ATTORNEY GRIEVANCE COMM'N v. AGBAJE
Issue: What sanction should the Court impose upon an attorney who entered into a real estate investment agreement with a client who lacked experience in real estate?Holding: By taking a large sum of money from a client to invest in real estate without advising the client of the risk relating to the investment or keeping her informed of needed repairs, the attorney's dishonest and deceitful misconduct warranted disbarment.
Alleged Violations: Maryland Lawyers' Rules of Professional Conduct 1.8(a) (conflict of interest); 8.4(a), (b), (c), and (d) (misconduct).
Citation: 438 Md. 695 (2014)
Opinion
PANEL: BARBERA, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, MCDONALD, WATTS, JJ.Opinion by BARBERA, C.J.
I believe [Assistant Bar Counsel] has adequately provided Answers to Interrogatories as required by the Rules. . . . [T]hey are entitled to give you information that is exclusively within their possession. They have guided you as to where you could get certain information that was not in their possession, [and] told you how to contact Ms. Popoola. They do not represent her. . . . [T]hey don't have . . . her address. You could [have] easily obtained that or at least made an attempt to obtain that based on the information that was provided to you, mainly her phone number, her email address as well as the assurance of Counsel . . . that she was going to be cooperative in . . . coordinating with Ms. Popoola to speak with you for a deposition without the need of subpoena or a notice. And you've chosen not to avail yourself of that. And that is your right to do. . . . But I do not find it to be a discovery violation.Shortly before the commencement of the evidentiary hearing, the Commission, acting through Assistant Bar Counsel, filed a motion to permit Ms. Popoola to testify at that hearing by video conference. Assistant Bar Counsel explained that Ms. Popoola lived in England and her personal appearance at the hearing could not be secured by subpoena. Furthermore, Assistant Bar Counsel asserted that requiring Ms. Popoola to travel internationally in order to appear in person would impose upon her an undue hardship. Assistant Bar Counsel proposed allowing Ms. Popoola to testify over Skype - a real-time video conferencing program that she could access on her home computer - and assured the hearing judge that no other individual would be present in the room during her testimony. The hearing judge Page 5 granted the motion, without explanation and over Respondent's opposition. During the two-day evidentiary hearing, the hearing judge received evidence primarily through the testimony of Ms. Popoola and Respondent as well as various exhibits submitted by both parties. Noteworthy for present purposes, before Ms. Popoola commenced her testimony over Skype, she took an oath to tell the truth. In addition, at Respondent's request, she surveyed the room from which she was testifying, with the video camera, to satisfy the hearing judge that she was not receiving improper assistance. At the conclusion of the hearing, the hearing judge took the case under advisement. Pursuant to Maryland Rule 16-757(c), the hearing judge was required to file his findings of fact and conclusions of law no later than 45 days after the conclusion of the hearing. After that deadline had passed, and his findings and conclusions had not been docketed by the Clerk of the Circuit Court, the Commission, acting through Assistant Bar Counsel, filed in this Court a motion to extend the 45-day deadline. Assistant Bar Counsel asserted that the hearing judge had completed his findings and conclusions and transmitted them to the Clerk's office before the deadline, but that office had not docketed them timely due to a backlog. Assistant Bar Counsel further noted that the motion for an extension had been filed "with the knowledge and approval of [the hearing judge]." This Court granted the motion, thereby accepting for filing the hearing judge's findings and conclusions, which we set forth below.
The hearing judge determined that Ms. Popoola's testimony was credible and Respondent's testimony, in its entirety, was not credible. He made the following factual findings.
This is a partnership agreement between Taiwo Agbaje and Dolapo Popoola for investment in real estate in accordance with the following:
Business Model Acquire 2 houses on assignment from record owner located at (1) 308 East Lorraine Ave., Baltimore, MD 21208 for $150,000 as is, with the investor-assignee to pay all taxes and liens and (2) 1209 James Street, Baltimore, MD 21223 for $140,000 as is, with the investor-assignee to pay all taxes and liens.
Dolapo will invest in the partnership the sum of $20,000 each for repairs to the two properties and payment of any liens.
Taiwo Agbaje to manage the repairs and has secured the pricing on the homes, will prepare all the legal paperwork.
It is expected that the properties upon completion of repairs will be sold asPage 8 follows:
1. 308 East Lorraine Ave, Baltimore, MD 21208 comp market value rehabbed home to date is $215,000
2. 1209 James Street, Baltimore, MD 21223 comp market value rehabbed home is in the neighborhood of $200,000 more or less.
The repairs will take 3 months and the houses will be sold in three months. From the proceeds of the sale, we will pay the record owner the contract amount and the net profit, will be shared equally after deducting each partner's investment outlay.
Scenario: Assume $220,000 sale for 308 east Lorraine.
Sale Price: $220,000 Owner: $150,000 Gross Profit $70,000 Refund of Dolapo's investment $20,000 Net Profit $50,000 Dolapo's share $25,000 Taiwo's share $25,000 Real estate taxes and liens will also be paid from gross profits. This is a real estate investment partnership not a loan or securities investment.This is the entire agreement of the parties.
After
executing the agreement, Ms. Popoola wrote Respondent a check in the
amount of $40,000. At the time she entered into the partnership
agreement, Ms. Popoola, in
the words of the hearing judge, "was a current client of Respondent"
and
"[o]ther than the sale of her residence in Great Britain . . . had no
prior
real estate or investment experience." Furthermore, the hearing judge
found
that Respondent did not advise Ms. Popoola before she
Page 9
signed the agreement that: (1) she could have, or should have,
consulted
independent legal counsel and/or taken additional time to consider the
agreement; (2) real estate investments have significant risks and
profits
are not guaranteed; (3) the James Street property was in foreclosure
and
Respondent therefore did not have clear title to the property; (4)
Respondent had power of attorney for his cousin's interest in the
Lorraine
Avenue property; and (5) Respondent could personally profit as the
seller,
realtor, and auctioneer of the two properties. At some point after
entering into the partnership agreement, Respondent
hired a contractor named Karl McDonald to perform repairs on the
Lorraine
Avenue property. McDonald, however, abandoned the project before its
completion because of a dispute with Respondent over payments. Some
repairs
were made to the Loraine Avenue property. Respondent, however, did not
produce receipts for the payments he allegedly made to contractors, nor
did
he produce receipts for the supplies those contractors allegedly used
to
perform repairs. On February 1, 2008, Respondent, exercising his
authority
under the power of attorney, sold the Lorraine Avenue property, on his
cousin's behalf, to one of his relatives for $180,000. Respondent did
not
advise Ms. Popoola that he was selling the property to a relative. Ms.
Popoola eventually received the $20,000 she had invested in the
property,
plus a $2,000 profit. Respondent produced no evidence demonstrating
that any repairs had been
made to the James Street property or that he had used any portion of
Ms.
Popoola's $20,000 investment to prepare the property for sale. At some
point
in 2008, the property was
Page 10
foreclosed upon. Ms. Popoola did not receive any return on her
investment. Ms. Popoola regularly called and emailed Respondent
requesting updates on
the progress of the repairs to the two properties before they were sold
or
foreclosed upon. Respondent rarely responded to those requests and,
when he
did, his answers were, in the words of the hearing judge, "persistently
misleading." Based upon these factual findings, the hearing judge
concluded, by a clear
and convincing evidence standard of proof, that Respondent violated
MLRPC
1.8(a) and MLRPC 8.4(a), (b), (c) and (d). The hearing judge explained
his
legal conclusions, as follows:
Rule 1.8 Conflict of Interest: Current Clients: Specific Rules
This court, having found facts as described above, concludes, by clear and convincing evidence, that Respondent violated Rule 1.8(a)(1), (2) and (3). The facts show that Respondent was actively engaged in pursuing Permanent Resident status for Popoola at the time that he entered into discussions with her about investing in his real estate business. As such he was obligated to fully disclose to her each detail of the proposal. He never disclosed to her what percentages he was expecting to collect for acting as the real estate broker or the auctioneer. He did not disclose to her that as the owner of the James Street property, and with the Power of Attorney for the Lorraine Avenue property, he had the authority to reduce the profitability of her investment to favor himself. Among other things, he could set the sales price, commission percentages and accept or reject offers. Their levels of experience were vastly disproportionate. Respondent had been actively engaged in the buying and selling of real estate for some time, while Popoola had no prior experience in this area. Respondent never told Popoola that the 2 properties that he directed her to, especially James Street, were distressed by liens, title issues and badly in need of repair. Instead he presented a proposal to Popoola that appeared to guarantee a windfall of $25,000 in excess of her investment within 3 months, on Lorraine Avenue alone. . . . Respondent acknowledged that he never explained the potential risks to Popoola or included that in his proposal. This was a completely one-sided deal where Popoola was exposed to the risk of losing her money, while Respondent was free to use her money without anyPage 11 oversight or risk to himself. In no way can it be said that this was fair or reasonable.Respondent was obligated to not only suggest to Popoola to seek independent counsel before entering into this agreement, but should have advised her of such, in writing. It is undisputed that this was not done. Even after he drafted the agreement, he never suggested that she have it reviewed by another attorney, or to take some time to review it herself. Instead he had her execute it and took her $40,000 check at the initial meeting. . . . Respondent's actions clearly display a conflict of interest to that of his client.
Misconduct
8.4(a) This court, for the reasons discussed below, concludes, by clear and convincing evidence, that Respondent violated Rules 8.4(b), (c) and (d) and as a consequence thereof is in violation of Rule 8.4(a). Attorney Grievance Commission v. Foltz, 411 Md. 359 (2009).
8.4(b) This court, having made findings of fact as described above, concludes . . . that Respondent violated Rule 8.4(b).
This court concludes that Respondent committed the criminal act of theft, in that he willfully and knowingly utilized deception to obtain control over his client Popoola's $40,000 investment. Annotated Code of Maryland, Criminal Law § 7-104(b)(1), (2) and (3). Respondent committed this act when he failed to advise Popoola that his profit making proposal was not based on established market values, appraisals or comparable sales. He also failed to disclose to her the potential risk of losing all or part of her investment. As well, he failed to disclose to her that he could profit from her financial loss. To the contrary, he presented the proposal as if it were a guarantee to return a substantial profit within 3 months. Essentially, this was a fraudulent inducement.
8.4(c) This court, having made findings of fact as described above, concludes, by clearing and convincing evidence, that Respondent violated Rule 8.4(c).
Honesty is of paramount importance in the practice of law. Attorney Grievance Commission v. Ellison, 384 Md. 688 (2005). Candor andPage 12 truthfulness are two of the most important moral character traits of a lawyer. Attorney Grievance Commission v. Myers, 333 Md. 440 (1994). This court concludes that Respondent displayed a persistent pattern of dishonesty and deceit toward his client, Popoola. This started with suggesting that she invest in properties that were distressed by lack of repair, liens, and delinquent mortgage payments. While he disclosed to her that he had an interest in the properties, he did not tell her that he had the ability to manipulate the sale prices, costs of repairs and fees, commissions and settlement costs to his financial advantage. When Popoola became concerned about the lack of progress of the repairs and sales, Respondent often avoided her communications. When Respondent did respond to Popoola, typically through email, he misled her with a series of excuses and deceptions. At one point he told her that he was pursuing criminal charges against the contractor who abandoned the repair work. . . . At hearing, Respondent acknowledged that he took no such action. Without any consultation with Popoola, Respondent sold the Lorraine Avenue property to his relative at a price that was $40,000 less than was stated in the REIP. He also gave the relative an additional $10,800 in settlement assistance. . . .
Respondent's dishonesty and deceit with regard to the James Street property was worse. In a December 11, 2007 email to Popoola, Respondent indicates that he had a buyer for the property and that the contract had been executed and loan approved. . . . This contract was never produced by Respondent. Months later, Respondent told Popoola that he had found tenants for the property who had an option to buy it. Respondent states that he will keep the monthly rental payments as reimbursement for the mortgage payments that he was paying. . . . The clear and convincing evidence produced showed that there were no renters and Respondent had not been paying the mortgage on the James Street property, which was by this time in foreclosure. As Popoola's inquiries continued, Respondent next tells her that he has rented the property to a nonprofit organization . . ., which again, was untrue. In fact, a review of Respondent's emails submitted into evidence show a pattern of excuses, deceptions and lies. At various times, he blames his lack of response to Popoola's calls on poor phone service, illness, being away on travel, and being overwhelmed with problems. When Popoola pressed further for resolution, Respondent tried to stall her efforts with offers for her to purchase other properties. . . .
8.4(d) This court, having made findings of fact as described above, concludes, by clear and convincing evidence, that Respondent violated Rule 8.4(d).Page 13
Conduct which is likely to impair public confidence in the profession, impact the image of the legal profession and engender disrespect for the court is conduct prejudicial to the administration of justice. Attorney Grievance Commission v. Childress, 360 Md. 373 (2000).
As stated, Respondent utilized his skill, knowledge and training as a member of the bar to induce his client to give him $40,000 to invest in distressed properties, owned and/or controlled by him. Respondent induced Popoola to enter into an agreement which was overwhelmingly beneficial to Respondent's financial situation, but provided substantial risks that his client could lose all or part of her investment. He then commenced a pattern of avoidance, delay, denial and falsehoods to prevent her from finding out the truth of his scheme. Most assuredly, Respondent's actions and conduct were prejudicial to the administration of justice.
"In attorney discipline proceedings, this Court has original and complete jurisdiction and conducts an independent review of the record." Attorney Grievance Comm'n v. Page, 430 Md. 602, 626 (2013). "[W]e accept the hearing judge's findings of fact as prima facie correct unless shown to be clearly erroneous." Attorney Grievance Comm'n v. Lara, 418 Md. 355, 364 (2011). "Consistent with the standard of review for factual findings . . . we have iterated that the judge `may elect to pick and choose which evidence to rely upon.'" Attorney Grievance Comm'n v. Kreamer, 404 Md. 282, 311 (2008) (quoting Attorney Grievance Comm'n v. Harris, 403 Md. 142, 158 (2008)). Furthermore, "[t]he Court shall give due regard to the opportunity of the hearing judge to assess the credibility of witnesses." Md. Rule 16-759(b)(2)(B). We review de novo the hearing judge's conclusions of law. Md. Rule 16-759(b)(1). The ultimate decision as to whether an attorney has engaged in professional misconduct therefore lies with this Court. Attorney Grievance Comm'n v. Joehl, 335 Md. 83, 88(1994).Page 14
When a party files exceptions to the hearing judge's findings of fact, those exceptions will be overruled so long as the findings are not clearly erroneous. Attorney Grievance Comm'n v. Manger, 396 Md. 134, 146 (2006) (citation omitted). When a party takes exception to the hearing judge's conclusions of law, those exceptions will be overruled so long as the conclusions are supported by the facts found. Id. at 146-47. Respondent has filed numerous exceptions, which we shall address in turn.
Respondent's first exception concerns the hearing judge's denial of his motion to compel the Commission to disclose Ms. Popoola's address in England. Respondent claims that the Commission's failure to provide the address prejudiced his ability to take Ms. Popoola's deposition. He contends that, without the address, he could not comply with the "mandatory notice" requirement of Maryland Rule 2-412(a) and thereby guarantee her attendance at the deposition. The record reflects, and Respondent does not deny, both that the Commission had no independent knowledge of Ms. Popoola's address in England and that Assistant Bar Counsel made a good faith effort to obtain the address, but Ms. Popoola was unwilling to provide it. The discovery rules required no more from Assistant Bar Counsel. See Md. Rule 2-421(b) ("An answer [to an interrogatory] shall include all information available to the party directly or through agents, representatives, or attorneys.") (emphasis added). In any event, Page 15 Respondent has not demonstrated that he was prejudiced by the denial of his motion to compel. He does not dispute that Assistant Bar Counsel offered to arrange a telephone deposition of Ms. Popoola and Ms. Popoola confirmed, in writing, her willingness to appear. Moreover, Respondent does not dispute that he never followed up with Assistant Bar Counsel to have the deposition scheduled. Consequently, the deposition did not occur. Given these circumstances, the hearing judge neither erred nor abused his discretion in denying the motion to compel. Accordingly, the exception is overruled. Respondent's next exception concerns the hearing judge's granting the Commission's motion to allow Ms. Popoola to testify at the evidentiary hearing over Skype. Respondent argues that, even assuming Ms. Popoola resided in England, the Commission did not explain adequately why traveling to Maryland would impose upon her an undue cost or hardship. Respondent claims that citizens of England - who do not require a visa to visit the U.S. - travel to this country in order to testify in court "all the time." He further argues that the Commission's motion did not comply with certain requirements set forth in Maryland Rule 2-513, the Rule governing testimony taken by telephone. Finally, he contends that the hearing judge failed to implement safeguards to guarantee the integrity of Ms. Popoola's video testimony. We disagree on all fronts. Regardless of whether requiring Ms. Popoola to travel to Maryland would have imposed upon her an undue cost or hardship, the hearing judge lacked jurisdiction to enforce a subpoena compelling her attendance at the evidentiary hearing. See Attorney Grievance Comm'n v. Gallagher, 371 Md. 673, 701-02 (2002) Page 16 ("the subpoena powers of the State of Maryland stop at the state line") (quoting Bartell v. Bartell, 278 Md. 12, 19 (1976)). Thus, to the extent Ms. Popoola was unwilling or unable to appear personally, allowing her to testify over real-time video conference constituted a reasonable alternative. Furthermore, Respondent's reliance upon Rule 2-513 is misplaced. There was no reason for Assistant Bar Counsel to satisfy the requirements of that Rule, including the requirement that all motions be filed at least 30 days before the hearing, because, by its plain language, the Rule applies only to testimony taken by "landline telephone" - not video conference.
Likewise, there is no merit to Respondent's claim that the hearing judge did not impose reasonable safeguards to ensure the integrity of Ms. Popoola's testimony. Maryland Rule 5-611(a) affords trial judges broad discretion to control "the mode . . . of interrogating witnesses and presenting evidence so as to . . . make the interrogation and presentation effective for the ascertainment of the truth." The record reflects that the hearing judge required Ms. Popoola to take the same oath to tell the truth that she would have taken had she appeared personally in the courtroom. Moreover, the judge required her to survey the room in which she was testifying, with her video camera, to confirm that she was alone. Our conclusion that the hearing judge did not abuse the broad discretion afforded to him in this context is unchanged by Respondent's complaint that Ms. Popoola referred throughout her testimony to a computer screen other than the one displaying the Skype program. The record Page 17 reflects that reference to the second computer was necessary in order to allow Ms. Popoola to review electronic versions of the Commission's exhibits, which Assistant Bar Counsel had sent to Ms. Popoola in advance of the hearing. The record is devoid of evidence indicating that she consulted the second computer for any other purpose. For all of these reasons, we overrule Respondent's second exception. Respondent's third exception challenges the circumstances that led to Assistant Bar Counsel filing a motion to extend the deadline for the hearing judge to file his findings of fact and conclusions of law. Respondent points out that the deadline, under Maryland Rule 16-757(c), was September 3, 2013, but the findings and conclusions were not docketed until three days later. Respondent claims that, after Assistant Bar Counsel discovered that the findings and conclusions had not been docketed by the September 3 deadline, she contacted the hearing judge's chambers, without first notifying Respondent, and engaged in an ex parte communication with the judge related to the filing of a motion for an extension. Respondent further complains that the hearing judge failed to notify him of the ex parte communication with Assistant Bar Counsel after the fact, as he was required to do under the Maryland Code of Judicial Conduct. All of this, Respondent argues, is evidence of the hearing judge's bias and inattentiveness, which manifested themselves in his findings and conclusions.
During oral argument before this Court, Assistant Bar Counsel clarified the extent of her communication with the hearing judge's chambers related to the filing of the motion for an extension. She explained that she spoke only to the hearing judge's law clerk, not the Page 18 hearing judge himself. During that conversation, she discovered that the findings and conclusions had been submitted timely to the Clerk's office, but had not been docketed timely by that office. She conceded that she did not contact Respondent before communicating with the hearing judge's chambers but emphasized that Respondent received a copy of the Commission's motion and was afforded sufficient time to oppose its merits. In Attorney Grievance Commission v. Davy, 435 Md. 674, 697 (2013), we rejected an exception similar to the one Respondent presents, reasoning that the respondent in that case "received a copy of the motion to extend time, and the Commission did not communicate directly with the hearing judge about the motion." We reach the same conclusion here, and therefore overrule the exception.
Respondent's fourth exception alleges that Assistant Bar Counsel received improper legal advice from her father at some point during the evidentiary hearing. This exception has no basis in the record. The affidavit of Respondent's wife, on which he relies in support of this exception, states that Assistant Bar Counsel received what appeared to be legal advice from "a lawyer or staff with the Attorney Grievance Commission" - not Assistant Bar Counsel's father. This is consistent with Assistant Bar Counsel's disclosure to the hearing judge at the beginning of the hearing that she was joined by co-counsel. Nothing in the Maryland Rules prohibits a lawyer from consulting with co-counsel during a hearing. Accordingly, we overrule the exception.
We first address Respondent's broad challenge to the hearing judge's crediting Ms. Popoola's testimony and relying upon that testimony in making his findings of fact. The general rule is that we defer to the credibility findings of the hearing judge. We do so because the hearing judge, not this Court, "is in the best position to assess the demeanor-based credibility of a witness." See Attorney Grievance Comm'n v. Guida, 391 Md. 33, 50 (2006). Respondent argues that, in light of Ms. Popoola's "multiple instances of failure[] to remember facts with sufficient detail," the hearing judge improperly credited her testimony and, therefore, her testimony cannot serve as support for the hearing judge's findings of fact. We disagree. Ms. Popoola remembered all the material facts of her dealings with Respondent. It is of no moment, for example, that seven years after the fact, Ms. Popoola could not remember the precise date on which she and Respondent entered into their initial retainer agreement. Accordingly, we overrule Respondent's general exception to the hearing judge's finding Ms. Popoola to be a credible witness, and turn to his specific exceptions to the findings of fact.
Respondent excepts to several of the Commission's factual averments in the Petition, claiming that the Commission did not establish those averments by clear and convincing evidence. We consider below only those exceptions to averments about which the hearing judge made specific factual findings See Md. Rule 16-758(b) (providing only for "exceptions to the findings and conclusions of the hearing judge"). We overrule Respondent's exceptions to the Commission's averments that the hearing judge did not Page 20 resolve, because Respondent suffered no prejudice. The hearing judge's "failure" to make any findings in connection with those averments could not have redounded to the prejudice of Respondent; if anything, the hearing judge's silence on the Commission's averments was to the disadvantage of the Commission, not Respondent. Respondent excepts to the hearing judge's factual finding that, after Respondent completed legal services for Ms. Popoola related to her H1B visa, he never notified her that the attorney-client relationship had been terminated. He contends that the Commission presented no "clear and convincing evidence" in support of this finding. We disagree. Ms. Popoola testified that Respondent never informed her - in writing or otherwise - that he was no longer her attorney. The hearing judge credited that testimony. Accordingly, we overrule Respondent's exception.
We next address Respondent's exception to the hearing judge's finding that Ms. Popoola paid Respondent $1,000 in June or July of 2007 for legal services related to her application for permanent residency. Respondent argues that there is "no evidence" to support this finding. As Respondent concedes, however, the hearing judge based this finding upon the testimony of Ms. Popoola, which he fully credited. We therefore overrule the exception.
Respondent excepts to the hearing judge's finding that, other than the sale of her own home in England, Ms. Popoola had no prior real estate investment experience when she approached Respondent to inquire about purchasing properties. Respondent argues that Ms. Page 21 Popoola's own testimony does not support such a finding, as she testified that she had owned and sold homes in England, North Carolina, and Maryland. Respondent incorrectly equates home ownership with expertise in real estate investments. Although he is correct that Ms. Popoola owned and sold three homes before entering into the partnership agreement, the record reflects that she had no separate experience purchasing investment properties. Thus, we find no support for Respondent's implied suggestion that he and Ms. Popoola, at the time they formed their partnership, were on equal footing in terms of relevant knowledge and experience. Accordingly, we overrule Respondent's exception.
Respondent next excepts to the finding that he did not disclose to Ms. Popoola the extent to which the James Street property was encumbered by liens and unpaid taxes. In support of this exception, he relies exclusively upon his testimony that he advised Ms. Popoola "that the taxes and liens couldn't be . . . more than $3,000." Ms. Popoola testified that she had "no idea whatsoever" about the outstanding taxes, nor was she informed about any liens on the James Street property. The hearing judge credited Ms. Popoola's testimony and did not credit any part of Respondent's testimony. We therefore overrule the exception.
Respondent's next exception concerns the hearing judge's finding that Respondent did not disclose to Ms. Popoola, at the time he and she executed the partnership agreement in July 2007, that the James Street property was in foreclosure. He argues, and the record supports, that the property was not in foreclosure at the time they entered into the agreement. The record shows that the foreclosure action was not filed until several months after he and Page 22 Ms. Popoola formed their partnership. Because the record does not support the finding that the James Street property was in foreclosure, or was reasonably at risk of foreclosure, at the time he and Ms. Popoola signed the partnership agreement, we sustain Respondent's exception on this limited point.
Respondent next excepts to the hearing judge's finding that he
failed to
explain to Ms. Popoola the nature of potential conflicts of interest
arising
out of his various connections to the James Street and Lorraine Avenue
properties. The entirety of his argument is that he "testified that
disclosures were made." Ms. Popoola's testimony, which the hearing
judge
credited, demonstrates otherwise. She testified that Respondent never
explained to her the possible ways in which his "fiduciary
relationship"
with the owner of the Lorraine Avenue property conflicted with the
interests
of the partnership. Nor did he disclose to her, in the partnership
agreement
or elsewhere, the amount of the profits he would, or could, collect as
a fee
for his services as the realtor and/or auctioneer. All of this
information
was critical to Ms. Popoola's making an informed decision regarding her
investment. Accordingly, we overrule the exception. Respondent excepts
to the hearing judge's finding that he failed to
disclose to Ms. Popoola that he held a power of attorney for his
cousin's
interest in the Lorraine Avenue property. We sustain this exception. At
the
hearing, Assistant Bar Counsel asked Ms. Popoola whether Respondent
ever
told her that he held a power of attorney for the seller of Lorraine
Avenue,
and Ms. Popoola answered, "yeah, he did."
Page 23
Respondent's next exception concerns the hearing judge's finding that Respondent failed to produce any third-party receipts for "home improvement supplies and repairs on the properties" and for "payments to home improvement and repair workers on the properties."[4] Respondent argues that he produced, during discovery, "cancelled checks for payments made to Karl McDonald in the amount totaling $11,000," which were admitted into evidence at the hearing. Those checks, he asserts, are "evidence of receipt[s] for repairs and to workers." The hearing judge's finding regarding Respondent's failure to produce any receipts was well supported by the record. No receipts were entered into evidence at the hearing and Ms. Popoola testified that Respondent never provided her with receipts for the purchase of supplies or the payment of workers' wages in connection with the renovations to the Lorraine Avenue property. Respondent, when questioned by Assistant Bar Counsel, admitted that he could not produce receipts to confirm the amount of any of the payments he professed to have made to pay other laborers to step in and complete the work that McDonald abandoned. We therefore overrule the exception.
Respondent next excepts to the hearing judge's finding that no portion of Ms. Popoola's $20,000 investment in the James Street property was used for repairs or other Page 24 improvements to that property, as was required by the partnership agreement. Citing his own testimony and his personal accounting of construction-related costs at the James Street property, Respondent alleges that he arranged for various renovations of the property costing over $20,000. The hearing judge did not credit Respondent's testimony related to this or any other matter and, as we noted above, Respondent failed to present third-party receipts to corroborate what he alleged to be the costs of repairs. Accordingly, we overrule the exception. Respondent's next exception concerns the hearing judge's finding that he failed to "advise Popoola that the purchaser of Lorraine Avenue was his relative." Respondent asserts that he informed Ms. Popoola that the property had been sold to his niece. Although the record indeed reflects that Respondent informed Ms. Popoola that his niece was the buyer of the Lorraine Avenue property, Ms. Popoola's testimony, credited by the hearing judge, reflects that Respondent made this disclosure only after the sale had taken place. It was incumbent upon Respondent to advise Ms. Popoola of this fact prior to the sale in order to afford her a reasonable opportunity to consider whether such a sale was in the best interest of the partnership. We therefore overrule Respondent's exception.
Respondent excepts to the finding that he misled Ms. Popoola in responding to her numerous inquiries about the status of her investment in the James Street property. According to Respondent, "he advised Ms. Popoola of the status of the property at numerous times." Respondent is correct that the record contains several emails from him to Ms. Page 25 Popoola concerning repairs to the James Street property. Nevertheless, the record also supports the hearing judge's description of those emails as "persistently misleading." Respondent stated, for example, that "some repairs [to the James Street property] started" and "[t]he work on James Street is resumed [and] should be finished shortly." Given the hearing judge's finding that no repairs to the James Street property had been completed, these statements were at best misleading and at worst fraudulent. Consequently, we overrule the exception.
As a preliminary matter, Respondent contends that the hearing
judge's
conclusions of law must be "rejected in [their] totality" because they
are
drawn from unsupported factual findings. For the reasons discussed
above,
other than the two instances in which we sustained Respondent's
exceptions,
we accept the hearing judge's findings of fact as fully supported by
the
record. We therefore overrule this general exception. We turn, then, to
address Respondent's specific exceptions related to the hearing judge's
legal conclusions.
Respondent first excepts to the hearing judge's conclusion that he violated MLRPC 1.8(a). Respondent does not challenge the hearing judge's conclusion that he failed to comply with the various disclosure requirements of Rule 1.8(a)(1)-(3). Rather, his argument reduces to the assertion that a necessary predicate of any Rule 1.8 violation is the existence of an attorney-client relationship and, at the time he and Ms. Popoola entered into the Page 26 partnership agreement, no such relationship existed. We have acknowledged in the past, and it bears repeating here, that "[w]hat constitutes an attorney-client relationship is a rather elusive concept." Attorney Grievance Comm'n v. Brooke, 374 Md. 155, 172 (2003) (quoting Attorney Grievance Comm'n v. Shaw, 354 Md. 636, 650 (1999)). The general rule is that:
An attorney-client relationship is formed when:Id. at 174 (quoting Restatement (Third) of the Law Governing Lawyers § 14 (2000)). Thus, "[t]he relationship may arise by implication from a client's reasonable expectation of legal representation and the attorney's failure to dispel those expectations." Id. at 175. "[T]he lack of any explicit agreement or payment arrangement [does] not preclude the formation of an attorney-client relationship." Id. at 173. "The services of an attorney to the client may be rendered gratuitously but the relationship of attorney and client nonetheless exists." Id. at 174 (quoting Attorney Grievance Comm'n v. James, 355 Md. 465, 476 (1999)).(1) a person manifests to a lawyer the person's intent that the lawyer provide legal services for the person; and . . .
(b) the lawyer fails to manifest lack of consent to do so, and the lawyer knows or reasonably should know that the person reasonably relies on the lawyer to provide [legal] services.
Respondent does not dispute that he performed legal work for Ms. Popoola beginning in 2005. He contends, however, that he was no longer her lawyer when they commenced their business relationship approximately two years later. In support of this argument, he relies upon the fact that the only explicit agreement between the parties for legal services Page 27 related to Ms. Popoola's application for an H1B visa. That agreement, Respondent asserts, did not mention or contemplate an application for a Green Card. Respondent therefore claims that the scope of his representation of Ms. Popoola was limited to obtaining the H1B visa on her behalf and, when he did so in March 2007, the attorney-client relationship terminated. We are unconvinced. The record reflects that, around the same time she retained him in 2005, Ms. Popoola discussed with Respondent her desire to achieve "permanent resident" status through the acquisition of a Green Card. Then, during or shortly before July 2007 - the month Ms. Popoola and Respondent formed their partnership - she paid him $1,000 to represent her in connection with her application for permanent residency. Such a payment, we have held, constitutes "rather conclusive evidence of the establishment of the attorney-client relationship." See Brooke, 374 Md. at 173-74 (quoting James, 355 Md. at 476). If there existed any doubt regarding Ms. Popoola's belief that Respondent remained her lawyer, she made her intentions clear one month later when she sent him an email in which she referred to him as her attorney.
Respondent, for his part, never expressed, in writing or otherwise, his "lack of consent" to assist Ms. Popoola in connection with her application for a Green Card. See Brooke, 374 Md. at 174. Instead, his actions - including his acceptance of Ms. Popoola's $1,000 payment in the summer of 2007 and his subsequent email to her employer stating that he was "the lawyer assisting Ms. Popoola" - evidence his intent to continue providing legal Page 28 services to her. Respondent is correct that a lawyer need not necessarily write a "case closed letter" in order to terminate a legal relationship with a client, but the lawyer is required to do something to dispel the client's reasonable expectation of legal representation. Here, the record supports the hearing judge's finding that Respondent took no such action.
Given our conclusion that the record contains clear and convincing evidence that an attorney-client relationship between Respondent and Ms. Popoola existed at the time they entered into the partnership agreement, we agree with the hearing judge, for the reasons stated in his written conclusions of law, that Respondent violated the requirements of MLRPC 1.8(a)(1)-(3). We therefore overrule the exception.
Respondent next challenges the conclusion that he committed theft in violation of Maryland Code, § 7-104(b) of the Criminal Law Article (2002, 2012 Repl. Vol.) (hereinafter "§ 7-104(b)") and, as a consequence of that criminal act, violated MLRPC 8.4(b).
It is well established that a conviction is not required to find a violation of MLRPC 8.4(b). Attorney Grievance Comm'n v. Jarosinski, 411 Md. 432, 454 (2009). A court must find only clear and convincing evidence of conduct that would violate a criminal statute. Id. The crux of the 8.4(b) analysis then becomes "whether an attorney's criminal act `reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects.'" Attorney Grievance Comm'n v. Thompson, 367 Md. 315, 324 (2001).
Section 7-104(b) provides:Page 29
A person may not obtain control over property by willfully or knowingly using deception, if the person:Respondent argues that the hearing judge's finding that he committed theft is clearly erroneous, reasoning that he did not induce Ms. Popoola, fraudulently or otherwise, to enter into the partnership agreement with him. He claims, instead, that he was "minding his own business" when Ms. Popoola approached him.[5] Respondent further claims that Ms. Popoola conceded that "the terms of the agreement were discussed with her and that she read the agreement," evidently suggesting that she was aware of the numerous risks associated with her investment. Respondent disputes the hearing judge's characterization of the partnership agreement as guaranteeing a profit for Ms. Popoola and the judge's conclusion that Respondent stood to enjoy a financial gain while Ms. Popoola, alone, bore the risk of financial loss.(1) intends to deprive the owner of the property;
(2) willfully or knowingly uses, conceals, or abandons the property in a manner that deprives the owner of the property; or
(3) uses, conceals, or abandons the property knowing the use, concealment, or abandonment probably will deprive the owner of the property.
We overrule this exception. The record establishes that Respondent used deception, in violation of § 7-104(b), to obtain control over Ms. Popoola's $40,000 investment. Page 30 Respondent took advantage of Ms. Popoola's inexperience in investing, faith in his experience in that area, and trust in him as an attorney and acquaintance. To make investing more attractive to Ms. Popoola, Respondent employed deceit. He did not convey to her the risk of financial loss attendant to all real estate investments. Rather, the message he communicated in the agreement itself was that profit was a certainty. Nor did he disclose details that would have allowed Ms. Popoola to make an informed assessment of the return she could expect to receive on her investment, such as the amount of existing liens and taxes for which the partnership would be responsible. Finally, he concealed the extent of his personal interest in the venture, including the amount of the commission he would receive as realtor and auctioneer of the properties before any profits were paid to the partnership. This conduct plainly reflects adversely on Respondent's honesty and trustworthiness. Our conclusion that Respondent used deceit to obtain Ms. Popoola's investment is unchanged by the facts that Ms. Popoola was the one who approached Respondent for advice about investing or that, as a partner, he had a stake in the success of their venture. Accordingly, we affirm the legal conclusion that Respondent violated MLRPC 8.4(b).
Respondent excepts, on similar grounds, to the hearing judge's
conclusion
that he violated MLRPC 8.4(c) through "a persistent pattern of
dishonesty
and deceit" toward Ms. Popoola. Respondent, again, challenges the
factual
findings underlying the hearing judge's conclusion. He disputes, for
instance, that he guaranteed Ms. Popoola a profit, stood to make
Page 31
money while only she risked a loss, failed to disclose the extent to
which
the properties were in need of repairs, and failed to disclose that the
James Street property was subject to liens. As discussed, the record
reflects that Respondent was dishonest and
deceitful in inducing Ms. Popoola to enter into the Real Estate
Investment
Partnership Agreement. That finding, alone, supports a violation of
MLRPC
8.4(c). We nonetheless shall address Respondent's specific exceptions
to
that legal conclusion. Respondent excepts to the hearing judge's
finding that he misled Ms.
Popoola in telling her that he was pursuing criminal charges against
McDonald - the contractor who had abandoned the project at the Lorraine
Avenue property - when, in fact, Respondent had not pursued any such
charges. Respondent, however, does not dispute that he informed Ms.
Popoola
that he was pursuing the criminal charges against McDonald and admits
that
he failed "to complete the task of pursuing [those] criminal charges."
We
therefore overrule the exception. Respondent excepts to the hearing
judge's finding that Respondent misled
Ms. Popoola in telling her that he had found, first, a buyer, then, a
tenant, for the James Street property, when he had not. The hearing
judge
found that "there were no renters" for the property. None of the
exhibits
entered into evidence at the hearing, nor any other portion of the
record,
reflects that Respondent found a buyer or renter for the James Street
property. In representing that he had, Respondent misled Ms. Popoola.
We
therefore overrule this exception.
Page 32 As to the
hearing judge's basing his conclusion that Respondent violated
MLRPC 8.4(c) on the finding that Respondent lied to avoid Ms. Popoola's
communications, Respondent argues that there was no evidence of "any
dishonest reason . . . responsible for the communication gaps."
Respondent
claims that he presented evidence demonstrating that he failed to
respond to
certain communications because he was "overworked . . . dealing with
law
practice, auction business and trying to complete work on the [Lorraine
Avenue and James Street properties]." This evidence came in the form of
Respondent's representations, in emails to Ms. Popoola, that he was
busy,
ill, or otherwise unable to respond. The hearing judge did not credit
any of
those representations. In the end, the record demonstrates that,
subsequent to inducing Ms.
Popoola to enter into the partnership agreement, Respondent engaged in
further deceit. He misled Ms. Popoola as to the progress of renovations
and
as to the likelihood that the James Street property would be sold or
rented.
All the while, he avoided her attempts to contact him regarding the
status
of the repairs. We therefore conclude, as did the hearing judge, that
Respondent violated MLRPC 8.4(c).
Respondent excepts to the hearing judge's conclusion that he violated MLRPC 8.4(d) through conduct likely to impair public confidence in the legal profession, harm the image of the profession, and engender disrespect for the court. Respondent argues that his conduct cannot be considered prejudicial to the administration of justice because Ms. Popoola has Page 33 been able to avail herself of civil remedies for breach of contract and he "did not do anything" to prevent her from filing criminal charges against him. We overrule Respondent's exception. Trustworthiness is one of the most important qualities in a lawyer. Here, Ms. Popoola testified that she trusted Respondent, in part, because he was an attorney. When an attorney proves untrustworthy, as was the case here, the trustworthiness of every member of the Bar is susceptible to being called into question, thereby diminishing the public's confidence in the legal profession. See Attorney Grievance Comm'n v. Whitehead, 405 Md. 240, 260 (2008); Attorney Grievance Comm'n v. Pak, 400 Md. 567, 608 (2007). We conclude, as did the hearing judge, that Respondent violated MLRPC 8.4(d).
Having determined that the hearing judge's findings of fact were supported by clear and convincing evidence and his resulting conclusions of law were supported by those facts, we conclude that Respondent violated MLRPC 1.8(a) and MLRPC 8.4(a), (b), (c), and (d).[6] Our only remaining task is to determine the appropriate sanction for Respondent's misconduct. During oral argument before this Court, Respondent recommended a reprimand, claiming that he did not act with malice. Bar Counsel recommends disbarment. Bar Counsel contends that, absent mitigating circumstances, which the hearing judge did not find were present in this case, the appropriate sanction for "repeated actions of dishonest, fraudulent, or misleading behavior," such as Respondent's conduct in this case, is disbarment.
In determining the appropriate sanction for an attorney's misconduct, we evaluate the particular facts and circumstances of each case. See Attorney Grievance Comm'n v. Coppola, 419 Md. 370, 404 (2011). "The severity of the sanction depends on . . . the intent with which the acts [of misconduct] were committed, the gravity, nature and effect of the violations, and any mitigating factors." Attorney Grievance Comm'n v. Ward, 394 Md. 1, 33 (2006). As we consider the appropriate sanction, we bear in mind that the purpose of a sanction is not to punish the attorney, Attorney Grievance Comm'n v. Garcia, 410 Md. 507, 521 (2009), but rather, "to protect the public and the public's confidence in the legal profession." Attorney Grievance Comm'n v. Zimmerman, 428 Md. 119, 144 (2012). Page 35 "Sanctions accomplish these goals by deterring intolerable conduct and keeping those unfit to practice law from doing so." Id.
Respondent has violated numerous Rules of Professional Conduct. We need only refer at this juncture to the conduct that, standing alone, warrants disbarment. "We long have held that repeated acts of dishonest, fraudulent, or misleading behavior may warrant a sanction of disbarment." Attorney Grievance Comm'n v. Steinberg, 395 Md. 337, 373 (2006). "Unlike matters relating to competency, diligence and the like, intentional dishonest conduct is closely entwined with the most important matters of basic character to such a degree as to make intentional dishonest conduct by a lawyer almost beyond excuse." Garcia, 410 Md. at 521-22 (quoting Attorney Grievance Comm'n v. Vanderlinde, 364 Md. 376, 418 (2001)). Thus, "[w]hen an attorney's conduct involves intentional dishonesty, fraud, deceit or misrepresentation, we do not discuss `degrees' of dishonesty, but generally order disbarment, absent compelling extenuating circumstances." Id. at 521 (citation omitted).
Here, the gravamen of Respondent's misconduct is his dishonest, deceitful, and fraudulent conduct in connection with, and subsequent to, his obtaining Ms. Popoola's agreement to invest $40,000 in the James Street and Lorraine Avenue properties. Respondent withheld from Ms. Popoola information that would have allowed her to make an informed decision regarding her investment. In addition, he crafted the partnership agreement in such a way as to make it appear that a return on Ms. Popoola's real estate investment was guaranteed, rather than informing her of the numerous risks associated with Page 36 such investments. Respondent's pattern of deceit and misrepresentation continued after Ms. Popoola signed the partnership agreement. He failed to allocate any of Ms. Popoola's $20,000 investment in the James Street property toward repairs and improvements, as he was required to do under the agreement. And when Ms. Popoola inquired about the status of her investment in that property, he falsely represented that the renovations were underway and nearly completed. That conduct, taken together, is sufficiently dishonest to warrant disbarment absent compelling mitigating circumstances.
Even when mitigating circumstances exist, the bar for avoiding disbarment remains high. "In order to demonstrate sufficient mitigation to warrant a lesser sanction than disbarment there `needs to be almost conclusive, and essentially uncontroverted evidence that . . . the attorney had a serious and debilitating mental condition.'" Attorney Grievance Comm'n v. Kobin, 432 Md. 565, 586 (2013) (quoting Vanderlinde, 364 Md. at 418-19). In addition, "the mental condition must serve as the `root cause' for the misconduct - meaning, it must affect[] the ability of the attorney in normal day to day activities, such that the attorney was unable to accomplish the least of those activities in a normal fashion." Id. (citation and internal quotations omitted). "[T]he mental condition must `also result in [the] attorney's utter inability to conform his or her conduct in accordance with the law and with the [Rules of Professional Conduct].'" Attorney Grievance Comm'n v. Palmer, 417 Md. 185, 212 (2010) (quoting Vanderlinde, 364 Md. at 414).
The hearing judge did not find the presence of mitigating circumstances. Page 37Respondent's only suggested mitigation is that he suffers from "psychiatric conditions" and takes medication that affects his "function and memory." Respondent, however, provided no evidence, much less conclusive evidence, corroborating his mental illness. Even if he had, such evidence would not excuse his misconduct because the record does not support a claim that he was unable to perform "normal day to day activities . . . in a normal fashion" at the times pertinent to this action. See Kobin, 432 Md. at 586. In fact, in emails he sent to Ms. Popoola in 2007, Respondent documented how he was performing tasks related to his law practice and his various business ventures. Although he may have been "overwhelmed" by those activities, Respondent did not prove that there existed any circumstances mitigating his misconduct.
All of the above leads us to conclude that disbarment is the appropriate sanction for Respondent's misconduct.
IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY THE CLERK OF THIS COURT, INCLUDING COSTS OF ALL TRANSCRIPTS, PURSUANT TO MARYLAND RULE 16-761(b), FOR WHICH SUM JUDGMENT IS ENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMMISSION OF MARYLAND AND AGAINST TAIWO A. AGBAJE.
A lawyer shall not enter into a business transaction with a client unless:
(1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
(2) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and
(3) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer's role in the transaction, including whether the lawyer is representing the client in the transaction.
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Maryland Lawyers' Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;
(b) commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects;
(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
(d) engage in conduct that is prejudicial to the administration of justice;
- Decided on .