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In re Bach

February 26, 2009


The opinion of the court was delivered by: Farrell, Senior Judge

On Report and Recommendation of the Board on Professional Responsibility (BDN 071-05).

Argued January 27, 2009

Dated December 20, 2007

Before REID, Associate Judge, and FERREN and FARRELL, Senior Judges.

Concurring opinion by Senior Judge FERREN at page 7.

Respondent, while serving as conservator for the estate of a 92-year-old woman, wrote himself a check from the estate for his services knowing that he was not authorized to do so without court approval, which he had not yet received. The Board on Professional Responsibility, in agreement with a Hearing Committee, concluded that this was intentional misappropriation of client funds and, accordingly, recommends that respondent be disbarred. See D.C. Rule of Professional Conduct 1.15(a); In re Addams, 579 A.2d 190 (D.C. 1990) (en banc).*fn1

We accept the Board's conclusions and recommendation, which are supported by its thorough and well-reasoned opinion. We attach the relevant parts of the opinion hereto, with record citations deleted (and footnotes renumbered). We add the following brief discussion that assumes familiarity with the Board's report and chiefly addresses the Board's stated concern that Addams' strong presumption of disbarrment as the proper sanction for intentional misappropriation may result in an unjust disposition here.

Respondent wrote himself a check for attorney's fees in the amount of $2,500 from the ward's modest estate, knowing that he was thereby violating D.C. Code § 21-2060 (a) (2001) and Superior Court Probate Rule 308, both requiring advance court approval of payment for attorney conservator services. As the Board and the Hearing Committee found, his reason for doing so was simple: the ward's nursing home had made a claim against the estate, and respondent was afraid that if he waited for court approval of his fee petition, "there would be no funds left to pay my fees."*fn2 Respondent thus conceded that the act was deliberate, and so he cannot rely on the extenuation we found in In re Fair, 780 A.2d 1106 (D.C. 2001), where the lawyer had relied on "an ambiguous probate culture" to mitigate her taking of unapproved fees despite a similar statutory bar governing work on decedents' estates. Id. at 1113. Respondent, unlike Fair, was under no misapprehension of his duty to obtain advance court approval. Thus, the rule of Addams applies, which holds that "[b]ecause the 'breach of trust' entailed by intentional misappropriation 'is so reprehensible, striking at the core of the attorney-client relationship, . . . '[o]nly the most stringent of extenuating circumstances [will] justify a lesser disciplinary sanction such as suspension.'" In re Pennington, 921 A.2d 135, 141 (D.C. 2007) (quoting Addams, 579 A.2d at 193, 198-99). As the Board correctly found, no such circumstances are present here.*fn3

The Board nevertheless has expressed strong misgivings about the justice of applying Addams' presumption of disbarrment to respondent's case:

[I]f we had the discretion to do so, we would not subject a lawyer whose only violation consists of prematurely taking a legitimately earned fee to the same draconian sanction that is appropriately imposed on a lawyer who deliberately steals client funds. The latter is undoubtedly far more serious than the former, constitutes an extraordinary violation of the client's trust and more seriously undermines public confidence in the integrity of the legal profession - the underlying considerations cited by the Addams Court. Addams, 579 A.2d at 193-94. We have no doubt that the public would recognize that these two forms of misconduct, though both serious, are fundamentally different and that the former warrants a less severe though substantial sanction. . . . [D]isbarring Respondent effectively equates his misconduct with the most egregious and dishonest misappropriations that victimize clients, and needlessly deprives the Court and an underserved public of a capable conservator who made a single mistake that ultimately caused no harm.

In his brief, Bar Counsel does not address these expressed concerns at all, but we must do so. The Board either is asking the division to craft an exception to the strict Addams rule for respondent's behavior, or is implicitly asking the court to reconsider Addams' holding that "in virtually all cases of misappropriation, disbarrment will be the only appropriate sanction unless it appears that the misconduct resulted from nothing more than simple negligence." Addams, 579 A.2d at 191. If the former, then we do not think the Board has furnished us with a principle on which to distinguish our prior decisions. Its comparison of respondent to a lawyer who "deliberately steals client funds" appears to stress the fact that respondent was later found to have "legitimately earned [the] fee" he took. But attorneys heretofore disbarred for misappropriation - including Addamshimself, see 579 A.2d at 192-93 - have likewise claimed they had earned or were otherwise entitled to the funds, see also, e.g., In re Pels, 653 A.2d 388, 397 (D.C. 1995), and the court has been unmoved by such expectations of (or wagers on) after-the-fact ratification. E.g., In re Utley, 698 A.2d 446, 450 (D.C. 1997) ( rejecting attorney's reliance on later "ratification").*fn4

It is also true, as the Board notes, that respondent did not conceal his self-payment, in the sense that he later disclosed it in his annual accounting (filed over a year after the check was written), thus enabling the probate court through its "supervisory mechanisms" to discover it and take appropriate action.*fn5 But an attorney who knows he has done what the law forbids may not leave it to chance or the diligence of auditors to bring (or not bring) the action to light; and so the fact that respondent revealed the improper payment confirms only, we think, that he acted without the "moral corruptness" of an intent to deceive - a factor that Addams makes irrelevant to deliberate misappropriation and the attendant sanction. See 579 A.2d at 196-97. Finally, although respondent committed only a "single mistake" involving a modest sum of client money, Addams rejected repetition - or multiple misdeeds - as the key to the required sanction in this area of taking client funds, see id. at 198, and we see no difference in principle between an attorney who takes a much larger unauthorized fee and respondent's action in taking money from an estate that (according to his later accounting) totaled less than $12,000.

Consequently, while disbarrment may appear "draconian" as applied to respondent's conduct, the Board has not defined for us an exception of principle to Addams' rule that does not risk "simply paying lip service" to it. Pels, 653 A.2d at 398. Disbarrment under Addams is not reserved for the "most egregious and dishonest" instances of intentional misappropriation, and the Board's own recommendation of disbarrment effectively admits that respondent's conduct differed only in degree, not kind, from cases in which the Addams rule has been applied unyieldingly. See, e.g., In re Robinson, 583 A.2d 691 (D.C. 1990) (attorney disbarred for misappropriation despite relatively small sum involved, quick restoration of funds, lack of financial harm to client, single instance of misappropriation, and attorney's relative inexperience, absence of a prior disciplinary record, and favorable character testimony).

It is probable, therefore, that the Board, without expressly saying so, sees this as a case that invites reconsideration of Addams. In that regard, we confine ourselves to restating what the division in Pels said in rejecting the recommendation by Board members of a "stay" of disbarrment there:*fn6

Individual members of this division . . . believe the result Addams dictates in this case is a harsh one. On the other hand, . . . in Addams the court weighed the concern of seemingly unjust application of a categorical sanction to particular cases against "our concern . . . that there not be an erosion of public confidence in the integrity of the bar. Simply put, where client funds are involved, a more stringent rule is appropriate." Addams, 579 A.2d at 198. Whether the paramount goal of deterrence that drove the decision in Addams can be achieved by lesser , more case-individual sanctions for misappropriation is an issue the full court is always free to revisit - though with the attendant risk of loss of predictability in our exercise of this most critical feature of our regulatory supervision. The division's obligation in this case, in any event, is clear.

653 A.2d at 398.

Accordingly, respondent William S. Bach is hereby disbarred from the practice of law in the District of Columbia effective thirty days from the date of this opinion.*fn7

So ordered.

FERREN, Senior Judge, concurring:

I join in the Board's recommendation and the court's opinion ordering disbarrment, but only because, as Judge Farrell makes clear, our en banc opinion in Addams,*fn8 decided almost two decades ago, forces that result. But for Addams' virtually per se rule requiring disbarrment in all cases of intentional misappropriation of client funds, that remedy may be too severe on the facts here. Mitigating factors, when compared with factors in aggravation, may suggest that respondent deserves no more that a suspension of some sort.*fn9 For the reasons that follow, therefore, I urge the full court to revisit Addams.

In urging such reconsideration, I continue to subscribe to the views expressed in my opinion in Addams concurring in the result.*fn10 There, I agreed with "the majority's basic thesis that misappropriation cases are different from other disciplinary cases and therefore call for 'a more stringent rule.'"*fn11 To me, however, this meant that "in determining the sanction in a non-negligent misappropriation case, we should begin with a presumption of disbarrment" -- a presumption, as I see it, that establishes the "more stringent rule" -- but then "evaluate and apply all aggravating and mitigating factors as we would in any other disciplinary case."*fn12

The Addams majority, however, essentially abandoned application of standard mitigation and aggravation analysis by adding to the presumption of disbarrment a limitation that makes the presumption "virtually non-rebuttable."*fn13 Said the court: "[T]he mitigating factors of the usual sort, see, e.g., In re Reback, [supra note 5], will suffice to overcome the presumption of disbarrment only if they are especially strong and, where there are aggravating factors, they substantially outweigh any aggravating factors as well."*fn14 As a result of this severe language, this court has limited exceptions to disbarrment for intentional misappropriation of client property under Rule 1.15(a) to cases of chronic alcoholism found to provide a medical excuse for the lawyer's behavior.*fn15 Addams, therefore, as predicted, has established for all practical purposes a per se disbarrment rule.*fn16

I have no sympathy for lawyers who intentionally misappropriate funds. I agree that the public deserves protection against them -- a protection supplied, initially, by the presumption of disbarrment announced prospectively in Hines*fn17 and reinforced in Addams. Once that presumption is in place, however, I believe that this court should return to Hines's reliance on case-by-case factual analysis.*fn18 In Hines, we initially articulated the presumption: "[W]e take this occasion to notify the bar that in future misappropriation cases disbarrment will ordinarily be the sanction imposed by this court."*fn19 Then came the invitation to rebuttal:

We stress the word 'ordinarily,' for every case must turn on its own particular facts. There may be instances of misappropriation which, for any number of reasons, may call for a lesser sanction. Nevertheless, the bar should take notice that from this moment on, in disciplinary cases involving attorneys who misappropriate their clients' funds, disbarrment will be the norm unless it appears that the misconduct resulted from nothing more than simple negligence.*fn20

The Boards on Professional Responsibility that we have entrusted with disciplinary recommendations over the years, and certainly those from Hines to Addams and now this case,*fn21 have believed in the Hines approach, rejecting automatic disbarrment for intentional misappropriation. Their view has consistently been that, in addition to a lawyer's alcoholism or other impairment,*fn22 there will be instances -- probably very rare -- when various factors combine to make disbarrment unjust. I agree with that sentiment and, in particular, with the Board's post-argument submission -- indeed, its plea -- in Addams:

The use of mandatory sanction or so called "per se rules" should be avoided in the disciplinary system. Using per se rules leads to the perception that discipline is imposed in a mechanistic or even arbitrary manner. Although predictability may be fostered by per se rules, this benefit is offset by a real risk of injustice when the individual circumstances of a case cannot be taken into account in imposing sanctions. This is especially so when the per se rule leaves no choice but to impose the ultimate sanction of disbarrment.*fn23

Moreover, I concur entirely with the similar view of the present Board quoted by Judge Farrell.*fn24

Thus far, in addition to a finding of intentional misappropriation of client property, only conviction of a crime involving moral turpitude leads to automatic disbarrment.*fn25 All other lawyer misconduct is evaluated without any presumption as to sanction, let alone decided by reference to a conclusive sanction policy applicable to a specified category of misconduct.*fn26 Our standard of review*fn27 and stare decisis, of course, foster consistent dispositions, including disbarments, in comparable cases; but these consistent results are attributable to appraisals of fact, not to a conclusive disciplinary presumption.

If I were free to reject Addams' harsh rule, I would vote to restore greater symmetry to our disciplinary approach by reinstating the Hines formulation. To do so would not create a slippery slope of lesser sanctions that induce lawyers to misappropriate funds in anticipation of discipline less than disbarrment. I do not believe that lawyers behave unethically because they perceive that they can get away with a disciplinary sanction they find acceptable. In any event, with the presumption of disbarrment intact, as in Hines, I expect that disbarrment would continue to be the strongly preferred sanction for intentional misappropriation. I also expect that the minimum discipline imposed for intentional misappropriation (absent a disability that caused the misconduct) would be suspension from practice for a period appropriate to the facts. Finally, as the Board indicates in this case,*fn28 the public will expect, and be satisfied with, a just result without insistence on a wooden rule to get there -- indeed, a rule that requires disbarrment, on occasion, when grossly out of proportion to particular facts.

I recognize that a roll-back from Addams will raise questions about the propriety of some previous disbarments and will require the evolution of a new jurisprudential pattern for intentional misappropriation cases. My bet is, however, that given the presumption of disbarrment, the results over time will reflect little change; disbarments for such egregious behavior will remain the norm. A few individuals, however, perhaps including respondent in this case, will benefit appropriately from evaluation of their cases more closely along the lines that all other disciplinary cases are scrutinized, case by ...

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