On Report and Recommendation of the Board on Professional Responsibility (BDN 054-01)
Submitted August 18, 2009
Before REID and KRAMER, Associate Judges, and FARRELL, Senior Judge.
The Board on Professional Responsibility recommends disbarrment of respondent for his cumulative conduct over more than ten years evincing (in Bar Counsel's summation) "non-negligent misappropriation and dishonesty, . . . [and] failure [a] to promptly deliver funds belonging to another, . . . [b] to deposit entrusted funds in a proper account, . . . [c] to maintain complete records of the funds for the required amount of time, . . . [d] to adequately protect [one] client ['s] . . . interests by intentionally failing to pursue her objectives or to act with reasonable promptness, and . . . [e] to comport himself properly before the disciplinary system" (Br. for Bar Counsel at 22).
We accept the Board's recommendation, supported by the comprehensive and cogent reasoning set forth in its report, which we adopt and append hereto. Fundamentally, the report demonstrates "a pattern or course of conduct [by respondent manifesting] an unacceptable disregard for the welfare of entrusted funds," In re Anderson, 778 A.2d 330, 339 (D.C. 2001) (Anderson I), in that he made it a practice not to pay . . . medical providers but [rather] to use the funds that should have been paid to them for other purposes until and unless pursued and caught by the medical providers. In [the present] case, he kept and used the funds for his own purposes for at least five years, while repeatedly falsely reassuring the client that he had satisfied the medical providers and that she should not concern herself with their claims.
Accordingly, respondent is hereby disbarred from the practice of law in the District of Columbia. For purposes of reinstatement, the period of disbarrment shall begin following his compliance with the requirements of D.C. Bar R. XI, § 14. See id. § 16 (c). Reinstatement shall also be conditioned upon respondent's fulfillment of the restitution obligation recommended by the Board.
REPORT AND RECOMMENDATION OF THE BOARD ON PROFESSIONAL RESPONSIBILITY
This is the third case in the last seven years brought against Respondent for misappropriation during the 1990's resulting from keeping for his own use or his clients' use personal injury settlement funds that belonged to medical providers or to his clients. Although the basic activities in this matter occurred before Respondent was suspended for six months by the D.C. Court of Appeals (in August 2001) for the first matter brought against him by Bar Counsel, In re Anderson, 778 A.2d 330 (D.C. 2001) (hereafter, "Anderson I"), critical actions by the Respondent in this matter, after the suspension, reveal that Respondent still lacks an appreciation of his responsibilities to protect his clients' interests in settlement funds and to deliver promptly to creditors of the clients monies that had been designated for them.
Disbelieving Respondent's explanations -- because of both his dissembling demeanor at an evidentiary hearing and the implausibility of his story -- Hearing Committee No. Six unanimously recommended Respondent's disbarrment for what it found to be at least reckless misappropriation. The Hearing Committee concluded that Respondent's failure to pay the medical providers from the 1996 settlement ripened into at least reckless misappropriation by 2001 when Respondent falsely reassured his client that he had paid the outstanding bills from the settlement proceeds even though he had no records to substantiate those claims, made no effort to locate such records and took no actions with the creditors to satisfy these long overdue claims. Viewing this record in the light of the two previous similar cases against Respondent and examining the "entire mosaic" presented of Respondent's approach to settlement funds,*fn1 as we were urged to do by the Court of Appeals in its recent decision in In re Ukwu, No. 05-BG-788, ___ A.2d ___ (D.C. June 21, 2007), the Board concludes that the misappropriation was at least reckless from the outset and compounded by dishonest conduct around the time of his suspension and recommends disbarrment.
The Hearing Committee found that Bar Counsel had proved all of its charges by clear and convincing evidence. Those charges were violations of the D.C. Rules of Professional Conduct, 1.3(b) (failure to pursue client's objectives), 1.3(c) (failure to act with reasonable promptness), 1.15(a) (misappropriation, failure to maintain financial records), 1.15(b) (failure to deliver funds promptly), 1.17(a) (failure to deposit trust funds in properly denominated account), 8.4(c) (dishonesty), 8.4(d) (serious interference with administration of justice), and D.C. Bar R. XI, § 19(f) (failure to keep proper escrow records). The Board similarly concludes that each of the violations has been established by clear and convincing evidence and that disbarrment is required under In re Addams, 579 A.2d 190 (D.C. 1990) (en banc) because the misappropriation was at least reckless.
We adopt below the Hearing Committee's well supported findings of fact, with minor modifications, but reach our own legal conclusions and characterizations of these findings, although they lead to the same ultimate recommendation.
1. Respondent is a member of the District of Columbia Bar, having been admitted on September 22, 1989 and assigned Bar Number 420236. Tr. 211; BX A.*fn2
2. On July 17, 1995, Robin Fisher-Hammond and her minor son were injured in an automobile accident in Maryland. Tr. 43, 102; BX 7 at 1, 4. Ms. Fisher-Hammond was transported by ambulance to Laurel Regional Hospital in Laurel, Maryland on the same day and treated there for her injuries. Tr. 44; BX 7 at l. The bill for her treatment was $397.12. BX 2. Ms. Fisher-Hammond's son also received treatment at Laurel Regional Hospital. Tr. 46. Ms. Fisher-Hammond received follow-up medical treatment for approximately eight months after the accident from Dr. William J. Launder of Maryland Orthopedics. Tr. 48-51; BX 1, 7 at 2.
3. The day after the accident, Ms. Fisher-Hammond engaged Respondent to pursue her claim against the driver who had struck her automobile. Tr. 44-49. Ms. Fisher-Hammond does not recall receiving or signing an engagement agreement with Respondent, and no such agreement appears in Respondent's file as submitted to Bar Counsel. Tr. 45-46; BX 7 (materials provided by Respondent to Bar Counsel).*fn3 She did recall signing an engagement agreement in an earlier case in which Respondent had acted for her. Tr. 47. Respondent settled Ms. Fisher-Hammond's son's case and disbursed the proceeds; those funds are not at issue in this matter.
A. Deposit, Disbursement and Withholding of Settlement Proceeds
4. Ms. Fisher-Hammond's case settled in or about April 1996. Pursuant to the settlement, the Maryland Automobile Insurance Fund ("MAIF") issued a check (No. C25283) dated April 12, 1996 to "Robin Hammond and John Anderson, Attorney" in the amount of $14,338.37. Tr. 225, 313-315; BX 3, 7 at 2.
5. On or about April 19, 1996, Respondent deposited the MAIF check into an account denominated "John Anderson & Associates" and numbered 6670178125 at Signet Bank (now Wachovia Bank, Tr. 17, 20-21). Tr. 25, 27-28; BX 4 at l. Ms. Fisher-Hammond does not recall endorsing or even seeing the MAIF check. Tr. 53-54. But cf. Tr. 313-315 (Respondent's claim that he presented check to client for her co-endorsement). Respondent's bank account did not contain the words "trust" or "escrow" in its title. Tr. 22; BX 4-6.
6. On or about May 10, 1996, Respondent met Ms. Fisher-Hammond at her home and provided her with a check in the amount of $7,802.00 drawn on the "John Anderson & Associates" account at Signet Bank. Tr. 54-55, 226; BX 5 at 11, 11 A; BX 7 at 2. Respondent also presented and asked Ms. Fisher-Hammond to sign a disbursement sheet. Tr. 56, 224-225; BX 1. The disbursement sheet is undated and contains the following entries:
Robin Hammond v. Anna Luckett
Amount of Settlement$14,338.37
Rental Expenses Recovered (included in the above sum) (No Atty Fee charged on this amount)$1,500.00
Attorney Fee (Atty Fee charged on $12,838.37 only)$4,279.00
Misc. Expenses (records fee to Hospital; phone calls to both insurance companies long dist.; pictures; postage; faxes; courier; trips to dealership)$100.00
Dr. Launder (reduced from $2,490.12 balance)$1,800.00
P.G. Radiodiagnostic (reduced from $173.00)$133.00
Capital Emergency Associates$120.00
PIP Benefits to A. Hammond$292.75
Total to Ms. Hammond$7,802.00
Ms. Robin Hammond Thank-you for using my office!!
Tr. 56, 224-225; BX 1 (italicized text indicates Ms. Fisher-Hammond's signature).
7. Respondent indicated to Ms. Fisher-Hammond at the May 10 meeting that he would pay her medical providers using the $2,450.12 he had withheld from the settlement proceeds for that purpose. Tr. 58-60, 242; BX 1. The medical providers included Maryland Orthopedics, P.G. Radiodiagnostic, Capital Emergency Associates, and Laurel Regional Hospital (indicated on the disbursement sheet as "P.G. Hospital"). BX l. As reflected on the disbursement sheet, Respondent represented that two of these providers, Maryland Orthopedics and P.G. Radiodiagnostic, had already agreed to reduce their bills. Tr. 57; BX 1.
8. As a consequence of her May 10, 1996 meeting with Respondent, Ms. Fisher-Hammond assumed that the medical providers would be paid with the withheld settlement proceeds and gave no further thought to their payment for some years thereafter. Tr. 59-61.
B. Payments to Medical Providers
9. Respondent appears to have paid one of Ms. Fisher-Hammond's medical providers, Capital Emergency Services, albeit less than the invoiced amount. The Signet Bank account was debited on May 17, 1996 for check 1053 in the amount of $96.00. Tr. 31-32; BX 5 at 1. Although the microfiche copy of the check is largely illegible, the words "CAPITAL EMERGENCY" are clearly visible on the back side of the check. Tr. 31, 34-36, 228-229; BX 5 at 16a. A payment of $96.00 would reflect a 20% discount of the initial invoice amount of $120.00. Such a discount would be consistent with Respondent's practice of "compromising" or negotiating reductions of his clients' medical bills after settlement. We note in this regard that Respondent appears to have sought a 20% reduction of the Laurel Regional Hospital bill as well, though apparently without success. Tr. 302-303; BX 7 at 25, 83; RX 2. There is no documentation, however, establishing that Capital Emergency Associates actually agreed to the reduction as opposed to simply cashing the check and failing to pursue the balance on account of the small amount of money involved. It is also curious that the Capital Emergency Associates check was cashed on the same day as Ms. Fisher-Hammond's disbursement check, yet the 20% reduction is not reflected on the disbursement sheet Respondent provided to Ms. Fisher-Hammond with her check.
10. The May and June 1996 statements for the "John Anderson & Associates" account at Signet Bank do not reflect any payments to Maryland Orthopedics, Laurel Regional Hospital, or P.G. Radiodiagnostic. Tr. 31-32; BX 4-6. There is no evidence to corroborate Respondent's claim that he paid Maryland Orthopedics in 1996. Tr. 136-137. He has not remitted the amount of the reduction (presumably the $1,800.00 he withheld for this purpose minus $1,250.00, or $550.00) to Ms. Fisher-Hammond, although these funds belong to her. Tr. 77-78. Respondent was not able to produce any documentation of having paid Maryland Orthopedics prior to the February 14, 2006 settlement, of having paid the $397.00 invoice from Laurel Regional Hospital, or of having paid the $173.00 invoice from P.G. Radiodiagnostic. BX 7; see also BX 4-6.
C. Unauthorized Use of Settlement Proceeds
11. Although the May and June Signet Bank account statements fail to show payments to three of the four medical providers, they clearly reflect the impermissible depletion of withheld settlement funds from the account. Checks 1061 and 1062 cleared on June 21, 1996, bringing the account balance to $670.20, well below the $2,330.12 (i.e., the $2,450.12 withheld minus the discharged $120.00 obligation to Capital Emergency Associates) Respondent was required to hold in trust to pay Ms. Fisher-Hammond's medical providers, plus the $24 he owed to Ms. Fisher-Hammond on account of the reduction of the Capital Emergency Associates payment.*fn4 Tr. 29-32; BX 6 at 1; But cf. Tr. 39-40 (evidence does not foreclose possibility that smaller invoices from P.G. Radiodiagnostic and Laurel Regional Hospital were paid after June 24, 1996 from remaining $670.20 of withheld settlement proceeds).
12. The disbursements leading to this shortfall were clearly for Respondent's own purposes rather than Ms. Fisher-Hammond's, with a number of checks made out to "Cash" or to third parties with no apparent relation to the case. BX 5, 6. By Respondent's own admission, the two checks (1061 and 1062) that immediately precipitated the shortfall pertain to another case. Tr. 239-242. Check 1061 is payable to an Antoine Thompson for "Settlement" in the amount of $900. BX 11-12. Check 1062 is made out to "Cash" in the amount of $1,600.00, with the notation "Thompson - Reduced Fee" in the "Memo" section. BX 6 at 13-14; see also Tr. 239-241 (Respondent's statement that $1,600.00 was fee relating to another case).
13. Ms. Fisher-Hammond had not authorized Respondent to use the funds for any purpose other than paying her medical providers. Tr. 59-61.*fn5
14. Respondent concedes that these transactions resulted in a misappropriation of funds, Resp. Post-Hrg. Br. 7 ("There is no dispute that Respondent misappropriated funds . . . ."), and the Committee found and the Board affirms that Bar Counsel ...