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In re Nave

Court of Appeals of The District of Columbia

March 8, 2018

In re Brandi S. Nave, Respondent.

          Argued October 17, 2017

         A Suspended Member of the Bar of the District of Columbia Court of Appeals (Bar Registration Number 490964) On

         Report and Recommendation of the Board of Professional Responsibility (BDN-234-10, BDN-308-12, BDN-128-13 & BDN-186-13)

          Brandi S. Nave, pro se.

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

          Before Thompson and Beckwith, Associate Judges, and Farrell, Senior Judge.

          OPINION

          Per Curiam

         The Board on Professional Responsibility (the Board) recommends that respondent be disbarred from the practice of law in the District of Columbia because of clear and convincing evidence that respondent intentionally misappropriated entrusted funds. District of Columbia Rule of Professional Conduct 1.15 (a). The Board relatedly concluded that respondent had committed thirty-four separate violations of Rule 1.15 (c) (failure promptly to deliver funds) and 1.15 (d) (failure to distribute funds).[1] We accept the Board's recommendation.

         I.

         Respondent's conduct giving rise to the violations stemmed from her personal injury law practice and transactions that followed a common pattern, namely: respondent's clients received medical treatment from a chiropractor and signed (along with respondent) the medical provider's authorization and assignment form creating liens on the proceeds of any settlement amounts received by the client-patients from insurers. Respondent then negotiated a settlement with the involved insurance carrier, normally including also a reduction of the medical bills by the treatment providers.[2] During the time period at issue, respondent referred her personal injury clients to two different chiropractors or chiropractor clinics, Dr. Mohammed Yousefi and Medical Support Services (MSS). Respondent's failure to hold in trust and timely disburse funds received pursuant to these settlements and owed these providers formed the basis of the violations found by the Hearing Committee and the Board.

         A.

         Misappropriation is "any unauthorized use of [a] client's funds entrusted to [the lawyer], including not only stealing but also unauthorized temporary use for the lawyer's own purpose, whether or not [the lawyer] derives any personal gain or benefit therefrom." In re Anderson, 778 A.2d 330, 335 (D.C. 2001) (internal quotation marks and citation omitted). "Misappropriation happens when the balance in [the lawyer's] trust account falls below the amount due the client" or third persons to whom the client is indebted. In re Ahaghotu, 75 A.3d 251, 256 (D.C. 2013) (internal quotation marks and citation omitted).[3] The Board and the Hearing Committee both concluded that twice, first in the period from October 5- 8, 2012, and again on October 16, 2012, respondent's trust account balance fell below the cumulative amount of $41, 893 owed to the two medical providers involved. Respondent contends that Disciplinary Counsel failed to prove this trust deficiency by presenting no "evidence of the actual dates [o]n which insurance checks were received [from the insurers] and deposited" in her trust account. Instead, respondent argues, Disciplinary Counsel relied on "circumstantial inferences" from the evidence that effectively "transfer[red] the burden of proof" to respondent to show that her trust account had funds sufficient to cover the amounts owed the medical providers.

         We reject these arguments. First, as the Board recognized, the record reveals six instances of actual deposits of settlement checks to respondent's trust account at around the time corresponding settlement disbursement sheets reflect receipt of the funds from insurers. Further, as the Board properly determined from the record, respondent "repeatedly and insistently urged [before the Hearing Committee] that all settlement funds at issue . . . were timely deposited in her trust fund" contemporaneously with their receipt. Specifically, respondent testified that "it could be ten, fourteen days" between when the client signed the settlement sheet and when the check was received from the insurance company, and another "three or four days before [the check] can get to the bank." Indeed, she acknowledged that "the majority of the insurance companies" released the settlement funds before the disbursement sheets were signed. And in her Answer to the Specification of Charges, she likewise admitted that "on or about" the same dates she would both settle most claims with the insurers "and receive[] settlement funds." See On or About, Black's Law Dictionary (10th ed. 2014) (defining "on or about" as "[a]pproximately; at or around the time specified"). Thus, by the time of the first alleged misappropriation from October 5-8, 2012, respondent's trust fund should have held funds equal to the outstanding debts to the two medical providers, but did not. Disciplinary Counsel offered convincing evidence that, although respondent owed the providers an aggregate of at least $40, 893 for some nineteen selected cases as of August 1, 2012, by the alleged misappropriation dates of October 5-8 and 16, she had in the trust account less than $37, 000, when no disbursements for those cases had yet been made to the providers.

         In attempting to show that Disciplinary Counsel had not established the necessary pre-October link between settlements and corresponding payments received from the insurers, respondent identified cases in which she argued that settlements were reached and payments received much later than the alleged October misappropriation dates. But in fact those cases regularly turned out to have followed this pattern: the medical provider would agree to reductions reflected on the disbursement sheets, then withdraw those reductions after respondent, though paid by the insurers, failed to pay the bills (often claiming "fraudulent" billing), whereupon either the provider would reinstate the reductions after further negotiation or the patients would be saddled with paying the balance. See infra Part II. The Hearing Committee thus found that the "19 cases relied on by [Disciplinary] Counsel as evidence of misappropriation were settled or had Client Disbursement sheets signed at least 46 days prior to October 5, 2012, " and concluded that this was "clear and convincing evidence that the settlement checks for these 19 clients were received and should have been deposited in Respondent's trust account prior to October 5, 2012." At best, respondent has been able to nibble at the edges of this conclusion, certainly not enough to persuade us that the Hearing Committee and the Board erred in finding from the discrepancy between client funds owed and possessed by respondent, and those maintained in the trust account, that respondent committed misappropriation.

         B.

         Respondent does not contend that she maintained more than one trust or escrow account, such that Disciplinary Counsel's proof rested on an incomplete picture of how she kept the funds received from insurers in escrow. Nor does she assert that funds received from the insurers and owed the medical providers were kept separate (uncommingled) in a way other than by deposit in her trust account. Compare In re Ingram, 584 A.2d 602, 603 (D.C. 1991) (no misappropriation because entrusted funds, though not deposited in trust account, were "kept . . . intact in the client's file"). Instead, to justify her failure to maintain the funds in trust or timely pay the obligations, respondent argues additionally that the providers, MSS especially, engaged in "fraudulent billing practices" in amounts they charged for services such as X-rays. But the Board and the Hearing Committee properly rejected this argument by pointing out (in the Hearing Committee's words) that in "all of these matters, there is no evidence that any insurer or any third party challenged the accuracy or validity of the charges on MSS's bills" before agreeing to a settlement. As the Hearing Committee explained, respondent's duty to pay the providers once the insurers had settled "far outweighed her own interests in evaluating the accuracy and integrity of medical bills for which she had already ...


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