Attorney Grievance Commission v. Smith
116 A.3d 977
| Md. | 2015Background
- Smith delegated substantial authority to a non-lawyer assistant, with minimal supervision, leading to misappropriation of funds from a personal injury trust account totaling over $600,000.
- Smith maintained two SunTrust trust accounts; he had sole check-signing authority but failed to keep proper records, reconcile, or monitor deposits and disbursements.
- The assistant (Staley-Jackson) forged and cashed checks, settled matters without client knowledge, and diverted settlement proceeds over several years (2009–2012).
- Smith deposited personal funds into the trust account to offset shortfalls, causing commingling and overdrafts and later delayed payments to medical providers and clients.
- Multiple clients (Matthews, Thomas, the Hardys, and others) experienced lack of communication, delayed settlements, and improper settlements, with some cases dismissed or unresolved due to mismanagement.
- The Court ultimately disbarred Smith, holding him responsible for the misconduct of his non-lawyer employee under supervisory liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Supervision of non-lawyer staff | 5.3(a)-(b) require reasonable measures to ensure staff conduct complies with ethics. | Smith did supervise (allegedly) but failed to detect misconduct due to reliance on Staley-Jackson. | Disbarment upheld for failure to supervise. |
| Unauthorized practice by non-lawyer | Unsupervised non-lawyer activity amounted to the practice of law. | Non-lawyer tasks delegated under supervision do not amount to unauthorized practice. | Violation of 5.5(a) established. |
| Misconduct related to trust account and client funds | Failure to safeguard funds, commingling, and delayed disbursements harmed clients. | Misconduct resulted from neglect and lack of oversight rather than malicious intent. | Violations of 1.15, 16-606.1, 16-607, 16-609 established. |
| Knowledge and remedial action under 5.3(c)(2) imputation for employee misconduct | Attorney liable for employee’s intentional misconduct due to supervisory knowledge. | Argues no specific knowledge of each deceitful act; no ratification. | Smith held responsible under 5.3(c)(2) for employee misconduct. |
| Sanction appropriate for pattern of neglect | Disbarment necessary to protect public and profession. | Suspension with reinstatement could suffice given mitigation. | Disbarment imposed. |
Key Cases Cited
- Attorney Grievance Comm’n v. Zuckerman, 386 Md. 341 (2005) (supervision duties under 5.3; neglect enabling misconduct may violate ethics)
- Attorney Grievance Comm’n v. Glenn, 341 Md. 448 (1996) (supervisory responsibility for non-attorney misconduct within a firm)
- Attorney Grievance Comm’n v. Kremer, 432 Md. 325 (2013) (pattern of neglect supports severe discipline; aggravating factors weigh against mitigation)
- Attorney Grievance Comm’n v. Mungin, 439 Md. 290 (2014) (neglect of trust accounts constitutes incompetence; timely action required)
- Attorney Grievance Comm’n v. Davy, 435 Md. 674 (2013) (trust-account mishandling and delay in disbursements prejudicial to clients)