Attorney Grievance Commission v. Chapman
430 Md. 238
| Md. | 2013Background
- Chapman, a Maryland attorney admitted in 1979, was charged in 2011 with disciplinary violations arising from a loan-modification consulting arrangement with JW Capital (Weiskerger).
- Bar Counsel alleged Chapman used his law firm to cloak JW Capital’s activities, misleading clients into believing they were engaging a law firm’s services.
- The consulting agreement, executed November 1, 2008, provided for JW Capital to obtain clients and for the Chapman Firm to pay a consulting fee and manage representation; fees often paid up front.
- Two clients, Barbara Bogarosh and John Butler, filed complaints; their retention agreements stated the firm would provide legal services, while Chapman testified most work was non-legal consulting by JW Capital.
- Judge Kathleen Gallogly Cox held that Chapman violated MRPC Rules 1.4, 5.3, and 8.4, but did not find clear and convincing evidence of violations for certain other rules.
- The Court of Appeals conducted an independent review and ordered an indefinite suspension with the right to reapply in 90 days, costs to be paid by Chapman.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Chapman violate MRPC 1.4 by failing to communicate and inform clients? | Bar Counsel argues Chapman failed timely communication and updates. | Chapman contends regular email updates and meetings occurred; lack of outcome does not prove violation. | Yes for Bogarosh late communications; no clear and convincing42 evidence for Butler. |
| Were the fees charged to Bogarosh and Butler reasonable under MRPC 1.5? | Bar Counsel says fees were improper given no legal services provided by Chapman. | Fees covered non-legal consulting with services commensurate to charges. | Bar Counsel exception sustained; 1.5 violated due to up-front fees with no legal work by Chapman. |
| Did the Consulting Agreement violate MRPC 5.3 by supervising nonlawyers? | Chapman abdicated supervision by entrusting JW Capital with core work. | There was regular oversight via meetings and emails. | Yes; 5.3 violated because JW Capital managed cases with minimal Chapman involvement. |
| Did the arrangement violate MRPC 8.4 by dishonesty/misrepresentation? | The purpose was to mislead clients into believing firm representation. | Arrangement was a legitimate consulting model supervised by Chapman. | Yes; clear and convincing evidence of 8.4 violation. |
| Did the scheme implicate MRPC 1.15 (trust accounts) or 5.5/5.4 restrictions? | Bar Counsel argues funds were not held in proper trust and fee-sharing concealed from clients. | Retainer agreements stated fees earned upon receipt with client consent; funds handled per practice. | 1.15(c) violated due to earned-on-receipt structure; 5.4/5.5 concerns supported by the overall fee-sharing model. |
Key Cases Cited
- Attorney Grievance v. Seltzer, 424 Md. 94 (Md. 2011) (courts review attorney discipline with independent duties to protect the public)
- Attorney Grievance v. Stern, 419 Md. 525 (Md. 2011) (trustworthy implementation of disciplinary standards)
- Attorney Grievance v. Lara, 418 Md. 355 (Md. 2011) (independent review of findings in attorney discipline)
- Attorney Grievance v. Monfried, 368 Md. 373 (Md. 2002) (fee arrangements where no legal services rendered violate Rule 1.5)
- Attorney Grievance v. Brennan, 350 Md. 489 (Md. 1998) (indirect fee-sharing and related misconduct in discipline context)