In re Krame

• Decision Date: 03 November 2022
• Docket Number: 19-BG-674
• Parties: IN RE Evan J. KRAME, Respondent. A Member of the Bar of the District of Columbia Court of Appeals (Bar Registration No. 370772)
• Court: D.C. Court of Appeals

284 A.3d 745

IN RE Evan J. KRAME, Respondent.

A Member of the Bar of the District of Columbia Court of Appeals (Bar Registration No. 370772)

No. 19-BG-674

District of Columbia Court of Appeals.

Argued June 24, 2021

Decided November 3, 2022

Andrew H. Marks for respondent.

Becky Neal, Senior Assistant Disciplinary Counsel, with whom Hamilton P. Fox, III, Disciplinary Counsel, was on the brief, for the Office of Disciplinary Counsel.

Stephen H. Marcus filed an amicus curiae brief on behalf of respondent's clients, David Abramowitz, David Farber, Debra Friedmann, Peter Friedmann, Alan Golden, Neil Kishter, James A. Klein, Laurence Kline, Paul Rosengard, Steven Solomon, Jeffrey O. Spiegel, Ellen B. Kagan Waghelstein, Charles Weinberg, and Rabbi Shohama Wiener, in support of respondent.

Rachel F. Cotton filed an amicus curiae brief on behalf of District of Columbia Bar members Barry Coburn, Sherman L. Cohn, Anne W. Coventry, Myrna L. Fawcett, Leslie G. Fein, Steven W. Jacobson, Alban Salaman, Raymond J. Sherbill, Frederick J. Tansill, and Stefan F. Tucker, in support of respondent.

Before McLeese and Deahl, Associate Judges, and Thompson,^* Senior Judge.

Deahl, Associate Judge:

The Board on Professional Responsibility recommends we disbar Evan J. Krame based on his conduct as trustee of three special needs trusts. That recommendation stems from two central conclusions.

First is the Board's conclusion that Krame "engaged in a pervasive dishonest scheme for personal gain" by knowingly making false statements to the Probate Division of the D.C. Superior Court when seeking compensation for administering the trusts. Krame's alleged scheme related to his persistent efforts to be compensated based on a percentage of the trust funds he administered, with Krame sometimes resorting to dishonesty to evade court orders directing that he instead be compensated on an hourly basis.

Second is the Board's conclusion that, on two separate occasions, Krame misappropriated entrusted client funds when he issued duplicate payments to himself (from the trusts) for the same services. While Krame maintained that those double payments resulted from the administrative oversights of his staff, and not any wrongdoing on his part, the Board found that Krame himself acted negligently with respect to those duplicate payments. Disciplinary Counsel goes one step further and now contends that a "culpable state of mind is not an element of misappropriation," which it deems "essentially a per se offense," (quoting In re Cloud , 939 A.2d 653, 660 (D.C. 2007) ), so that "[a]ny unauthorized use of entrusted funds is misappropriation."

Krame takes exception to the Board's recommendation, as does Disciplinary Counsel to a more limited extent. See infra Part III.E (addressing the lone exception taken by Disciplinary Counsel). Krame contends the Board usurped the Hearing Committee's role as factfinder when it repeatedly rejected the Hearing Committee's factual findings. For instance, while the Hearing Committee credited Krame's testimony that he was not deliberately or intentionally dishonest with the probate court in relation to the trusts he administered, the Board reached the opposite conclusion. Krame contends the Board thereby improperly intruded into the Hearing Committee's exclusive role as factfinder. Krame also argues that Disciplinary Counsel did not present clear and convincing evidence that he negligently misappropriated funds because it failed to show his conduct fell below a standard of reasonable care when he caused (and later corrected) the duplicate payments described above. He disputes Disciplinary Counsel's contention that misappropriation is a per se offense that requires no finding of a culpable mindset. Rather than disbar him, Krame asks that we impose a thirty- to sixty-day suspension.

We partly agree with Krame's contentions that the Board improperly intruded into the Hearing Committee's role as factfinder. Namely, the Board failed to accept certain credibility findings made by the Hearing Committee, and some of the more serious violations found by the Board were infected by that misstep. As for the negligent misappropriation charges, we agree with the Board that Krame engaged in negligent misappropriation in at least one instance, and therefore do not need to resolve the parties’ disagreement about the extent to which misappropriation is a per se offense that can be found in the absence of a culpable mindset. Ultimately, based on the type and number of Rule violations we sustain, we consider the Board's recommended sanction of disbarment to be too harsh. We instead suspend Krame from the practice of law in the District of Columbia for eighteen months.

I.

Not long after Krame joined the District of Columbia Bar in 1983, he developed an expertise in administering special needs trusts.¹ He preferred to be compensated based on a flat percentage of trust assets, typically 1%, determined annually. While that was once a fairly standard compensation scheme, by 2005, much to Krame's chagrin, judges in the Probate Division of the D.C. Superior Court indicated that he and other trustees should instead be paid on an hourly basis. Krame resisted that change in various ways, which eventually drew the attention of Disciplinary Counsel and prompted an investigation into his handling of three special needs trusts. The trusts at issue were for the benefit of severely disabled minors: Vernice Seay (Seay trust), De'Shawn Mecco Brown (Brown trust), and Dion Baker (Baker trust).

At the conclusion of its investigation, Disciplinary Counsel charged Krame with violating seven Rules of Professional Conduct, most of them several times over. They largely stemmed from Krame's efforts to continue being paid based on a percentage of trust assets, contrary to the probate court's directions, and the dishonesty he engaged in to further that pursuit. After a ten-day evidentiary hearing, the three members of the Ad Hoc Hearing Committee were ultimately divided as to which violations Krame had committed and as to what sanction should be imposed. There was some limited unanimity among the committee members, however.

The Hearing Committee unanimously found that Krame violated Rule 3.4(c)—knowingly violating an obligation to a tribunal—on two occasions. The first was when he submitted a fee petition seeking thousands of dollars in compensation for his personal crusade to be paid on a percentage basis, despite a court order directing him not to do so. And the second was when he failed to promptly return $200 in compensation following a court order to do so. The Hearing Committee also unanimously found that Krame made a false claim in an appellate brief about the non-existence of time records that could support an hours-based fee request, thereby violating Rules 3.3(a)(1) (making a false statement to a tribunal), 8.4(c) (dishonesty), and 8.4(d) (serious interference with the administration of justice). Finally, it unanimously found that Krame again violated Rules 8.4(c) and 8.4(d) when he recklessly (but not intentionally) submitted four altered time entries in support of a trustee fee petition.

A majority of the Hearing Committee then determined that the remaining Rule violation charges were not supported by clear and convincing evidence. One Hearing Committee member, however, would have found additional violations of Rules 3.3(a)(1), 3.4(c), and 8.4(c), including that the violations were made intentionally, not recklessly, and that Krame also violated Rule 1.5(a) for charging an unreasonable fee. A different Hearing Committee member would have found two violations of Rule 1.15(a) for negligent misappropriation. Because the three Hearing Committee members did not reach consensus on the charged violations, they recommended three different sanctions, ranging from a suspension of six months to eighteen months.

Both Krame and Disciplinary Counsel took exception to the Hearing Committee's report and recommendation. Disciplinary Counsel contested the Hearing Committee's determination that Krame did not commit negligent misappropriation, charge an unreasonable fee, or commit additional knowing and intentional violations of Rules 3.3(a)(1) and 8.4(c). It also argued that the Rule 8.4(c) violations that were found were intentional, not reckless. Krame, for his part, conceded the violations of Rule 8.4(c) and 8.4(d) relating to the reckless alteration of certain time entries, as well as the Rule 3.4(c) violations for disobeying a tribunal's order. But he contested the Rule 3.3(a)(1), 8.4(c), and 8.4(d) violations relating to him making a false claim in an appellate brief.

On review, the Board largely agreed with Disciplinary Counsel. It determined that Krame negligently misappropriated entrusted client funds on two occasions when he paid himself twice for the same work in violation of Rule 1.15(a); that he charged for the time he spent litigating the fee issue in violation of Rule 3.4(c); that he committed additional and intentional (rather than reckless) violations of Rules 3.3(a)(1), 8.4(c) and 8.4(d); and that he charged an unreasonable fee in violation of Rule 1.5(a). It did, however, agree with Krame that he did not make a false statement in an appellate brief. As a sanction, the Board recommends we disbar Krame.

Krame has now filed exceptions to the Board's report and recommendation with this court. He challenges a variety of the violations found by the Board along with its recommended sanction of disbarment. Because this appeal raises a host of fact-intensive questions, we flesh out the facts more below, in the context of the particular rule violations they relate to.

II.

Before delving into the particular rule violations, the parties spar over an overarching question that affects much of the analysis below: Whether the Board relied upon its own de novo factual and credibility findings regarding Krame's state of mind, contrary to the factual findings of the Hearing Committee, and thereby...