Friday, December 30, 2016

The Second Time Around

A District of Columbia Hearing Committee has found intentional misappropriation and recommends disbarment of an attorney previously disbarred for that same misconduct in 1990 and subsequently reinstated to practice.

The complainant was not the client.

Rather, the matter involved a dispute with co-counsel over the allocation of fees in successful litigation.

The Specification of Charges alleges that following the conclusion of a successful suit in the courts of the Commonwealth of Virginia, Respondent, who was the sole custodian of the proceeds of that suit, undertook to distribute those proceeds. He made an appropriate and unchallenged distribution to the plaintiff/client, satisfying the client’s claims pursuant to the retainer.  He also made an appropriate and unchallenged distribution to the Virginia attorney who served as local counsel in the litigation.  The problem which brought this matter to the attention of Disciplinary Counsel arose in the course of making a distribution to the two District of Columbia attorneys who had first been engaged by the plaintiff and who were responsible for arranging for Respondent’s participation in the matter. Respondent, the two complainants, and Virginia local counsel were parties to the retainer agreement, but that agreement made no provision for the division of attorneys’ share among them. While local counsel was satisfied with his share, the three District of Columbia attorneys could not reach any agreement on the division of the fee.

Notably, then Bar (now Disciplinary) Counsel, had apparently not alleged misappropriation but rather charged a Rule 1.15 (d) (duty to hold disputed funds) violation.

The hearing committee nonetheless found that the attorney engaged in intentional misappropriation 

We take this view notwithstanding Disciplinary Counsel’s suggestion that we are bound by the Contact Member’s determination. There is nothing in the record available to us to suggest that the Contact Member did indeed consider the question, and even assuming the Contact Member did consider it, we respectfully disagree with his/her conclusion. Given the facts of the Specification as pled by Disciplinary Counsel and accepted by Respondent, and considering our Court’s express views on intentional misappropriation, we are merely following those to bring this matter into conformity with the law in the District of Columbia.

In considering this matter we note some anomalies. First, it is curious that Disciplinary Counsel remarks on the “punctiliousness” of Hearing Committees which, in the face of the Disciplinary Counsel’s consistent practice of pleading misappropriation cases in the alternative, that is, not specifying whether charged conduct was intentional, reckless, or negligent, here suggests that this Committee is in contradiction of that general practice of our sister Hearing Committees when we require that in this matter Disciplinary Counsel plead the “general” misappropriation charge when Disciplinary Counsel has pled the “specific” charge which addresses the conduct here. Disciplinary Counsel’s argument neglects the core problem in this and those matters, that is, the Court of Appeals has stated a strong preference for a particular sanction when misappropriation is intentional or reckless. That preference compels that a respondent be given sufficient notice of the potential for that sanction, and equal treatment requires  that any and all conduct which amounts to intentional or reckless misappropriation be treated as such.

Finally, this and every other matter before the Board deserves as prompt a resolution as possible, and such is required in fairness to the Respondent and the public we are charged to protect. Having notified the parties that we would do so and then considering the evidence as to a charge of reckless/negligent misappropriation as well as the charge of violating Rule 1.15(d) we have provided the Board and the Court with the fullest record upon which to act. By making clear herein how we would resolve this matter on the charge of Rule 1.15(d) and on the charge of Rule 1.15(a) and (c), if the Court or the Board disagrees with our view, they can address that question without need for a remand.

The above discussion refers to the process by which an attorney hearing committee member serves as "contact member" to review proposed petitions charging ethical misconduct pursuant to the court's Rule XI

A Contact Member designated under section 4(e)(5) of this rule shall have the power and duty to review and approve or suggest modifications of recommendations by Disciplinary Counsel for dismissals, informal admonitions, the institution of formal charges, and the deferral or abatement of disciplinary investigations pending the outcome of related criminal or civil litigation. In the event of a disagreement between Disciplinary Counsel and the Contact Member regarding the disposition recommended by Disciplinary Counsel, the matter shall be referred by the Executive Attorney to the Chairperson of a Hearing Committee other than that of the Contact Member for decision. The decision of the Hearing Committee Chairperson to whom the matter is referred shall be final.

I have been in a few of the "disagreements" referred to in the rule. Such interactions remain confidential, although as my late mentor Len Becker would say, the stories are occasionally juicy. 

As to handling of the disputed proceeds, the hearing committee found

Pursuant to the retainer agreement in this matter, after distributing $360,000 to [client] Ms. Bables, the attorneys’ portion of the recovery in Ms. Bables’ matter was $240,000. One of Respondent’s first distributions of that recovery was to pay Mr. Thompson, local Virginia counsel, $15,000. While Messrs. Long and Stovall have indicated they would have paid Mr. Thompson more, Mr. Thompson has never formally complained and thus is not a party to the fee dispute among the three District of Columbia lawyers which occasioned the instant proceeding. There was, as a result, a dispute over the division of the remaining $225,000. Disciplinary Counsel contends that Respondent violated Rule 1.15(d) when, despite the fact that he had been put on notice that there was a dispute concerning the division of fees between Respondent and co-counsel in the Bables matter, Leonard L. Long, Esquire, and W. Thomas Stovall, II, Esquire, over a period of months following his distribution to Ms. Bables and local counsel, Respondent distributed to himself virtually all of the remaining $225,000 of the settlement.

And as to reliance of advice from disciplinary counsel

 While in principle Respondent can be fairly said to be in compliance with Rule 1.5(e) throughout his dispute with Messrs. Long and Stovall, in fact he never claimed reliance on the Rule until he consulted with the Office of Disciplinary Counsel long after the dispute had arisen, and after he had been advised that Messrs. Long and Stovall believed the entire sum of $225,000 was in dispute. 

Key finding

As a matter of fact, we find that there was indeed a meeting of the minds on the question of the division of the fee. At least two things indicate that Messrs. Long and Stovall were correct when they testified that the understanding between the three counsel when the association began was that the fee would be divided among them in equal parts...

The Hearing Committee finds Respondent incredible in his claim that there was no agreement on the split at the beginning of the case, and Messrs. Long and Stovall testified truthfully when they said the original agreement was that the fee would be divided equally among the three. We find that Robinson’s protestations of unfairness not to the contrary, he well knew that he had an oral agreement with Messrs. Long and Stovall to split the fee evenly, and he was thus obligated to maintain $150,000 in his account as being in dispute. He clearly did not.

The case is In re Wendell Robinson.

The apparent disagreement between the hearing committee and disciplinary counsel is an interesting one. Disciplinary proceedings are not criminal in nature and the contact member is not in any sense a grand jury.

Rather, the approval process is informal and usually  (in my stale personal experience) rather perfunctory. Indeed, there are those who believe that the process should be discarded in its entirety.

Consistent with due process notice requirements, I have no doubt that an approved petition can be amended as evidence of misconduct develops without returning to the contact member for permission.

Any other approach would elevate mindless proceduralism over common sense. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2016/12/a-district-of-columbia-hearing-committee-found-intentional-misappropriation-and-recommends-disbarment-of-an-attorney-previous.html

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Comments

Thomas Stovall tried to do me the same way but it didnt work

Posted by: Ingrid Lipford | Oct 7, 2017 12:40:27 PM

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