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In Re andrew J. Kline

January 13, 2011

IN RE ANDREW J. KLINE, RESPONDENT.


A Member of the Bar of the District of Columbia Court of Appeals (Bar Registration No. 358547) On Report and Recommendation of the Board on Professional Responsibility (BDN 407-05)

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

Argued November 23, 2010

Before RUIZ and FISHER, Associate Judges, and FARRELL, Senior Judge.

Respondent Kline, in the Hearing Committee's words, "committed a significant number of serious ethical violations" which the Board on Professional Responsibility (the Board) summarized as follows:

Respondent failed to make crucial litigation filings, and as a result, a default judgment was entered against his client, [The Ad Agency, Inc.]. Without telling his client about the default judgment, Respondent negotiated settlement terms with the adverse parties [collectively the Savino defendants] under which his client was to pay $50,000. He did not bring these terms to his client's attention. Instead, he submitted a draft agreement that called for dismissal of his client's $7,500 contract claim, but required no monetary payment from his client. When even those terms were not acceptable to his client, he forged his client's signature on a settlement agreement containing the terms he had negotiated, paid the adverse parties $50,000 of his own funds*fn1 and presented the forged agreement to them as a valid settlement agreement.

Further, respondent commingled his personal funds with client funds in a trust account, and after he paid the $50,000 to the adverse parties by check from the trust account, the balance dropped to some $4,342.53 less than he was required to maintain for existing clients, resulting in misappropriation of client funds. For detailed reference, we attach to this opinion the findings of fact of the Hearing Committee and the Board.

On this evidence, the Hearing Committee and the Board determined that respondent had violated numerous Rules of Professional Conduct, chiefly 8.4 (b) (committing a criminal act, forgery, that reflected adversely on his fitness as a lawyer), 8.4 (c) (conduct involving dishonesty or deceit), 1.15 (a) (commingling and negligent misappropriation), and 1.3 (b)(2) (intentionally prejudicing or damaging a client during the course of the professional relationship). The Board recommends that respondent be suspended from the practice of law in the District of Columbia for eighteen months, with nine months of the suspension stayed in favor of monitored probation with conditions, and without a requirement that he show fitness to be reinstated.

Respondent does not dispute the recommended sanction, but Bar Counsel argues, in his brief and reply brief, that respondent should be disbarred because (a) contrary to the Board's conclusion, his misappropriation of client funds was reckless, not negligent, see generally In re Addams, 579 A.2d 190 (D.C. 1990) (en banc); In re Anderson, 778 A.2d 330 (D.C. 2001); and (b) in any case, the aggregate of his dishonest conduct - including the criminal act of forgery - compels that sanction.*fn2 We do not accept the Board's recommendation of an eighteen-month suspension (much less the halving of it in favor of probation), because in our view that sanction takes inadequate account of the gravity of respondent's misconduct, which included a criminal act, forgery, and multiple though related acts of dishonesty besides misappropriation. Instead, we will suspend respondent for three years in keeping with past sanctions ordered for analogously culpable behavior by an attorney. Like the Board, however, we do not believe that a showing of fitness is necessary before respondent may be reinstated.

I.

As neither respondent nor Bar Counsel seriously disputes the facts found by the Hearing Committee, and respondent takes no issue with any of the violations determined by the Board, the questions before us relate to the proper sanction. Our framework for consideration of that issue was summarized in In re Bettis, 855 A.2d 282 (D.C. 2004):

This court's Rules Governing the Bar state that the court . . . 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. D.C. Bar Rule XI, § 9(g)(1). Generally speaking, if the Board's recommended sanction falls within a wide range of acceptable outcomes, it will be adopted and imposed. However, "[w]hen the court disagrees with the Board as to the seriousness of the offense . . . the Board's recommendations are accordingly granted less weight." In re Kennedy, 542 A.2d 1225, 1228 (D.C. 1988) (citing In re Reback, 513 A.2d 226, 230-231 (D.C. 1986) (en banc)). "In the final analysis, the responsibility to discipline lawyers is the court's". . . In re Shillaire, 549 A.2d 336, 342 (D.C. 1988); see also, e.g., In re Ryan, 670 A.2d 375, 380 (D.C. 1996) ("the ultimate choice of a sanction rests with this court" (citation omitted)). We determine what the appropriate sanction should be by considering "the nature of the violation, aggravating and mitigating circumstances, the absence or presence of prior disciplinary sanctions, the moral fitness of the attorney, and the need to protect the legal profession, the courts, and the public." In re Lenoir, 604 A.2d 14, 15 (D.C. 1992).

Id. at 287 (citations and internal quotation marks partly omitted).

II.

In their briefs, Bar Counsel and respondent first dispute at length whether his misappropriation of client funds was reckless, requiring near-automatic disbarrment under Addams, 579 A.2d at 191, or instead negligent, as the Board concluded. Bar Counsel makes only a feint at challenging the Hearing Committee's finding that respondent in fact believed that the $50,000 he withdrew from the trust account belonged to him, in the form of earned legal fees he had neglected to remove from the account. Since that finding was based on an assessment of respondent's credibility at the hearing, we accept it, see In re Micheel, 610 A.2d 231, 234 (D.C. 1992), particularly because all but some $4,343 of the $50,000 was indeed (commingled) funds belonging to respondent.

Bar Counsel nonetheless argues that respondent's handling of the trust account exhibited "a conscious indifference to the consequences of his behavior for the security of [unearned] funds," Anderson, 778 A.2d at 339, in the first instance because, when the records of the account were destroyed by a crash of his laptop computer in late February or early March of 2005 (a fact found by the Hearing Committee and not disputed), respondent had no back-up record allocating the funds in the account. "As a fiduciary," Bar Counsel maintains, respondent was reckless in "keeping all of his financial records on a laptop computer with no computer back-up or documentation regarding his handling, maintenance and disposition of client funds entrusted with him." But, in our view, though that neglect may be inexcusable - a lapse from the standard of care owed by an attorney keeping records in the computer age - it does not show recklessness by the required proof quantum of clear and convincing evidence. See Anderson, 778 A.2d at 339.

Bar Counsel's main point, however, focuses on respondent's conduct - or relative inaction - after the computer crash, in the period before he wrote the $50,000 check in mid-July of 2005. Respondent did not hire an accountant to aid in reconstructing his records,*fn3 but instead only (a) secured help from a data recovery firm, unsuccessfully, to retrieve the information on the computer hard-drive, and (b) set up a new trust account at a different bank, leaving the old account dormant except to pay submitted claims that apprised him of the presence therein of client funds. Respondent, in other words (Bar Counsel's), "was content to wait silently for five months, and if no one made a claim in that time, he decided he would assume the funds remaining in a fiduciary account belonged to him."

Respondent's mere recourse to a new account and the inaction of awaiting claims, if any, to funds in the old one did not justify his ultimate withdrawal of the $50,000, even if he believed that money was his. Yet, as the Board pointed out, nearly all of the withdrawn funds in fact belonged to respondent, and in these circumstances we agree with the Board that his meager remedial measures before treating the funds as his fall on the side of negligence rather than recklessness. Recklessness cannot "be shown by inadequate record-keeping alone combined with commingling and misappropriation." Anderson, 778 A.2d at 340. And, the fact that respondent drew on funds nearly all his own to pay a settlement founded on deceit is not, we think, an "aggravating factor[]," id., enough to show recklessness by clear and convincing evidence. Rather, it is properly dealt with under Bar Counsel's alternative argument that the entirety of respondent's misconduct, including forgery, dishonesty, and misappropriation compels a greater sanction.

III.

Although the ordinary sanction for negligent misappropriation would not exceed suspension for six months, see, e.g., In re Fair, 780 A.2d 1106, 1115 (D.C. 2001); Anderson, 778 A.2d at 332, respondent's misconduct went far beyond the unauthorized use of client funds. His additional undisputed serious misconduct included: dishonesty and deceit toward both his client and an adversary to cover up the neglect of his client's case; the criminal act of forgery; the deliberate failure to communicate with his client about the status and direction of the case; and the deliberate frustration of the client's objective by settling the case, through a false agreement, without the client's permission. The Hearing Committee struggled, as did the Board on review, to recommend a sanction in keeping with what both saw as decisions of this court themselves not marked by "complete consistency" (in the Hearing Committee's words). We do not lightly reject the recommendation of either body for an eighteen-month suspension, and we applaud each for its conscientious effort to distill unifying principles from our cases imposing sanctions for analogous misconduct. Nevertheless, for the reasons that follow, we conclude that an eighteen-month suspension understates the gravity of respondent's misconduct, see Bettis, supra (normal rule of deference carries less weight when court disagrees with Board's evaluation of ...


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