Thursday, May 26, 2022

Disbarred After 50+ Years

The Maryland Court of Appeals has disbarred an attorney whose trust account operated on a "rob Peter to pay Paul" basis

In this case, we must determine the appropriate sanction to impose for an attorney’s intentional misconduct in connection with activities in which he engaged related to his attorney trust account, including taking cash disbursements, commingling personal funds with client funds, paying personal expenses directly from his attorney trust account, and maintaining negative client-matter balances. The attorney, Respondent, Clifford Baer Silbiger, admits to borrowing funds from his attorney trust account to cover expenses related to his law firm—in essence, taking an interest-free loan from his client without her knowledge or consent. The only issue in dispute is the appropriate sanction to be imposed for the misconduct. Mr. Silbiger has proven considerable mitigating factors, including an unblemished professional record that spans 50 years and an excellent reputation in the legal community. And he asserts that no client or third party was harmed in connection with the misconduct. In fact, the client was likely not even aware that Mr. Silbiger borrowed from the funds held in trust, which Mr. Silbiger claims that he always intended to repay, and did indeed repay. For the reasons set forth herein, although we have considered the facts and circumstances presented in this case, we do not determine that the circumstances surrounding the misconduct justify a deviation from the sanction of disbarment that is ordinarily warranted when considering misconduct of this nature.

His downfall began with an overdraft report

Mr. Silbiger testified that he had a thriving law practice until 2018 when he spent a considerable amount of money on marketing and advertising in an effort to compete with larger law firms. Unfortunately, this investment did not pay off, and his practice began to decline. When Mr. Silbiger’s cash flow diminished, and he was faced with office expenses, payroll, mortgages, and other expenses, he became distressed. He testified that he made the ill-fated decision to borrow funds from his attorney trust account—to “rob Peter to pay Paul”—because “I was so anguished over the fact that I couldn’t satisfy my expenses.” He made this decision despite his testimony that he held a 50% ownership in a marina that was doing exceedingly well. In fact, he testified that the marina’s operating account had “an abundance of cash” that was accessible to him “at any time,” and he “always knew that if it came to the point where I had to satisfy the money I took from the trust account, I would always have the wherewithal to pay it back through the marina . . . .” However, his “pride got in the way[,]” and he was too “embarrassed” to ask his partner in the marina if he could take funds from the marina account to meet the commitments and expenses of his law practice. Being too proud to go to his partner, Mr. Silbiger decided to use funds from his attorney trust account to cover his expenses. Mr. Silbiger asserts that it was never his intent to permanently deprive anyone of their funds and that he always had the ability to repay the borrowed funds. And in fact, he did pay all of it back.

Nonetheless

in the decades since our pronouncement of the Vanderlinde standard, we have not imposed a sanction less than disbarment where the underlying conduct involves theft or misappropriation of funds, and we decline to do so here. Our unwillingness to impose a sanction less than disbarment here is not based upon the application of a bright-line rule, and we have carefully considered the presence of the aggravating and mitigating circumstances established. Some of the most difficult attorney discipline cases for this Court are those in which the attorney, like Mr. Silbiger, has had a long and distinguished career. We have considered the credible testimony of the character witnesses who, to quote the hearing judge, all attested to Mr. Silbiger’s “unblemished record and reputation as an otherwise competent, careful attorney who is always attentive to and respectful of others and with an excellent reputation as an ethical practitioner with this subject episode being the only black mark against him in over 50 years of practice.” We have considered Mr.
Silbiger’s reputation, the genuine remorse found by the hearing judge, the candor and responsibility that he has taken, and the fact that no clients were harmed by his actions—which in essence, amount to taking a short term, interest-free loan from the client without her knowledge or consent. However, we cannot ignore that Mr. Silbiger violated one of the most sacred obligations of an attorney...

Mr. Silbiger knew that his conduct was wrong, and admits that he had other funds at his disposal that could have covered the expenses of his law firm. Instead of tapping into those funds (which would have caused him personal embarrassment with his partner in his marina venture), he took funds from his trust account to cover expenses without his client’s knowledge and consent. We cannot minimize or excuse the misconduct simply because his client was not harmed and may have never even known that it occurred. To impose a sanction less than disbarment simply on that basis would send a message to both the public and the legal profession that this Court subscribes to the adage that “it’s better to be lucky than good” when it comes to wrongfully borrowing funds from an attorney’s trust account. As the Court noted in its questions during oral argument, the client could have been harmed. We do not find that Mr. Silbiger’s significant mitigating factors justify imposing a sanction less than disbarment here.

The marina sold for $7.5 million. (Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2022/05/the-maryland-court-of-appeals-has-disbarred-an-attorney-whose-trust-account-operated-on-a-rob-peter-to-pay-paul-basis.html

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