Tuesday, July 2, 2013
The Maryland Court of Appeals has reprimanded an attorney who disregarded a writ of garnishment issued against him.
The attorney had represented the plaintiffs in a legal malpractice case. In an earlier unrelated case, a corporation obtained a judgment against his client.
He was served with a writ of garnishment prior to the settlement in the legal malpractice action. In his answer, he denied holding any property "but [stated] that he would honor the court's order should he come into the possession of any such property."
He later distributed settlement funds without notice to the creditor or its attorney and without challenging the validity of the writ.
He ended up paying $40,000 of his own money to the creditor, whose attorney also filed a bar complaint.
The court found that he violated his obligation to hold disputed funds in escrow (Rule 1.15(e)), his obligations to a tribunal (Rule 3.4(c)) and engaged in conduct prejudicial to the administration of justice.
The attorney had practiced for 47 years without blemish, lacked a selfish motive, cooperated with Bar Counsel and paid the creditor out of his own pocket.
Justice Adkins dissented and would dismiss on a finding of no ethical violation. He concluded that the funds at issue were not the property of the creditor and not subject to garnishment:
But when there is clear law that renders the writ of garnishment invalid, the lawyer has no [Rule 1.15] obligation...the fact remains - [the judgment creditor] had no valid claim to the funds...
To be sure, Respondent may not have had an altogether pure heart, in that his goal was to keep the settlement funds away from his clients' creditors, and to do so secretly...
We should always keep in mind the serious consequences for an individual lawyer as we impose even the lowest form of discipline. A reprimand imposed on a good lawyer can have a profound impact on his reputation, a commodity that is irreplaceable. As the old saying goes, "It takes a lifetime to build a good reputation, but you can lose it in a minute."