A Member of the Bar of the District of Columbia Court of Appeals (Bar Registration No. 372772) On Report and Recommendation of the Board on Professional Responsibility (BDN 374-04)
The opinion of the court was delivered by: Ruiz, Associate Judge:
In this case, we determine, for the first time, that the presumptive rule of disbarrment established in In re Addams, 579 A.2d 190, 191 (D.C. 1990) (en banc), should not be imposed as a sanction for intentional misappropriation. We adopt the Board on Professional Responsibility's uncontested finding that respondent misappropriated client funds but, unlike the Board, conclude that the misappropriation was intentional, not negligent. However, we agree with the Board's alternative recommendation, and conclude that the facts of this case present "extraordinary circumstances" that warrant an exception to Addams's presumptive discipline of disbarrment for intentional misappropriation, id., and adopt the Board's recommended sanction that respondent be suspended for six months, with the suspension stayed in favor of probation.
The Hearing Committee found the following facts, which the Board adopted. Respondent, Willie N. Hewett, has practiced law in the District of Columbia for over 15 years without any prior ethical complaint against him. On March 6, 1992, respondent was appointed by the Probate Court to serve as successor conservator for Ralph H. Jewell, who had been a ward of the court since 1985. The Hearing Committee and the Board found that, as Jewell's conservator, respondent "completely fulfilled his duties . . . and took steps, based on basic human kindness, which went beyond his legal responsibility to his ward." Mr. Jewell, who lived in a nursing home, was confined both to a wheelchair and a feeding tube. Other than respondent and a church group, he had no relatives or visitors; respondent "visited Mr. Jewell on personal, uncompensated visits." Mr. Jewell died on April 21, 2003, and respondent was the only person at his funeral.
The facts giving rise to the instant disciplinary matter occurred when respondent was given notice in March of 2001 that Mr. Jewell would be undergoing a Medicaid eligibility review in the next few months and that his cash assets "could not exceed $2500 or he would be disqualified for Medicaid." (internal alterations omitted). Mr. Jewell's nursing home care was paid for by Medicaid; his only source of income was $90 per month from the Veterans Administration. After he was appointed as conservator, respondent had established a bank account in Mr. Jewell's name, in which the monthly Veterans Administration checks were deposited and for which respondent filed an annual accounting. In March of 2001, there was a total of $7,820.79 in Mr. Jewell's account, $5,320.79 over the maximum allowed to maintain Medicaid eligibility. "Respondent believed and the Hearing Committee found that a disqualification would have been devastating to the interests of the ward."
In preparation for the Medicaid eligibility review, respondent began to spend down Mr. Jewell's bank account. Among other items, respondent purchased a blue serge suit and gloves, which had been requested by Mr. Jewell, and paid a funeral home for "pre-need funeral expenses," and for "Grave opening and closing; Marker and Vault Placement," at a cemetery. In total, respondent spent $4,646.54 on behalf of Mr. Jewell, but after deducting back charges and adding the month's $90 veteran's check, on May 30, the account was still approximately $750 over the Medicaid limit. The report to Medicaid concerning Mr. Jewell's assets was due May 31.
On May 31, 2001, respondent filed with the probate court the ninth annual accounting of Mr. Jewell's finances, together with a separate petition seeking a fee of $2,006.25 for his "legal services." The Board found that "but for the impending Medicaid review, Respondent would not have filed the petition for legal fees." Respondent's petition detailed the time he had spent on Mr. Jewell's matters during the year, and "carefully documented" 16.05 hours, which included "filing appropriate documents on the ward's behalf when necessary, and visiting the ward to assess his needs and provide for those needs." The petition requested a "reasonable fee" of $125 an hour. Contrary to the applicable statute and court rule, respondent withdrew the requested funds from Mr. Jewell's account the same day he filed the petition, before any approval had been granted by the probate court. Although the petition stated that "[t]he ward is currently in the process of spending down to maintain Medicaid eligibility," it did not inform the court that the fees requested in the petition were being withdrawn as part of the spend-down. After the withdrawal, Mr. Jewell's account carried a balance of $1,244.09, within the Medicaid limit.
Respondent's ninth annual accounting was approved, but his fee petition was denied by the probate court on September 11, 2001, because the services respondent had provided to Mr. Jewell were "not legal in nature nor compensable as attorney's fees pursuant to court rule." (internal alterations omitted) Even though respondent had been appointed in 1992, because Mr. Jewell's conservatorship had begun in 1985, it was governed by Superior Court Probate Rule 225, which provides that "[c]ompensation to a conservator . . . for ordinary services shall be by commission which shall not exceed 5% of amounts disbursed from the estate."*fn1 In other words, while respondent was entitled to collect a fee for the services he provided Mr. Jewell, he was eligible to receive only 5% of the amounts disbursed from the estate, or approximately $23.67, for the 16 hours of "ordinary services" he had devoted to Mr. Jewell (less than $1.50/hr.). This was far less than the $2,000 he had requested as a "reasonable fee" for "legal services." The Hearing Committee credited respondent's testimony that he never received a copy of the order denying his fee petition.
Subsequently, the Probate Court scheduled a show-cause hearing for December 10, 2002, because respondent had not filed the next (tenth) annual accounting, due April 12, 2002.*fn2 The Hearing Committee found that it was not until December 8, 2002, in preparation for the hearing and for filing the tenth accounting, that respondent became aware that his fee petition filed the previous year had been denied. On December 9, 2002, respondent filed the overdue tenth accounting and, on December 12, 2002, respondent deposited the $2,006.25 he had withdrawn from Mr. Jewell's account as payment for respondent's services on May 31, 2001. Upon the filing of the accounting, the Probate Court vacated its show-cause order but scheduled a status hearing, after which the Honorable A. Franklin Burgess, Jr. referred respondent to Bar Counsel because he had "without court approval, paid himself a fee at a rate inconsistent with the applicable rule."
II. The Disciplinary Proceedings
The Hearing Committee was "constrained to find a misappropriation" but thought that "the stigma attached to a finding of misappropriation" was not warranted in respondent's case. Because there was no "evidence of fraud, self-dealing, misrepresentation, conflict of interest, or any pattern of inappropriate conduct," and, to the contrary, respondent's action "was, in intent and effect, in the best interest of his ward," the Committee recommended that respondent be suspended for thirty days, stayed during a one-year probationary period during which respondent would be required to complete six hours of legal education "on the subject of representing wards before the probate court." The Board issued a Report*fn3 recommending that the court should find respondent in violation of District of Columbia Rules of Professional Conduct 1.1 (a),*fn4 (b),*fn5 1.15 (a),*fn6 and 8.4 (d).*fn7 The Board found that "[w]hile generally over a long period of time, respondent's representation had been competent and compassionate, his actions in dealing with the upcoming Medicaid eligibility fell short of fully competent." In particular, the Board faulted respondent for procrastinating in dealing with the need to spend down Mr. Jewell's assets and failing to inform the court and consult with other experienced practitioners. The Board found that respondent's failure to disclose in his fee petition that he had withdrawn the requested fees from the ward's account and to examine the court's files more promptly, slowed his return of the funds, and "therefore, constituted conduct seriously interfering with the administration of justice." The Board found that respondent had misappropriated client funds in violation of Rule 1.15(a), but that the misappropriation had been negligent. In the alternative, should we conclude that respondent's misappropriation was intentional or reckless, the Board expressed the view that respondent's case presents "extraordinary circumstances" that overcome Addams's presumptive disbarrment for misappropriation that is not the result of simple negligence. In either case, the Board recommended a six-month stayed suspension. Before us, Bar Counsel argues that respondent engaged in intentional misappropriation and should be disbarred. Respondent asks that we impose the thirty-day stayed suspension recommended by the Hearing Committee.
Upon review of a report and recommendation of the Board in an original disciplinary matter, "the Court shall accept the findings of fact made by the Board unless they are unsupported by substantial evidence of record . . . ." D.C. Bar R. XI, § 9 (g)(1). However, the court owes no deference to "ultimate facts" or questions of law determined by the Board. See In re Micheel, 610 A.2d 231, 235 (D.C. 1992). Where, as here, the question before the court deals with misappropriation, "[w]hether [the] underlying circumstances constitute misappropriation and whether any misappropriation resulted from more than simple negligence are questions of law concerning 'ultimate facts,'" and are reviewed by this court de novo. In re Berryman, 764 A.2d 760, 766 (D.C. 2000). "[M]isappropriation is 'any unauthorized use of client's funds entrusted to [the lawyer], including not only stealing but also unauthorized ...