Attorney Grievance v. KarambelasAttorney Grievance v. Karambelas
Attorney Grievance Commission v. Nicholas G. Karambelas, Misc. Docket AG No. 37, September Term, 2019. Opinion by Barbera, C.J.
ATTORNEY MISCONDUCT — DISCIPLINE — DISBARMENT
Respondent, Nicholas G. Karambelas, violated Maryland‘s Rules of Professional Conduct 1.1, 1.4, 1.15, 3.3, and 8.4. Additionally, Respondent violated D.C. Rule of Professional Conduct 1.15, and Section 10-306 of the Maryland Business Occupations and Professions Article. These violations principally arose from Respondent‘s intentionally dishonest conduct involving the misappropriation of estate funds and various misrepresentations to the Orphan‘s Court as well as to his clients. In conjunction with several aggravating factors, these violations warrant disbarment as the appropriate sanction for Respondent‘s misconduct.
Barbera, C.J.,
McDonald
Watts
Hotten
Getty
Booth
Biran,
JJ.
Opinion by Barbera, C.J.
Filed: April 1, 2021
This Court designated the Honorable Margaret M. Schweitzer of the Circuit Court for Montgomery County to serve as the hearing judge. The hearing was conducted on February 24, 2020. By an email memorandum dated February 20, 2020, Respondent informed Petitioner and the hearing judge that he could not “participate in the hearing in a meaningful way” due to his health but was not seeking “to adjourn the hearing.” On February 21, 2020, the court conducted a conference call on the record with Petitioner and Respondent to clarify the contents of the emailed memorandum. Respondent confirmed that he did not seek a continuance of the hearing but did wish to make a written submission. On Sunday, February 23, 2020, Respondent emailed to the court and Petitioner a Settlement Agreement from a civil matter tangentially related to the instant matter.
At the commencement of the February 24, 2020 hearing, the hearing judge contacted Respondent via telephone. Respondent sought to have two documents admitted at the hearing: The Settlement Agreement,3 emailed on February 23,
At the hearing, the judge heard testimony from two witnesses: (1) Dennis Katz, the grandson of Respondent‘s client, Ida Moss; and (2) Alton Burton, an attorney and certified public accountant initially hired to handle the administration of the estate of Patricia Brandon, daughter of Ida Moss and another of Respondent‘s clients. The hearing judge issued written findings of fact and proposed conclusions of law, concluding that Respondent had violated many of the aforementioned provisions of Maryland‘s Rules of Professional Conduct, D.C. Rule 1.15, as well as
Petitioner filed no exceptions to the hearing judge‘s findings of fact and proposed conclusions of law; Respondent filed exceptions only to the mitigating factors. Respondent recommended a public reprimand as the appropriate sanction; Petitioner recommended disbarment.
On October 5, 2020, we heard oral argument, and on October 6, 2020, we issued a per curiam order disbarring Respondent. Attorney Grievance Comm‘n v. Karambelas, 471 Md. 96 (2020). We explain in this opinion the reasons for that action.
I.
The Hearing Judge‘s Findings of Fact
We summarize below the hearing judge‘s findings of fact, which are supported by clear and convincing evidence.
Background
Respondent was admitted in 1980 to the Bars of New York and the District of Columbia. He was admitted to the Maryland Bar in 1999.4 During the course of events at issue in this case, Respondent maintained a law office in Washington, D.C., practicing under the firm name of Sfikas & Karambelas, LLP.
Representation of Ida Moss and the Ida Moss Estate
In and about November 1996, the Respondent met and formed an attorney-client
Ms. Moss also owned two commercial properties, one located in Wheaton, Maryland (the “Wheaton property“) and another in Waldorf, Maryland (the “Waldorf property“). Tenants occupied both properties, both of which were managed for Ms. Moss by professional rental management companies.
The 1995 Will
Ms. Moss executed a Last Will and Testament in late 1995 (the “1995 Will“), before Respondent began acting as her attorney. The 1995 Will was prepared by Ms. Moss‘s then-attorney, Lawrence L. Bell. The 1995 Will included cross-references to an “Amended and Restated Ida Moss Trust Agreement” (the “1995 Trust Agreement“), a separate document also executed by Ms. Moss in late 1995. The 1995 Trust Agreement contained amended and restated provisions for the “Ida Moss Trust,” a revocable inter vivos trust first established in 1987.
The 1995 Will contained instructions for the disposition of tangible personal property and directed that Ms. Moss‘s residuary estate be given to the then-serving Trustee of the Ida Moss Trust, “to be held, administered and ultimately distributed upon the terms and conditions and for the uses and purposes set [forth] in the [1995] Trust Agreement.”
The 1995 Will also provided for Patricia Brandon and Lawrence L. Bell, “together or the survivor of them, to serve as Co-Personal Representatives or Personal Representatives, as the case may be,” of Ms. Moss‘s estate. The 1995 Trust Agreement named Ms. Moss as Trustee during her lifetime and designated Ms. Brandon and Mr. Bell as successor co-trustees or trustee, whatever the case, upon Ms. Moss‘s “incapacity, voluntary resignation or death.”
In December 1996, Respondent met with Mr. Bell to discuss Ms. Moss‘s request that Respondent handle all her legal affairs. At or about that time, Mr. Bell transferred Ms. Moss‘s estate planning documents, including the 1995 Will, to Respondent. That transfer was confirmed in a letter by Mr. Bell to Respondent, dated December 20, 1996.
In March 1997, Ms. Moss executed a codicil (the “1997 codicil“) to her 1995 Will, revoking the appointment of Mr. Bell as co-personal representative and personal representative. In his place, Ms. Moss appointed Respondent, providing him “with all rights, powers and duties set forth” in the 1995 Will. Respondent‘s signature appears on page two of the 1997 codicil. The hearing judge found that Respondent‘s signature confirmed his actual knowledge of the existence of Ms. Moss‘s 1995 Will and related 1995 Trust Agreement.
Ms. Moss died on December 17, 2002. From November 1996 and continuing until her death, Respondent acted as Ms. Moss‘s attorney for personal and business matters. The hearing judge found that following Ms. Moss‘s death, Respondent failed to act promptly to open an estate and to carry out Ms. Moss‘s testamentary wishes
Per the 1995 Will, after payment of debts, taxes, expenses of estate administration, and the distribution of personal property, the entire residuary estate was to be distributed to the Ida Moss Trust. The 1995 Trust Agreement stipulated that there was to be a distribution of $30,000 in cash from the trust to Dennis Katz, Ms. Moss‘s grandson. The remaining balance of the trust fund was to be equally divided between Ms. Brandon and Adam Brandon. The hearing judge found that Respondent failed to take any steps to disburse the funds as specified in the 1995 Trust Agreement.
The Estate Petition, Opening of the Estate, and Respondent‘s Conduct Regarding the Estate
On January 31, 2005, more than two years after Ms. Moss‘s death, Respondent filed with the Register of Wills for Montgomery County a Regular Estate Petition for Administration on behalf of Ms. Brandon and the estate. The petition sought the appointment of Ms. Brandon as personal representative of the Estate of Ida Moss. Respondent did not disclose to the Register of Wills his knowledge that a will existed, and he did not file either the original document or the copy provided to him by Mr. Bell in 1996. Rather, Respondent checked the box that Ms. Moss died intestate, notwithstanding his knowledge of the existence of her 1995 Will.
Respondent claimed in his Response to the Petition that he never saw the original will, and due to Ms. Moss‘s several changes to her will, he never saw the final will. The hearing judge found Respondent‘s claims unpersuasive, explaining that even if Respondent never saw the original or final will, he was aware that the will existed because he signed the 1997 codicil to the 1995 Will. Moreover, despite Respondent‘s claims that such a will was never under his dominion or control, the hearing judge further found that Respondent likely knew the location of the will, or at least where a copy was located, but made no effort to locate either the original or a copy. The hearing judge determined that Respondent, by proceeding as if Ms. Moss died intestate, clearly controverted the desires of his client and made a knowing misrepresentation to the Orphans’ Court for Montgomery County (the “Orphans’ Court“).6
On January 31, 2005, the Register of Wills for Montgomery County opened the Estate of Ida Moss and issued an Administrative Probate Order appointing Ms. Brandon as personal representative. Respondent subsequently advised Ms. Brandon that it was necessary to sell the Wheaton property to pay estate taxes. Relying on that advice, and at Respondent‘s direction, Ms. Brandon sold the Wheaton property in March 2005 for $908,000. The net proceeds to be distributed to the Estate of Ida Moss totaled $852,305.50.
Respondent, however, did not make use of the Wheaton property sale proceeds to pay the estate taxes. In fact, following that sale, Respondent did not open an estate bank account or an account in the name of the Ida Moss Trust to receive the net proceeds ($852,305.50) of the sale. Instead, Respondent advised Ms. Brandon to place the funds in his attorney trust account, which, evidently, she permitted at Respondent‘s direction. Respondent subsequently provided instructions to the settlement agent to wire the net proceeds of the sale ($852,305.50) to his trust account at Wachovia
Respondent‘s Acts of Misappropriation
Once the net proceeds of the sale of the Wheaton property were deposited in his IOLTA account, Respondent began an extended course of misappropriation of the funds. Respondent made the following transfers from his trust account to a personal bank account: March 21, 2005, a transfer of $8,000; March 29, 2005, a transfer of $10,000; April 4, 2005, a transfer of $13,000; and April 25, 2005, a transfer of $6,000. In addition to those transfers, Respondent often withdrew cash and wrote several checks drawn from his trust account to pay his personal expenses, as well as those of his daughters. Respondent utilized the estate‘s money to pay for things such as his daughters’ private school tuition, his personal credit card bill payments, professional liability insurance policy payments, and generous donations to charities in his name.
Respondent maintained no client matter ledger or record to keep track of those funds entrusted to him as a fiduciary for the estate. From March 18, 2005 to August 20, 2007, the balance of Respondent‘s trust account fluctuated from deposits and disbursements made for other clients. On August 25, 2007, Respondent made another transfer, this time for $25,000 from the trust account to his personal account. Following that transfer, the remaining balance in Respondent‘s trust account was $1,596.04.
While misappropriating the proceeds from the sale of the Wheaton property, Respondent occasionally issued “income” checks to Ms. Brandon between March 2005 and May 2007. Those checks, drawn from the trust account, ranged in amount from $5,000 to $6,500. There was no obvious basis or schedule for those payments. Respondent claims to have made occasional cash disbursements to Ms. Brandon as well, but he provided no records to substantiate that claim.
Actions Taken by the Orphans’ Court
In February 2006, the Orphans’ Court entered an Order to Show Cause why Ms. Brandon should not be removed as personal representative for failure to file a timely first account and inventory for the Estate of Ida Moss. Respondent failed to appear at the show cause hearing on April 19, 2006, resulting in Ms. Brandon being temporarily removed as personal representative.
On May 19, 2006, Respondent filed a motion to vacate the April 19, 2006 order, stating that “undersigned counsel has agreed to take an active personal role in the affairs of the Estate and to close the Estate as required by law.” The hearing judge found this statement misleading given that Respondent had been legally responsible for the “affairs of the Estate” since Ida Moss‘s death.
On May 23, 2006, Respondent filed with the Register of Wills an Information Report and Inventory for the Moss Estate. In the Inventory, he stated the real property estate assets as: (1) the Waldorf property, valued at $880,000; (2) the Wheaton property, valued at $700,000 (though, no longer part of the estate having been sold); and (3) the Bethesda residence valued at $475,000. However, Respondent did not identify any tangible personal property, financial accounts, or cash assets belonging to the Estate of Ida Moss at that time.
Following a hearing held before the Orphans’ Court on July 19, 2006, the court reinstated Ms. Brandon as personal representative and directed that a First and Final Accounting be filed by August 15, 2006. On August 15, 2006, Respondent filed an Amended Inventory and the First and Final Account. The Amended Inventory
The First and Final Account that Respondent prepared and filed listed the following assets available for distribution: $1,622,460 in real property based on the valuation of the Waldorf property and the Bethesda residence, and $903,000 in cash proceeds from the Wheaton property sale. Respondent identified Ms. Brandon as “daughter and sole beneficiary EXEMPT,” attempting to suggest she was exempt from any obligation for inheritance tax. The hearing judge found that Respondent‘s classification of Ms. Brandon as the sole beneficiary was a misstatement. Under the 1995 Will, Ms. Brandon was entitled to only half of the trust fund remainder, with the other half going to Adam Brandon. Even if Ms. Moss had died intestate, Ms. Brandon was not the only prospective heir, so she was not the “sole beneficiary.”
The hearing judge determined from these facts that Respondent knowingly and intentionally failed to provide true and accurate information about the assets of the Ida Moss Estate, any changes in the assets, and the disbursements made when he filed the First and Final Account. Namely, Respondent failed to note his receipt of the funds from the sale of the Wheaton property as well as his misappropriation of those funds.
On February 15, 2007, the Orphans’ Court issued another Order to Show Cause why Ms. Brandon should not be removed as personal representative, this time for failure to perfect the First and Final Account. On April 3, 2007, Respondent filed a “Status Report on February 15, 2007 Order.” This led the Auditor for the Register of Wills to file a “Request for Rescinding Order of April 5, 2007,” which in turn caused the Orphans’ Court to issue an “Order Rescinding Order to Show Cause Why Personal Representative Should Not Be Removed on April 6, 2007.” Upon approval by the Auditor for the Register of Wills, the Orphans’ Court approved the First and Final Account in the Ida Moss Estate on June 6, 2007. No exceptions were filed, and the order became final twenty days after its entry.
The hearing judge noted other concerns regarding Respondent‘s final accounting. As mentioned earlier, the Wheaton and Waldorf properties were both commercial real estate that Ms. Moss had leased to commercial tenants. Respondent, however, never provided to the Orphans’ Court any accounting of rental income received after Ida Moss‘s death from the Wheaton property (before its sale) or the Waldorf property. Respondent also failed to account for any disbursement of estate funds to pay expenses associated with any of the properties. Moreover, the hearing judge noted that Respondent did not disclose his misappropriation of estate funds, and he never petitioned for the approval of any attorney‘s fees for himself.
Representation of Patricia Brandon
Ms. Brandon relied on Respondent‘s advice and counsel, both before and after her mother‘s death. Respondent advised Ms. Brandon regarding the management of the Wheaton and Waldorf commercial rental properties, as well as the family‘s financial affairs more generally. Respondent also drafted Ms. Brandon‘s will. The hearing judge noted that sometime after having depleted the Wheaton property sale proceeds, Respondent knowingly misrepresented to Ms. Brandon that the proceeds had been lost in the 2008 stock market crash.
In early 2011, Ms. Brandon began to suffer from various health issues, at which time her nephew, Dennis Katz, traveled from his home in Florida to Maryland to
Dennis Katz then visited the Waldorf property and discovered that Respondent, with the power of attorney granted to him by Ms. Brandon, was trying to sell the Waldorf property. Ms. Brandon was unaware of the attempted sale and subsequently executed a new power of attorney in favor of Dennis Katz, who was able to prevent the sale of the Waldorf property.
Civil Suit Against Mr. Karambelas
In May 2011, due to their concerns regarding Respondent‘s actions, Mr. Katz and Adam Brandon sought the advice of three other attorneys, Alton Burton, Robert Bunn, and Christopher Hoge. Mr. Hoge was engaged to handle a civil lawsuit against Respondent. Mr. Bunn took over as the family‘s estate attorney, and Mr. Burton examined the estate‘s tax liability due to its neglect under Respondent‘s care.
Ms. Brandon died in June of 2011, and in October of that year Adam Brandon and Dennis Katz instituted a civil suit against Respondent and his firm, Sfikas & Karambelas, LLP. The suit sought $1.5 million in compensatory damages and $1 million in punitive damages. The complaint alleged legal malpractice, breach of fiduciary duty, and wrongful conversion.
During discovery, Respondent provided Mr. Hoge with copies of checks from Respondent‘s trust account that were issued during the relevant period from 2005 to 2007. Mr. Burton reviewed the records to account for the Wheaton property sale proceeds. His analysis broke down the $852,305.50 in sale proceeds as follows: $218,261.97 was attributed to payments for the benefit of Ms. Brandon; $44,771.71 was attributed to payments for the benefit of Adam Brandon; $12,281.00 was attributed to payments for the benefit of Moss Enterprises (an entity used to collect funds and pay bills relating to the Waldorf property); and $576,990.82 was attributable to the misappropriation by Respondent.
The suit further alleged that Respondent failed to properly advise Ms. Brandon about having to pay nearly $670,000 in federal and Maryland estate taxes within nine months of Ida Moss‘s death. Due to that failure, there were inchoate tax liens filed against the Waldorf property and the Bethesda residence. Moreover, considerable interest and penalties were assessed for the failure to pay the estate taxes when due in 2003. Ultimately, the Bethesda residence had to be sold in March 2012 to preserve the equity in the home because the bank was going to foreclose on the property. The equity was then used to help pay the outstanding estate tax liabilities, as well as the costs of the civil suit. The sale forced Adam Brandon out of the family residence and into a back room of a store situated on the Waldorf property, which he converted into a one-room apartment.
Respondent argued that as the estate attorney, he was not responsible for handling any tax consequences relating to the administration of the estate. He further claimed that he encouraged Ms. Brandon to seek outside counsel for handling the estate‘s taxes; evidently, he took no other steps.
Mr. Burton, familiar with the process of estate taxation, testified at the evidentiary hearing that addressing estate taxation is a component of an estate attorney‘s responsibilities. He also testified that a competent estate attorney, at a minimum, would find a suitable tax attorney or accountant to manage the estate‘s taxes if the estate attorney was unable to do it himself. Respondent failed to act accordingly.
The hearing judge ultimately found that Respondent‘s fraudulent misappropriation of estate funds and lack of competence in administering the estate caused substantial financial detriment to the Ida Moss Estate and her intended beneficiaries. Furthermore, Respondent‘s misconduct required additional proceedings relating to the handling of the Ida Moss Estate since its reopening and the extensive efforts made in resolving the estate‘s tax issues.
The civil suit was dismissed in December 2012 when the parties entered into a Settlement Agreement. The parties settled the matter on December 6, 2013 for $850,000, not including interest, to be paid in full by July 1, 2018. The Settlement Agreement provided that Respondent‘s malpractice carrier pay $500,000 to the beneficiaries of the Estate of Ida Moss, and Respondent pay the remaining $350,000 pursuant to a payment plan. Respondent complied with the payment plan and made the final payment on December 21, 2015.
The hearing judge, however, determined that the settlement was not full restitution, stating it was clear that the $500,000 paid by the malpractice carrier was meant to compensate the plaintiffs for Respondent‘s mishandling of the estate; whereas, the $350,000 was a settlement of the monies that Respondent misappropriated. Thus, the hearing judge did not find that the settlement amount fully compensated the Estate of Ida Moss for the misappropriated monies of over $576,990.82. Furthermore, the hearing judge determined that the hearing testimony showed that the plaintiffs incurred significant litigation costs in bringing suit, which further contributed to their losses due to Respondent‘s actions.
II.
The Hearing Judge‘s Conclusions of Law
The hearing judge determined that Respondent violated Rules 1.1, 1.4(a) and (b), 1.15(a) and (d), 3.3(a), and 8.4(a)–(d). Additionally, Respondent violated D.C. Rule of Professional Conduct 1.15(a) and (c). The hearing judge lastly determined that Respondent violated
Neither Respondent nor Petitioner filed exceptions to the hearing judge‘s findings of fact and conclusions of law. Respondent filed exceptions, though, relating to mitigating factors.
III.
Standard of Review
This Court has “original and complete jurisdiction” in attorney disciplinary proceedings and “conducts an independent review of the record.” The hearing judge‘s findings of fact are left undisturbed unless those findings are clearly erroneous or either party excepts to them. . . . We review the hearing judge‘s conclusions of law without deference.
Attorney Grievance Comm‘n v. Edwards, 462 Md. 642, 682–83 (2019) (citations omitted). As is the case here, where no exceptions to the findings of fact are filed, “the Court may treat the findings of fact as established.”
IV.
Discussion
We turn now to the hearing judge‘s conclusions of law. For reasons explained below, we agree with the hearing judge that Respondent violated the following Rules of Professional Conduct, as well as D.C. Rule of Professional Conduct 1.15 (safekeeping of property), and
Rule 1.1 Competence
Rule 1.1 provides that “[a] lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”
We have held that a “failure to apply the requisite thoroughness and/or preparation in representing a client is sufficient alone to support a violation of Rule 1.1.” Attorney
Grievance Comm‘n v. Guida, 391 Md. 33, 54 (2006). Furthermore,
The record is clear that Respondent violated
Respondent attempts to explain that he never saw an original or final will because Ms. Moss, and later Ms. Brandon, maintained all documents. Respondent‘s explanation does not justify why he incorrectly stated that Ms. Moss died intestate. Regardless of his never seeing the
Respondent continued to violate
Respondent claims he was not tax counsel for Ms. Brandon and should not be at fault for the estate‘s tax troubles. However, Mr. Burton, attorney and certified public accountant, testified at the evidentiary hearing that ensuring that both estate taxes and tax returns are filed is something a reasonably competent estate attorney would do. Even if Respondent was not competent to handle the tax issues himself, the fact that he advised Ms. Brandon to sell the Wheaton property to pay for estate taxes and counseled her in that sale shows, at a minimum, that he had an obligation to confirm the tax issues were being handled and not disregarded. Respondent‘s failure to competently advise Ms. Brandon ultimately led to substantial tax liability issues for the estate, the process of resolving those issues being “lengthy and grueling.” In fact, the estate‘s tax issues were not resolved until approximately 2016.
Respondent also failed to advise Ms. Brandon of the requirement to file a timely First Account and Inventory in the estate of Ida Moss. Furthermore, Respondent, without explanation, failed to appear at the show cause hearing on April 19, 2006 causing Ms. Brandon to be temporarily removed as personal representative.
Respondent‘s failure to provide competent representation continued when he included various misstatements and omissions in documents he filed with the Register of Wills. First, in filing the Information Report and Inventory for the estate, Respondent failed to include material information such as tangible personal property, financial accounts, or cash assets of the estate. Second, he wrongfully stated that Ms. Brandon was the sole beneficiary of the estate in the First and Final Account. Third, he failed to note changes of estate assets and disbursements made from those assets in the First and Final Account, including his receipt of the Wheaton
These facts show by clear and convincing evidence that Respondent failed to provide competent representation under
Rule 1.4(a) and (b) Communication
(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; . . .
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.
This Court has determined that
Respondent violated
Unfortunately, Respondent‘s failure to keep Ms. Brandon reasonably informed continued into 2011, when it came to light that he was attempting to sell the Waldorf property without Ms. Brandon‘s knowledge or consent. Such conduct is a clear
Rule 1.15(a) and (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. Funds shall be kept in a separate account . . . . Complete records of the account funds and of other property shall be kept by the lawyer and shall be preserved for a period of at least five years after the date the record was created.
. . . .
(d) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. 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 and, upon request by the client or third person, shall render promptly a full accounting regarding such property.
Respondent violated
Under the facts of this case, Respondent violated
Respondent also violated
Respondent violated
Rule 3.3(a) Candor Toward the Tribunal
(a) A lawyer shall not knowingly:
(1) 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[.]
The facts found by the hearing judge undoubtedly show that Respondent was knowingly dishonest with the Orphans’ Court on multiple occasions. Respondent made his first knowingly false statement when he stated that Ms. Moss died intestate, thereby indicating she had no will. As previously discussed, Respondent had knowledge that a will existed given that Ms. Moss‘s former attorney transferred the estate planning documents to Respondent, and Respondent signed the 1997 will codicil. In accordance with that misrepresentation, Respondent withheld the 1995 Will from the Register of Wills.
Respondent continued to violate
Respondent again intentionally provided inaccurate information when he filed the First and Final Account on August 15, 2006. He failed to note his receipt of the funds from the Wheaton property sale, his misappropriation of those funds, and any disbursements he made to Ms. Brandon. Respondent also incorrectly stated that Ms. Brandon was the sole beneficiary of the estate. Under the 1995 Will and Trust Agreement, Ms. Brandon was entitled to only half of the remainder of the trust fund. But even if Ida Moss had died intestate, Ms. Brandon would not have been the sole beneficiary because she was not the only heir. These intentional misstatements and withholdings from the Orphans’ Court are in clear violation of
Rule 5.5(a) Unauthorized Practice of Law
Rule 8.4(a)–(d) Misconduct
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Maryland Lawyers’ Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;
(b) commit a criminal act that reflects adversely on the lawyer‘s honesty, trustworthiness or fitness as a lawyer in other respects;
(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
(d) engage in conduct that is prejudicial to the administration of justice[.]
As discussed above, Respondent has violated various other Rules, thereby violating
We have held that an intentional misappropriation of client funds “is an act infected with deceit and dishonesty.” Attorney Grievance Comm‘n v. Cherry-Mahoi, 388 Md. 124, 161 (2005) (quoting Attorney Grievance Comm‘n v. James, 385 Md. 637, 666 (2005)). Thus, it has been consistently determined that an attorney‘s intentional misappropriation of client funds violates
Moreover, “[when] an attorney knowingly makes a false statement, he necessarily engages in conduct involving misrepresentation,” in violation of
Respondent also lied to Ms. Brandon when he told her the remaining sale proceeds of the Wheaton property were lost in the 2008 stock market crash when, in reality, he had misappropriated those funds. Lastly, Respondent was deceitful in his attempt to sell the Waldorf property without Ms. Brandon‘s knowledge or consent. Through these various acts, Respondent has certainly violated
As mentioned previously, Respondent misrepresented the reason for the sale of the Wheaton property, knowingly misappropriated those funds entrusted to
Respondent‘s conduct and misrepresentations led to harmful consequences for Ida Moss‘s family, the impact of which has been felt over the course of many years. Some of the harmful consequences, as noted by the facts found by the hearing judge, include: the sale of the family home to pay estate taxes, which forced Adam Brandon to move into a back room at one of the commercial properties and convert it into an apartment; the Moss estate having to be reopened and treated as an intestate estate, whereupon beneficiaries not specified in Ida Moss‘s will were able to receive parts of the estate—causing further litigation for the family; and vast estate tax issues, the resolution of which was not obtained until late 2016.
In sum, we find that Respondent‘s conduct negatively impacts the public‘s perception of the legal profession, and we agree with the hearing judge‘s assessment that Respondent‘s conduct is prejudicial to the administration of justice in violation of
D.C. Rule 1.15(a) and (c) Safekeeping Property
Respondent is held responsible under
Business Occupations & Professions Article Section 10-306 (Misuse of trust money)
The plain language of
V.
Aggravating and Mitigating Factors
We next address the presence of any aggravating or mitigating factors, as such an analysis is necessary in determining the proper sanction. Attorney Grievance Comm‘n v. Thomas, 445 Md. 379, 397 (2015) (citation omitted). The Respondent bears the burden of proving any mitigating circumstances by a preponderance of the evidence. Attorney Grievance Comm‘n v. Joseph, 422 Md. 670, 695 (2011). Bar Counsel must prove the existence of any aggravating factors by clear and convincing evidence. Edwards, 462 Md. at 708.
We consider the following mitigating factors when determining the appropriate sanction:
- absence of a prior disciplinary record;
- absence of a dishonest or selfish motive;
- personal or emotional problems;
- timely good faith efforts to make restitution or to rectify consequences of misconduct;
- full and free disclosure to the disciplinary board or a cooperative attitude toward proceedings;
- inexperience in the practice of law;
- character or reputation;
- physical disability;
- mental disability or chemical dependency;
- delay in disciplinary proceedings;
- imposition of other penalties or sanctions;
- remorse;
- remoteness of prior offenses; and
- unlikelihood of repetition of the misconduct.
See Attorney Grievance Comm‘n v. Sperling, 459 Md. 194, 277-78 (2018) (citation omitted) (reformatted).
In his Response to the Petition, Respondent argued that the following mitigating factors applied: absence of prior disciplinary record, absence of dishonest or selfish motive, restitution, cooperation with bar counsel, remoteness, and unlikelihood of repetition of misconduct. The hearing judge found mitigation in that the Respondent has no prior disciplinary history. However, upon examining the evidence, the hearing judge determined that Respondent failed to prove any other mitigation by a preponderance of the evidence. Respondent argues that the hearing judge erred in that determination and filed exceptions to all four of the mitigating factors he advances: remoteness, restitution, no prior disciplinary action, and unlikelihood of repetition of the misconduct. Respondent did not need to except to the factor of no prior disciplinary action because the hearing judge found that mitigating factor to exist. We will not disturb
As previously noted, Respondent‘s case in chief at the evidentiary hearing consisted of only the Settlement Agreement and the “Factual Clarifications” section of his Response. We look to that evidence in making our determinations.
First, we agree with the hearing judge that Respondent has not provided evidence showing the absence of a dishonest or selfish motive. The evidence before us indicates, rather, that Respondent‘s conduct was dishonest and selfish. He misappropriated a substantial amount of client funds for personal expenses, demonstrating his selfish motive. Moreover, he hid his conduct from his clients and the Orphans’ Court and lied about his actions, which undoubtedly constitutes dishonesty.
Respondent also points to the mitigating factor of restitution, arguing it was satisfied by the December 6, 2013 settlement for $850,000. We are not persuaded. To start, we consider the settlement amount to have been only partial restitution. Although the total settlement amount exceeded the roughly $576,990.82 that Respondent misappropriated, the $500,000 that the insurance company paid was solely attributed to Respondent‘s gross mishandling of the estate. The remaining $350,000 that Respondent paid was attributed to his theft of the Wheaton property sale proceeds. That sum does not equate to the total amount Respondent misappropriated.
Moreover, as the hearing judge correctly found, Respondent‘s partial restitution was neither timely nor in good faith. See Attorney Grievance Comm‘n v. Miller, 467 Md. 176, 225 (2020) (noting how repayment characterized as a sanction or penalty was not made in good faith to remedy the attorney‘s misconduct). The hearing judge found that Respondent did not pay the $350,000 out of an altruistic need to rectify his misconduct, but rather because Respondent was sued following the discovery of his wrongdoing years later and entered into the Settlement Agreement to end that suit and avoid greater monetary liability. As we have previously stated, “reimbursement after inquiry . . . does not serve to mitigate [Respondent‘s] conduct.” Attorney Grievance Comm‘n v. Whitehead, 405 Md. 240, 265 (2008). Accordingly, we overrule Respondent‘s exception and find that this mitigating factor is absent.
We agree with the hearing judge that Respondent has not offered any evidence that he cooperated with Bar Counsel throughout the proceedings. While Respondent did call in at the beginning of the evidentiary hearing, he did not otherwise participate in the proceeding. Moreover, as previously mentioned, Respondent‘s case consisted of only his Factual Clarifications from his Response to the Petition and the Settlement Agreement. Thus, we cannot make that finding.
Respondent maintains that the factor of remoteness applies here. We disagree. Respondent contends that his misrepresentations to the Orphans’ Court were made between 2006 and 2007, his misappropriation of funds occurred between 2006 and 2007, and the civil case settled in 2013. However, Respondent does not provide any case law to support his interpretation of remoteness. Moreover, we find that he misunderstands this factor. This Court has indicated that the mitigating factor of remoteness speaks to prior disciplinary proceedings for past Rules violations, not remoteness of the underlying events. Attorney Grievance Comm‘n v. Sperling, AG No. 6, slip op. at 57-58 (Md. Mar. 1, 2021) (rejecting the attorney‘s argument that “remoteness” refers to the lapse of time between the underlying misconduct and the filing of the Petition for Disciplinary
The hearing judge astutely pointed out that if remoteness pertained to distance in time of underlying misdeeds, then the Court would essentially be rewarding attorneys for their ability to hide misconduct from the public and this Court. Such an interpretation would be counter to the core purpose of a disciplinary proceeding: to protect the public and prevent wrongdoing by attorneys. Sperling, 459 Md. at 274-75 (citation omitted) (explaining that the Court imposes sanctions to protect the public and to deter lawyers from violating the Rules). We will not interpret the factor of remoteness as Respondent wishes us to. The exception is overruled.
Lastly, Respondent asks that we find that he is unlikely to repeat his Rules violations. Respondent has provided no evidence that would prompt us to make that finding. Respondent merely states he has practiced law for forty years without being subject to disciplinary action. This is insufficient support, and in fact does not do Respondent any favors. The fact that he has practiced for such an extended period of time and yet still committed the discussed misdeeds does not convince this Court that his experience will prevent further misconduct.
The aggravating factors we consider when determining the appropriate sanction include:
- prior attorney discipline;
- dishonest or selfish motive;
- pattern of misconduct;
- multiple Rules violations;
- bad faith obstruction of the disciplinary proceeding by deliberately failing to comply with rules or orders;
- submission of false evidence, false statements, or other deceptive practices during the disciplinary process;
- refusal to acknowledge the wrongful nature of conduct at issue;
- the vulnerability of the victim;
- substantial experience in the practice of law;
- display of indifference to making restitution;
- illegal conduct; and
- likelihood of repetition of the misconduct.
Sperling, 459 Md. at 275 (citation omitted) (reformatted).
Petitioner has alleged the existence of evidence to support several of the above listed aggravating factors in Respondent‘s case. The hearing judge found the following to exist by clear and convincing evidence: dishonest or selfish motive, pattern of misconduct, multiple Rules violations, refusal to acknowledge wrongfulness of conduct, substantial experience in the practice of law, and illegal conduct. Based upon our independent review of the record, we agree that those aggravating factors are supported by clear and convincing evidence.
First, Respondent had a dishonest and selfish motive in acquiring and misappropriating estate funds entrusted to him while representing both the estate and Ms. Brandon. His selfish motive led him into further misconduct involving not only his own clients, but the Orphans’ Court as well. Respondent‘s selfish motive is evidenced by his misuse of the estate funds, entrusted to him as a fiduciary, to pay for his own personal expenses.
Second, a pattern of misconduct is evidenced by Respondent‘s multiple instances
Third, as demonstrated in our analyses of the various Rules violations, Respondent engaged in multiple violations under our Rules of Professional Conduct,
Fourth, we find that Respondent has not fully acknowledged the wrongfulness of his conduct. Upon review of the evidence, Respondent neither admitted responsibility for his wrongdoing, nor acknowledged the long-lasting impact his behavior had on the Ida Moss Estate and Ms. Moss‘s family. Rather, in his Response, he defended some of his actions by stating he “did not serve as tax counsel” and was therefore, not responsible for the numerous and long-lasting tax issues the estate had to resolve. Moreover, Respondent seems to argue that his payment of the settlement was full restitution and made Ida Moss‘s family whole again. However, as previously discussed, this is not the case. At most, the settlement was partial restitution of some of the money Respondent had misappropriated. And again, we do not find that repayment as a result of the lawsuit and opting for settlement to avoid greater monetary liability equates to taking full responsibility for one‘s transgressions.
Fifth, Respondent‘s forty years of legal practice is a clear indicator that he had substantial experience and knowledge to conform his behavior to the Rules of Professional Conduct, and that he knew the wrongfulness of his actions.
Finally, the misappropriation of estate funds entrusted to him as a fiduciary constitutes illegal conduct.
VI.
The Sanction
The remaining issue to be resolved is the appropriate sanction to be imposed. It is well established that the purpose of attorney disciplinary proceedings is to protect the public and preserve the public‘s confidence in the legal profession, not to punish the lawyer. See, e.g., Attorney Grievance Comm‘n v. Good, 445 Md. 490, 513 (2015). Determining the appropriate sanction depends on the facts and circumstances of the case, including any aggravating and mitigating factors. Id. This Court also aims to issue a sanction that is “commensurate with the nature and gravity of the violations and the intent with which they were committed.” Id. (quoting Attorney Grievance Comm‘n v. Stein, 373 Md. 531, 537 (2003)).
Here, disbarment is the appropriate sanction for Respondent‘s numerous and severe violations under our Rules of Professional Conduct,
Respondent‘s misappropriation of client funds entrusted to his care in and of itself warrants disbarment. Attorney Grievance Comm‘n v. Sullivan, 369 Md. 650, 655-56 (2002) (citations omitted) (“misappropriation, by an attorney, of funds entrusted to his or her care . . . ordinarily will result in disbarment“). Respondent‘s pattern of dishonesty also warrants disbarment. Joseph, 422 Md. at 707 (“ordinarily, disbarment
For the reasons set forth in this opinion, we issued a per curiam order disbarring Respondent on October 6, 2020. Attorney Grievance Comm‘n v. Karambelas, 471 Md. 96 (2020).
Notes
We provide this guidance for the benefit of future attorney disciplinary proceedings: In the event that the date of a respondent‘s bar admission is a relevant fact in such a proceeding, Bar Counsel or the respondent should present the hearing judge with evidence of this Court‘s records of admission and suggest that the hearing judge take judicial notice of those records during the hearing.