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In re Nave

Court of Appeals of The District of Columbia

November 29, 2018

In re Brandi S. Nave, Respondent. A Suspended Member of the Bar of the District of Columbia Court of Appeals Bar Registration Number 490964

          Argued October 17, 2017

         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 court's original opinion in this matter was issued on March 8, 2018. After its issuance, respondent Brandi Nave petitioned for rehearing and rehearing en banc. On June 21, 2018, an order denying the petitions was issued prematurely and, we have determined, improvidently. Accordingly, the order of June 21, 2018, denying respondent's petition is hereby withdrawn. Upon consideration by the full Division of the petition for rehearing, a majority of the Division has determined to grant the petition[1] and to issue this amended opinion.[2]The opinion reported at 180 A.3d 86 (D.C. 2018) is hereby vacated. The petition for rehearing en banc is denied as moot.

         I.

         The Board recommends that this court disbar respondent from the practice of law in the District of Columbia on the ground that on multiple occasions she violated Rules 1.15 (a), 1.15 (c), and 1.15 (d) of the Rules of Professional Conduct and that she intentionally misappropriated entrusted funds. We reject the recommendation to disbar respondent because we conclude that the finding that she misappropriated funds is not supported by clear and convincing evidence. We accept the Board's conclusion that respondent violated Rule 1.15 (a) by failing to place the funds of a third party in trust, violated Rule 1.15 (c) by failing to deliver promptly funds that a third party was entitled to receive, and violated Rule 1.15 (d) by failing to timely distribute funds.[3] For that misconduct, we impose a one-year suspension.

         II.

         Respondent's charged conduct relates to her representation of clients in personal injury matters, which typically followed a common pattern in her "high-volume" practice. Namely, respondent's clients received medical treatment from a chiropractor and signed (along with respondent) the medical provider's authorization and assignment ("A&A") form creating liens on the proceeds of any settlement amounts received by the client-patients from insurers. Respondent would then gather the medical records and expenses, put together a demand package to send to the insurance company, and negotiate a settlement with the involved insurance carrier, which would typically offer to settle the claim in an amount sufficient to pay some but not all of the chiropractor's bills. The final settlement typically reflected a reduction of the medical bills by the treatment providers.

         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"). Providers' complaints about respondent's failure to timely make payments to them led to an investigation by Disciplinary Counsel and then to proceedings before Hearing Committee No. 5 and the Board. The Board and Hearing Committee recounted the evidence that in some cases years passed between the chiropractor's agreement to a reduced payment or the client's approval of a proposed settlement and respondent's actual disbursal of funds to the chiropractor, and that in many cases respondent paid the chiropractors months or even more than a year after she paid settlement amounts to the clients-patients following her receipt of funds from the insurance companies. The Hearing Committee, whose factual findings the Board accepted, found that respondent's "standard practice was to ignore the fiduciary duty she accepted by signing the A&As and to engage in post-settlement hard bargaining with third parties to whom she owed an ethical obligation," essentially using her delay in paying bills "as leverage to resolve all outstanding matters." In addition, in at least one case, respondent delayed depositing an insurance company check for two years, i.e., so long that she had to request a replacement check.

         The Board's and Hearing Committee's conclusion that respondent violated Rule 1.15 by failing to make timely payments does not necessitate extended discussion. The Board found that respondent made "utterly meritless excuses for her failures promptly to pay her clients' medical providers."[4] The Hearing Committee found that respondent "demonstrate[d] an appalling callousness towards the duty she owed to the doctors." Upon our review of the record, we agree that Disciplinary Counsel proved by clear and convincing evidence that respondent, through her payment practices with respect to the chiropractors, violated her obligations under Rule 1.15 (a), (c), and (d).

         III.

         We conclude, however, that Disciplinary Counsel did not meet its burden of proof as to the charge of misappropriation. 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); In re Abbey, 169 A.3d 865, 869 (D.C. 2017) (involving misappropriation of funds that were to be paid to clients' medical providers). One circumstance in which misappropriation occurs is "when the balance in [the lawyer's] trust account falls below the amount due [to] 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 omitted).[5]

         The Hearing Committee found "no evidence that [respondent] withdrew any money [from her trust account] for her own use."[6] The Board and the Hearing Committee both concluded, however, that during 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 Dr. Yousefi and MSS. Disciplinary Counsel offered evidence that on those dates (the "putative out-of-trust dates"), respondent's trust account held less than $37, 000, when no disbursements for those cases had yet been made to the providers.

         The Board recognized that to proceed as Disciplinary Counsel did "on the 'account balance' theory of proof, Disciplinary Counsel must show that the attorney actually deposited entrusted funds into escrow."[7] The Board also recognized that "the most appropriate means of proving [that] entrusted money [wa]s placed in an escrow account" is "direct proof" of individual deposits, a methodology that the Board said is the methodology it "expect[s] Disciplinary Counsel regularly to employ." The Board found, however, that Disciplinary Counsel had offered such direct evidence in only "six" of the "19 selected cases" Disciplinary Counsel relied on to prove misappropriation (based on the aggregate trust account balance and outstanding-payment-owed-to-providers approach). As the Board noted, the Hearing Committee "felt unable to determine exactly when [r]espondent received settlement payments from the insurance carriers."

         Whether Disciplinary Counsel proved by clear and convincing evidence that respondent had actually received checks from the insurance companies as to all of the "19 selected cases" by the putative out-of-trust dates was a central issue during oral argument before the Board.[8] Disciplinary Counsel's theory was that "the date of the settlement sheet [or "client disbursement sheet" signed by respondent's clients] equates to the date that [respondent] had the funds in her possession." A Board member recognized, however, that "the full and final settlement date is usually the date of the release[, ] . . . not the [date of the] disbursement sheet," and Disciplinary Counsel acknowledged that the releases were not introduced into the record. Respondent's counsel told the Board that the evidence thus did not allow the Board to "know when the insurance company cut the check, . . . when they sent it [to respondent], and . . . when Ms. Nave deposited it."

         In its Report and Recommendation, the Board found that "[t]here is no ambiguity as to the dates upon which [r]espondent received the settlement monies in any of the[] cases, because her Answer to the Specification of Charges . . . unequivocally," "definitively," and "clearly and convincingly" established the dates. The Board's statement was a reference to the fact that, in her Answer, respondent admitted that she received insurance checks "on or about" specified dates, all of which were prior to the October 2012 putative out-of-trust dates. For example, respondent admitted in her Answer that "[o]n or about June 13, 2012, [she] settled a case on behalf of her client, Latia Proctor, and received settlement funds totaling $7, 000"; that "[o]n or about June 19, 2012, [she] settled a case on behalf of her client, DeAngelo Wooten, and received settlement funds totaling $6, 800"; and that "[o]n or about July 3, 2012, [she] settled a case on behalf of her client, Ayonia Allen, and received settlement funds totaling $16, 500."

         We reject the Board's analysis on this point. To begin with, respondent filed her Answer before she knew that Disciplinary Counsel would attempt to prove his misappropriation theory on the basis of the account balance methodology rather than through what the Board termed "the most appropriate" means of proof, "direct proof of individual deposits," the methodology the Board "expect[s] Disciplinary Counsel regularly to employ." Respondent had no reason to know that more precision in her answers about dates was critical (and, if her records were in ...


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