Office of Disciplinary Counsel v. Davis

CAPPY, Justice,

dissenting.

I respectfully dissent. This Court, in response to the report and recommendation filed in this matter on October 9, 1990, by the Disciplinary Board, issued a rule upon respondent, Michael E. Davis to show cause why he should not be disbarred from the practice of law in the Commonwealth of Pennsylvania. I would discharge the rule to show cause and order Davis suspended from the practice of law effective May 21, 1986, for a period of time equal to that which he has already served.

The disciplinary matter before this Court was commenced by two separate petitions for discipline filed by the Office of *35 Disciplinary Counsel (ODC), charging Davis with numerous violations of the provisions of the disciplinary rules of the Code of Professional Responsibility. On October 5, 1987, ODC filed its petition, docketed No. 74 DB 87, accusing Davis of neglect and of counseling two unrelated clients to misrepresent their counties of residence in order to circumvent venue requirements, thus reducing the costs associated with their divorces. It also accused Davis of participating in the creation and preservation of evidence that he knew was false. On February 2, 1988, ODC filed its petition, docketed No. 12 DB 88, accusing Davis of improperly handling master’s fee refunds in seven divorce actions in Lancaster County.

Both matters were referred to a Hearing Committee. At the hearing, ODC presented no witnesses, and only Davis testified on his behalf. On August 3, 1989, the Hearing Committee issued its report, finding Davis intentionally violated numerous disciplinary rules, and recommending that Davis be disbarred. Oral argument was subsequently held before the Board pursuant to Pa.R.D.E. 208(d). On October 9, 1990, the Board issued its report, finding Davis did not intentionally violate the disciplinary rules, and recommending that Davis be suspended from the practice of law for six months to run concurrent with a prior suspension imposed at No. 78 DB 82 by order of this Court dated February 28, 1985. 1

This matter was then referred to the attention of this Court for review and action pursuant to Pa.R.D.E. 208(e). Due to the great variance between the recommendations of the Hearing Committee and the Board based upon the same record, this Court, on February 27,1991, entered a rule upon Davis to *36 show cause why he should not be disbarred. On March 15, 1991, Davis requested oral argument pursuant to Pa.R.D.E. 208(e)(3), which this Court granted by order dated August 28, 1991. For the reasons that follow, I would discharge the rule to show cause and order Davis suspended from the practice of law effective May 21, 1986, for a period of time equal to that which he has already served.

The review of this Court in attorney discipline matters is de novo, and thus, this Court is not bound by the findings of either the Hearing Committee or the Board. Office of Disciplinary Counsel v. Shorall, 527 Pa. 413, 416 , 592 A.2d 1285, 1287 (1991). With this standard in mind, I proceed with a review of the matter sub judice.

This is not the first time that Davis has been sanctioned for unethical behavior. In fact, Davis has been subjected to numerous disciplinary proceedings and sanctions. Although he has complied with all sanctions previously imposed, he has remained on suspension status since May 21, 1984. While I am not compelled to address the intricacies of those prior proceedings and sanctions, it is apparent that nearly all of his prior violations were directly related to poor practice management. At the heart of Davis’ problems is his decision to build a practice based upon a high volume of “simple” divorces.

In 1980, the Pennsylvania Legislature reformed the Divorce Code 2 to allow divorces upon consent without fault of either party. This permitted attorneys to complete divorce actions without court appearances, and with substantially reduced costs to the client. Based upon this change in the law, Davis began a statewide newspaper campaign advertising low cost services in these “No-Fault” divorce situations.

In response to these advertisements, each week Davis was responding to several hundred inquires, and was accepting, on average, 90 to 130 new cases. All of these cases were filed in Allegheny County regardless of where the parties resided *37 until court officials, in response to a backlog of non-resident divorce cases began strict enforcement of venue requirements. Thereafter, Davis began filing non-resident actions in Cameron County, which was the lowest cost forum welcoming nonresident actions. However, Cameron County stopped this practice sometime after April 23, 1982, when the Court Administrator of Pennsylvania, pursuant to instructions from this Court, issued a memorandum and directive to all President Judges requiring strict enforcement of Pa.R.C.P. 1920.2, 3 precluding divorce actions from being brought in counties where neither the plaintiff nor the defendant resided.

The record does not reveal precisely when Davis was notified by court officials of Cameron County that it would no longer be permissible to file divorces in Cameron County where neither party resided therein. However, it is clear that when Davis received such notice he had already undertaken representation of Mrs. Michelle H. Dietrich and Mrs. Deborah R. Westcott, and had intended to file their divorce actions in Cameron County, which offered the lowest costs. Davis notified both of these women that he would no longer be able to file their actions in Cameron County, and that the costs associated with their actions would be higher in the counties in which they or their husbands resided. It is the events that transpired thereafter in these two cases that resulted in the charges by ODC through its Petition for Discipline dated October 5, 1987 and docketed 74 DB 87.

In the Dietrich matter, ODC alleges that Davis counseled Mrs. Dietrich to use a fictitious address in order to reduce costs associated with her divorce action, and filed documents that falsely represented her county of residence, when he knew or it was obvious that the address was false. The facts support only one of these contentions.

After Davis notified Mrs. Dietrich that he would not be able to file her divorce in Cameron County, Mrs. Dietrich, in *38 seeking to have her divorce filed in the least costly county, informed Davis that her address in Montgomery County was a temporary school address and that her permanent address was in Philadelphia County. Based upon this information, Davis prepared and filed a verified complaint providing that Mrs. Dietrich resided in Philadelphia County. Thereafter, the Court of Common Pleas of Philadelphia County requested a sworn affidavit from Mrs. Dietrich providing the dates she resided in Philadelphia County. Davis prepared an affidavit using the Philadelphia address, which Mrs. Dietrich executed. In response to this affidavit, the court scheduled a hearing for the purpose of establishing the residence of the parties and the proper venue for the divorce action. Mrs. Dietrich appeared at this hearing alone in order to reduce costs. At the hearing, Mrs. Dietrich falsely testified under oath that she resided in Philadelphia County, but recanted her testimony when the court confronted her with a communication from the Department of Public Welfare that indicated that her permanent residence was in Montgomery County. The case was then transferred to Montgomery County.

ODC urges this Court to conclude that Davis conferred with Mrs. Dietrich regarding her situation, counseled her to lie regarding her permanent residence and knowingly filed a complaint and supporting affidavit referencing the fictitious address. In support of this position ODC offers a stipulation as to what Mrs. Dietrich’s testimony would have been had she appeared at the hearing in this matter. 4 I find this stipulation incredible, as it was prepared upon the uncorroborated and unsworn allegations of a client who: expressly informed Davis that her permanent residence was in Philadelphia County; verified the address set forth in the complaint; and admits that while under oath, she misrepresented her place of residence to the Court of Common Pleas of Philadelphia County on two separate occasions. I choose to believe the testimony of Davis that at all times he believed that Mrs. Dietrich’s *39 permanent residence was in Philadelphia County, and that he did not counsel her to utilize a fictitious address. Accordingly, I find insufficient evidence to conclude that Davis either counseled Mrs. Dietrich to utilize a fictitious address, or knew up until the time he filed the complaint that Mrs. Dietrich did not have a permanent residence in Philadelphia.

However, the record does reveal that Davis’s contact with Mrs. Dietrich and the Court of Common Pleas of Philadelphia County after the filing of the complaint should have alerted him to a problem regarding her residence. Davis clearly ignored many warning signs: Mrs. Dietrich’s goal of obtaining the least expensive divorce possible; her convenient story about a temporary college address once she learned that it was cheaper to file in Philadelphia County rather than Montgomery County; her desire to continue to receive mail at the Montgomery County address; and the questions being posed by the court concerning her residency. The combination of all of these signs should have prompted Davis to make further inquiry prior to filing the affidavit of residency and demonstrates insufficient attention to detail. While this failure was obviously exacerbated by the deluge of other obligations inherent in the high-volume practice Davis undertook, had he been more diligent, it would have been obvious to him that Mrs. Dietrich did not live in Philadelphia.

I am not convinced that his ignorance of these warning signs rises to the level of an intentional act, but once they appeared Davis should not have prepared the affidavit of residency until conducting an investigation. Therefore, I find that on these facts, Davis had an affirmative duty to act on that which should have been obvious. His failure to act under these circumstances amounts to a violation of Disciplinary Rule 7 — 102(A)(6) (participation in the creation or preservation of evidence when it is obvious that the evidence is false), and Disciplinary Rule 1-102(A)(6) (conduct that adversely reflects on his fitness to practice law).

In the Westcott case, ODC alleges that Davis similarly counseled Mrs. Westcott to use a fictitious address in order to reduce costs associated with her divorce action. It also alleg *40 es that Davis neglected this matter. The facts do not support these contentions.

After Davis notified Mrs. Westcott that he would not be able to file her divorce action in Cameron County, a confusing sequence of events occurred, encompassing the termination and reinstatement of Davis as counsel, the refund and repayment of costs and fees, missing correspondence, and ultimately an inability to locate Mrs. Westeott’s file. 5 Thereafter, Mrs. Westcott wrote Davis and provided him with a Bucks County address that he could use to file her divorce action. Davis prepared a complaint using the Bucks County address, which was never filed. Mrs. Westcott eventually terminated Davis’ representation, and Davis refunded all monies paid by Mrs. Westcott. Davis handled the Westcott case for approximately six months.

Davis testified that he never believed that Mrs. Westcott resided in Bucks County and that he did not counsel her to provide the fictitious Bucks County address. He stated that he prepared the complaint using the Bucks County address, but that he did not file it because he was not convinced that her husband resided in Bucks County. I choose to believe Davis rather than Mrs. Westcott whose unsworn allegations were offered by ODC through the same stipulation discussed in connection with the Dietrich matter. In addition, I believe that Mrs. Westcott is responsible for much of the delay in this matter, and that Davis’ poor management only compounded the problem.

I agree with the conclusion of the Board that Mrs. Westcott presents the picture of a difficult client. She terminated Davis as counsel and demanded a refund when she learned of the additional costs; subsequently reinstated Davis; provided Davis with a fictitious address; and ultimately terminated Davis again when he did not file the complaint because he was not convinced that her husband resided in Bucks County. As *41 further evidence of her own lack of diligence in pursuing a divorce, I note that as of the first hearing in 1988 she still had not obtained a divorce. However, Davis’ conduct did not help alleviate the problems in this case.

Davis was inundated with hundreds of pieces of correspondence each day. His filing system was complicated, disorganized and sloppy. Many functions were performed automatically by secretarial staff, and resulted in delay, missing correspondence and files. Clearly, Davis should have kept abreast of the status of his representation of Mrs. Westcott, and been more diligent in investigating the residency question. However, while Davis’ conduct demonstrates poor management of a law office and in some ways falls below the standard I believe should be maintained by members of the profession, I am not convinced that Davis counseled Mrs. Westcott to utilize a fictitious address or excessively neglected this matter.

ODC’s second Petition for Discipline dated February 2, 1988, and docketed No. 12 DB 88, arises in connection with seven divorce actions filed in Lancaster County. ODC alleges that Davis intentionally failed to return entrusted funds and improperly commingled these funds with funds that were the sole property of his law firm.

At the time these actions were filed, Lancaster County required the payment of master’s fees regardless of whether they were necessary. Once a divorce decree was issued in cases where a master was not required, the master’s fees would be refunded upon praecipe by counsel. At the time the complained of conduct occurred, Davis was involved in many divorce actions in Lancaster county. When a Lancaster County divorce decree was issued, Davis would praecipe the court for the return of master’s fees advanced. When the fees were returned, Davis would instruct a secretary to deposit the funds and prepare a check for the client. This system provided no procedure for ensuring that unused funds requested from Lancaster County were actually returned.

The record reveals that in the seven cases at issue, which represented approximately 10 to 25 percent of the active *42 Lancaster actions, Davis did praecipe for the return of the unnecessary master’s fee advances. However, for one reason or another Lancaster County did not refund the fees, and Davis did not inquire as to the status of the fee refunds. Ultimately, once Davis learned of the problem, he immediately refunded these fees to his clients. Clearly, Davis did not attempt to cover-up or conceal the receipt of funds or seek to convert client funds to his own use. Thus, while Davis’ conduct again leaves much to be desired, it simply does not support a finding that Davis sought to intentionally deprive his clients of these funds.

However, I would be remiss if I did not admonish Davis for depositing the master’s fee refunds into a bank account containing law firm funds, as Davis is charged with knowledge of the requirements of the disciplinary rules. His actions clearly violated Disciplinary Rule 9-102(A) (preserving identity of funds and property of a client). While there is no excuse for such commingling of funds, I believe it is a manifestation of inexperience compounded by a high volume practice.

Sanction

The practice of law requires enormous dedication and attention to detail. As Davis learned, simple legal matters are relatively rare, and become non-existent when one attempts to handle these “simple” matters in high volume. Thus, in a high volume setting, competent and ethical representation becomes nearly impossible by any practitioner, absent supreme business acumen. This is a gift that few possess, and unfortunately for Davis, one that he certainly did not possess at the time of the conduct that gave rise to the matter sub judice.

The charges against Davis occurred as a direct result of his time constraints and the inability of his office to efficiently and properly act upon the matters associated with the high volume of cases. Considering the enormous amount of responsibility that Davis undertook, his total lack of organizational business tools, and his unreasonable reliance upon support staff, Davis’ *43 ability to act competently and ethically on behalf of his clients was doomed to fall short. However, I believe, as did the Board, that these failures do not warrant the severe sanction of disbarment, as they are not the type of conduct for which disbarment is appropriate.

ODC would have this Court believe that it is precluded from disregarding the findings of the Hearing Committee that Davis intentionally violated the disciplinary rules, as only the Hearing Committee can weigh the credibility of Davis. However, this Court is not bound by these findings. Shorall, Id. at 416 , 592 A.2d at 1287 . There is no credible evidence that Davis acted intentionally in any of these matters, and his actions did not result in the loss of any of his clients’ funds or abilities to exercise their rights. Thus, I believe this Court is left only with a judgment concerning the by-products of a poorly managed law practice, which fall below the requisite standard of care.

Initially, I am somewhat concerned with Davis’ lengthy disciplinary record. However, as Davis’ shortcomings in the matter sub judice were the result of poor business management and not a conscious effort to violate the disciplinary rules, I conclude that Davis’ conduct does not reflect negatively upon his honesty, integrity, knowledge of the law or fitness to practice law. It is the lack of these characteristics that may warrant the extreme sanction of disbarment in order to protect the public, maintain the integrity of the bar, and preserve our ability to police ourselves. See Office of Disciplinary Counsel v. Keller, 509 Pa. 573 , 506 A.2d. 872 (1986). As I believe Davis possesses these characteristics, the extreme sanction of disbarment is not warranted.

Since May 21,1984, Davis has not practiced law, and despite being subjected to the uncertainties associated with his ongoing suspension status, rather than attempt to continue his life in a new direction, he has nurtured his ties to the law. He has functioned as a manager in law practices in order to learn the skills necessary to provide effective attention to the needs of *44 clients. He has attended a wide variety of continuing legal education and office management courses, and has remained consistently positive in his devotion to the law.

Based upon the length of his prior suspensions, 6 Davis has been eligible to apply for readmission to the bar since May 21, 1986, and has forgone attempting readmission solely because of the pendency of the matter sub judice. Nearly six years have passed since Davis became eligible to apply for readmission. During his ongoing period of suspension, Davis has acted to correct his prior deficiencies and acquire an ability to properly manage a law practice. His actions exhibit resolve, character, and knowledge of the proper tools necessary to enable him to perform the art of practicing law as prescribed by the disciplinary rules. Considering the ethical violations that I have found, I believe that the suspension Davis has been serving since May 21, 1986 is sufficient to effectuate the purpose of the disciplinary process, and I find no reason to expose him to further negative consequences in excess of those that he has already suffered.

Therefore, I would discharge the rule to show cause entered upon Davis, and order Davis suspended from the practice of law effective May 21, 1986, for a period of time equal to that which he has already served.

. The Disciplinary Board initially remanded the matter back to the Hearing Committee to consider the question of laches arising from the time lapse between the alleged misconduct in 1982 and the filing of the Petitions for Discipline in 1987 and 1988. The Hearing Committee determined that laches was not an issue, and reasserted its recommendation that Davis be disbarred. The Board accepted this recommendation as to laches. I agree that the defense of laches is not applicable as Davis contributed to the delay and has not demonstrated the requisite prejudice arising from such delay. However, I note with some interest that ODC’s contribution to the delay in this matter is rather ironic when viewed in light of its assertion that Davis’ inattention to legal matters was sufficient to support a charge of neglect.

. Act of 1980, April 2, P.L. 63, No. 26, 23 P.S. § 101 et seq. The Divorce Code was officially codified by Act of 1990, Dec. 19, P.L. 1240, No. 206, 23 Pa.C.S. § 3101 et seq.

. Pa.R.C.P, 1920.2 in effect at the time of this memorandum and directive provided that a divorce action could be brought only in the county in which the plaintiff or the defendant resides. This rule was subsequently amended in 1989, and now provides that a divorce action may also be brought in a county upon which the parties have agreed.

. Through this document, Davis only stipulated as to how Mrs. Dietrich would testify if she appeared at the hearing. He did not stipulate that the testimony was truthful, and merely accepted the admission of the testimony without the right to cross-examine Mrs. Dietrich.

. These events are essentially irrelevant to the charges before this Court except to the extent that they provide reasons for the delay in this matter and further evidence of the complete inadequacy of Davis’ office management system to handle his excessive case load.

. Six-month suspension imposed at No. 25 DB 83 by order of this Court dated May 21, 1984; one-year consecutive suspension imposed at No. 56 DB 82 by order of this Court dated September 7, 1984; and six-month consecutive suspension imposed at No. 78 DB 82 by order of this Court dated February 28, 1985.