Attorney Grievance Comm'n of Md. v. DonnellyAttorney Grievance Comm'n of Md. v. Donnelly
ATTORNEY DISCIPLINE - SANCTIONS - THIRTY-DAY SUSPENSION - Court of Appeals suspended from practice of law in Maryland for thirty days lawyer who was a member of, and counsel for, limited liability company, and engaged in actions not authorized by the company. Lawyer filed complaint for partition of property against one of company‘s members and assigned client‘s property rights to trust, identifying himself as trustee, failed to provide complaint and assignment of contract rights to members who owned majority of company, failed to communicate changes to fee agreement and to have contingent fee agreement signed by members who owned majority of company, and failed to move to dismiss case and promptly surrender papers upon termination of his representation. Such conduct violated Maryland Lawyers’ Rules of Professional Conduct (“MLRPC“) 1.2(a) (Allocation of Authority Between Client and Lawyer), 1.4(a)(2) (Communication Generally), 1.5(b), 1.5(c) (Communication of Fees), 1.16(a)(3), 1.16(d) (Terminating Representation), and 8.4(a) (Violating MLRPC).
Barbera, C.J.
Greene
Adkins
McDonald
Watts
Hotten
Getty,
JJ.
Vernon Charles Donnelly, Respondent, a member of the Bar of Maryland, was one of six people who formed Solomons One, LLC. The other five people were: Deborah
Solomons One‘s members debated whether to sue Calvert County and the State to secure its right to build a pier. Donnelly drafted, and he and Steffen signed, an Attorney-Client Agreement, naming Solomons One as the client and Donnelly as the attorney for Solomons One. On behalf of himself and Solomons One, Donnelly filed a complaint against Calvert County and the State, seeking the right to build a pier. Donnelly contended that he forwarded to the members of Solomons One a cover letter describing the Attorney-Client Agreement, with the Agreement and the complaint as attachments. While the pier rights litigation was pending, Donnelly drafted an Assignment of Contract Rights, in which Solomons One purportedly assigned its right to build a pier to Donnelly to hold as a trustee for Solomons One‘s members. The Assignment of Contract Rights changed the contingency fee arrangement that was set forth in the Attorney-Client Agreement. Donnelly and Steffen were the only members of Solomons One who signed the Assignment of Contract Rights.
On Solomons One‘s behalf, Donnelly filed a complaint against McNelis, seeking a partition of the property owned by Solomons One and McNelis. Subsequently, at a meeting of Solomons One‘s members, members who owned a majority of Solomons One voted to revoke the MOU and discharge Donnelly as Solomons One‘s counsel. Donnelly, however, continued to act on Solomons One‘s behalf in the pier rights litigation. Donnelly‘s position was that, although the revocation of the MOU terminated him as Solomons One‘s counsel for general purposes, the Attorney-Client Agreement independently authorized him to continue to represent Solomons One in the pier rights litigation. This litigation was ultimately successful, with Solomons One gaining the right to build a pier.
Jennifer Kneeland, counsel for the Greenbergs, and Laurence W.B. Cumberland, counsel for Erickson-File and McNelis, filed complaints against Donnelly with Bar Counsel. In the complaints, Kneeland and Cumberland alleged that, among other misconduct, Donnelly acted without Solomons One‘s authorization in continuing to represent Solomons One in the pier rights litigation, drafting and executing the Assignment of Contract Rights, and filing the complaint to seek a partition of Solomons One‘s and McNelis‘s property.
On March 29, 2016, on behalf of the Attorney Grievance Commission, Petitioner, Bar Counsel filed in this Court a “Petition for Disciplinary or Remedial Action” against Donnelly, charging him with violating Maryland Lawyers’ Rules of Professional Conduct (“MLRPC“) 1.2 (Scope of Representation and Allocation of Authority
On April 7, 2016, this Court designated the Honorable Nicholas E. Rattal (“the hearing judge“) of the Circuit Court for Prince George‘s County to hear this attorney discipline proceeding. Between February 13, 2017 and April 4, 2017, on thirteen non-consecutive days, the hearing judge conducted a hearing. On June 20, 2017, the hearing judge filed in this Court an opinion including findings of fact and conclusions of law, concluding that Donnelly had violated
On October 6, 2017, we heard oral argument. For the below reasons, we suspend Donnelly from the practice of law in Maryland for thirty days.
BACKGROUND
The hearing judge found the following facts, which we summarize. In May 1982, this Court admitted Donnelly to the Bar of Maryland. Donnelly maintains an office for the practice of law in Solomons, Maryland.
Donnelly‘s Purchase of Property
In 1993, Donnelly purchased a property at 14532 Solomons Island Road in Solomons, Maryland, next to the Patuxent River. Subsequently, Donnelly learned that his property and a property adjacent, 14538 Solomons Island Road (“the Property“), included the right to build a commercial pier. In 1995, Donnelly began a personal relationship with Steffen. At some point, Steffen acquired an ownership interest in the property that Donnelly had purchased at 14532 Solomons Island Road.
The Operating Agreement
On June 1, 2005, Donnelly, Steffen, the Greenbergs, Erickson-File, and McNelis signed an Operating Agreement (“the Operating Agreement“), creating Solomons One. Solomons One‘s purpose was to develop, manage, lease, and sell real property. Solomons One had six members, each with the following interests: Donnelly, 24 1/3%, Steffen, 24%, the Greenbergs jointly, 48 1/3%, Erickson-File, 2 1/3%, and McNelis, 1%.
The Operating Agreement provided for decision-making as follows:
The Members, acting jointly, shall have the right to manage the business of [Solomons One], including, but not limited to, establishing and reviewing rental arrangements concerning the Property, encumbering, pledging, conveying[,] and otherwise dealing with any or all of the Property, borrowing funds (executing confessed judgment notes in connection therewith)[,] and operating [Solomons One‘s] business.
Management decisions shall be approved by majority vote of the members.
(Emphasis added). Each member‘s vote counted for the percentage of Solomons One that he or she owned.2 The Operating Agreement specifically stated that management decisions, including whether to engage in litigation, must be “approved by a majority vote of the members.”
The Operating Agreement advised each member to seek independent counsel to review the agreement, as follows:
The parties hereto acknowledge that this Operating Agreement has been drafted by [] Donnelly[], who is a member of [Solomons One], at the request of the Members. [] Donnelly[] has not acted as counsel for the individual members[,] and each Member acknowledges that he or she has been advised to seek their own independent attorney as to their rights and obligations under this [Operating] Agreement. Each member acknowledges that he or she has retained other counsel to review . . . this [Operating] Agreement. Each member acknowledges that[,] entering into this [Operating] Agreement, he or she has not relied upon the legal advice of [] Donnelly, nor has [] Donnelly acted as their legal counsel for this matter. Likewise, [] Donnelly[], has not provided any member with advice as to any estate issues arising from th[is Operating] Agreement or the impact of this [Operating] Agreement on a member‘s individual estate planning.
At the disciplinary hearing, all of Solomons One‘s members, except Donnelly, testified that they knew that they had the opportunity to engage independent counsel regarding the Operating Agreement, but decided not to do so.
The MOU
On August 10, 2005, Donnelly, Steffen, the Greenbergs, Erickson-File, and McNelis, on Solomons One‘s behalf, and Donnelly, individually, signed the MOU. The MOU provided that Donnelly would be Solomons One‘s counsel, and that he could be terminated upon written notice from a member. The MOU acknowledged that Donnelly‘s appointment as counsel involved a conflict of interest, as Donnelly was a member of Solomons One. The hearing judge found that Steffen, the Greenbergs, Erickson-File, and McNelis understood that there was a conflict of interest with regard to Donnelly‘s representation of Solomons One, and “expressly waived such conflict of interest” by signing the MOU.
Solomons One‘s Purchase of Property and the Joint Venture Agreement
In August 2005, Solomons One purchased the Property at 14538 Solomons Island Road. BB&T Bank loaned the money for the purchase. Solomons One‘s members were the loan‘s guarantors. On August 12, 2005, Solomons One and McNelis entered into a Joint Venture Agreement, pursuant to which Solomons One acquired a 70% interest in the Property, while McNelis acquired a 30% interest in the Property. The Joint Venture Agreement stated that, if Solomons One filed for bankruptcy, McNelis would have the option to purchase the Property.
Between 2008 and 2012, Donnelly had intermittent conversations with Solomons One‘s other members regarding the Property‘s pier rights. Eventually, Donnelly submitted a joint application to Calvert County and the State to build such a pier. Donnelly testified that he had Solomons One‘s consent to submit the joint application. Calvert County and the State denied the joint application.
Thereafter, Solomons One‘s members discussed whether Solomons One should pursue litigation to secure its right to build a pier. On April 3, 2012, Donnelly e-mailed Dr. Greenberg regarding Solomons One‘s right to build a pier. Dr. Greenberg responded: “I love the idea.” On July 12, 2012, Donnelly again e-mailed Dr. Greenberg regarding Solomons One‘s right to build a pier. Dr. Greenberg testified that he could not recall whether, in response to Donnelly‘s July 12, 2012 e-mail, he authorized Donnelly to engage in litigation to secure Solomons One‘s right to build a pier. Dr. Greenberg testified: “I believe [that] I had taken a stand [that] we were not interested in pier rights.” On July 14, 2012, Mrs. Greenberg sent an e-mail in which she stated that engaging in litigation to secure Solomons One‘s right to build a pier would be a “fool‘s errand[.]” In the same e-mail, Mrs. Greenberg stated that she did not want to pay any attorney‘s fees that would result from such litigation.
Daniel Guenther, Erickson-File‘s and McNelis‘s counsel, testified that he was certain that he did not authorize Donnelly to represent Solomons One, McNelis, and/or Erickson-File in litigation to secure Solomons One‘s right to build a pier. Guenther did not recall telling Donnelly to protect Erickson-File‘s and McNelis‘s interests in Solomons One‘s right to build a pier.
On July 31, 2012, Dr. Greenberg e-mailed Donnelly, stating: “[W]e should not incur further expenses[.]” On August 2, 2012, Dr. Greenberg e-mailed Donnelly, stating: “[W]e have decided not to participate in the pursuit of the pier rights for the Property. On August 7, 2012, however, Dr. Greenberg e-mailed Donnelly, stating:
I have been in touch with [McNelis] and [Erickson-File] and rethinking the pier rights question. They will be consulting their attorney on the 9th. . . . However, it looks like we will be going forward with this, so let me know what has to be done on this end. So do we need agreements between us, et cetera . . . [W]e‘ll do what is necessary as per your instructions.
(Second ellipsis in original). Dr. Greenberg testified that he ultimately decided to move forward with litigation to secure Solomons One‘s right to build a pier to increase the value of the Property, as well as the value of Solomons One itself.
The hearing judge found that members who owned a majority of Solomons One authorized Donnelly to pursue litigation to secure its right to build a pier. Those members were Donnelly, Steffen, and Dr. Greenberg.
Attorney-Client Agreement
On August 21, 2012, Donnelly and Steffen signed an Attorney-Client Agreement as “Member[s] and Operating Manager[s]” of Solomons One. In the Attorney-Client Agreement, Solomons One purportedly retained Donnelly to represent it in litigation to secure its right to build a pier. The Attorney-Client Agreement provided for a contingency fee, stating: “If there is no recovery, no fees are due from [Solomons One].”
[Solomons One] agrees to retain [Donnelly] under a contingency fee agreement,
plus a fixed reimbursement for attorney[‘s] fees and costs[,]explained as follows: A.If a recovery, [Solomons One] agrees to pay [Donnelly] from any recovery $12,000 in attorney[‘s] fees and costs;andB. Additionally,if a recovery, [Solomons One] agrees that [Donnelly] is entitled to 33 1/3% of any settlement or amount recovered by a decision or settlement at the Circuit Court level, or 40% of any settlement of an amount recovered by decision at the appellate court level.
The hearing judge found that Donnelly and Steffen testified that the Greenbergs did not see “the final version of the” Attorney-Client Agreement. No meeting of Solomons One‘s members was held to discuss the Attorney-Client Agreement. Although Dr. Greenberg authorized Donnelly to pursue litigation to secure Solomons One‘s right to build a pier, Dr. Greenberg testified that he did not think that Donnelly should have been paid for pursuing such litigation, as Solomons One‘s members had agreed to contribute their time, effort, and professional expertise toward Solomons One‘s objectives. Steffen testified that she was privy to a conversation in which the Greenbergs authorized the Attorney-Client Agreement. Consistently, Donnelly testified that, during a telephonic conversation, Dr. Greenberg authorized him to execute the Attorney-Client Agreement.
Dr. Greenberg could not remember a telephonic conversation with Donnelly in which he authorized the Attorney-Client Agreement. Dr. Greenberg denied that he had received a copy of the Attorney-Client Agreement with the handwritten changes on it. Dr. Greenberg denied that he had authorized Donnelly “to act as an attorney for [Solomons One] in executing the” Attorney-Client Agreement. Mrs. Greenberg testified “that she did not discuss the fee agreement with anyone.” Erickson-File testified that she was shocked and angered when she saw the Attorney-Client Agreement. Erickson-File denied agreeing to pay Donnelly for pursuing litigation to secure Solomons One‘s right to build a pier. Similarly, McNelis denied that she had authorized the Attorney-Client Agreement.
Guenther testified that he had not, on Erickson-File‘s and McNelis‘s behalf, authorized Donnelly to enter into the Attorney-Client Agreement. Immediately after quoting a portion of Guenther‘s testimony, the hearing judge found “that Bar Counsel‘s witnesses were more credible than [Donnelly]‘s witnesses[,] and that the Attorney[-]Client Agreement was not authorized.” The hearing judge found that members who owned a majority of Solomons One did not authorize the Attorney-Client Agreement. The hearing judge also found that Donnelly‘s “attempt to bind [Solomons One] to [the] Attorney[-]Client Agreement was [] done in a dishonest and deceitful manner.”
Start of Pier Case
In the Circuit Court for Calvert County (“the circuit court“), Donnelly filed a complaint, initiating litigation to secure Solomons One‘s right to build a pier (“the Pier Case“). Donnelly contended that he mailed to the Greenbergs a letter dated August 23, 2012, a copy of the complaint in the Pier Case, and the Attorney-Client Agreement. The hearing judge found that Dr. Greenberg testified that he did not recall receiving Donnelly‘s August 23, 2012 letter,
Donnelly kept Solomons One‘s other members updated regarding the Pier Case by sending them correspondence and pleadings. Donnelly sent the Greenbergs, Erickson-File, and McNelis letters in which he described developments in the Pier Case. Additionally, starting in September 2012, Donnelly sent Solomons One‘s other members monthly statements that detailed the legal services that he was providing on Solomons One‘s behalf. In the monthly statements Donnelly listed Solomons One as the client.
Assignment of Contract Rights
On or about December 4, 2012, Donnelly prepared an Assignment of Contract Rights, under which Donnelly would “act as trustee[,]” and hold the right to build a pier in trust for Solomons One‘s members, including himself. The Assignment of Contract Rights provided for $8,000 in attorney‘s fees and costs, as well as a contingency fee. On December 4, 2012, Donnelly and Steffen signed the Assignment of Contract Rights.
The hearing judge found that Donnelly testified that members who owned a majority of Solomons One authorized him to execute the Assignment of Contract Rights. At the disciplinary hearing, as a witness for Donnelly, Patricia Davis, his secretary, testified that, while she was at her desk outside Donnelly‘s office, she heard Dr. Greenberg tell Donnelly to proceed with the Assignment of Contract Rights. The hearing judge found, however, that there were “reasons to doubt that Davis could have been able to hear and/or understand what [the Greenbergs said], and whether her recollections of the conversation were based on what [Donnelly] and Steffen told her about the conversation.” For example, in an affidavit that was submitted to Bar Counsel during the investigation in this attorney discipline proceeding, Davis averred:
I was able to overhear [] Donnelly and [] Steffen‘s responses during this telephone conversation between [] Donnelly and Dr. Greenberg. I could determine that [] Dr. Greenberg agreed and authorized [] Donnelly to prepare the Assignment of Contract Right[s.] . . . [] Donnelly and I also had a conversation about the telephone call[,] and[,] during that conversation, [] Donnelly reconfirmed that Dr. Greenberg was in agreement to assign the commercial pier right from Solomons One [] to [its] individual members and that[,] together with the Greenbergs, [] Steffen and [] Donnelly, it was a majority vote to assign the commercial pier right[s].
In the affidavit, Davis did not aver that she could hear what the Greenbergs were saying, or that the telephonic conversation was on speakerphone. The hearing judge determined that the affidavit demonstrated that Donnelly and Steffen were the sources of Davis‘s recollection of the Greenbergs’ role in the conversation.
Steffen testified that she was privy to a telephonic conversation in which Donnelly and the Greenbergs discussed the assignment of Solomons One‘s right to build a pier. In an affidavit that was submitted during Solomon One‘s bankruptcy proceeding-which is discussed below-Steffen averred that the telephonic conversation was not on speakerphone. Steffen averred, however, that she was “present”
By contrast, the Greenbergs, Erickson-File, and McNelis testified that they did not authorize Donnelly to execute the Assignment of Contract Rights. The Greenbergs, Erickson-File, and McNelis testified that they did not know about the Assignment of Contract Rights until May or June 2013, when McNelis found it while searching the land records of Calvert County. McNelis testified that she was “shocked” to find the Assignment of Contract Rights. Guenther, Erickson-File‘s and McNelis‘s counsel, testified that he never authorized Donnelly “to do anything.”
The hearing judge found that Bar Counsel‘s witnesses were more credible than Donnelly‘s witnesses on the issue of whether Donnelly was authorized to execute the Assignment of Contract Rights. In other words, the hearing judge found that the Assignment of Contract Rights was unauthorized. The hearing judge also found that Donnelly‘s “conduct with regard to the Assignment [of Contract Rights] was dishonest as to [Solomons One], the Greenbergs, McNelis[,] and Erickson-File, in that he used it to divest [Solomons One] of an asset and establish a trust enabling him to pursue the [Pier Case] without acting as” Solomons One‘s counsel.
Donnelly did not send a copy of the Assignment of Contract Rights to the Greenbergs, McNelis, Erickson-File, or Guenther. Donnelly testified that he did not provide the Assignment of Contract Rights to the Greenbergs because they preferred to leave matters to attorneys, and “they had a small place.” Donnelly sent Erickson-File and McNelis a letter dated December 11, 2012, attached to which were nine documents that were related to the Pier Case. Donnelly did not mention the Assignment of Contract Rights in his December 11, 2012 letter, nor in subsequent letters to Erickson-File and McNelis dated February 26, 2013, April 8, 2013, May 7, 2013, May 30, 2013, and July 18, 2013. On December 28 and 30, 2012, Donnelly communicated with the Greenbergs, Erickson-File, and McNelis. In those communications, Donnelly did not mention the Assignment of Contract Rights, or that he was acting as a trustee for himself and Solomons One‘s other members.
On December 28 or 29, 2012, in an e-mail that was addressed to McNelis and also sent to Solomons One‘s other members, Donnelly stated:
[With regard] to the [P]ier [C]ase[, y]ou will recall that I tried to get your involvement[,] but you decided to follow [] Guenther‘s advice. The [Pier Case] was filed on behalf of [Solomons One‘s] member[s‘] interests, not on behalf of your individual interest in the property. Hopefully[,] Guenther took action to preserve your individual interest. If not[,] there may be a limitations bar. That said, I can think of several possible ways to address that issue[,] but I am not your attorney.
Donnelly did not mention the Assignment of Contract Rights in this e-mail. The hearing judge found that Donnelly‘s statements in this e-mail were inconsistent with Donnelly‘s position that McNelis‘s individual interest in Solomons One‘s right to build a pier had been assigned to him effective December 4, 2012, and that Donnelly was a trustee for McNelis‘s interest.
Donnelly‘s Filings in Pier Case After Assignment of Contract Rights
After executing the Assignment of Contract Rights on December 4, 2012, Donnelly
Confession of Judgment3 Case
In August 2012, having notified Solomons One‘s other members that they would do so, Donnelly and Steffen stopped making monthly contributions to Solomons One. In September 2012, the Greenbergs, Erickson-File, and McNelis also stopped making monthly contributions to Solomons One. After August 2012, Solomons One stopped making payments to BB&T Bank, which had loaned the money for Solomons One‘s purchase of the Property. In March 2013, BB&T Bank filed a complaint against Solomons One and its members, seeking a confession of judgment (“the Confession of Judgment Case“).
On April 20, 2013, Donnelly e-mailed Solomons One‘s other members, suggesting that he file, on Solomons One‘s behalf, a motion to vacate in the Confession of Judgment Case. Donnelly testified that he did not receive a reply to his April 20, 2013 e-mail. Donnelly testified, however, that the Greenbergs authorized him to file a motion to vacate
in the Confession of Judgment Case. Dr. Greenberg testified that he could not recall whether he authorized Donnelly to file a motion to vacate. In April 2013, in the Confession of Judgment Case, on Solomons One‘s behalf, Donnelly filed a motion to vacate BB&T Bank‘s Confession of Judgment. Donnelly believed that doing so was within his authority as Solomons One‘s counsel, and was in Solomons One‘s best interest.
Partition Case
On May 2, 2013, in the circuit court, on Solomons One‘s behalf, Donnelly filed a complaint against McNelis, seeking a partition of the Property (“the Partition Case“). At the disciplinary hearing, Steffen testified that she was “present” during a telephonic conversation in which Dr. Greenberg authorized Donnelly to file the complaint in the Partition Case. The Greenbergs testified, however, that they did not authorize Donnelly to file the complaint. Dr. Greenberg did not recall seeing a copy of the complaint. Mrs. Greenberg testified that Donnelly filed the complaint without her knowledge. The hearing judge found that Donnelly did not consult with Solomons One‘s other members before filing the complaint in the Partition Case, and that Donnelly was not authorized to file the complaint.
May 17, 2013 Meeting of Solomons One‘s Members and Aftermath
Kneeland, the Greenbergs’ counsel, assisted Dr. Greenberg in setting up a meeting of Solomons One‘s members, the purpose of which was to discharge Donnelly as Solomons One‘s counsel. On or about May 3, 2013, Donnelly was notified that a meeting of Solomons One‘s members had been scheduled for May 9, 2013. Donnelly was informed that the meeting‘s purpose was to discuss revoking the MOU. At Donnelly‘s
On the same day as the meeting, with Kneeland‘s assistance, Dr. Greenberg e-mailed Donnelly, stating: “As a follow-up to today[‘]s meeting of Solomons One, [] please send a note to the members terminating your representation as counsel to Solomons One [] as of today[.]” Donnelly replied: “No. The minutes reflect what happened.”
In discussing the May 17, 2013 meeting of Solomons One‘s members, the hearing judge concluded that Donnelly “did not withdraw the [P]artition [Case], despite being requested to do so.” On or about June 12, 2013, Kneeland and Solomons One‘s new counsel mailed Donnelly a cease-and-desist letter. In a letter to Kneeland dated June 19, 2013, Donnelly stated that he had filed the complaint in the Partition Case to protect Solomons One‘s interests, and to fulfill his responsibilities as Solomons One‘s counsel. As to the May 17, 2013 meeting, Donnelly stated:
As you know, [Solomons One‘s] members voted to terminate me as counsel for [Solomons One]. [] Steffen and I (48 1/3% membership interest) disagreed with that action. As of [May 17, 2013], I ceased my legal representation as counsel for [Solomons One] pending the members’ selection of new, independent counsel for [Solomons One]. By agreement and practice, the selection of counsel for [Solomons One] is by unanimous consent of the members.
The hearing judge determined that, in so stating, Donnelly recognized that, as of May 17, 2013, he was no longer authorized to speak or act on Solomons One‘s behalf.
Donnelly did not participate in Solomons One‘s other members’ efforts to retain new counsel for Solomons One. In mid-July 2013, the members of Solomons One other than Donnelly agreed to retain Ralph Powers as Solomons One‘s new counsel.
Proceedings in the Pier Case
Donnelly did not inform the circuit court of his discharge as counsel for Solomons One, and continued to act as Solomons One‘s counsel in the Pier Case. On May 30, 2013, in the Pier Case, Donnelly filed a supplemental memorandum of law in support of a motion for declaratory judgment. On June 17, 2013, the circuit court conducted a hearing in the Pier Case. Donnelly appeared at the hearing on behalf of the plaintiffs, including himself and Solomons One. At the conclusion of the hearing, the circuit court granted summary judgment in favor of the plaintiffs, determining that the plaintiffs had a right to build a pier. A hearing on damages was scheduled for October 16, 2013. On July 24, 2013, in the Pier Case, on behalf of himself, Solomons One, and the other plaintiffs, Donnelly filed a motion for entry of final judgment.
Complaint for Dissolution and the Start of Bankruptcy Case
In or before August 2013, Donnelly filed a complaint for dissolution of Solomons
One.4
Further Proceedings in the Pier Case
On September 3, 2013, in the Pier Case, Donnelly filed a “substitution of the trustee for” Solomons One. Donnelly testified that
In the Pier Case, Solomons One‘s bankruptcy counsel filed a motion to strike Donnelly‘s appearance (“the Motion to Strike“). In September 2013, Donnelly filed an opposition to the Motion to Strike. Donnelly testified that he opposed the Motion to Strike because, in the Motion to Strike, Solomons One‘s counsel had alleged that Donnelly had engaged in fraud, conversion, and malpractice.
Proceedings in the Bankruptcy Case
In the Bankruptcy Case, Donnelly filed a motion to dismiss on the ground that the decision to file the petition for bankruptcy protection had not been unanimous. Donnelly filed the motion to dismiss in his capacity as a member of Solomons One, not in his capacity as an attorney. As of October 28, 2013, Donnelly had failed to provide Solomons One‘s papers and files to its new counsel. As a result, on or before that date, in the Bankruptcy Court, Solomons One‘s counsel filed a motion to compel turnover. In an Order dated October 30, 2013, the Bankruptcy Court denied the motion to dismiss, concluding that majority vote, not unanimous consent, was sufficient for Solomons One to file the petition for bankruptcy protection. The Bankruptcy Court “ruled that [Donnelly]‘s actions [in
Donnelly‘s Correspondence with Bar Counsel
Kneeland and Cumberland filed complaints against Donnelly with Bar Counsel. Bar Counsel asked Donnelly for a response to Kneeland‘s and Cumberland‘s complaints. At the disciplinary hearing, Donnelly testified that he made truthful statements to Bar Counsel in his responses to Kneeland‘s and Cumberland‘s complaints.
In a letter to Bar Counsel dated August 27, 2013, Donnelly stated that he had “served as counsel for Solomons One[] from August, 2005 until discharged by [Solomons One‘s] members on May 17, 2013.” The hearing judge found that Donnelly‘s statement was false because, after being discharged as Solomons One‘s counsel on May 17, 2013, Donnelly continued to represent Solomons One in the Pier Case. According to the hearing judge, in his August 27, 2013 letter to Bar Counsel, Donnelly stated that the Attorney-Client Agreement was authorized by the Greenbergs, Erickson-File, and McNelis. The hearing judge found that this statement was false. Nonetheless, elsewhere in his opinion, the hearing judge stated that, during the hearing, “Bar Counsel did not specifically identify statements [in Donnelly‘s letters to Bar Counsel that] it contended were false.”
Aggravating Factors and Mitigating Factors
The hearing judge found that Donnelly‘s misconduct was aggravated by a pattern of misconduct, multiple violations of the MLRPC, and a refusal to acknowledge his misconduct‘s wrongful nature. The hearing judge found that Donnelly‘s misconduct was mitigated by the circumstances that the Assignment of Contract Rights did not cause substantial financial harm to Solomons One, and that Donnelly was successful in the Pier Case.
STANDARD OF REVIEW
In an attorney discipline proceeding, this Court reviews for clear error a hearing judge‘s findings of fact, and reviews without deference a hearing judge‘s conclusions of law. See
DISCUSSION
(A) Donnelly‘s Request for New Hearing
In his exceptions to the hearing judge‘s findings of fact and conclusions of law, Donnelly contends that Bar Counsel engaged in improprieties before and during the hearing, and that, as a result of these improprieties, he should be afforded a “fair” hearing, i.e., a new hearing. Donnelly contends that Bar Counsel failed to conduct an independent investigation of Kneeland‘s and Cumberland‘s complaints against him. Donnelly points out that, before the filing of the Petition for
Donnelly contends that Bar Counsel inappropriately dismissed a complaint against another attorney who represented Erickson-File and McNelis in a matter. Donnelly argues that the complaint against the other attorney included allegations that were identical to those in Kneeland‘s and Cumberland‘s complaints against him—namely, that the other attorney filed pleadings on Solomons One‘s behalf without authorization.
Donnelly asserts that Bar Counsel engaged in discovery violations. Donnelly alleges that, before the hearing, Bar Counsel failed to disclose the existence of papers that Guenther, Erickson-File‘s and McNelis‘s former counsel, had provided to Cumberland, Erickson-File‘s and McNelis‘s current counsel. Donnelly also alleges that the hearing judge refused to allow him to inspect these papers. According to Donnelly, Bar Counsel acknowledged that the papers included the August 23, 2012 letter from Donnelly to Guenther, to which the Attorney-Client Agreement was attached. Donnelly maintains that, by using information from the papers at the disciplinary hearing without having provided them to him, Bar Counsel violated discovery rules and Donnelly‘s right to due process. Donnelly contends that it was improper for Bar Counsel to call Guenther as a rebuttal witness at the disciplinary hearing, as Bar Counsel did not offer Guenther‘s testimony in response to a matter that arose during Donnelly‘s presentation of evidence. Donnelly argues that, due to this alleged impropriety, this Court should not consider Guenther‘s testimony.
In Donnelly‘s response to Bar Counsel‘s exceptions, and at oral argument, Donnelly‘s counsel asserted that Donnelly had lacked sufficient notice of the allegations that he made false statements in his letters to Bar Counsel. Donnelly‘s counsel observed that, in the Petition for Disciplinary or Remedial Action, Bar Counsel alleged as follows: “In his responses to Bar Counsel‘s requests for responses to [Kneeland‘s and Cumberland‘s] complaints, [Donnelly] knowingly made misleading and inconsistent statements.” Donnelly‘s counsel noted that Donnelly filed a response to the Petition for Disciplinary or Remedial Action, in which he contended that the above language was vague, and moved for a more definite
Donnelly‘s counsel observed that the hearing judge stated that, during the hearing, “Bar Counsel did not specifically identify statements [in Donnelly‘s letters to Bar Counsel that] it contended were false.” Donnelly‘s counsel noted that, nonetheless, the hearing judge concluded that Donnelly had violated MLRPC 8.1 (Disciplinary Matters) and 8.4(c) (Dishonesty, Fraud, Deceit, or Misrepresentation) by making false statements to Bar Counsel. Donnelly‘s counsel observed that the hearing judge also concluded that Donnelly had also violated MLRPC 8.4(c) by executing the Attorney-Client Agreement and the Assignment of Contract Rights without authorization. Donnelly‘s counsel argued that these conclusions by the hearing judge are invalid because, in the Petition for Disciplinary or Remedial Action, Bar Counsel failed to specify any false statements by Donnelly—whether in his letters to Bar Counsel or otherwise.
Donnelly requests that we “take appropriate action to provide [him] with a fair [hearing] and full disclosure by Bar Counsel.” At oral argument, Donnelly‘s counsel clarified that he requests that we remand this attorney discipline proceeding and designate a new hearing judge, who would conduct the hearing.
In this case, we do not find persuasive the grounds on which Donnelly asserts that a new hearing is warranted. Donnelly does not bring to our attention any authority that supports his contentions that a new hearing is warranted because of alleged flaws in Bar Counsel‘s investigation, or because Bar Counsel chose not to charge another lawyer for allegedly similar misconduct. Bar Counsel‘s decision not to charge another lawyer has no bearing on the question of whether Donnelly violated the MLRPC. Although the allegation that Bar Counsel failed to conduct an independent investigation is worrisome, it is not a defense to Donnelly‘s alleged violations of the MLRPC that Bar Counsel allegedly did not conduct a thorough investigation. Any MLRPC violations that this Court concludes are supported by clear and convincing evidence are substantiated by the hearing judge‘s findings of fact, testimony from the disciplinary hearing, and other evidence in the record.
Similarly, Donnelly‘s allegations concerning Bar Counsel‘s discovery violations are troubling, but do not persuade us that a new hearing is warranted. Donnelly challenges his inability to obtain papers that Guenther forwarded to Cumberland‘s law firm—i.e., documents that pertained to Guenther‘s representation of Erickson-File and McNelis. For the most part, Donnelly does not identify the documents that he sought from Cumberland‘s law firm, or why the documents would have been helpful to his case. A document is not discoverable if it is subject to the attorney-client privilege or the work product doctrine. See E.I. du Pont de Nemours & Co. v. Forma-Pack, Inc., 351 Md. 396, 407, 414, 718 A.2d 1129, 1134, 1138 (1998).9 Because Donnelly does not explain the nature of the documents that he sought, it is impossible to
In his exceptions, Donnelly mistakenly relies on Wright v. State, 349 Md. 334, 708 A.2d 316 (1998), and State v. Booze, 334 Md. 64, 637 A.2d 1214 (1994), for the proposition that Guenther‘s testimony as a rebuttal witness merits a new hearing. Wright, 349 Md. at 354, 708 A.2d at 326, and Booze, 334 Md. at 80, 637 A.2d at 1222, are criminal cases in which this Court held that trial courts abused their discretion in allowing the State to call rebuttal witnesses under certain circumstances. Wright and Booze do not stand for the proposition that an allegedly improper rebuttal witness entitles a respondent in an attorney discipline proceeding to a new hearing. Indeed, in Wright, 349 Md. at 342, 708 A.2d at 319, and Booze, 334 Md. at 69, 637 A.2d at 1217, this Court noted that, in a criminal case, one of the factors in an analysis of whether the State improperly called a rebuttal witness is “whether the jury would be likely to give undue emphasis” to the rebuttal witness‘s testimony. (Citations omitted). Such a concern is nonexistent in attorney discipline proceedings, in which hearing judges, not juries, are the finders of fact. At oral argument, Donnelly‘s counsel relied on In re Ruffalo, 390 U.S. 544 (1968) and Bar Ass‘n of Balt. City v. Cockrell, 270 Md. 686, 313 A.2d 816 (1974) for the proposition that Donnelly is entitled to a new hearing due to insufficient notice of the allegations that he made false statements to Bar Counsel. In Ruffalo, 390 U.S. at 545, 550, 552, the Supreme Court of the United States reversed an order of disbarment where the attorney received insufficient notice of the charges against him. During an attorney discipline proceeding in Ohio, the disciplinary authority charged the attorney with an additional violation of the ethical rules. See id. at 546. Ultimately, based in part on that violation, the Supreme Court of Ohio disbarred the attorney. See id. at 547.10 In a reciprocal discipline proceeding, a United States Court of Appeals also disbarred the attorney. See Ruffalo, 390 U.S. at 545. The Supreme Court noted that, in an attorney discipline proceeding, an attorney is “entitled to procedural due process, which includes fair notice of the charge.” Id. at 550 (citation omitted). The Supreme Court observed that the attorney had no notice that he would be charged with the additional violation of the ethical rules until after he testified at the hearing. See id. at 550-51. The Supreme Court concluded that the lack of notice deprived the
In Cockrell, 270 Md. at 692-93, 313 A.2d at 819, this Court reversed a hearing judge‘s finding that an attorney had misappropriated his client‘s funds because the Bar Association of Baltimore City11 had not charged the respondent with “that particular misconduct” in the petition. In the petition, the Bar Association of Baltimore City alleged that the attorney‘s client had denied receiving any money from the attorney after a settlement was reached in the client‘s civil case. See id. at 688, 313 A.2d at 817. The judicial panel found that the attorney misappropriated his client‘s funds by cashing a check from an insurance company, and then failing to convey the funds to his client. See id. at 691, 313 A.2d at 819.
This Court observed that, under a predecessor to current
While [Maryland Rule 19-721(b)‘s predecessor] does not require that the charges be set forth in any certain form or in extensive detail, it does establish a requirement that the charges be ‘sufficiently clear and specific’ so as to make the attorney aware of what he [or she] is compelled to answer for and defend against. In fact[,] any rule which did not require this degree of specificity would violate the minimum requirements of constitutional due process mandated by Article 23 of the Maryland Declaration of Rights.
Id. at 692, 313 A.2d at 819 (citation and footnote omitted). In Cockrell, id. at 693, 313 A.2d at 820, this Court concluded that the Bar Association of Baltimore City had failed to comply with
At oral argument, Donnelly‘s counsel contended that this attorney discipline proceeding is analogous to Ruffalo and Cockrell because Donnelly lacked sufficient notice of allegations regarding false statements.
(B) Findings of Fact
Donnelly and Bar Counsel except to multiple findings of fact by the hearing judge.
Finding That Attorney-Client Agreement Was Unauthorized
Donnelly contends that the hearing judge clearly erred in finding that members who owned a majority of Solomons One did not authorize him to execute the Attorney-Client Agreement. Donnelly observes that, on August 7, 2012, Dr. Greenberg e-mailed him, stating that he wanted to move forward with litigation to secure Solomons One‘s right to build a pier, and asking whether any agreements were needed. Donnelly argues that Dr. Greenberg‘s August 7, 2012 e-mail shows that Dr. Greenberg expected to enter into an attorney-client agreement. Donnelly asserts that the evidence shows that, on August 23, 2012, he sent the Attorney-Client Agreement to the Greenbergs, who never questioned him about it. Donnelly maintains that the lack of any objection by Dr. Greenberg to the Attorney-Client Agreement shows that he authorized the agreement. In other words, Donnelly contends that Dr. Greenberg‘s silence operated as acceptance of the Attorney-Client Agreement. Bar Counsel responds that, based on Dr. Greenberg‘s testimony that he did not recall a conversation in which he authorized the Attorney-Client Agreement, it is reasonable to infer that no such conversation ever occurred. Bar Counsel argues that the hearing judge correctly determined that silence alone was insufficient for Dr. Greenberg to have authorized the Attorney-Client Agreement.
We conclude that the hearing judge did not clearly err to the extent that he found that members who owned a majority of Solomons One did not expressly authorize Donnelly to execute the Attorney-Client Agreement. That conclusion, however, does not end our inquiry. We must determine whether the hearing judge was correct in concluding that the Attorney-Client Agreement was not accepted by virtue of the circumstance that, after executing the agreement, Donnelly provided notice of the agreement to Dr. Greenberg, who received the benefit of Donnelly‘s legal services, and did not object to the Attorney-Client Agreement. Donnelly contends that, on August 23, 2012, he sent to Dr. Greenberg a cover letter describing the Attorney-Client Agreement. Donnelly argues that, upon receipt of the August 23, 2012 letter, Dr. Greenberg did not respond or object in any way to the Attorney-Client Agreement. Donnelly asserts that Solomons One—and, by extension, its members, including Dr. Greenberg—benefitted from Donnelly‘s legal services in the Pier Case.
It is undisputed that Donnelly and Steffen were in favor of the Attorney-Client Agreement, and that they signed the agreement on August 21, 2012. For there to have been a majority, at least one of the Greenbergs (who jointly owned 48 1/3% of Solomons One) and/or Erickson-File (who owned 2 1/3%) must also have been in favor of the Attorney-Client Agreement. At the disciplinary hearing, the Greenbergs, Erickson-File, and Guenther testified that they did not authorize Donnelly to sign the Attorney-Client Agreement, and the hearing judge found their testimony on this point to be more credible than Donnelly‘s witnesses. These circumstances compel the conclusion that
Although Donnelly was not explicitly authorized to sign the Attorney-Client Agreement, it does not necessarily follow that Dr. Greenberg did not later accept the Attorney-Client Agreement. If Solomons One‘s members received the signed Attorney-Client Agreement or notice of the agreement, did not object, and received the benefit of Donnelly‘s offer of legal services, then Solomons One‘s members’ silence constituted acceptance of the agreement. As this Court explained in Porter v. Gen. Boiler Casing Co., 284 Md. 402, 412, 396 A.2d 1090, 1095-96 (1979):
Silence can [] operate as acceptance. Where services are rendered under such circumstances that the party benefited thereby knows the terms on which they are being offered, if he [or she] receives the benefit of the services in silence, when he [or she] had a reasonable opportunity to express his [or her] rejection of the offer, he [or she] is assenting to the terms proposed and thus accepts the offer.
(Emphasis added) (cleaned up). Similarly, in Cochran v. Norkunas, 398 Md. 1, 23-24, 919 A.2d 700, 714 (2007), this Court stated:
Silence is generally not to be considered an acceptance of an offer unless the parties had agreed previously that silence would be an acceptance, the offeree has taken the benefit of the offer, or because of previous dealings between the parties, it is reasonable that the offeree should notify the offeror if she does not intend to accept.
(Emphasis added) (citations omitted).
In this case, the hearing judge admitted into evidence a letter dated August 23, 2012—i.e., two days after Donnelly and Steffen signed the Attorney-Client Agreement, and one day after Donnelly crossed out the language that provided for “a fixed reimbursement for attorney[‘s] fees and costs” in the amount of $12,000. The letter was signed by Donnelly, and addressed to the Greenbergs. In the letter, Donnelly stated that he had enclosed a copy of the Attorney-Client Agreement, that he had waived any upfront fees, and that his fee would strictly be on a contingency basis. Specifically, in the August 23, 2012 letter to the Greenbergs, Donnelly provided the following information about the Attorney-Client Agreement:
I also enclose a copy of the Attorney[-Client] Agreement for Solomons One[]. You will note [that] I have waived the request for payment of immediate escrow amounts for the [a]ttorney[‘s] fee and [c]osts. I have made payment for those amounts due from any recovery. I have made payment for those amounts due from any recovery. The attorney contingency fee remains in place[,] and the customary rates. In the event [that] there is no recovery, then there is no payment due from [Solomons One] or the members. I am shouldering myself the hourly attorney[‘s] fee and costs from my own pocket. Candidly, I would rather have a member sue me for recovering money for [Solomons One], th[a]n sue me for not taking any action to protect [Solomons One]‘s asset.
The hearing judge found: “Dr. Greenberg testified that he did not recall receiving a copy of [Donnelly]‘s August 23, 2012 letter, the complaint[ in the Pier Case,]
The [h]earing [j]udge is clearly erroneous that [Solomons One] did not have knowledge of the terms of the [] Attorney[-]Client Agreement and that [Solomons One] did not accept the terms thereof. The evidence proved that the Greenbergs, McNelis[,] Erickson-File, and [] Guenther, all received a copy of the August 23, 2012 [1]etters enclosing and explaining the [] Attorney-Client Agreement and Complaint filed in the Pier [Case]. . . . The evidence in Bar Counsel‘s case[-]in[-]chief prove[d] that the Attorney-Client Agreement was executed by two members of [Solomons One] on behalf of [Solomons One], and was then sent to [Solomons One‘s other] members on August 23, 2012 with cover letters, which letters were admittedly received by the members. . . . No member questioned [] Donnelly concerning the Pier [Case] or the Attorney-Client Agreement[,] despite admitting receipt of numerous communications. . . . Even assuming that Dr. Greenberg testified entirely truthfully that he could not recall what he authorized and what enclosures he received from [] Donnelly, the written communications between [] Donnelly and the members[, which] the members admit to receiving[,] specifically reference and explain the Attorney-Client Agreement. . . . [T]he [h]earing [j]udge‘s finding of fact that the Attorney[-]Client Agreement was not authorized . . . is clearly erroneous.
Donnelly‘s contention that Dr. Greenberg received his August 23, 2012 letter directly contradicts the hearing judge‘s finding that Dr. Greenberg testified that he did not recall receiving Donnelly‘s August 23, 2012 letter. Thus, we must determine whether the hearing judge‘s finding that Dr. Greenberg testified that he did not recall receiving Donnelly‘s August 23, 2012 letter is accurate.
As a threshold matter, we observe that the hearing judge did not find that Dr. Greenberg did not receive Donnelly‘s August 23, 2012 letter. Instead, the hearing judge found only that Dr. Greenberg testified that he did not recall receiving the letter. Contrary to the hearing judge‘s finding, the record reflects that Dr. Greenberg testified as follows about his receipt of the August 23, 2012 letter:
[ASSISTANT BAR COUNSEL:] That is a -- appears to be a letter dated August 23 of 2012. Do you see that?
[DR. GREENBERG:] Yes.
[ASSISTANT BAR COUNSEL:] All right. Is that a copy of a letter that you received from [] Donnelly?
[DR. GREENBERG:] Yes. Yes.
[ASSISTANT BAR COUNSEL:] All right. As of August 23 of 2012, had you told [] Donnelly that you were authorizing him to pursue the pier rights on behalf of [Solomons One]?
[DR. GREENBERG:] No.
[ASSISTANT BAR COUNSEL:] Had you told him that you had agreed to authorize him to enter into a contingency fee agreement on behalf of [Solomons One]?
[DR. GREENBERG:] No.
[ASSISTANT BAR COUNSEL:] All right. I would like to move Number 15, Your Honor. 1.15.
As the August 23, 2012 letter was being admitted into evidence, Bar Counsel advised the hearing judge that, although the existence of enclosures such as the Attorney-Client Agreement were in dispute, the August 23, 2012 letter was not. Bar Counsel stated:
[ASSISTANT BAR COUNSEL]: Your Honor, [Dr. Greenberg] is going -- well, I don‘t want to say what he is going to
testify to. There is a dispute whether or not there w[ere] enclosures with the letter, but certainly, the letter itself is not in dispute. Number 15. [HEARING JUDGE]: So you say you‘re not opposed to the letter coming in?
[DONNELLY‘S COUNSEL]: That‘s correct.
[HEARING JUDGE]: Okay. Let me read the letter so I know -- I turned to it, but I don‘t know what it says. (Reviewing exhibit.)
Okay. Interesting. This is a letter from [] Donnelly to the Greenbergs which is 1.15. It references enclosures. It re[]states -- I‘m guessing, because I don‘t know what the enclosures are – re[]states stuff that‘s in the enclosures.
Thereafter, the hearing judge stated: “If -- well, right now, there -- I guess at this point, there is a factual dispute as to whether the enclosures were in the letter or not, even though I don‘t know if that‘s directly asked.” After that, the record reflects that Dr. Greenberg again testified in a manner that indicated he received the August 23, 2012 letter, but had not previously authorized the Attorney-Client Agreement:
[ASSISTANT BAR COUNSEL]: Prior to receiving this letter on August the 23rd of 2012, had you told [] Donnelly that you had agreed to an attorney-client fee agreement with him?
[DR. GREENBERG:] No.
In his opinion, immediately after finding that Dr. Greenberg testified that he did not recall receiving the letter, the hearing judge referenced portions of the testimony from the disciplinary hearing that occurred after the above exchanges. In the first portion of the testimony that the hearing judge referenced, the following exchange occurred:
[DONNELLY‘S COUNSEL:] The question, Dr. Greenberg, is, is it your testimony that you did not receive a package with a letter, a copy of the complaint and a copy of the Attorney-Client Agreement in or around late August 2012?
[DR. GREENBERG:] You would have to show me something in that package. I don‘t recall. I mean, I‘m just saying, I don‘t -- I don‘t -- I don‘t know how to answer that question.
Is there something I can refer to in this book over here?[DONNELLY‘S COUNSEL:] Dr. Greenberg, at any time, did you notify [] Donnelly, after August 23rd, 2012, that you did not receive a letter from him or a copy of the pier rights complaint or a copy of an Attorney-Client Agreement as stated in this August 23rd, 2012 e-mail to you?
[DR. GREENBERG:] I don‘t recall.
In the second portion of the testimony that the hearing judge referenced, the following exchange occurred:
[DONNELLY‘S COUNSEL:] Is it your contention — is it your testimony — that you did not receive any enclosures with this August 23rd, 2012[] letter that you testified you received?
[DR. GREENBERG:] I don‘t recall.
[DONNELLY‘S COUNSEL:] You don‘t recall whether or not there were enclosures?
[DR. GREENBERG:] I don‘t know how to answer your question.
[DONNELLY‘S COUNSEL:] Do you remember if there were enclosures when you received this letter that is dated August 23rd, 2012?
[DR. GREENBERG:] I do not remember enclosures.
Upon review of the record, we conclude that the hearing judge clearly erred in
In sum, on August 21, 2012, Donnelly and Steffen executed the Attorney-Client Agreement. Donnelly alleges that, in separate letters dated August 23, 2012, he informed the Greenbergs and Guenther that he had enclosed copies of the Attorney-Client Agreement. In his August 23, 2012 letter to Dr. Greenberg, Donnelly described the fee
arrangement, and addressed the waiver of upfront fees under the Attorney-Client Agreement. Dr. Greenberg acknowledged that he received Donnelly‘s August 23, 2012 letter to him and Mrs. Greenberg. Significantly, Dr. Greenberg did not testify that, after receiving Donnelly‘s August 23, 2012 letter, he responded to the letter in any way or told Donnelly that he objected to the Attorney-Client Agreement.
Given that the Greenbergs testified that they did not see or receive the Attorney-Client Agreement, we cannot say that the hearing judge clearly erred in finding that Donnelly did not send, and the Greenbergs did not receive, the Attorney-Client Agreement. That does not, however, prevent us from concluding that Dr. Greenberg received notice of the Attorney-Client Agreement via Donnelly‘s August 23, 2012 letter describing the Attorney-Client Agreement. Based on the record, it is undisputed by Bar Counsel that Dr. Greenberg received Donnelly‘s August 23, 2012 letter, in which he described the Attorney-Client Agreement and the contingency fee for which it provided.
A person accepts an offer of services through silence where the person knows the terms on which the services are offered, receives the benefit of the services, and does not reject the offer despite having a reasonable opportunity to do so. See Porter, 284 Md. at 412, 396 A.2d at 1095-96; Cochran, 398 Md. at 23-24, 919 A.2d at 714. Here, in his August 23, 2012 letter to the Greenbergs, Donnelly made clear the terms on which he offered legal services. Specifically, Donnelly offered to represent Solomons One in the Pier Case in exchange for a specified contingency fee. It is undisputed that Solomons One—and, by extension, its members—received the benefit of Donnelly‘s legal services in the Pier Case.
In sum, we do not find that the hearing judge clearly erred in finding as a factual matter that Solomons One‘s members did
Finding That Assignment of Contract Rights Was Unauthorized
Donnelly excepts to the hearing judge‘s finding that members who owned a majority of Solomons One did not authorize Donnelly to execute the Assignment of Contract Rights. Donnelly contends that, based on his communications with Dr. Greenberg, he had a good-faith belief that Dr. Greenberg had authorized the Assignment of Contract Rights. Donnelly acknowledges that he did not provide the Assignment of Contract Rights to Erickson-File and McNelis, and maintains that he believed that it was in Solomons One‘s best interest to keep the Assignment of Contract Rights from Erickson-File and McNelis.
We conclude that the hearing judge did not clearly err in finding that the Assignment of Contract Rights was unauthorized. The Greenbergs, McNelis, and Erickson-File testified that they did not authorize Donnelly to execute the Assignment of Contract Rights. The Greenbergs, Erickson-File, and McNelis testified that they did not even realize that the Assignment of Contract Rights existed until McNelis found it while searching the land records of Calvert County. Although Donnelly, Davis (his secretary), and Steffen testified that, during a telephonic conversation, Dr. Greenberg authorized the Assignment of Contract Rights, the hearing judge pointed out inconsistencies in Davis‘s testimony, and found that Donnelly and Steffen were the sources of Davis‘s recollection of what the Greenbergs said. The hearing judge found that, on the issue of whether Donnelly was authorized to execute the Assignment of Contract Rights, Bar Counsel‘s witnesses were more credible than Donnelly‘s witnesses. We discern no basis on which to disturb this finding.
Finding That Complaint in Partition Case Was Unauthorized
Donnelly excepts to the hearing judge‘s finding that he was not authorized to file the complaint in the Partition Case. Donnelly contends that the only basis for the hearing judge‘s finding was the testimony of Dr. Greenberg, who could not recall multiple matters. Donnelly argues that Bar Counsel did not dispute his statement in his June 19, 2013 letter to Kneeland—namely, that he filed the complaint in the Partition Case to protect Solomons One‘s interests. Donnelly asserts that the notes of the May 17, 2013 meeting of Solomons One‘s members show that there was no vote on whether to have the Partition Case dismissed.
We conclude that the hearing judge did not clearly err in finding that the complaint in the Partition Case was unauthorized. The hearing judge observed that Steffen testified that, during a telephonic conversation, Dr. Greenberg authorized the complaint; however, the hearing judge
Finding That Filings in Pier Case Were Unauthorized
Donnelly contends that the hearing judge clearly erred in finding that he was not authorized to file documents in the Pier Case after the May 17, 2013 meeting of Solomons One‘s members. Donnelly argues that, at the meeting, members who owned a majority of Solomons One voted merely to terminate the MOU, in which Solomons One appointed Donnelly as its counsel as a general matter. Donnelly asserts that, at the meeting, there was no vote to terminate the Attorney-Client Agreement, which independently authorized him to represent Solomons One in the Pier Case. Alternatively, Donnelly maintains that, as he stated in his June 19, 2013 letter to Kneeland, his termination as Solomons One‘s counsel was pending the selection of new counsel. Donnelly contends that, without anyone else to represent Solomons One, he had a duty to appear on Solomons One‘s behalf at the June 17, 2013 hearing in the Pier Case.
Bar Counsel responds that the hearing judge correctly found that Donnelly understood that, at the May 17, 2013 meeting of Solomons One‘s members, his representation of Solomons One was terminated for all purposes. Bar Counsel observes that, on the same day, Dr. Greenberg e-mailed Donnelly, asking that he confirm that he was terminated as Solomons One‘s counsel. Bar Counsel argues that the hearing judge was not required to accept Donnelly‘s contention that he remained Solomons One‘s counsel until it retained new counsel. Bar Counsel notes that the MOU provided that, upon written notice of termination, Donnelly would immediately stop representing Solomons One.
As a threshold matter, we observe that it is undisputed that, at the May 17, 2013 meeting, members who owned a majority of Solomons One voted to revoke the MOU. According to the notes of the meeting, Kneeland asked Solomons One‘s members: “Do you want to revoke the [MOU]?” Immediately before the vote, Dr. Greenberg said: “Motion made to revoke the [MOU]. Can everyone identify themselves and vote?” The Greenbergs, Erickson-File, and McNelis voted “yes,” thus providing the necessary majority.
Neither the Attorney-Client Agreement nor the Pier Case was discussed at the meeting. Although the revocation of the MOU terminated Donnelly‘s representation of Solomons One generally, the Attorney-Client Agreement that concerned Donnelly‘s representation of Solomons One in the Pier Case was not addressed, even though, as Dr. Greenberg acknowledged, he had received Donnelly‘s August 23, 2012 letter describing the Attorney-Client Agreement and the Pier Case. The hearing judge recognized representing Solomons One in the Pier Case was “outside of the scope of” Donnelly‘s general role as Solomons One‘s counsel pursuant to the MOU. Specifically, the hearing judge stated: “Since [the Pier Case] was outside of the scope of original representation, proper consent from [Solomons One‘s] members
Findings That Donnelly Engaged in Dishonesty and Misrepresentation13
Donnelly excepts to the hearing judge‘s findings that he engaged in dishonesty and misrepresentation with regard to several matters. We address each finding separately, and sustain Donnelly‘s exceptions.
First, the hearing judge found that Donnelly was “dishonest and deceitful” in “attempting to bind [Solomons One] to” the Attorney-Client Agreement. The hearing judge also found that, in his August 27, 2013 letter to Bar Counsel, Donnelly falsely stated that the Greenbergs, Erickson-File, and McNelis had authorized the Attorney-Client Agreement. As discussed above, Donnelly provided notice of the Attorney-Client
Agreement in his August 23, 2012 letter to Dr. Greenberg, who received the benefit of Donnelly‘s legal services,14 and acknowledged receiving the letter, but did not object to the Attorney-Client Agreement. Also, Donnelly testified that he sent a letter and the Attorney-Client Agreement to Guenther, Erickson-File‘s and McNelis‘s former counsel. Guenther testified that he may have received the letter and the Attorney-Client Agreement and included it in his file, which he forwarded to the law firm of Cumberland, Erickson-File‘s and McNelis‘s new counsel. Additionally, Donnelly sent bills and updates to the members of Solomons One concerning his representation of the company in the Pier Case. Given these facts, we are not convinced that there is a sufficient basis for the hearing judge‘s finding that Donnelly engaged in dishonesty or deceit in executing the Attorney-Client Agreement, or in stating to Bar Counsel that the Attorney-Client Agreement was valid.
17, 2013 meeting of Solomons One‘s members, at which the MOU was revoked. On May 17, 2013, Donnelly‘s general role as Solomons One‘s counsel ended. Donnelly contended that the Attorney-Client Agreement provided an independent source of authority for him to continue to act as Solomons One‘s counsel in the Pier Case. As discussed above, the record establishes that Dr. Greenberg received notice of the Attorney-Client Agreement in the form of Donnelly‘s August 23, 2012 letter, and did not object to the Attorney-Client Agreement. And, Donnelly communicated with the members of Solomons One about the Pier Case by sending bills and updates. We conclude that, under these circumstances, the evidence does not support the hearing judge‘s determination that Donnelly was dishonest in continuing to represent Solomons One in the Pier Case.
Third, the hearing judge found that, in his August 27, 2013 letter to Bar Counsel, Donnelly falsely stated that he had served as Solomons One‘s counsel until May 17, 2013. The record reflects, however, that Donnelly‘s statement was accurate. At the May 17, 2013 meeting of Solomons One‘s members, the MOU was terminated, and Donnelly‘s general role as Solomons One‘s counsel ceased. Pursuant to the Attorney-Client Agreement, however, Donnelly continued representing the plaintiffs, including Solomons One, in the Pier Case, which the hearing judge acknowledged was separate from the scope of his role as Solomons One‘s counsel. There is not a sufficient basis for the hearing judge‘s determination that Donnelly engaged in dishonesty by advising Bar Counsel that he served as Solomons One‘s counsel until May 17, 2013, when he was indeed terminated as Solomons One‘s counsel on that date.
Fourth, the hearing judge found that Donnelly engaged in dishonesty or misrepresentation when he filed the complaint in the Partition Case without authorization. As discussed above, the hearing judge did not clearly err in finding that the complaint was unauthorized. That does not necessarily mean, however, that Donnelly‘s filing of the complaint was an act of dishonesty or misrepresentation. In other words, the circumstance that members who owned a majority of Solomons One did not authorize the complaint does not automatically lead to the conclusion that Donnelly acted with dishonesty or made a misrepresentation. Although it is accurate that the Greenbergs and Erickson-File testified that they did not authorize Donnelly to file the complaint, none of the witnesses testified to telling Donnelly, in advance of the filing of the complaint, that he was not authorized to do so, i.e., that such a complaint should not be filed. We decline to conclude that taking an action on behalf of a client absent explicit authorization, without any additional evidence of dishonesty, fraud, deceit, or misrepresentation, is per se an act of dishonesty.
Fifth, the hearing judge found that Donnelly was “dishonest” in executing the Assignment of Contract Rights, as he used it to “divest” Solomons One of its right to build a pier, and to “enabl[e]” himself to pursue the Pier Case without acting as Solomons One‘s counsel. Contrary to the hearing judge‘s determination, however, there was no evidence that Donnelly‘s purpose in executing the Assignment of Contract Rights was to “divest” Solomons One of its right to build a pier. Although Donnelly executed the Assignment of Contract Rights, in which Solomons One purportedly assigned him, as trustee, its right to build a pier, there was
Exceptions to Failure to Find Aggravating Factors
Bar Counsel excepts to the hearing judge‘s failure to find that Donnelly‘s misconduct was aggravated by a dishonest or selfish motive. Bar Counsel contends that Donnelly pursued the Pier Case, and executed the Assignment of Contract Rights, for the
selfish purpose of enhancing his property‘s value, notwithstanding the contrary wishes of Solomons One‘s other members. As discussed above, the evidence does not demonstrate that personal gain was the reason for executing the Assignment of Contract Rights. Indeed, the purpose of securing and protecting Solomons One‘s right to build a pier was to increase the Property‘s value—which, in turn, benefitted all of Solomons One‘s members, not just Donnelly. Although Donnelly might have also benefitted from Solomons One‘s right to build a pier due to his status as an owner of an adjoining property, this does not establish that Donnelly‘s motive was dishonest or selfish. We overrule this exception.
Bar Counsel also excepts to the hearing judge‘s failure to find that Donnelly‘s misconduct was aggravated by false statements and other deceptive practices during this attorney discipline proceeding. Bar Counsel relies on the hearing judge‘s finding that Donnelly made false statements in his August 27, 2013 letter to Bar Counsel. As discussed above, we are not persuaded that Donnelly made false statements in his August 27, 2013 letter to Bar Counsel. We overrule this exception as well.
Bar Counsel excepts to the hearing judge‘s failure to find that Donnelly‘s misconduct was aggravated by substantial experience in the practice of law. The hearing judge found that this Court admitted Donnelly to the Bar of Maryland in
Exception to Finding of Mitigating Factor
Bar Counsel excepts to the hearing judge‘s finding that Donnelly‘s misconduct was mitigated by the circumstance that the Assignment of Contract Rights did not cause Solomons One substantial financial harm. Bar Counsel acknowledges that, ultimately, Solomons One sold its right to build a pier as part of the Bankruptcy Case. Bar Counsel contends, however, that, as a result of the Assignment of Contract Rights, Solomons One incurred attorney‘s fees in an adversary case (“the Adversary Case“),16 in which the Bankruptcy Court determined that the Assignment of Contract Rights was void, and that Donnelly violated the automatic stay by filing the substitution of the trustee and other documents in the circuit court. Bar Counsel acknowledges, however, that, in the Adversary Case, the Bankruptcy Court awarded Solomons One approximately $40,000 in attorney‘s fees. We conclude that the hearing judge did not clearly err, and we overrule this exception.
(C) Conclusions of Law17
MLRPC 1.2(a) (Allocation of Authority Between Client and Lawyer)
In its entirety,
(a) Subject to sections (c) and (d) of this Rule, a lawyer shall abide by a client‘s decisions concerning the objectives of the representation and, when appropriate, shall consult with the client as to the means by which they are to be pursued. A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by a client‘s decision whether to settle a matter. In a criminal case, the lawyer shall abide by the client‘s decision, after consultation with the lawyer, as to
a plea to be entered, whether to waive jury trial and whether the client will testify.
(b) A lawyer‘s representation of a client, including representation by appointment, does not constitute an endorsement of the client‘s political, economic, social[,] or moral views or activities.
(c) A lawyer may limit the scope of the representation in accordance with applicable Maryland Rules if (1) the limitation is reasonable under the circumstances, (2) the client gives informed consent, and (3) the scope and limitations of any representation, beyond an initial consultation or brief advice provided without a fee, are clearly set forth in a writing, including any duty on the part of the lawyer under Rule 1-324 to forward notices to the client.
(d) A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.
To begin, the hearing judge concluded that Donnelly violated
In concluding that Donnelly violated
Clear and convincing evidence supports the hearing judge‘s conclusions that Donnelly violated
There is clear and convincing evidence to support the hearing judge‘s conclusion that Donnelly violated
The hearing judge determined that Donnelly violated
The hearing judge‘s conclusion that Donnelly violated
Similarly, the hearing judge‘s conclusion that Donnelly violated
The hearing judge was correct in concluding that clear and convincing evidence did not establish that Donnelly violated
Finally, the hearing judge correctly concluded that there was not clear and convincing evidence that Donnelly violated
MLRPC 1.4(a)(2) (Communication Generally)
In its entirety,
(a) A lawyer shall:
(1) promptly inform the client of any decision or circumstance with respect to which the client‘s informed consent, as defined in Rule 1.0(f), is required by these Rules;
(2) keep the client reasonably informed about the status of the matter;
(3) promptly comply with reasonable requests for information; and
(4) consult with the client about any relevant limitation on the lawyer‘s conduct when the attorney knows that the client expects assistance not permitted by the Maryland Lawyers’ Rules of Professional Conduct or other law.
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.
The hearing judge concluded that Donnelly violated
The hearing judge did not identify the specific provisions of
The hearing judge‘s conclusions that Donnelly violated
Clear and convincing evidence also supports the hearing judge‘s conclusion that Donnelly violated
The hearing judge‘s conclusion that Donnelly violated
to the right to build a pier. In the letter, Donnelly explained that the Pier Case would possibly enhance the value of Solomons One‘s property. As discussed above, at the disciplinary hearing, Dr. Greenberg acknowledged receiving the August 23, 2012 letter. Donnelly also testified that he sent a letter and attachments to Guenther, Erickson-File‘s and McNelis‘s counsel. Guenther, however, did not acknowledge receiving the letter, but testified
Given Dr. Greenberg‘s acknowledgement of his receipt of the August 23, 2012 letter and the circumstances set forth above regarding Donnelly‘s contention that he sent the letter and the attachment to Guenther, the hearing judge‘s conclusion that Donnelly violated
Finally, the record demonstrates that hearing judge correctly concluded that Donnelly “kept [Solomons One] reasonably informed about the status of the Pier [Case] by sending correspondence and pleadings to the individual members.”
MLRPC 1.5(b) and (c) (Communication of Fees)
(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment of the attorney;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.
(b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client.
(c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by section (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be responsible whether or not the client is the prevailing party. . . .
The hearing judge concluded that Donnelly violated
The hearing judge‘s analysis of
We have previously concluded that the Attorney-Client Agreement, although not expressly authorized by Dr. Greenberg or other members of Solomons One, was accepted by Dr. Greenberg based on his receipt of Donnelly‘s letter of August 23, 2012, and acceptance of the benefit of Donnelly‘s legal services.
As to the Assignment of Contract Rights and its change of the attorney‘s fees by requiring a payment of $8,000 for fees and costs in addition to the contingency fee, there is clear and convincing evidence that this conduct was a violation of
MLRPC 1.7 (Conflict of Interest: General Rule)
(a) Except as provided in section (b), a lawyer shall not represent a client if the representation involves a conflict of interest. A conflict of interest exists if:
(1) the representation of one client will be directly adverse to another client; or
(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer‘s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a conflict of interest under paragraph (a) of this Rule, a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
(4) each affected client gives informed consent, confirmed in writing.
The hearing judge concluded that Donnelly did not violate
In its exceptions, Bar Counsel contends:
To the extent the members waived any potential conflict at the time [Solomons One] was organized, the waiver would not have acted as a waiver of all conflicts of interest forever and all time. As events and circumstances changed additional information was required to be given and the informed consent of the client obtained as to the current circumstances.
Bar Counsel argues that Donnelly‘s execution of the Assignment of Contract Rights, the Attorney-Client Agreement, and representation of multiple clients in the Pier Case violated
In contrast to its exceptions, in the Petition for Disciplinary or Remedial Action, Bar Counsel alleged only that: “From August 2005 until May 17, 2013, [Donnelly] represented Solomons One as well as himself as an individual in the [P]ier [Case]. The MOU included a waiver of any possible conflict of interest presented by [Donnelly]‘s joint representation of Solomons One and himself.” In the Petition for Disciplinary or Remedial Action, Bar Counsel also alleged: “In his arguments in the bankruptcy proceedings, [Donnelly] argued against his former client‘s interests.” There is no mention in the Petition for Disciplinary or Remedial Action with respect to any alleged conflict of interest concerning Donnelly‘s conduct as to the Assignment of Contract Rights, the Attorney-Client Agreement, and his representation of multiple parties in the Pier Case. Given the waiver of the conflict of interest in the MOU, the hearing judge correctly determined that there was no violation of
MLRPC 1.8(i) (Conflict of Interest: Current Clients: Specific Rules: Proprietary Interest)
A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may:
(1) acquire a lien authorized by law to secure the lawyer‘s fee or expenses; and
(2) subject to
Rule 1.5 , contract with a client for a reasonable contingent fee in a civil case.
The hearing judge found that Donnelly violated
The Assignment of Contract Rights provided that Solomons One assigned its right to build a pier to Donnelly, who agreed to hold that right “in Trust, as Trustee, for” Solomons One‘s members. Given that the Assignment of Contract Rights authorized him to hold the right to build a pier merely as a trustee for Solomons One‘s members, Donnelly did not acquire a proprietary interest in the subject matter of the Pier Case. A “trustee” is “[s]omeone who stands in a fiduciary or confidential relation to another; esp[ecially], one who, having legal title to property, holds it in trust for the benefit of another[,] and owes a fiduciary duty to that beneficiary.” Trustee, Black‘s Law Dictionary (10th ed. 2014). The hearing judge‘s conclusion with respect to Donnelly‘s violation of
MLRPC 1.13(a) (Organization as Client)
(a) A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.
(b) If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engaged in action, intends to act or refuses to act in a matter related to the representation that is a violation of a legal obligation to the organization, or a violation of law that reasonably might be imputed to the organization, and is likely to result in substantial injury to the organization, the lawyer shall proceed as is reasonably necessary in the best interest of the organization. Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances, to the highest authority that can act on behalf of the organization as determined by applicable law.
(c) When the organization‘s highest authority insists upon action, or refuses to take action, that is clearly a violation of a legal obligation to the organization, or a violation of law which reasonably might be imputed to the organization, and is reasonably certain to result in substantial injury to the organization, the lawyer may take further remedial action that the lawyer reasonably believes to be in the best interest of the organization. Such action may include revealing information otherwise protected by
Rule 1.6 only if the lawyer reasonably believes that:
(1) the highest authority in the organization has acted to further the personal or financial interests of members of the authority which are in conflict with the interests of the organization; and
(2) revealing the information is necessary in the best interest of the organization.
(d) In dealing with an organization‘s directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization‘s interests are adverse to those of the constituents with whom the lawyer is dealing.
(e) A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of
Rule 1.7 . If theorganization‘s consent to the dual representation is required by Rule 1.7 , the consent shall be given by an appropriate official of the organization other than the individual who is to be represented, or by the shareholders.
The hearing judge concluded that Donnelly violated
In the Petition for Disciplinary Action, Bar Counsel charged Donnelly with violating
MLRPC 1.15(a) , (d) (Safekeeping Property)
(a) A lawyer shall hold property of clients or third persons that is in a lawyer‘s possession in connection with a representation separate from the lawyer‘s own property. . . . [P]roperty [other than funds] shall be identified specifically as such and appropriately safeguarded, and records of its receipt and distribution shall be created and maintained. . . .
(d) . . . Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall deliver promptly to the client or third person any funds or other property that the client or third person is entitled to receive[.] . . .
Solomons One‘s new counsel filed a Motion to Strike Donnelly‘s appearance in the Pier Case in the circuit court. In the Motion to Strike, Solomons One‘s counsel contended that, by executing the Assignment of Contract Rights, Donnelly had assigned the pier rights to himself, and had conveyed the rights to himself for his own personal benefit. Donnelly filed an opposition arguing that he held the pier right interest in trust for himself and the other members, and that the Motion to Strike was moot. In finding a violation
When the Motion to Strike was filed, the matter of whether the Assignment of Contract Rights was valid was subject to dispute. Eventually, in the Adversary Case, the Bankruptcy Court declared that the Assignment of Contract Rights was void. See Solomons One, LLC v. Vernon Charles Donnelly et al., Adversary No. 13-00580-TJC, 2014 WL 846084, at *12 (Bankr. D. Md. Mar. 4, 2014). Specifically, the Bankruptcy Court held that, “because no written consent was obtained by a majority of the members of [Solomons One], the Assignment [of Contract Rights] was not properly authorized under § 6.1(B) of the Operating Agreement[.] . . . This case highlights the need for the written consent requirement in § 6.1(B) of the Operating Agreement.” Id. at *9. The Bankruptcy Court concluded, as we have, that the Assignment of Contract Rights was not authorized by members who owned a majority of Solomons One, see id.; but the Bankruptcy Court did not conclude that Donnelly had conveyed rights to himself for his own personal benefit. Apart from the bald allegations in the Motion to Strike, there is no evidence that Donnelly assigned the pier rights to himself for personal benefit. Even if the hearing judge had found a violation of
MLRPC 1.16(a)(3) , (d) (Terminating Representation)
“[A] lawyer . . . shall withdraw from the representation of a client if . . . the lawyer is discharged.”
Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client‘s interests, such as giving reasonable notice to the client, allowing time for employment of another lawyer, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The lawyer may retain papers relating to the client to the extent permitted by other law.
The hearing judge concluded that Donnelly violated
The hearing judge‘s determination with respect to Donnelly‘s violations of
The hearing judge‘s conclusion that Donnelly violated
MLRPC 3.1 (Meritorious Claims and Contentions)
“A lawyer shall not bring . . . a proceeding, or assert or controvert an issue therein, unless there is a basis for doing so that is not frivolous, which includes, for example, a good faith argument for an extension, modification[,] or reversal of existing
With respect to the violation of
There was clear and convincing evidence that [Donnelly] continued to assert that [Solomons One], had contract pier rights and was the proper party to pursue those rights after the rights were [a]ssigned on December 4, 2012, in violation o[f]
MLRPC 3.1 . The assertion of rights on behalf of [Solomons One], after the Assignment [of Contract Rights] was executed was frivolous and baseless.
We have concluded that Donnelly violated
The hearing judge‘s conclusion that Donnelly violated
MLRPC 3.3(a)(1) (Candor Toward the Tribunal); MLRPC 8.1(a) (Disciplinary Matters); MLRPC 8.4(c) (Dishonesty, Fraud, Deceit, or Misrepresentation)
“A lawyer shall not knowingly[] make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer[.]”
An applicant for admission or reinstatement to the bar, or a lawyer in connection with a bar admission application or in connection with a disciplinary matter, shall not:
(a) knowingly make a false statement of material fact; or
(b) fail to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority, except that this Rule does not require disclosure of information otherwise protected by
Rule 1.6 .
“It is professional misconduct for a lawyer to . . . engage in conduct involving dishonesty, fraud, deceit[,] or misrepresentation[.]”
The hearing judge made separate findings with respect to
As to
As to
The hearing judge concluded that Donnelly‘s conduct with regard to the Assignment of Contract Rights, unauthorized filing of the complaint in the Partition Case, continued representation of Solomons One after May 17, 2013, and allegedly false representations regarding authorization of the Attorney-Client Agreement were violations of
The hearing judge‘s conclusions that Donnelly violated
As to the Assignment of Contract Rights, on December 4, 2012, Donnelly executed the Assignment, and, on September 3, 2013, Donnelly filed the substitution of the trustee, in which he informed the circuit court of the Assignment of Contract Rights. The nine-month delay, without more, does not establish that Donnelly engaged in dishonesty toward the circuit court. The Assignment of Contract Rights necessitated that Donnelly file a substitution of the trustee as the plaintiff in the case. The action that the circuit court needed to take as a result of the Assignment of Contract Rights was to replace Solomons One with Donnelly, as trustee, on the list of plaintiffs. Undoubtedly, Donnelly was required to file a notice of substitution of party. There is simply insufficient evidence that Donnelly‘s failure to timely do so was an intentional act of dishonesty. There was no evidence that Donnelly executed the Assignment of Contract Rights to divest Solomons One of its right to build a pier, or to enable himself to continue to pursue the Pier Case solely for his personal enrichment.
With regard to
Although the hearing judge concluded that Donnelly stated in his August 27, 2013 letter to Bar Counsel that the Attorney-Client Agreement “was authorized by the Greenbergs, McNelis, and Erickson-File,” and that this statement was materially false, the record reflects that, in actuality, in his August 27, 2013 letter to Bar Counsel, Donnelly stated: “The contingent fee agreement was agreed to by 96 2/3% of the members (Donnelly, Steffen[,] and the Greenbergs).” As such, Donnelly did not, as the hearing judge found, allege that the Greenbergs and Erickson-File had authorized the Attorney-Client Agreement in advance. In other words, Donnelly did not state that the Greenbergs and Erickson-File had concurred in the Attorney-Client Agreement contemporaneous with, or before, its making. Rather, Donnelly‘s advisement to Bar Counsel that the Greenbergs had agreed to the Attorney-Client Agreement was consistent with his having sent the letter of August 23, 2012 to Dr. Greenberg, describing the contingency fee agreement and the waiver of advance fees under the Attorney-Client Agreement. Donnelly also contended that he had attached the Attorney-Client Agreement to the August 23, 2012 letter and forwarded it to Dr. Greenberg, and that he had forwarded the same documents to Guenther, Erickson-File‘s and McNelis‘s counsel. It is undisputed that, at the disciplinary hearing, Dr. Greenberg acknowledged receipt of Donnelly‘s August 23, 2012 letter. As such, Dr. Greenberg knew of the Attorney-Client Agreement and did not object to it. Under these circumstances, we do not find clear and convincing evidence to support a violation of
The hearing judge determined that Donnelly violated 8.4(c) by filing the complaint in the Partition Case without authorization. We disagree. Other than finding that Donnelly‘s “unauthorized filing of the partition suit” constituted a violation of
MLRPC 4.2(a) (Communication with Person Represented by Counsel)
[I]n representing a client, a lawyer shall not communicate about the subject of the representation with a person who the lawyer knows is represented in the matter by another lawyer unless the lawyer has the consent of the other lawyer or is authorized by law or court order to do so.
The hearing judge concluded that Donnelly did not violate
MLRPC 4.4(a) (Respect for Rights of Third Persons)
“In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.”
MLRPC 4.4(a) .
The hearing judge concluded that Donnelly did not violate
MLRPC 8.4(b) (Criminal Act)
“It is professional misconduct for a lawyer to . . . commit a criminal act that reflects adversely on the lawyer‘s honesty, trustworthiness or fitness as a lawyer in other respects[.]”
MLRPC 8.4(b) .
In his discussion of
MLRPC 8.4(d) (Conduct That Is Prejudicial to the Administration of Justice)
“It is professional misconduct for a lawyer to . . . engage in conduct that is prejudicial to the administration of justice[.]”
MLRPC 8.4(d) . “Generally, a lawyer violatesMLRPC 8.4(d) where the lawyer‘s conduct would negatively impact the perception of the legal profession of a reasonable member of the public.” Chanthunya, 446 Md. at 602, 133 A.3d at 1049 (cleaned up).
The hearing judge concluded that Donnelly violated
MLRPC 8.4(a) (Violating the MLRPC)
“It is professional misconduct for a lawyer to[] violate . . . the” MLRPC.
MLRPC 8.4(a) .
Clear and convincing evidence supports the hearing judge‘s conclusion that Donnelly violated
(D) Sanction
Bar Counsel recommends that we disbar Donnelly, who asks us to dismiss the attorney discipline proceeding.
In Attorney Grievance Comm‘n v. Allenbaugh, 450 Md. 250, 277-78, 148 A.3d 300, 316-17 (2016), this Court stated:
This Court sanctions a lawyer not to punish the lawyer, but instead to protect
the public and the public‘s confidence in the legal profession. This Court accomplishes these goals by: (1) deterring other lawyers from engaging in similar misconduct; and (2) suspending or disbarring a lawyer who is unfit to continue to practice law. In determining an appropriate sanction for a lawyer‘s misconduct, this Court considers: (1) the MLRPC that the lawyer violated; (2) the lawyer‘s mental state; (3) the injury that the lawyer‘s misconduct caused or could have caused; and (4) aggravating factors and/or mitigating factors.
Aggravating factors include: (1) prior attorney discipline; (2) a dishonest or selfish motive; (3) a pattern of misconduct; (4) multiple violations of the MLRPC; (5) bad faith obstruction of the attorney discipline proceeding by intentionally failing to comply with rules or orders of the disciplinary agency; (6) submission of false evidence, false statements, or other deceptive practices during the attorney discipline proceeding; (7) a refusal to acknowledge the misconduct‘s wrongful nature; (8) the victim‘s vulnerability; (9) substantial experience in the practice of law; (10) indifference to making restitution or rectifying the misconduct‘s consequences; (11) illegal conduct, including that involving the use of controlled substances; and (12) likelihood of repetition of the misconduct.
Mitigating factors include: (1) the absence of prior attorney discipline; (2) the absence of a dishonest or selfish motive; (3) personal or emotional problems; (4) timely good faith efforts to make restitution or to rectify the misconduct‘s consequences; (5) full and free disclosure to Bar Counsel or a cooperative attitude toward the attorney discipline proceeding; (6) inexperience in the practice of law; (7) character or reputation; (8) a physical disability; (9) a mental disability or chemical dependency, including alcoholism or drug abuse, where: (a) there is medical evidence that the lawyer is affected by a chemical dependency or mental disability; (b) the chemical dependency or mental disability caused the misconduct; (c) the lawyer‘s recovery from the chemical dependency or mental disability is demonstrated by a meaningful and sustained period of successful rehabilitation; and (d) the recovery arrested the misconduct, and the misconduct‘s recurrence is unlikely; (10) delay in the attorney discipline proceeding; (11) the imposition of other penalties or sanctions; (12) remorse; (13) remoteness of prior violations of the MLRPC; and (14) unlikelihood of repetition of the misconduct.
(Cleaned up).
In Attorney Grievance Comm‘n v. Hill, 398 Md. 95, 103, 104-05, 919 A.2d 1194, 1198, 1199 (2007), a lawyer violated
In another matter, a client retained the lawyer to represent him in a domestic relations case. See id. at 99, 919 A.2d at 1196. At a pretrial conference before a master, the lawyer‘s client and his ex-wife reached an agreement, pursuant to which the lawyer agreed to submit a consent order within two weeks. See id. at 99, 919 A.2d at 1196. The lawyer failed to do so, despite telephone calls from the master‘s office and telephone calls and letters from the lawyer‘s client. See id. at 99-100, 919 A.2d at 1196. After six months, a circuit court ordered the lawyer to show cause why sanctions and costs should not be imposed against him. See id. at 100, 919 A.2d at 1196. The lawyer did not inform his client of the show cause order. See id. at 100, 919 A.2d at 1196. The lawyer prepared a consent order and sent it to opposing counsel. See id. at 100, 919 A.2d at 1196. Once both the lawyer and opposing counsel had signed the consent order, the lawyer submitted it to the circuit court. See id. at 100, 919 A.2d at 1196. The lawyer did not inform his client that he had prepared a consent order and submitted it to the circuit court without his client‘s review. See id. at 100, 919 A.2d at 1196. After the lawyer‘s client filed a complaint against him, on two occasions, Bar Counsel requested the lawyer‘s file on his client‘s case. See id. at 100, 919 A.2d at 1196. The lawyer failed to comply with Bar Counsel‘s requests. See id. at 100, 919 A.2d at 1196.
Neither party excepted to the hearing judge‘s conclusions that, in the first matter, the lawyer violated
In Attorney Grievance Comm‘n v. Shuler, 443 Md. 494, 508, 513, 117 A.3d 38, 47, 50 (2015), reconsideration denied (July 24, 2015), this Court concluded that a lawyer had violated
This Court concluded that the lawyer violated
This Court explained why a thirty-day suspension was the appropriate sanction, as follows:
Although occasionally missing court dates due to illness may be excusable, doing so repeatedly within a five-month period and without sufficient amelioration is not. Despite having been informally admonished by Bar Counsel of the District of Columbia, [the lawyer] once again missed a court date and failed to ameliorate her failure to appear; thus, we must do more than slap [the lawyer] on the wrist to protect the public and to impress upon [the lawyer] the importance of remedying failures to appear and managing health issues so that they do not cause violations of the MLRPC.
Id. at 510, 117 A.3d at 48. This Court conditioned the lawyer‘s reinstatement on a demonstration of mental and physical competency to resume the practice of law because the lawyer had a history of physical illnesses, and her filings in this Court “include[d] several concerning assertions[,]” such as a nonsensical contention that the attorney discipline proceeding violated her right “to practice her religious beliefs[.]” Id. at 511-12, 117 A.3d at 49.
Here, Donnelly violated
As to the injury that Donnelly‘s misconduct caused or could have caused, the hearing judge found that the Assignment of Contract Rights did not cause substantial financial harm to Solomons One, and that Donnelly was successful in the Pier Case.
We note four aggravating factors: substantial experience in the practice of law, a pattern of misconduct, multiple violations of the MLRPC, and a refusal to acknowledge the misconduct‘s wrongful nature. We note two mitigating factors: the absence of prior attorney discipline, and unlikelihood of repetition of the misconduct.21
In light of the absence of substantial financial harm to Solomons One, the lack of prior attorney discipline, and the circumstance that this conduct is unlikely to recur, we conclude that a thirty-day suspension is the appropriate sanction for Donnelly‘s misconduct. In our view, this sanction will impress upon Donnelly, and all other members of the Bar of Maryland, the necessity of obtaining clients’ authorization before taking important actions, providing important documents to clients, communicating changes in fee arrangements to clients, and withdrawing from cases and surrendering files in a timely manner after clients terminate the representation.
The instant case bears a few similarities to Hill, 398 Md. at 105, 919 A.2d at 1199, and Shuler, 443 Md. at 513, 117 A.3d at 50, in each of which this Court imposed a thirty-day suspension. Like the lawyers in Hill, 398 Md. at 104, 919 A.2d at 1199, and Shuler, 443 Md. at 508, 117 A.3d at 47, Donnelly violated
Considering all of the similarities and differences between this case and Hill and Shuler, and considering this case as a whole, we determine that Donnelly‘s misconduct warrants the sanction of a thirty-day suspension. In other words, as we expressly concluded in Hill, 398 Md. at 105, 919 A.2d at 1199, and Shuler, 443 Md. at 510, 117 A.3d at 48, we are satisfied that a thirty-day suspension will protect the public.
In closing, we take the opportunity to provide guidance concerning the circumstance of a lawyer filing with Bar Counsel a complaint against another lawyer regarding his or her conduct in ongoing litigation in which the complaining lawyer is opposing counsel.22 Under such circumstances, we believe that it would be advisable for Bar Counsel to await the conclusion of the underlying litigation before determining whether an attorney discipline proceeding is warranted.23 Following this procedure would avoid any perception that Bar Counsel and the attorney disciplinary process are being used to further the complaining attorney‘s interest in ongoing litigation. Cf. Attorney Grievance Comm‘n v. Dyer, 453 Md. 585, 597, 162 A.3d 970, 976 (2017) (“As the litigation progressed, opposing counsel . . . filed complaints against [the respondents] with the Attorney Grievance Commission, Petitioner, alleging misconduct related to the litigation.“).
Regardless of whether Bar Counsel awaits the disposition of litigation in which a lawyer allegedly engaged in misconduct, Bar Counsel should conduct an investigation that is independent of the existing litigation.24 In other words, Bar Counsel should independently determine whether any alleged misconduct occurred, rather than relying exclusively on affidavits, and/or other sources of factual allegations, that are derived from the underlying litigation. In litigation, affidavits, although accurate, may be drafted by lawyers for
For the above reasons, we suspend Donnelly from the practice of law in Maryland for thirty days. The suspension will begin thirty days after the date on which this opinion is filed.
IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY THE CLERK OF THIS COURT, INCLUDING COSTS OF ALL TRANSCRIPTS, PURSUANT TO
Notes
On application by or on behalf of a member, the circuit court of the county in which the principal office of the limited liability company is located may decree the dissolution of the limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or the operating agreement.
Consistent with Donnelly‘s assertions in the substitution of the trustee, in September 2013, in the monthly statements that detailed the legal services that he provided on Solomons One‘s behalf, Donnelly stopped referring to Solomons One as the client; started referring to Solomons One‘s members as the clients; and started referring to himself as a trustee.
Donnelly‘s counsel stated that, in a response to an interrogatory by Donnelly, Bar Counsel identified the alleged false statement in Donnelly‘s letters to Bar Counsel as his assertion that Solomons One lacked a right to build a pier. Donnelly‘s counsel asserted that Bar Counsel‘s response to this interrogatory prevented the hearing judge from making a finding that “Donnelly made a misleading or inconsistent statement” as to any other matter. Under
[u]pon a motion filed under Rule 2-432(a), the court, if it finds a failure of discovery, may enter such orders in regard to the failure as are just, including . . . [a]n order refusing to allow the failing party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence[.]
As such, at the disciplinary hearing, pursuant to
“The work product doctrine protects from discovery the work of an attorney done in anticipation of litigation or in readiness for trial.” E.I. du Pont de Nemours, 351 Md. at 407, 718 A.2d at 1134 (citation omitted). The attorney-client privilege “prevents the disclosure of a confidential communication made by a client to his [or her] attorney for the purpose of obtaining legal advice.” Id. at 414, 718 A.2d at 1138 (citation omitted).
In the opening paragraph of its opinion, the Supreme Court stated that the attorney “was ordered indefinitely suspended from the practice of law by the Supreme Court of Ohio[.]” Ruffalo, 390 U.S. at 545. Later in the opinion, however, the Supreme Court stated that the Supreme Court of Ohio “concluded that the two violations required disbarment.” Id. at 547. The sanction the Supreme Court of Ohio imposed does not affect the above analysis.
Before the Office of Bar Counsel was created, bar associations were responsible for enforcing ethical rules.
The hearing judge admitted into evidence another letter dated August 23, 2012, signed by Donnelly, and addressed to Guenther. In the letter, Donnelly stated that he had enclosed a copy of the Attorney-Client Agreement. Donnelly testified that he did not receive a response to his August 23, 2012 letter to Guenther. Guenther testified that could not recall whether he received Donnelly‘s August 23, 2012 letter to him—but, if he did, he would have put it in his file regarding his representation of McNelis and Erickson-File, which he gave to Cumberland. Cumberland acknowledged receiving Guenther‘s file, but was not asked about Donnelly‘s August 23, 2012 letter to Guenther.