee is required by Rule 5(b) to interview the applicant, verify the facts contained in the questionnaire, contact the references, make any further investigation it deems necessary or desirable, and then evaluate the applicant's character and fitness for the practice of law. The Committee shall then transmit to the Board a report of its investigation and a recommendation as to the approval or denial of the application for admission. If the Committee concludes that there may be grounds for recommending denial of the application, it shall notify the applicant and schedule a hearing, on the record, affording the applicant the right to testify, present witnesses and to be represented by counsel. Rule 5(b)(2). After the hearing, the Committee is required to transmit a written report to the Board and the applicant containing findings of fact on which its recommendation is based and a statement supporting the conclusion. Rule 5(b)(2).

Rule 5(c) provides that if the Board concludes that there may be grounds for recommending denial of the application, the Board must "afford the applicant the opportunity for a hearing on the record made before the Committee." If the Board decides to recommend denial of the application, it shall give the applicant the opportunity to withdraw the application. Rule 5(c). If the applicant decides not to withdraw the application, this Court "shall require the applicant to show cause why the application should not be denied." Rule 5(d).

Rule 5(a) sets forth the burden of proof in these proceedings:

The applicant bears the burden of proving to the Character Committee, the Board and the Court the applicant's good moral character and fitness for the practice of law. Failure or refusal to answer fully and candidly any question set forth in the application or any relevant question asked by a member of the Character Committee, the Board, or the Court is sufficient cause for a finding that the applicant has not met this burden.

The applicant submitted his application for admission to the Bar in accordance with this procedure. Pursuant to Rule 5, his application was referred to the Character Committee for the Eighth Judicial Circuit. After a hearing on February 24, 1994, the Committee unanimously determined that the applicant had met his burden to prove that he possesses the requisite moral character and fitness to practice law and, accordingly, recommended that the applicant be admitted to the Bar. The Committee concluded that the applicant "has accepted responsibility for the non-payment of the Pennsylvania sales tax and the Federal withholding taxes." The Committee further found that

[w]ith respect to the Pennsylvania tax liability, [applicant] served the required time in jail and has fully paid the taxes owed. Although the Federal tax liability is still outstanding and represents a considerable sum, [applicant] has confirmed that, when gainfully employed, he intends to make serious efforts to discharge this obligation.

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[Applicant] appears to be a mature and sincere individual. He recognizes and appreciates his lack of judgment in failing to pay in a timely and diligent manner the Pennsylvania state sales taxes and the Federal withholding taxes during the ownership of his restaurant.

Noting that eight years had passed without any repetition of this conduct or similar conduct by the applicant, his honorable service in the California legal community during and following law school and his successful completion of law school, the Committee recommended the applicant be admitted to the Maryland Bar.

The State Board of Law Examiners then held a hearing on the matter, pursuant to Rule 5(c). The applicant testified before the Board but presented no witnesses. A majority of the panel, with two members dissenting, recommended that the applicant not be admitted to the Maryland Bar. The majority of the Board concluded that

the applicant had failed to demonstrate the financial responsibility and integrity which are key elements of the character and fitness necessary for admission to the Maryland Bar. The applicant supplied ample evidence in his testimony that he does not appreciate the seriousness of the pattern of activities which gave rise to these proceedings. Troubling issues of candor and credibility are raised by much of his testimony.

The Board identified specific evidence of these deficiencies in its report to this Court. The Board found that 1) the applicant's testimony before the Board substantially contradicted material elements of his testimony before the Character Committee, 2) the applicant's testimony before both the Character Committee and the Board included inconsistencies and hedged or evasive statements, and 3) the applicant failed to provide clear and convincing evidence that he presently possesses the good character and fitness necessary for admission to the Maryland Bar.

The applicant elected not to withdraw his application. Pursuant to Rule 5(d)(1), we scheduled a hearing requiring the applicant to show cause why his application should not be denied.

I.

The applicant was born on October 15, 1950, in Philadelphia, Pennsylvania. He graduated from high school in 1968 and attended one semester of college before enlisting in the United States Air Force. Following an honorable discharge from the military, he returned to college and received a Bachelor's degree in 1977. He worked as a manager for several Philadelphia restaurants from 1978 to 1989. Thereafter, he attended law school in California and, in 1993, became a member of the Bar of that State. He applied for admission to the Bar of Maryland on July 1, 1993, and passed the July 1993 bar examination. Final action on his application was deferred pending investigation of his moral character.

The applicant pled guilty in the Court of Common Pleas of Dauphin County, Pennsylvania, on January 23, 1986, to fifteen counts of failure to remit sales taxes in violation of Pennsylvania state law. The Commonwealth nolle prossed fifteen other counts. The applicant also failed to remit to the federal government employee income tax withholdings in the mid-1980's and owes the Internal Revenue Service approximately $125,000, composed of principal, penalties, and interest.

The applicant's criminal conviction and related tax problems arose out of his management of the Hoffmann House, a restaurant in Philadelphia, Pennsylvania. In December 1979, the applicant and his father collaborated to purchase the restaurant, which was under bankruptcy protection at the time. Although the applicant's father was the sole owner of the shares of the restaurant corporation, the applicant was solely responsible for managing the operations of the restaurant, including all bookkeeping, tax filings, and payments. The applicant was required to remit monthly sales taxes to the Commonwealth of Pennsylvania and quarterly employee income tax withholdings to the Internal Revenue Service. He filed the tax returns and remittances when the restaurant was profitable in the early 1980's; thereafter, however, business at the restaurant declined. As revenues declined, the applicant failed to remit the sales taxes and corporate tax to Pennsylvania and the employee payroll withholding taxes to the I.R.S. and, eventually, he stopped filing tax returns.

Following an audit of the restaurant records for the tax years 1983 to 1985, Pennsylvania authorities notified the applicant of the amount of sales taxes due and of the criminal penalties for failure to pay these taxes. He received notices of delinquency from Pennsylvania and the I.R.S. but ignored them; he explained that he hoped that business would improve in the future and enable him to bring the tax accounts current.

He was arrested and charged with criminal violations of the state code. In a written narrative that he submitted to the Board in support of his application, he explained:

Although the State continued to give me notice of the criminal penalties for failure to file, I ignored their warnings as bureaucratic paper shuffling. I was, unfortunately, mistaken in my belief.

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I don't wish to make any excuses for my improper actions while owner and manager of the Hoffmann House. Looking back on those years, I realize I was simply overwhelmed by the daily activities of the restaurant...