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In re Saint-Louis

Court of Appeals of Columbia District

October 27, 2016

In re Layn M. Saint-Louis, Respondent.

          Argued November 4, 2015

          Amended November 10, 2016 [1]

         A Member of the Bar of the District of Columbia Court of Appeals (Bar Registration No. 457001)

         On Report and Recommendation of the Board on Professional Responsibility (BDN-217-05)

          Melvin White, with whom Jeffrey W. Mikoni was on the brief, for respondent.

          Hamilton P. Fox, III, Assistant Disciplinary Counsel, with whom Wallace E. Shipp, Jr., Disciplinary Counsel, and Jennifer P. Lyman, Senior Assistant Disciplinary Counsel, were on the brief, for the Office of Disciplinary Counsel.

          Before Washington, Chief Judge, Beckwith, Associate Judge, and Reid, Senior Judge.

          REID, SENIOR JUDGE

         The Board on Professional Responsibility has recommended that Layn M. Saint-Louis, [2] Respondent, be disbarred for violations of the following Rules of Professional Conduct: (1) Rule 1.15 (a) - commingling of trust or escrow funds with the law firm's operating account; (2) Rule 1.15 (d) (now Rule 1.15 (e)) - failure to deposit unincurred (future) cost funds in an escrow account; (3) Rule 1.15 (a) - intentional misappropriation of entrusted funds; (4) Rule 1.15 (c) (now Rule 1.15 (d)) - failure to keep disputed funds separate; and (5) Rule 8.4 (c) - engaging in conduct involving dishonesty, fraud, deceit or misrepresentation.[3] Mr. Saint-Louis challenges the Report and Recommendation of the Board on the grounds that: (1) Bar Counsel (now Disciplinary Counsel) failed to present clear and convincing evidence of ethical misconduct; (2) disbarment is inappropriate because Mr. Saint-Louis did not intentionally misappropriate client funds or engage in conduct involving dishonesty, fraud, deceit or misrepresentation; and (3) Disciplinary Counsel's multi-year delay in prosecuting the case against him was inexcusable and prejudicial. For the reasons set forth below, we agree with the Board's recommended sanction.

         FACTUAL SUMMARY

         Documentary evidence assembled by Disciplinary Counsel reveals that the events resulting in the 2012/2013 specification of disciplinary charges against Mr. Saint-Louis took place between June and November 2004.[4] On June 22, 2004, Ovlas Trading S.A. ("Ovlas"), a foreign corporation organized under the laws of Geneva, Switzerland, and SL&J, a District of Columbia professional corporation, entered into a retainer or engagement agreement. The agreement was limited to "provid[ing] legal advice and assistance to [Ovlas] with respect to all matters pertaining to the purchase and acquisition of (2) [Embraer] EMB-120 aircrafts [from DMJ Aviation International, LLC of Houston, Texas ("DMJ")], including performing due diligence, establishing escrow accounts, monitoring inspection of aircrafts, negotiating and documenting transaction, and drafting all documents." Total compensation was set at $50, 000 - $25, 000 represented a "retainer deposit for the services to be rendered by Counsel pursuant to the terms [of the engagement agreement]." The remaining $25, 000 "constitute[ed] final payment to Counsel for completing [the] transaction in its entirety." Ovlas agreed to pay specified costs and expenses. SL&J was required to provide monthly statements, including (1) descriptions, of all services, costs, and expenses "for any month in which services [were] rendered and/or costs incurred, " and (2) "the balance of the retainer, less costs of services performed." Either party could terminate the agreement "at any time upon the delivery of written notice of termination." The agreement applied to the "present representation . . . and to any subsequent matters [SL&J] agree[d] to undertake" on Ovlas's behalf, unless the parties "agree[d] in writing to a different arrangement." The agreement also specified that it could "be modified only by subsequent written agreement signed by all parties." Patience Epelle of Ovlas sent a copy of the agreement, signed by Ms. Epelle and Mr. Saint-Louis, to SL&J via fax on June 29, 2004.

         Ms. Epelle notified Mr. Saint-Louis on June 30, 2004, that $545, 000 had been transferred to SL&J, $45, 000 of which was earmarked for fees and expenses. After a relatively short delay in the posting of the funds to the designated SL&J account, Mr. Saint-Louis acknowledged that the funds were received by his bank, Citibank, and should be available the morning of July 8, 2004.

         In addition to his work on the aircraft purchase mentioned in his firm's engagement agreement with Ovlas, Mr. Saint-Louis began to look at alternative aircraft for purchase by Ovlas. He notified Ms. Epelle on July 8, 2004, that plans were afoot to inspect "a number of planes in Little Rock, Arkansas." He stated that he had been in touch with "Akin and Captain Mike" and was "in the process of making reservations for them to travel to Little Rock."[5] Ms. Epelle responded on the same day, indicating "good news, " but she also instructed Mr. Saint-Louis to "stay action until you hear from me [because] I need to liaise with Mr. Dantata and Captain Adoga first." [6] Later on July 8, 2004, Ms. Epelle authorized the disbursement of $5, 000 to Akin Sotomi, and a $50, 000 deposit to DMJ, relating to the inspection of the DMJ aircraft; she cautioned that Mr. Saint-Louis "may not disburse any monies EXCEPT on my say so" (emphasis in original).

         On the following day, Ms. Epelle asked Mr. Saint-Louis to "look over" an updated purchase agreement for the aircraft from DMJ and "confirm if okay to sign." Mr. Saint-Louis responded to Ms. Epelle that the updated purchase agreement "does NOT at all [emphasis in original] protect the interest of Mr. Dantata"; he stated that he would draft a new document, and advised that he had not yet sent $50, 000 to DMJ as she had instructed because the funds should go to a title company rather than DMJ. At the same time, Mr. Saint-Louis sent a more extensive email to Mr. Dantata (addressed also to Ms. Epelle although she was not listed as a recipient of the email); he asserted that the updated purchase agreement "is simply terrible - at best" because, for example, it sought "monies upfront ($500, 000) without any guarantees or arrangement to finance the entire transaction."

         Mr. Saint-Louis informed Mr. Dantata on July 11, 2004, that he would forward a new draft purchase agreement between Ovlas and DMJ. He indicated that he was also in communication with a source at Delta Airlines that might have the specified aircraft available at less than the $2.7 million which DMJ was seeking. A couple of hours later, he sent the new purchase agreement to Mr. Dantata. Because she had received no response to her July 9, 2004, request that Mr. Saint-Louis "look over" the updated purchase agreement for the DMJ aircraft, on July 12 Ms. Epelle inquired about the status of Mr. Saint-Louis's review of that agreement, indicating that she was "still awaiting [his] comments or amendments." Mr. Saint-Louis replied that he had worked on the agreement and he was waiting to hear from Mr. Dantata.

         Between July 15 and July 30, 2004, Mr. Saint-Louis, Ms. Epelle, and Mr. Dantata communicated mainly about the Delta aircraft, with some attention to the DMJ aircraft. Ms. Epelle (with a copy to Mr. Dantata) informed Mr. Saint-Louis on July 26, 2004, that he should deposit $50, 000 with ASA/Delta "so we can move along."

         The dynamic among the parties clearly began to change in August and September 2004 when (1) Captain Kiker, who had inspected the Delta Airlines aircraft, forwarded a message to Ms. Epelle on August 5, 2004, that was critical of Mr. Saint-Louis;[7] (2) Ms. Epelle requested evidence of SL&J's escrow account and the deposit of funds ($545, 000) transferred by Ovlas, to SL&J; and in response to Ms. Epelle's request, Mr. Saint-Louis sent a fax transmission, dated September 1, 2004, of purported Citibank documents pertaining to SL&J's bank accounts;[8] and (3) Mr. Saint-Louis's September 8, 2004, email proposal to Mr. Dantata and Ms. Epelle regarding his fees, and his billing statement for the period July 22, 2004, to September 7, 2004, concerning his work on the proposed acquisition of another aircraft (Premier I) and covering his trip to South Africa in connection with that proposed acquisition. Although Ms. Epelle notified Mr. Saint-Louis on July 30, 2004, that the $15, 000 authorized for the South Africa trip would include his "service fee" (as well as his ticket and other expenses), the September 7, 2004, fee billing alone totaled $24, 300.

          By September 10, 2004, the acrimony between Mr. Saint-Louis and Ms. Epelle had become obvious. Mr. Saint-Louis complained to Mr. Dantata about a phone call from Ms. Epelle during which she allegedly said that Ovlas "is not in the drug or money laundering business and that [Mr. Saint-Louis] must take [Ovlas's representatives] as fools." Mr. Saint-Louis defended the reasonableness of his fees. The fax Mr. Saint-Louis transmitted to Ms. Epelle on September 13, 2004, set forth expenses for his South African trip in the amount of $12, 011.68. In her September 14, 2004, email to Mr. Saint-Louis, Ms. Epelle referenced Mr. Saint-Louis's apparent September 11, 2004, conversation with Captain Adoga and she stated that they "are not satisfied that this account [mentioned in the Citibank documents] is actually an Escrow account." She requested "evidence of an Escrow Account." In response, Mr. Saint-Louis sent Ms. Epelle a fax on September 15, 2004, consisting of a cover page and a statement from a Citibank officer indicating that SL&J had "a non-interest bearing escrow account that was opened on September 30, 2003.

         As of September 20, 2004, Ms. Epelle began dealing directly with Mr. Stricklin and Captain Kiker about the Delta aircraft purchase. However, she instructed Mr. Saint-Louis on September 24, 2004, to "liaise with [Captain] Kiker and arrange the immediate transfer of $63, 000" - $60, 000 deposit to Delta Airlines for the purchase of two aircraft, and $3000 to Captain Kiker "for 10 days at $300/day." Mr. Saint-Louis confirmed the transfer of funds on September 28, 2004.

         Beginning no later than October 2004, Ms. Epelle and Captain Adoga also started to handle the DMJ aircraft purchase directly, and on October 29, 2004, Ms. Epelle informed Mr. Saint-Louis that there had been "a slight change in the Embraer plans, " and that he should transfer $400, 000 to the escrow account of U.S. Aircraft Titles, Inc., in Oklahoma City. In addition, Ms. Epelle asked for a statement showing the balance for the escrow funds that Ovlas sent to SL&J. On November 1, 2004, Mr. Saint-Louis sent a fax to Ms. Epelle and Captain Adoga; the fax cover page stated the escrow balance as $294, 975 and indicated that Ms. Epelle and Captain Adoga "needed to speak with [Mr. Dantata] immediately." Included with the cover page was a letter from Mr. Saint-Louis to Ms. Epelle and Captain Adoga vigorously opposing their decision to deal with a new agent regarding the purchase of aircraft and insisting that Ovlas move forward on the transaction with Delta Airlines, as proposed by SL&J.

         In early November 2004, and apparently in response to Mr. Saint-Louis's November 1, 2004, letter, Ovlas gave a power of attorney to Ms. Epelle and Captain Adoga "[t]o undertake, continue and conclude negotiations for the purchase of Embraer Airplanes and all other matters related thereto or connected therewith." Mr. Saint-Louis criticized the power of attorney in his November 15, 2004, email and fax transmittal to Mr. Dantata. He terminated the engagement agreement between Ovlas and SL&J and included a proposed release from the agreement. He also submitted a final billing for the period September 7, 2004, through November 15, 2004, in the amount of $126, 812.50; that billing showed a current balance due to SL&J of $184, 554. On November 16, 2004, Mr. Saint-Louis sent Mr. Dantata (copy to Ms. Epelle) a document, entitled "Escrow Account - Final Reconciliation, " showing a beginning balance of $544, 975 and an ending balance of $13, 587.[9] On November 17, 2004, Mr. Saint-Louis sent an email to Mr. Dantata, with a copy to Ms. Epelle, attaching a purchase agreement with Delta, and pronouncing SL&J's "retainer relationship as Counsel to Ovlas on this transaction is ended." SL&J sent Ovlas a bank check totaling $27, 019.50, "the remaining escrow account balance."

         SL&J submitted a billing statement, dated November 18, 2004, for the period June 28, 2004, to November 18, 2004, claiming fees in the amount of $297, 590.25. Ms. Epelle faxed a letter to Mr. Saint-Louis from Captain Adoga, dated November 25, 2004, accusing Mr. Saint-Louis of taking funds sent to him by Ovlas for his "own selfish purposes." Specifically, Captain Adoga (1) characterized SL&J's claim of $188, 000 for the Premier 1 transaction as "fraudulent and unacceptable"; (2) described the "deduction of $200, 000 . . . for the (as yet to be completed) purchase of two EMB 120 aircrafts [as] baffling"; (3) accused Mr. Saint-Louis of having failed to deposit the funds sent to him in an escrow account; (4) stated that Mr. Saint-Louis's failure to send the required monthly statements about the funds was "unacceptable"; (5) asserted that Mr. Saint-Louis "persistently failed to follow the directives" that he, Ms. Epelle, and Mr. Dantata gave him; (6) asserted that "witnesses and documents" could "prove" that Mr. Saint-Louis "made commitments both written and financial" on behalf of Ovlas that he was "not ask[ed] . . . to initiate"; and (7) indicated that SL&J's proposed release form, the escrow reconciliation document, and the "deducting [of] fictitious fees and expenses" showed that Mr. Saint-Louis "acted hastily and unprofessionally, " and Ovlas "believe[d] [he] did this so as to embezzle the money." Captain Adoga demanded that Mr. Saint-Louis "return the money . . . fraudulently taken, [and] render proper handover notes and accounts."

         As further proof of Mr. Saint-Louis's alleged misconduct, Disciplinary Counsel obtained records from SL&J's bank; these records identify the activity on SL&J's escrow account from June 2004 through December 2004. The documents show: (1) a beginning balance of zero dollars as of June 30, 2004; (2) a deposit of $400, 000 on July 12, 2004, and an "Average Ledger Balance" and "Average Daily Collected Balance" of $290, 322.58 as of July 31, 2004; (3) an ending balance of $450, 000 as of August 31, 2004; (4) a withdrawal of $49, 950 on September 10, 2004, and a "wire out" of $60, 000 on September 24, 2004, leaving an ending balance of $339, 975 as of September 30, 2004; (5) withdrawals of $10, 000 on October 8, 2004, $15, 000 on October 15, 2004, and $20, 000 on October 25, 2004, leaving an ending balance of $294, 975 as of October 31, 2004; (6) withdrawals of $32, 557.75 (twice), $27, 019.50, international wire outs of $2, 000 and $750 on November 17, 2004, a wire out of $50, 000 on November 18, 2004, ...


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