Attorney Grievance Commission v. Stern
19 A.3d 904
| Md. | 2011Background
- Gary F. Stern was admitted to the Maryland bar in 1994; the Attorney Grievance Commission filed a Petition for Disciplinary or Remedial Action in 2010 under Rule 16-751(a).
- Judge Lawrence P. Fletcher-Hill conducted an evidentiary hearing after Stern failed to attend; findings were entered against Stern by clear and convincing evidence on multiple Rule violations.
- The Commission alleged a scheme with C.J.B. Therapy Centers, Inc. under which CJ.B would be paid from clients’ personal injury recoveries, with Stern signing authorization forms and sometimes not the only signer.
- Bank and client records showed nineteen clients in 2008-2009; CJ.B billed $74,605.68 and Stern’s accounts showed $44,465.59 remaining due after reductions, with several family members or associates involved in the same claims.
- Stern received settlement proceeds on behalf of many clients but did not remit full payments to CJ.B; in at least Turner’s case, Stern settled without Turner’s authorization, and attempted to conceal or misrepresent the settlement.
- The Court concluded Stern violated several rules (notably 1.2(a), 1.15(d), 8.4(d), 16-604, 16-609(c), and 10-306) and recommended disbarment, with the final order stating disbarment and costs against Stern.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Stern violate client funds rules by not paying CJ.B from settlements? | Bar Counsel: yes, violations of 1.15(d) and related provisions. | Stern: (no explicit defense summarized) no mitigating description provided; no exceptions filed. | Yes; violations established. |
| Did Stern violate trust accounting and related statutes with respect to funds from settlements? | Bar Counsel: improper handling/withdrawal creating negative balances and improper deposit practices. | Stern: arguments not developed due to lack of exceptions; no contrary filing. | Yes; violations of 16-609(c) and 10-306 established. |
| Did Stern engage in settlement of a client's claim without consent or knowledge? | Bar Counsel: Turner’s claim settled without authorization; misrepresented to insurer and client. | Stern: none provided; no exceptions; explanation in Exhibit 10 inconsistent with facts. | Yes; violation of Rule 1.2(a) and related misconduct. |
| Should disciplinary sanctions be disbarment given Stern's conduct? | Bar Counsel: disbarment warranted due to willful misappropriation and deceitful settlement conduct. | Stern: no contrary argument presented; no argument on behalf of respondent; court adopts state’s recommendation. | Disbarment and costs ordered. |
Key Cases Cited
- Attorney Grievance v. Palmer, 417 Md. 185 (Md. 2010) (misappropriation of client funds serious misconduct; disbarment as default for intentional misappropriation)
- Attorney Grievance v. Kapoor, 391 Md. 505 (Md. 2006) (settling client claim without authorization; forged signature context supports severe sanction)
- Attorney Grievance v. Fox, 417 Md. 504 (Md. 2010) (abandonment via settling without notification; dispositive for disbarment rationale)
- Attorney Grievance v. Thaxton, 415 Md. 341 (Md. 2010) (Rule 1.2(a) violation for failing to consult client about settlement parameters)
- Roberts, 394 Md. 137, 394 Md. 137 (Md. 2006) (trust accounting and timely payment standards for third-party payments)
- Attorney Grievance v. Stolarz, 379 Md. 387 (Md. 2004) (even inadvertent failure to pay third party from settlement funds violates Rule 1.15)
- Attorney Grievance v. West, 411 Md. 3 (Md. 2009) (default sanction for intentional misappropriation: disbarment)