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In re Pleshaw


August 12, 2010


On Report and Recommendation of the Board on Professional Responsibility (BDN 22-03).

The opinion of the court was delivered by: Kramer, Associate Judge

Argued June 30, 2010

Before WASHINGTON, Chief Judge, and KRAMER and FISHER, Associate Judges.

This case once again presents the question whether a conservator's misappropriation of estate funds involved "mere negligence" or recklessness. If we conclude that the respondent acted with more than "mere negligence," we are bound to disbar him under In re Addams.*fn1 We so conclude.

Following two days of hearings, respondent Robert Pleshaw was found to have violated thirteen disciplinary rules in his handling of matters for three different clients. The most egregious violation was the misappropriation of conservator funds,*fn2 which the hearing committee concluded was the result of negligence -- a conclusion which the Board on Professional Responsibility later determined understated Pleshaw's culpability. The facts relevant to the misappropriation charge are as follows. In late 1997, the Probate Division of the Superior Court of the District of Columbia (the "probate court") appointed Pleshaw to serve as counsel to Joseph Riley in an intervention proceeding, and later to be the guardian/conservator for the Riley Estate. On March 6, 1998, Pleshaw filed a petition for compensation as court-appointed counsel with the probate court in the amount of $1,050.

His petition was approved, and he withdrew this fee on May 7, 1998.

On May 17, 1999, Pleshaw again withdrew a fee, in the amount of $1,037.55, from the Riley Estate. This time, however, he neglected to file a petition for compensation before withdrawing these fees. Two days later, Pleshaw filed his First Accounting as conservator of the Riley Estate, in which he reported both the initial pre-authorized $1,050 withdrawal and the later unauthorized withdrawal of $1,037.55. This accounting was approved by the court, but not until February 7, 2000, over eight months after he withdrew the second fee.

Pleshaw once again withdrew funds without prior court authorization on June 11, 2001, in the amount of $1,652. This time he filed for court approval before withdrawing his fee. In fact, he filed two accountings with the court, one on October 26, 2000, and one on January 12, 2001. The court did not approve his request for the $1,652 commission in either instance; however, the documentation which Pleshaw received did not indicate the court's disapproval of the $1,652 commission.*fn3 Constance Stark, Esq., the former Register of Wills who testified for Bar Counsel regarding probate court procedures, indicated, when pressed, that it would be "reasonable" for an attorney to assume that an auditor would contact him if portions of the accounting had not been not approved. She also testified, however, that "I still take the position that the record is there and lawyers practicing in the [Probate] Division... would be well advised to check the file."

On July 21, 2003, the probate court issued an order finding that Pleshaw had made payments to himself totaling $2,689.55 without the court's prior approval and referred the matter to the Office of Bar Counsel. Notably, that order indicated that Pleshaw had already "re-deposited" the $2,689.55 to the Riley Estate. The hearing committee recommended that Pleshaw be suspended for one year. On review, the Board affirmed all of the hearing committee's findings of disciplinary violations, with the exception of its finding of negligent misappropriation of conservator funds.*fn4 The Board disagreed with the hearing committee's finding because it found "clear and convincing evidence that the misappropriation amounted to more than simple negligence." The Board concluded that Pleshaw's conduct constituted reckless misappropriation of entrusted funds and recommended disbarrment.

When considering a Report and Recommendation from the Board on Professional Responsibility, we "accept the findings of fact made by the Board unless they are unsupported by substantial evidence in the record, and shall adopt the recommended disposition of the Board unless to do so would foster a tendency toward inconsistent dispositions for comparable conduct or would otherwise be unwarranted."*fn5 While we defer to the Board's findings of fact, we review the Board's determinations of disciplinary violations de novo.*fn6 Notwithstanding the deference accorded to the Board's factual findings and its recommendation, "[u]ltimately... the system of attorney discipline, including the imposition of sanctions, is the responsibility and duty of this court."*fn7

Legal Analysis

We begin with the Board's finding of reckless misappropriation of conservator funds. Pleshaw does not dispute that he misappropriated funds and we agree with the Board that substantial evidence in the record supports this finding.*fn8 Pleshaw does contend, however, that the misappropriation was negligent, not reckless, and urges us to impose a suspension instead of disbarrment. Because we agree with the Board that Pleshaw's misappropriation of entrusted funds was reckless, we are required to disbar him on the authority of Addams.*fn9

We have defined misappropriation as "any unauthorized use of client's funds entrusted to [an attorney], including not only stealing but also unauthorized temporary use for the lawyer's own purpose, whether or not [he] derives any personal gain or benefit therefrom."*fn10 We have clearly established that "in virtually all cases of misappropriation, disbarrment will be the only appropriate action unless it appears that the misconduct resulted from nothing more than simple negligence."*fn11 In order to prove recklessness, Bar Counsel has the burden of proving by clear and convincing evidence*fn12 that Pleshaw "handled entrusted funds 'in a way that reveals either an intent to treat the funds as the attorney's own or a conscious indifference to the consequences of his behavior for the security of the funds.'"*fn13 Critically, under our precedent, "conscious indifference" suffices; disbarrment "is not reserved for the most egregious and dishonest" misappropriations.*fn14

Here, after being appointed conservator and properly withdrawing his initial fee pursuant to court authority, Pleshaw twice paid himself commissions from funds in the Riley Estate Account without obtaining court permission beforehand, in violation of D.C. Code § 21-2060*fn15 and Superior Court Probate Rule 308.*fn16 Pleshaw thus demonstrated that he was aware of and understood the conservatorship rules, but he nonetheless disregarded them for his own convenience.*fn17 This alone constitutes "conscious indifference."*fn18 Pleshaw contends that his conduct is analogous to that of the attorney in In re Fair, where we concluded that the "ambiguous probate culture" surrounding court authorization of fees and the fact that the relevant probate law changed less than a year after her violation mitigated an attorney's misappropriation of funds such that it did not rise to recklessness.*fn19 We disagree. The fact that Pleshaw properly followed the rules when he withdrew his initial fee demonstrates that the conservatorship culture is not "ambiguous." Moreover, the conservatorship laws requiring prior court approval for withdrawal of estate funds did not change around the time of Pleshaw's misappropriations, and notably have not changed to this day.*fn20

Pleshaw urges us to consider his prompt repayment of the funds and the fact that he did not commingle the misappropriated funds with his own as mitigating factors.*fn21 These factors do not help him overcome a finding of recklessness because proof of improper intent is not required.*fn22 We recognize the seeming oddity of imposing the identical severe sanction on attorneys who take legitimately earned fees without prior court authorization*fn23 as for attorneys who knowingly steal. Nonetheless, we are bound to follow*fn24 our long-standing judicial determination that misappropriation in any form is serious enough to warrant disbarrment.*fn25

We conclude that the record demonstrates that Pleshaw was familiar with the rules requiring a fiduciary to petition the court for permission before taking compensation from an estate. We agree with the Board that "the record evidence as a whole shows a clear pattern of 'conscious indifference' by [Pleshaw] to 'the security of funds' he held as a fiduciary." Accordingly, we adopt the Board's recommendation to disbar Pleshaw.*fn26

So ordered.

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