Thursday, November 3, 2022

Infected Findings Draw Reduced Sanction

The District of Columbia Court of Appeals has issued a significant opinion on the interaction between the findings of a bar hearing committee, the Board on Professional Responsibility and the Court

The Board on Professional Responsibility recommends we disbar Evan J. Krame based on his conduct as trustee of three special needs trusts. That recommendation stems from two central conclusions.

First is the Board’s conclusion that Krame “engaged in a pervasive dishonest scheme for personal gain” by knowingly making false statements to the Probate Division of the D.C. Superior Court when seeking compensation for administering the trusts. Krame’s alleged scheme related to his persistent efforts to be compensated based on a percentage of the trust funds he administered, with Krame sometimes resorting to dishonesty to evade court orders directing that he instead be compensated on an hourly basis.

Second is the Board’s conclusion that, on two separate occasions, Krame misappropriated entrusted client funds when he issued duplicate payments to himself (from the trusts) for the same services. While Krame maintained that those double payments resulted from the administrative oversights of his staff, and not any wrongdoing on his part, the Board found that Krame himself acted negligently with respect to those duplicate payments. Disciplinary Counsel goes one step further and now contends that a “culpable state of mind is not an element of misappropriation,” which it deems “essentially a per se offense,” (quoting In re Cloud, 939 A.2d 653, 660 (D.C. 2007)), so that “[a]ny unauthorized use of entrusted funds is misappropriation.”

The Court ordered an 18-month suspension.

My cursory initial review did not see any mention of the fact that the investigation of one of the matters began in 2007; the other in 2012.

The BPR Report was issued in July 2019. 

Because the BPR proposed disbarment, Respondent has been suspended on an interim basis for longer than the term of suspension that the Court imposed.

The third anniversary of the interim suspension was celebrated on October 15. 

As I read this decision - and assuming that Respondent filed the required affidavit - its effect is the reinstate him from that interim suspension.

Fifteen years from soup to nuts is - to put it charitably - nuts. 

Both sides had excepted from the BPR report

We partly agree with Krame’s contentions that the Board improperly intruded into the Hearing Committee’s role as factfinder. Namely, the Board failed to accept certain credibility findings made by the Hearing Committee, and some of the more serious violations found by the Board were infected by that misstep. As for the negligent misappropriation charges, we agree with the Board that Krame engaged in negligent misappropriation in at least one instance, and therefore do not need to resolve the parties’ disagreement about the extent to which misappropriation is a per se offense that can be found in the absence of a culpable mindset. Ultimately, based on the type and number of Rule violations we sustain, we consider the Board’s recommended sanction of disbarment to be too harsh. We instead suspend Krame from the practice of law in the District of Columbia for eighteen months.

The court noted a longstanding tension between the BPR's role in respecting hearing committee findings and its own authority to find facts

Our recognition of those limited bases for revisiting the Hearing Committee’s credibility determinations does not affect our prior rulings that credibility findings must be accepted and can have a foreclosing impact on ultimate facts and legal conclusions, so long as they are supported by substantial evidence and uninfected by legal error...

Neither we nor the Board have carte blanche to revisit the Hearing Committee’s credibility determinations simply because we disagree with them and they speak to some ultimate fact. To hold otherwise would “endanger th[e] basic allocation of decisionmaking responsibility” between the Board and the Hearing Committee. In re Anderson, 778 A.2d at 341. While our precedents have admittedly not always been clear on this point, we are not aware of any that conflict with the principles articulated above—stemming from In re Micheel, In re Temple, and In re Evans—and Disciplinary Counsel points to no genuinely conflicting authority.

Here

Had the Board accepted the Hearing Committee’s credibility finding—that Krame did not intentionally falsify his time entries, but instead tried to recreate them based on his experience and records (however misguided that attempted recreation might have been)—it would have had no choice but to accept that Krame’s conduct was no more than reckless, rather than intentional.

Violations

In sum, with respect to Krame’s oversight of the Brown and Baker trusts, we conclude that Krame violated Rules 3.3(a)(1) and 8.4(c) when he intentionally misled Judge Wolf into believing he did not have useful time records pertaining to the first fee petition filed in relation to the Brown trust; Rules 3.3(a)(1) and 8.4(c) when he intentionally did the same to Judge Wertheim pertaining to the second fee petition filed in relation to the Baker trust; Rule 3.4(c) when he defied Judge Wolf’s orders by expensing litigation costs to the Brown trust and failing to promptly repay certain of those costs; and Rules 1.5(a) and 8.4(c) and (d) when he recklessly submitted altered time entries. 

Mitigation

However, we also acknowledge the following substantial mitigating factors: Krame’s otherwise unblemished record; his cooperation with Disciplinary Counsel’s investigation; his long history of serving the disabled and elderly communities; the significant time Krame has devoted to the profession, including his service on the steering committee of the Bar’s Estates, Trusts, and Probate Section; and the amicus brief that over a dozen of Krame’s longstanding clients filed on his behalf, attesting to his valuable services, professionalism, upstanding character, and ethical conduct.

One unusual aspect of the case were two amicus briefs filed by Respondent's supporters and clients on his behalf. 

Associate Judge Deahl authored the opinion. (Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2022/11/the-district-of-columbia-court-of-appeals-the-board-on-professional-responsibility-recommends-we-disbar-evan-j-krame-based.html

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