The opinion of the court was delivered by: Reid, Associate Judge
On Report and Recommendation of the Board on Professional Responsibility (BDN 51-99)
Before REID and GLICKMAN, Associate Judges, and SCHWELB, Senior Judge.
The Board on Professional Responsibility ("the Board" or "the BPR") has recommended that respondent, Laurence A. Elgin, be suspended from the practice of law for six months and be required to pay Saundra Burka, one of his clients and a close friend of Mr. Elgin's wife, restitution in the amount of $5,000.00 with interest as a condition of reinstatement. The Board adopted the findings of the Hearing Committee ("the Committee") which determined that Mr. Elgin had violated the District of Columbia Rules of Professional Responsibility because he: 1) failed to consult with his client concerning a settlement;*fn1 2) intentionally prejudiced his client's interests;*fn2 3) failed to keep his client reasonably informed about the terms and conditions involved in the initiation and settlement of a lawsuit;*fn3 4) failed to adequately explain to his client the basis for his legal fees;*fn4 5) failed to disclose a conflict of interest to his client;*fn5 6) entered into an impermissible business transaction with his client;*fn6 7) engaged in dishonest conduct;*fn7 and 8) interfered with the administration of justice.*fn8 The Board agreed with the Committee that Mr. Elgin had not violated Rule 1.15 (b) by making unauthorized use of Ms. Burka's credit card, and that, in fact, Ms. Burka had authorized use of the credit card.*fn9 However, because the Board decided that the Committee's recommendation of a one-year suspension as a sanction was overly harsh, it reduced the recommended sanction to six months, with the condition that Mr. Elgin pay restitution to Ms. Burka before he could be reinstated. The District of Columbia Bar Counsel ("Bar Counsel") and Mr. Elgin filed exceptions to the Board's report and recommendation.
Bar Counsel argues that Mr. Elgin's "dishonesty was far more pervasive and egregious than the Hearing Committee and the Board concluded," and that the sanction recommended by the Board is too lenient. Bar Counsel believes the appropriate sanction is either disbarrment or a three-year suspension, full restitution,*fn10 and a fitness requirement as a condition of reinstatement. Mr. Elgin contends in his brief that a suspension of six months is inordinately severe, and that the court should impose public censure as his sanction, in addition to ordering restitution as a condition of reinstatement. During oral argument, Mr. Elgin expressed the view that, in the alternative, a three-month suspension, with a restitution requirement, would be acceptable.
Given the seriousness of Mr. Elgin's misconduct and in light of sanctions imposed in pertinent past cases, we impose the Board-recommended sanction of suspension for six months, and restitution in the amount of $5,000.00 to Ms. Burka, with interest, as a condition of reinstatement.
As a result of Ms. Burka's complaint, on August 16, 2000, Bar Counsel filed specification of charges and began formal disciplinary proceedings against Mr. Elgin, alleging that he violated Rules 1.2, 1.3 (b)(2), 1.4 (a) and (b), 1.5 (b), 1.7 (b)(4), 1.8 (a), 1.15 (b), 8.4 (c), and 8.4 (d) of the Rules of Professional Conduct. This matter was heard by the Committee on February 2, 7 and 16; March 19 and 21; and May 5 and 12, 2001. Bar Counsel called several witnesses, including Ms. Burka and Mr. Burka. Mr. Elgin testified and called Mrs. Elgin and other witnesses. The Hearing Committee issued its report and recommendation on December 3, 2003, finding that Mr. Elgin had violated Rules 1.2, 1.3 (b)(2), 1.4 (a) and (b), 1.5 (b), 1.7 (b)(4), 1.8 (a), 8.4 (c), and 8.4 (d), but not Rule 1.15 (b).
The Committee's Pertinent Factual Findings
The record compiled by the Committee shows that Mr. Elgin first met Ms. Burka in 1980 at his wedding. His wife, Eileen Elgin ("Mrs. Elgin"), and Ms. Burka met in 1973 while working together as real estate trainees and agents in Northern Virginia. They later became close personal friends. In 1982, Ms. Burka lent Mrs. Elgin $6,000.00 to assist the Elgins' with their personal expenses.*fn11
The controversy over Mr. Elgin's representation of Ms. Burka has its roots in the year 1983. In early 1983, Mr. Elgin provided Ms. Burka with legal services in relation to a greeting card company that she intended to create. The Committee found that Mr. Elgin had worked 36.25 hours for Ms. Burka on this venture and was compensated in the amount of $2,500. Despite Mr. Elgin's contentions that he regularly represented Ms. Burka between 1983 and 1993, the Committee determined that from April 5, 1983 to 1993, he received no other remuneration for any legal services he provided to Ms. Burka. While the Committee concluded that Mr. Elgin had intermittently provided legal advice to Ms. Burka, it did not consider such advice to constitute "regular representation in the usual sense of the phrase."
The relationship between Ms. Burka and the Elgins became more complicated in 1993, when the Burkas' marriage collapsed and Ms. Burka required legal assistance. As part of the termination of their marriage, in early 1993, the Burkas entered into a Property Settlement Agreement ("PSA"). The PSA provided that a defaulting party would be responsible for "all reasonable fees and costs (attorney's fees, court costs, and the like) incurred by the party seeking enforcement of the Agreement." Consistent with the PSA, Ms. Burka was awarded a cash sum and alimony for five years. A few months later, in or about May 1993, Mr. Burka sued his ex-wife, alleging that during her final walk-through of their marital home, she had violated the terms of the PSA by taking property designated for him. Mr. Burka sought the return of or compensation for the property, as well as attorney's fees. In October 1993, this action was consolidated by the Fairfax, Virginia Circuit Court with the Burkas' divorce proceeding. Ms. Burka initially chose Mark Barondess to represent her, but when it became clear he might be called as a witness, she began searching for alternate, less expensive counsel.
After discussing the matter with Mrs. Elgin, Ms. Burka asked and Mr. Elgin agreed in October 1993 to represent her in the consolidated action for a flat fee of $10,000.00 plus expenses.*fn12 It is uncontested that this oral fee agreement was never reduced to writing. Ms. Burka paid the $10,000.00 fee in addition to other expenses, which included charges for local counsel since Mr. Elgin was not a member of the Virginia Bar. The Committee found that there was such confusion over the cost of the representation that it could not be said that Mr. Elgin had adequately explained the terms of his fees to Ms. Burka.*fn13
The confusion over the attorney's fees intensified in late 1993 when the Internal Revenue Service ("IRS") notified Ms. Burka that she owed $34,000.00 plus $4,500.00 in interest relating to a joint 1991 tax return filed by the Burkas; she paid the sum in protest. In early 1994, Mr. Elgin alleged as an affirmative defense in the consolidated action against Ms. Burka, that Mr. Burka had breached the PSA by applying to the IRS for payment of that portion of the 1991 tax refund received by Ms. Burka. Mr. Elgin also filed a separate action in May 1994, alleging the same misconduct on the part of Mr. Burka, and submitted a motion to join the separate claim to the consolidated action. In July of 1995 the Fairfax Circuit Court denied Mr. Elgin's motion, and on August 30, 1995, Mr. Elgin filed a breach of contract action in the Fairfax Circuit Court pertaining to the IRS matter. When Mr. Burka's motion to dismiss this claim failed in early December 1995, the discovery phase proceeded during which Mr. Elgin offered and Mr. Burka rejected a settlement offer. In July 1996, the Fairfax court dismissed the breach of contract action with prejudice.
In July of 1994, Mr. Burka won his consolidated action. Ms. Burka, still represented by Mr. Elgin, appealed and lost again as the Court of Appeals of Virginia affirmed the judgment in favor of Mr. Burka on May 2, 1995. Mr. Elgin, on behalf of Ms. Burka, then petitioned for leave to appeal to the Supreme Court of Virginia but on September 15, 1995, that court dismissed the petition. The Committee found that "Ms. Burka was deeply involved in many of the details of the litigation of the [various legal actions], . . . that she raised many considerations that required substantial amounts of Mrs. Elgin's time to listen and record them and required significant amounts of [Mr. Elgin's] time to review and consider what action to take."
From an examination of the evidence regarding these legal actions and from the testimony of various witnesses, the Committee discredited Ms. Burka's testimony that she only discovered that Mr. Elgin was not a Virginia lawyer on the "'first day of court in March '94.'" Although the Committee found that the Elgins never explicitly advised Ms. Burka at the outset that Mr. Elgin was not a Virginia lawyer, it credited Mrs. Elgin's testimony that Ms. Burka knew this from previous legal dealings with Mr. Elgin and it also credited Mr. Elgin's testimony that Ms. Burka was heavily involved in the selection of local counsel. The Committee did not agree with Bar Counsel that Ms. Burka was unaware that she would have to pay additional expenses above the $10,000.00 amount for local counsel.
In addition, the Committee stated that "[d]ue to the complications that arose with regard to the IRS and the affirmative actions that were filed, it would be reasonable for [Mr. Elgin] to seek a revision to the flat fee arrangement." Although there were considerable discrepancies regarding additional fees paid to Mr. Elgin by Ms. Burka, the Committee determined that pursuant to an agreement between the Elgins and Ms. Burka, the Elgins were to accept $4,000 as a fee payment for the affirmative IRS matter (to be paid through Ms. Burka's repayment of bills incurred by [the Elgins] on [a] Crestar credit card), with an understanding that [Mr. Elgin's] request for a $10,000 retainer (for matters beyond those reasonably expected at the time representation began in October 1993) was being discounted by a $6,000 repayment of the 1982 loan to the Elgins.
The Crestar credit card which belonged to Ms. Burka and which had a maximum limit of $10,000.00 and a zero balance, created more problems. Ms. Burka not only gave the card to Mrs. Elgin but also indicated that she would pay charges up to the specified amount. True to her word, Ms. Burka paid the first $4,000.00 the Elgins charged to the card. Ms. Burka maintained that she did not authorize the Elgins to make charges on the card in excess of $4,000.00. However, the Committee concluded that by the end of June 1994, the Elgins had charged $9,420.04 on the credit card and Ms. Burka was aware of these charges because the bill was sent to her home. Bar Counsel asserted that Mr. Elgin misused the credit card by making charges on the card in excess of $4,000.00, but the Committee stated that Bar Counsel "failed to prove by clear and convincing evidence that the Elgins were authorized to charge only the $4,000 . . . ." The Committee again discredited Ms. Burka's testimony, noting:
If Ms. Burka felt coerced to hand over the card and intended to limit charges to $4,000 . . . her subsequent behavior seems unusual. First, it seems inconsistent with the very friendly note [Ms. Burka sent with a] replacement card.*fn14 Further, Ms. Burka was, at least to some degree, aware of the Elgins' past financial problems. She had previously loaned them $6,000 that was never repaid. Given the degree of sophistication about business that she displayed to the Committee, the Committee found it hard to believe that she would have given her credit card for use by another except for the reasons given by the Elgins -- a degree of personal concern for their situation*fn15 and the convenience to her of not having to come up with a lump of cash right away.
Ms. Burka's account of her actions when the Elgins had charged more than $4,000 seems odd as well. She knew they had a credit card of hers with a $10,000 limit and were having some difficulty paying the bills. She nonetheless had the statements sent to their address and did not cancel the card.*fn16 She says she did not cancel the card because [Mr. Elgin] told her it had been destroyed. If she believed that at the time, however, it still seems odd that someone with Ms. Burka's sophistication would not have canceled the card with Crestar.
In July of 1994, Ms. Burka paid down another $5,000.00 on the Crestar credit card. The reason for this was also in dispute, with Ms. Burka characterizing it as a loan given to the Elgins in a time of need, and the Elgins characterizing it as payment for Mr. Elgin's work on the appeal of the consolidated action. The Committee credit[ed the Elgins'] testimony insofar as Ms. Burka was aware that they considered the $5,000 payment to be applied to fees. Their testimony [wa]s consistent with the timing of the payment in connection with the loss at trial of the [consolidated] action and Ms. Burka's desire to appeal . . . . Further, the amount [wa]s consistent with a minimal fee for an appeal in what appears to have been a rather complex matter. Ms. Burka's notation on the check, "loan to L.E."*fn17 [wa]s consistent with her testimony at the hearing, but that check would not have been something seen by the Elgins. . . . Ms. Burka's rationale for not requesting a note for the 'loan' [wa]s inconsistent with her business acumen and her knowledge at the time.*fn18 Therefore, [the Committee found] that while, with the lack of clarity about what the original $10,000 fee was to cover, there may have been some dispute about payment of the $5,000, the Elgins believed that Ms. Burka had agreed to the $5,000 extra payment for the appeal, while Ms. Burka did not see it that way.
By September 20, 1994, the Crestar credit card showed a balance of $11,200.86, including a fee for charges in excess of the card's $10,000.00 limit. Although the Elgins attempted to pay down the balance, by July 20, 1995 the outstanding balance was $10,840.51, including $840.51 in excess of the $10,000.00 credit limit. As a result, Crestar Consumer Finance Corporation ("Crestar") sued Ms. Burka in Fairfax Circuit Court seeking repayment. The Motion of Judgment was posted on the front door of the Elgins' house on July 24, 1995; Ms. Burka initially had no notice of the action against her.
The Committee found that Mr. Elgin failed to notify Ms. Burka of the Crestar action against her in a timely fashion. In fact, there is little dispute that Mr. Elgin filed an answer to the complaint on August 14, 1995 on Ms. Burka's behalf without even informing her of the suit.*fn19 Although Mr. Elgin claimed to have told Ms. Burka about the lawsuit within a day or two of receiving notice, the Committee discredited his testimony. However, the Committee chose not to credit Ms. Burka's testimony that the Elgins never informed her of the lawsuit. Instead, the Committee found that it was "at least as likely as not that Ms. Burka was told about the Crestar lawsuit," based largely on Mrs. Elgin's testimony that she heard Mr. Elgin conduct a three-way conversation with Mr. Burka and Ms. Burka sometime in October or November of 1995 regarding the lawsuit. Mr. Elgin settled the Crestar lawsuit and the Fairfax Circuit Court dismissed the case on March ...