Holding: Lacking any mitigating circumstances, the lawyer's misappropriation of client funds would alone warrant a sanction of disbarment. But, combined with his his failure to provide competent representation, lack of diligence and failure to communicate with his clients, the case for disbarment is even more compelling.
Alleged Violations: Maryland Lawyers’ Rules of Professional Conduct 1.1 (competence); MLRPC 1.3 (diligence); MLRPC 1.4(a) and (b) (communication); MLRPC 1.5(a) and (c) (fees); MLRPC 1.15(a), (c), and (d) (safekeeping property); MLRPC 8.4(a), (c), and (d) (misconduct); Maryland Rule 16-606.1 (attorney trust account record-keeping); Maryland Rule 16-609 (prohibited transactions); and Maryland Code (1989, 2010 Repl. Vol.), § 10-306 of the Business Occupations and Professions Article (misuse of trust money).
Citation: Misc. Docket AG No. 84, September Term, 2012
Opinion by Barbera, C.J.>
On August 6, 2013, Petitioner, the Attorney Grievance Commission of Maryland, acting through Bar Counsel, filed with this Court a Petition for Disciplinary or Remedial Action (the "Petition") against Respondent, attorney Jason Robin Gelb. The Petition alleged violations of the Maryland Lawyers' Rules of Professional Conduct ("MLRPC") in connection with Respondent's misappropriation of his clients' funds and failure to represent his clients competently and diligently. Specifically, the Petition alleged that Respondent violated MLRPC 1.1 (competence); MLRPC 1.3 (diligence); MLRPC 1.4(a) and (b) (communication); MLRPC 1.5(a) and (c) (fees); MLRPC 1.15(a), (c), and (d) (safekeeping property); MLRPC 8.4(a), (c), and (d) (misconduct); Maryland Rule 16-606.1 (attorney trust account record-keeping); Maryland Rule 16-609 (prohibited transactions); and Maryland Code (1989, 2010 Repl. Vol.), § 10-306 of the Business Occupations and Professions Article (hereinafter "BOP § 10-306") (misuse of trust money).
On August 12, 2013, this Court designated the Honorable J. Barry Hughes of the Circuit Court for Carroll County (the "hearing judge") to conduct an evidentiary hearing and render written findings of fact and conclusions of law. Respondent was served with process, in compliance with Maryland Rule 16-753, but did not file a response to the Petition, timely or otherwise. Accordingly, on October 7, 2013, the hearing judge entered a default order against Respondent and the matter was set for a hearing to be held on December 13, 2013. Respondent neither moved to vacate the order nor appeared at the hearing.
Page 2During the December 13, 2013 hearing, the hearing judge heard evidence from Petitioner, along with three complainants testifying for Petitioner — Alan Jones, Jr., Calvin Jones, and Stephanie Dress. Thereafter, the hearing judge issued written findings of fact and conclusions of law, in which he concluded, by clear and convincing evidence, that Respondent had violated MLRPC 1.1; MLRPC 1.3; MLRPC 1.4(a) and (b); MLRPC 1.5(a) and (c); MLRPC 1.15(a), (c), and (d); MLRPC 8.4(a), (c), and (d); Maryland Rule 16-606.1; Maryland Rule 16-609; and BOP § 10-306. No exceptions were filed.
On September 4, 2014, we held oral argument, at which only Petitioner appeared.
We review de novo the hearing judge's conclusions of law. Md. Rule 16-759(b)(1); Page, 430 Md. at 626. This is true even if, as in this case, a default order was entered against the respondent by the hearing judge. See Attorney Grievance Comm'n v. Landau, 437 Md. 641, 650 (2014). The ultimate decision as to whether an attorney has engaged in professional misconduct lies with this Court. Attorney Grievance Comm'n v. Agbaje, 438 Md. 695, 717 (2014).
MLRPC 8.4(d) provides that "[i]t is professional misconduct for a lawyer to ... engage in conduct that is prejudicial to the administration of justice[.]" In Attorney Grievance Comm'n v. Reinhardt, 391 Md. 209, 222 (2006), we explained that an attorney's "failure to act on the client's case for over three years and failure to expedite litigation, to the client's detriment, is conduct prejudicial to the administration of justice."
Respondent filed collection cases on behalf of A. Jones and C. Jones, but he failed to prosecute several of the claims. As a result, "six collections cases in the District Court for Baltimore County were dismissed due to Respondent's lack of prosecution." Respondent also failed to represent Mr. Holley in the all of the matters for which Respondent was hired. We hold that Respondent's failure to pursue diligently his clients' Page 9 cases constitutes a violation of MLRPC 1.3, and is prejudicial to the administration of justice in violation of MLRPC 8.4(d). MLRPC 1.4(a) states, in relevant part, that a lawyer shall "keep the client reasonably informed about the status of the matter[, and] promptly comply with reasonable requests for information[.]"
MLRPC 1.4(b) states that "[a] lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation." We have held that "violations of MLRPC 1.3 can be ... closely linked to violations of MLRPC 1.4." Attorney Grievance Comm'n v. Pinno, 437 Md. 70, 80 (2014) (internal quotations and citations omitted).
The hearing judge
found that "Respondent initially began to discuss the
complainants' cases and as time progressed, failed to communicate with
complainants regarding information about their individual and company
cases." In particular, Respondent did not have any contact with Mr.
Potochney after late 2012, and he repeatedly failed to return Ms.
calls or respond to Mr. Holley's requests for information. Such conduct
violates MLRPC 1.4(a). Respondent's violation of MLRPC 1.3, discussed
also constitutes a violation of MLRPC 1.4(a) because Respondent failed
communicate with A. Jones and C. Jones on their pending claims that
subsequently dismissed for lack of prosecution. Respondent's lack of
communication denied the complainants the opportunity to make informed
decisions regarding their representation, in violation of MLRPC 1.4(b).
MLRPC 1.5(a) provides, in relevant part, that "[a] lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses." "Any charge by a lawyer in excess of [the amount to which the lawyer and client have agreed] is plainly impermissible and thus excessive or unreasonable" in violation of MLRPC 1.5(a). Attorney Grievance Comm'n v. Van Nelson, 425 Md. 344, 359-60 (2012) (internal quotations omitted). MLRPC 1.5(c) provides, in relevant part, that "[a] contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined[.]"
Respondent failed to memorialize in writing his contingency fee agreements with A. Jones, C. Jones, and Mr. Potochney, in violation of MLRPC 1.5(c). Further, as the hearing judge found, "Respondent initially agreed to charge Mr. Potochney a twenty-five percent (25%) contingent fee ..., but he charged Mr. Potochney a thirty-three percent (33%) fee for those matters in which he collected funds." We hold that, because Respondent charged Mr. Potochney more than the 25% fee in their original agreement, Respondent's fee was excessive and unreasonable in violation of MLRPC 1.5(a).
(a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account maintained pursuant to Title 16, Chapter 600 of the Maryland Rules, andPage 11 records shall be created and maintained in accordance with the Rules in that Chapter.Respondent issued remittance checks to A. Jones and Elite Bail Bonds from his operating account, instead of his trust account, improperly co-mingling his funds with his clients' funds in violation of MLRPC 1.15(a). Also, as the hearing judge concluded, Respondent failed to hold his clients' funds in his trust account, in violation of MLRPC 1.15(c). Maryland Rule 16-609 provides that "[a]n attorney or law firm may not borrow or pledge any funds required by the [Maryland Rules] to be deposited in an attorney trust account, ... or use any funds for any unauthorized purpose." Similarly, BOP § 10-306 states, "A lawyer may not use trust money for any purpose other than the purpose for which the trust money is entrusted to the lawyer." Because "the statute and the Rule have the same requirement," a violation of Rule 16-609 is a violation of BOP § 10-306. Attorney Grievance Comm'n v. Goff, 399 Md. 1, 30 (2007).
(c) Unless the client gives informed consent, confirmed in writing, to a different arrangement, a lawyer shall deposit legal fees and expenses that have been paid in advance into a client trust account and may withdraw those funds for the lawyer's own benefit only as fees are earned or expenses incurred.
MLRPC 8.4(c) states, "It is professional misconduct for a lawyer to ... engage in conduct involving dishonesty, fraud, deceit or misrepresentation[.]" The "misappropriation of client or third-party funds violates [MLRPC] 8.4(c)." Attorney Grievance Comm'n v. Goodman, 426 Md. 115, 129 (2012).
Page 12Respondent issued a trust account check to C. Jones that was declined for insufficient funds, and instructed Mr. Potochney not to deposit a check because he had insufficient funds in his account for the check to clear. In Attorney Grievance Comm'n v. Glenn, 341 Md. 448, 484 (1996), this Court held that, "[w]hen Respondent's escrow account balance fell below the amount required to satisfy the obligations due to [his clients], and he failed to provide a satisfactory explanation, he misappropriated their funds." Because Respondent did not provide an adequate explanation as to why his trust account had insufficient funds, we conclude that Respondent misappropriated the funds entrusted to him. We hold that this misappropriation constitutes a violation of Maryland Rule 16-609, BOP § 10-306, and MLRPC 8.4(c).
MLRPC 1.15(d) provides that "a lawyer shall deliver promptly to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall render promptly a full accounting regarding such property." Respondent received a settlement check for Ms. Dress's matter in August 2011. Respondent, however, did not pay Ms. Dress's medical bill, as he had agreed, until February 2012. Respondent's delayed issuance of the funds owed to the medical provider constitutes a violation of MLRPC 1.15(d).
Further, Respondent misappropriated the funds owed to the medical provider in violation of Maryland Rule 16-609, BOP § 10-306, and MLRPC 8.4(c). In Goodman, the respondent "could not provide any evidence to refute the [Attorney Grievance Page 13 Commission's] claims that the medical bills were unpaid." 426 Md. at 130. We held that "[a] permissible inference is that the respondent misappropriated funds that belonged rightfully to the creditors, which left an insufficient balance to pay his clients' medical bills." Id. Similarly, here, we can infer that, because Respondent did not pay Ms. Dress's medical bills until months after he had received her settlement funds, Respondent misappropriated the funds.
Respondent's misappropriation of funds also constitutes a violation
of MLRPC 8.4(d). See Attorney Grievance Comm'n v. Webster, 402
Md. 448, 467
(2007) (concluding that "misappropriation of client or third party
[is] 'prejudicial to the administration of justice' in violation of
MLRPC 1.15(a) states, in pertinent part, that "[c]omplete records of the account funds and of other property shall be kept by the lawyer[.]..." A Rules Committee Comment to MLRPC 1.15 notes that "[a] lawyer should maintain on a current basis books and records in accordance with generally accepted accounting practice ... and comply with Page 14 any other record-keeping rules established by law or court order." See Attorney Grievance Comm'n v. Obi, 393 Md. 643, 657 (2006) (citing the Comment). Maryland Rule 16-606.1 provides that an attorney shall create and maintain "[a] record for each client matter in which the attorney receives funds in trust[.]"
The hearing judge concluded that "Respondent initially provided records of transactions for the complainants. However, beginning in 2011, Respondent began to improperly maintain his recordkeeping. After mid-2012, he failed altogether to keep client records for the complainants." Respondent's failure to properly maintain records of the funds he collected on his clients' behalf constitutes a violation of MLRPC 1.15(a) and Maryland Rule 16-606.1. Respondent's lack of proper record-keeping, combined with his mishandling of the funds in his attorney trust account, discussed above, rise to a level of incompetent representation in violation of MLRPC 1.1.
must remember that the entrustment to them of the money and property of others involves a responsibility of the highest order. They must carefully administer and account for those funds. Appropriating any part of those funds to their own use and benefit without clear authority to do so cannot be tolerated.Landau, 437 Md. at 652 (quoting Attorney Grievance Comm'n v. Owrutsky, 322 Md. 334, 345 (1991)).
While the "misappropriation of client funds alone will result in disbarment in the absence of compelling extenuating circumstances[,]" Attorney Grievance Comm'n v. Weiss, 389 Md. 531, 566 (2005), here Respondent's misconduct in misappropriating funds is exacerbated by multiple other violations, including his failure to provide competent representation to his clients, his failure to prosecute diligently his clients' claims, and his failure to communicate adequately with his clients on their respective matters. These combined violations create an even stronger case for disbarment. See Attorney Grievance Comm'n v. Page, 430 Md. 602, 637 (2013) (holding disbarment appropriate after Page 17considering the aggravating factor that the respondent "committed multiple offenses"); Attorney Grievance Comm'n v. Bernstein, 363 Md. 208, 229 (2001) (holding disbarment appropriate where the respondent's misappropriation of funds was "compounded by other numerous rule violations").
In light of our precedent, it is clear that Respondent's misconduct warrants disbarment, absent compelling extenuating circumstances. Respondent did not offer, nor did the hearing judge find, any mitigating circumstances, compelling or otherwise, that would justify a lighter sanction. Therefore, disbarment is the appropriate sanction.
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 AGAINST JASON ROBIN GELB.
- Decided on .