August 25, 1994
IN RE: ROBERT D. POWELL, RESPONDENT, A MEMBER OF THE BAR OF THE DISTRICT OF COLUMBIA COURT OF APPEALS
On Report and Recommendation of the Board on Professional Responsibility
Before Steadman and Schwelb, Associate Judges, and Gallagher, Senior Judge.
The opinion of the court was delivered by: Gallagher
GALLAGHER, Senior Judge: Respondent, Robert D. Powell, a member of the bars of Maryland, New York, and the District of Columbia, was found by the Court of Appeals of Maryland to have unintentionally *fn1 misappropriated a client's funds and was suspended indefinitely from the practice of law in Maryland, with right to reapply and make a showing of fitness in not less than six months. Powell, supra note 1. The District of Columbia Board on Professional Responsibility ("the Board") considered the Maryland court's findings and concluded that respondent's behavior was also violative of the District's rule against misappropriation of funds, DR 9-103 (A), *fn2 but that the misconduct "warrants substantially different discipline in the District of Columbia." D.C. Bar R. XI, § 11 (c) (4). *fn3 Thus, the Board recommended a six-month suspension with automatic reinstatement.
Both respondent and Bar Counsel oppose the Board's recommendation. Respondent argues that he did not violate the District's rule against misappropriation of funds and that he should not be reciprocally disciplined by the District. *fn4 Bar Counsel maintains that reciprocal discipline, including a showing of fitness as a condition of reinstatement, is appropriate. We find persuasive Bar Counsel's analysis of this case and, therefore, reject the Board's recommendation that respondent be automatically reinstated at the Conclusion of a six-month suspension.
The facts of this case, presented in summary here, are more fully elucidated in the opinion by the Maryland Court of Appeals. Powell, supra note 1, 614 A.2d at 104-07. The complaint giving rise to disciplinary action against respondent arose from his representation of Hester Taxay ("the client"). She was the substituted plaintiff in a civil suit which concluded in a settlement whereby defendants made a cash payment to her in exchange for an order of dismissal with prejudice of the suit.
Prior to dismissal of the client's case on March 17, 1988, respondent received nine settlement checks on her behalf. Six of these checks, totaling $17,500, were deposited into a trust account which was intended to be the repository of all settlement funds and which had a balance of $110.76 prior to the deposits. Three of these checks, totaling $65,000, were mistakenly deposited into respondent's law firm's operating account which had a balance of $2,365.52 prior to the deposits.
In the months following dismissal of the case, the client sought disbursement of the settlement funds. According to respondent's accounting, $12,500 of the total collected was owed the client. *fn5 Respondent did not promptly forward the $12,500 to the client and instead requested that the client make an interest-bearing personal loan to him of the entire amount, citing his personal and financial difficulties. The client ultimately signed a promissory note prepared by respondent which was backdated to March 1, 1988.
The principal and interest accrued on the loan was due in January 1989. However, despite the client's repeated requests respondent made no payment until April 1989, when he mailed a check to his client in the amount only of the interest then due. *fn6 When the client had received no further payment from respondent by August 1989, she made complaint to disciplinary authorities in the states in which respondent was licensed to practice. *fn7
In the Maryland proceedings, respondent admitted that his client's frinds were misappropriated but argued that it was unintentional. 614 A.2d at 108-09. He said that the three checks deposited into the law firm's operating account had been erroneously deposited by a temporary employee. He said that he did not discover that a check for $12,500 had been misdeposited into that account until September 1988, nearly a year after the fact. Respondent became aware that an additional $52,500 had been misdeposited into that account in November 1987, shortly after the error was made. However, he allowed that money to remain in the firm's operating account because he determined that his fees and unpaid expenses exceeded $52,500.
The Maryland Court of Appeals found that respondent unintentionally misappropriated his client's funds through conduct, that if not grossly negligent, was "'perilously close' to gross negligence." 614 A.2d at 112 (citation omitted). As a result, he was suspended from the practice of law indefinitely with the right to reapply in not less than six months.
We have held that D.C. Bar R. XI, § 11 (c) "creates a rebuttable presumption that the discipline will be the same in the District of Columbia as it was in the original disciplining jurisdiction." In re Zilberberg, 612 A.2d 832, 834 (D.C. 1992) (citing In re Velasquez, 507 A.2d 145, 146-47 (D.C. 1986) (footnote omitted)). The presumption of reciprocal discipline may be rebutted upon a showing by clear and convincing evidence that one of the five exceptions to the imposition of reciprocal discipline enumerated in § 11 (c) is applicable. *fn8
The Board concluded that § 11(c) (4), which allows an exception where "the misconduct established warrants substantially different discipline in the District of Columbia," is applicable in this instance. We disagree.
In reviewing whether the "substantially different discipline" exception has been properly applied, this court engages in a two-step analysis. See In re Garner, 576 A.2d 1356, 1357 (D.C. 1990) (per curiam). First, we determine whether the "misconduct in question would not have resulted in the same punishment here as it did in the disciplining jurisdiction." Id. Then, where it is clear that the discipline imposed by the District would be different, the court must determine whether this difference is so substantial as to warrant a departure from the presumption of reciprocal discipline. Id.
We state at the outset that we view the Maryland sanction as the functional equivalent of at least a six-month suspension with a requirement of fitness. When viewed as such, this sanction falls within the range of measures this court has imposed in cases involving negligent misappropriation. See In re Cooper, 613 A.2d 938 (D.C. 1992) (six-month suspension with requirement of fitness for negligent misappropriation of client funds by attorney who admitted cocaine addiction); In re Hines, 482 A.2d 378 (D.C. 1984) (two-year suspension with requirement of fitness for reckless disregard resulting in the commingling and misappropriation of funds of two clients); In re Harrison, 461 A.2d 1034 (D.C. 1983) (suspension of a year and a day with requirement of fitness for unintentional commingling and misappropriation of client's funds aggravated by attorney's initial evasion of client's request for restitution and payment by a check returned for insufficient funds). *fn9
In support of its contention that a requirement of fitness places the Maryland sanction outside the range of sanctions imposed in this jurisdiction, the Board cites three recent District of Columbia cases in which attorneys who negligently misappropriated client funds were suspended for six months with automatic reinstatement. See In re Choroszej, 624 A.2d 434 (D.C. 1992) (per curiam) (six-month suspension for negligent misappropriation where numerous mitigating factors were cited); In re Evans, 578 A.2d 1141 (D.C. 1990) (per curiam) (six-month suspension for negligent misappropriation where court concluded that "greater sanction not required"); In re Hessler, 549 A.2d 700 (D.C. 1988) (six-month suspension for negligent commingling and misappropriation where six mitigating factors were taken into account).
The cases cited above, Cooper, Hines, Harrison, Choroszej, Evans, and Hessler, illustrate the range of sanctions this court has imposed upon attorneys found to have negligently misappropriated client funds. The sanction imposed by the Maryland court is within this range, and therefore, we need not reach the second step of the Garner analysis to conclude that imposition of reciprocal discipline is appropriate in this case. *fn10
Further, the facts of this case, which show that respondent was extremely slow to satisfy his client's requests for payment of the settlement proceeds and that he made his initial payment with a check that bounced, see Harrison, supra, 461 A.2d at 1036, coupled with the Maryland court's Conclusion that respondent's conduct was, at best, "perilously close to gross negligence," support Bar Counsel's contention that this case is more akin to Hines and Harrison than Choroszej, Evans, and Hessler. See Choroszej, supra, 624 A.2d at 436-37. That is to say, a six month suspension with proof of fitness is within the range of sanctions this Court would consider if this were a case of original jurisdiction. *fn11
Respondent argues that D.C. Bar R. XI, § 11 (c) (5), which provides an exception to the presumption of reciprocal discipline where it is demonstrated by clear and convincing evidence, that "the misconduct elsewhere does not constitute misconduct in the District of Columbia," is applicable in this case. He contends that the Maryland court's finding that he misappropriated funds in violation of that jurisdiction's Rule 1.15 (a) *fn12 (which could be proved simply by showing that the settlement checks had been negligently deposited in the law firm's operating account) did not constitute a violation of the District's rule against misappropriation in effect at the time, DR 9-103 (A). The District's rule provided that "all funds of clients paid to a lawyer or law firm, other than advances for costs and expenses, shall be deposited in one or more identifiable bank accounts. . . ." (Emphasis added.)
Respondent claims that his client orally authorized him to use the settlement funds as advances for costs and expenses and that, as a result, he cannot be found to have misappropriated funds under the District of Columbia rule. *fn13 We reject this argument.
Powell has failed to show by clear and convincing evidence that his client authorized him to use the funds as advances for costs and expenses. He complains that the Maryland court did not allow him to present evidence and create a record in support of this contention. The record of the Maryland proceedings contained in the materials before us is quite incomplete, but even if the respondent was thwarted in his efforts to reference the District of Columbia rules, he could have supplemented that record by making an offer of proof. More importantly, respondent failed to provide any evidence in support of his claim to the Board or this court. For example, he might have secured an affidavit from his client confirming his claim or prepared his own sworn statement detailing the agreement and the circumstances under which it was made. Respondent's failure to present a record upon which we might evaluate his claim is a sufficient basis upon which to reject his argument. Cf. Cobb v. Standard Drug Co., 453 A.2d 110, 111 (D.C. 1982) (stating that the "responsibility of perfecting the record remains with appellant and 'cannot be shifted to either the trial court or [the Court of Appeals]'" (citation omitted)).
Furthermore, if we were to accept respondent's claim that he was authorized to use the settlement funds as advances for costs and expenses it would directly contradict the version of events he presented in the Maryland proceeding. *fn14 In Maryland, respondent represented that settlement funds had been mistakenly and erroneously deposited in his law firm's operating account. It was the Maryland court's acceptance of this version of events which prevented the court from finding intentional misappropriation for which the presumptive sanction is disbarment. Powell, supra note 1, 614 A.2d at 110; accord, In re Addams, (supra) note 9, 579 A.2d at 191. Respondent may not now be heard to contradict the very version of the facts which prevented him from receiving harsher discipline in the original proceeding in Maryland.
Respondent makes several other claims in an attempt to fit his case into one of the exceptions to the rule requiring reciprocal discipline. He argues that he was deprived of due process in the Maryland proceeding and that the exception detailed at D.C. Bar R. XI, § 11(c) (1), see note 8, (supra) , is therefore applicable. He alleges that because he maintains his law office solely in the District and the complainant, and matters complained of, have no connection to Maryland, that the Maryland court had no authority to discipline him for infractions of its rules.
This argument is groundless. We have established the authority of this court to discipline active members of the District bar (those who maintain eligibility to engage in the practice of law here), who while practicing in other jurisdictions violate the ethical rules of the District. See In re Wade, 526 A.2d 936, 938-39 (D.C. 1987), cert. denied, 484 U.S. 1010, 98 L. Ed. 2d 659, 108 S. Ct. 709 (1988). Thus, we cannot deny the Maryland court's authority to discipline a member of its bar in this instance.
Respondent also argues that the imposition of reciprocal discipline "would result in grave inJustice." D.C. Bar R. XI, § 11 (c) (3). In support of this contention respondent cites In re Miller, 553 A.2d 201 (D.C. 1989), and In re Kent, 467 A.2d 982 (D.C. 1983), original jurisdiction cases in which this court imposed less severe disciplinary measures than those recommended by the Board, finding the offending attorneys' alcoholism and emotional instability to be mitigating factors.
Respondent presented evidence to the Maryland court regarding the severe emotional and financial stress he was under at the time of his misconduct and argues before this court that the District would have accorded greater weight to his personal circumstances in determining the appropriate discipline in his case. However, the cases on which he relies, Miller and Kent, are clearly inapposite in that the misconduct at issue in those cases did not impact the administration of Justice or violate the public trust. *fn15 Respondent has failed to present clear and convincing evidence of grave inJustice.
Finding that no exception to the imposition of reciprocal discipline has been shown by clear and convincing evidence, it is
ORDERED that respondent shall be, and hereby is, suspended from the practice of law in the District of Columbia for a period of six months with reinstatement conditioned on respondent's demonstration of fitness. On the assumption that the affidavit of Robert D. Powell submitted to this court on August 9, 1993, correctly states that he was not required to notify any persons or return any papers pursuant to D.C. Bar. R. XI, § 14, see In re Mulkeen, 606 A.2d 136, 137 (D.C. 1992), this order shall be retroactive to that date. *fn16