Monday, June 24, 2019

D.C. Board Rejects Strong Sanction For Second Misappropriation

An attorney who was the beneficiary of a huge break over twenty years ago deserves another, according to a report and recommendation of the District of Columbia Board on Professional Responsibility

The prior case required the Court of Appeals to reject the BPR's proposed sanction as unduly lenient

In In re Haar, 667 A.2d 1350 (D.C.1995) (hereinafter Haar I ), we concluded that Paul S. Haar, a member of the Bar of the District of Columbia, had violated Disciplinary Rule 9-103(A)(2) then in effect, forbidding an attorney to withdraw funds that allegedly belonged to the attorney from an account holding funds belonging both to the attorney and to the client, when the attorney's right to the claimed funds “is disputed by the client.”   We remanded to the Board on Professional Responsibility for recommendation of an appropriate sanction.   See id. at 1355.   The Board has now recommended an informal admonition.   Bar Counsel excepted, calling for a ninety-day suspension.   In our view of the case, a thirty-day suspension is required.

As Yogi Berra allegedly said, it's deja vu all over again. 


This matter arises out of Respondent’s representation of two clients in immigration cases. Its outcome turns on the application of In re Mance, 980 A.2d 1196 (D.C. 2009), in which the Court clarified that a flat fee payment for legal services is considered an “advance[] of unearned fees,” required by D.C. Rules of Professional Conduct 1.15(a) and (e) to be safeguarded as client property until earned.

In the first matter (involving client Ramiro Moya), Respondent received a flat fee more than a year before the Court issued its opinion in Mance. Consistent with common practice at the time (Mance, 980 A.2d at 1206), he treated the fee as his own. After Mance was decided, Respondent did not identify or transfer any unearned portion of the Moya fee to a trust account.

In the second matter (involving client Yalcin Gur), Respondent received a flat fee, three years after the Court decided Mance. He again treated it as his own before he earned it, but did not have the client’s consent to do so.

Respondent did not contest the material facts in this disciplinary case. Instead, he argued that he did not timely know that Mance had clarified the way flat fees were to be treated, and was thus unaware that any of his actions were wrong.

The Hearing Committee found with respect to the Moya matter that Respondent was presumed to know about Mance after it was decided, that Mance required him to identify and place in trust any unearned fee in the case, and that his failure to do so constituted reckless misappropriation and commingling. In the Gur matter, the Hearing Committee found that Respondent engaged in intentional misappropriation and commingling when he treated the flat fee as his own. The Hearing Committee recommended disbarment.

We conclude that Mance did not require Respondent to audit his file and reallocate the unearned portion of Mr. Moya’s flat fee to his trust account. We thus dismiss the charges arising from the Moya matter. In the Gur matter, we agree that Respondent was obligated to hold his flat fee in trust until earned and that he engaged in misappropriation and commingling when he instead treated it as his own without his client’s consent. However, Disciplinary Counsel did not prove by clear and convincing evidence that Respondent’s failure to comply with Mance resulted from anything other than his good faith mistake of law, and consequently proved only that Respondent acted negligently.

Because Respondent violated Rules 1.15(a) and 1.15(e) in the Gur matter, we recommend that he be suspended from the practice of law for seven months, followed by one year of probation with conditions.

Ignorance of the law is no excuse - unless it is

Our decision to hold Respondent responsible for misappropriation despite his ignorance of the change in the law regarding flat fees should be understood as a message to all members of the Bar about the seriousness with which lawyers should take their obligations under the Rules of Professional Conduct. There is no mandatory ethics CLE requirement in the District of Columbia, but every lawyer — regardless of his or her employment, area of practice or level of seniority — should read, become familiar with, understand, and adhere to the Rules of Professional Conduct and the Court’s decisions applying those Rules. Failure to do so risks a Rule violation that can, as here, result in a serious sanction.

For all of these reasons we conclude that Respondent should receive a suspension longer than the typical six-month suspension imposed in similar misappropriation cases.

Add a month for an attorney whose prior encounter with the predecessor version of the exact same rule ought to have made him singularly attentive to its obligations. 

Soon-to-depart Chair Robert Bernius authored the unanimous recommendation.

One of my catchphrases when I was at Bar Counsel was that the best thing about BPR members was that their terms always ended. 

The case is In re Paul Haar and can be found here. 

The Board's attempts to minimize and/or excuse violations of a core fiduciary responsibility continue apace.

And that is not the result of the views of any single member.

Rather, it is an institutional bias that has taken root over the course of decades.

Great for lawyers; for the public, not so much.  (Mike Frisch)

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