Appendix — James v. District of Columbia Court of Appeals
Supreme Court brief1983
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APPENDIX A
DISTRICT OF COLUMBIA COURT OF APPEALS
No. M-93-81
IN THE MATTER OF RICHARD ALLEN JAMES,
RESPONDENT, A MEMBER OF THE BAR OF THE
DISTRICT OF COLUMBIA COURT OF APPEALS
Argued May 26, 1982
Decided Oct. 21, 1982
Martha J. Tomich, Assistant Bar Counsel, with whom
Edwin Yourmans, Deputy Bar Counsel, Washington,
D.C., was on the brief, for the Bd. on Professional
Responsibility.
William F. Krebs, with whom Goeffrey P. Gitner,
Washington, D.C., was on the brief, for respondent.
Before NEWMAN, Chief Judge, and Mack and Pryor,
Associate Judges.
NEWMAN, Chief Judge:
The Board on Professional Responsibility found that
respondent had violated several disciplinary rules in con-
nection with two matters involving different clients.
With regard to one case, the Board found that respondent
had improperly converted to his own use funds intended
by the client to be paid to a third party in settlement
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of a legal dispute, and that this: constituted, inter alia,
“conduct involving dishonesty, fraud, deceit, or mis-
representation” in violation of DR [Disciplinary Rule]
1-102 (A) (4). In the other case, the Board concluded
that respondent violated DR 5-104(A) by failing to take
appropriate steps to protect his clients from a potential
conflict of interest that arose when he both drafted
and entered into a real estate transaction with them,
notwithstanding respondent's lack of fraudulent intent.
Respondent challenges these findings and conclusions
of law. He also asks us to reject the finding of one
violation on the ground that he was not given adequate
notice of the charge. A remand for reconsideration of
the sanction is sought because respondent’s opportunity
to present mitigating evidence was allegedly inadequate.
Finally, he contends that the Board’s recommended
sanction is unwarranted, We reject these challenges
and adopt the recommended sanction of a two year
suspension from the practice of law.
I. FACTS
A. The Coverdale Case (No. 319-79)
In September 1978 responent was retained by Lou-
venia Coverdale to represent her as a defendant in a
personal injury action. In October 1979, Mrs. Coverdale
agreed to pay the plaintiff $1,250 in settlement of the
dispute, and the suit was dismissed. Respondent billed
her $1,500 for his services. She proposed to satisfy her
obligations in monthly installments of $400, with half
of each payment going to the plaintiff to satisfy the
settlement, and half to respondent in payment of his
fee. After the plaintiff rejected this arrangement, Mrs.
Coverdale proposed to respondent that the full amount
of each installment be paid to the plaintiff until the
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settlement was satisfied, and that subsequent payments
be applied to the fee. According to Mrs. Coverdale's
testimony, which was accepted by the Hearing Commit-
tee and the Board, respondent accepted this arrangement
and promised to implement it on her behalf.! There-
after, Mrs. Coverdale gave respondent $350 in November
1979, and payments of $400 each in the succeeding three
months. However, respondent made no effort to transfer
funds to the plaintiff, and, without informing the client,
deposited the payments in his personal professional
account.?
In December 1979 or January 1980, the plaintiff's
counsel informed respondent that he would seek judicial
relief from the order of dismissal. Respondent then
advised Mrs. Coverdale to suspend her payments until
the court acted on the plaintiff's motion. On April 30,
a hearing on the motion was held, Respondent told the
court that his client had paid only $350 toward the
settlement, and had not sent him any funds for three
months. He failed to inform the court that payments
were suspended on his own advice, and stated instead
that his client was unable to pay any faster. He con-
curred in plaintiff’s contention that Mrs. Coverdale had
breached her agreement, and suggested that the plaintiff
could attach her property to enforce it. The court stated
that the motion would be denied if the full $1,250 was
1 As explained in Part II, the fact that respondent contradicted
his client's testimony in some respects does not vitiate the fact
that substantial evidence supporting the Board's finding exists.
Accordingly, we evaluate the evidence in a light favorable to
petitioner.
2 Following an inquiry by Bar Counsel, the amount of the
February payment was deposited in respondent's client escrow
account.
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paid immediately. Respondent neither informed the
court that his client had already paid him an amount
sufficient to cover the settlement, nor offered to pay it
forthwith, Instead, he requested fifteen days to attempt
to raise the money, The court then granted the motion
setting aside the settlement.
Respondent told Mrs, Coverdale that the reason the
settlement was set aside was that the entire amount had
not been paid within fifteen days of the settlement, He
failed to inform her that the motion would have been
denied if the full amount had been paid as of the hearing
date.
The Hearing Committee found that respondent had
violated several disciplinary rules in connection with the
Coverdale matter: DR 1-102 (A) (4) (conduct involving
dis honest y, fraud, deceit, or mis representation): DR
1-102 (A) 6) (conduct prejudicial to the administration
of justice); DR 6-101(A)(1)-(3) (neglect of a legal
matter); DR 7-101(A)(1)-(3) (intentionally failing to
seek the lawful objectives of the client, failing to carry
out a contract for legal services, and prejudicing the
client during the course of the professional relationship);
and DR 9-102(A) (failing to maintain client funds in an
account separate from his own professional account).
Only the finding of dishonesty and misrepresentation
pursuant to DR 1-102(A)(4) was challenged before the
Board, The Board accepted the Hearing Committee's
findings.
B. The Scott Case (No. 312-79)
In November 1979, Walter and Saundra Scott retained
respondent to aid them in renegotiating a lease on a
building they owned, and in selling the property. Due
to substantial losses incurred on the building, the Scotts
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were eager to dispose of it, After efforts to sell to third
parties had failed, Mr. Scott suggested that respondent
buy the property. Respondent then drafted two docu-
ments. The first was a contract to sell the building to
respondent for $40,000, The second suggested that the
Scotts would retain an equitable interest and that the
sale proceeds would be applied to the maintenance of
the property, after satisfaction of existing liens. Upon
subsequent resale, the net proceeds would be divided
equally between respondent and the Scotts. However,
the contract did not expressly require respondent to sell
the building, and did not establish time limits for its
rehabilitation or sale, Neither did it establish whether
the Scotts would be entitled to any part of future rents
collected, or provide for contingencies that might inter-
fere with the performance of the arrangement, such as
respondent's death,
Respondent reviewed the documents with the Scotts
for about an hour, after which the contracts were exe-
cuted, It was agreed that the second agreement would
not be disclosed to third parties, so that the tenant would
not learn of the true nature of the sale, Respondent's
share of the net proceeds would be in lieu of a prior
hourly fee arrangement. Respondent subsequently
testified that he had suggested that the Scotts consult
independent counsel, but they could not recall such a
suggestion, Due to difficulties in obtaining necessary
approvals from the District of Columbia Rental Accom-
modations Office, the contracts were never carried out.
The Hearing Committee concluded that respondent
violated DR 5-104(A) by failing to make the “full
disclosure“ necessary to protect his clients from the
conflict of interest inherent in a contract in which he
had a personal interest differing from that of the clients,
The Board later concurred in that conclusion, finding
that respondent neither “review[ed] with his clients
in considerable detail the nature of the proposed agree-
ment“ nor “discussed in any detail .. the nature of
the potential conflict of interest.” Board Report and
Recommendation at 12.
II. FINDINGS OF DISHONESTY, FRAUD, DECEIT,
AND MISREPRESENTA1.ON
The sole substantive issue before us regarding the
Coverdale case concerns the Board's finding of conduct
involving dishonesty, fraud, deceit, and misrepresenta-
tion, which the Board found established a violation of
DR 1-102(A)(4). We are required to accept that finding
unless it is unsupported by substantial record evidence.
D.C, App. R. XI § 7(3).
Testimony supporting a finding of dishonesty, etc., is
more than ample, The client testified that respondent
had agreed to forward her monthly payments to a third
party in order to satisfy a settlement agreement. Re-
spondent admittedly failed to do so, Instead, he applied
the payments to his own account, without so informing
the client, He later misled a court about the payments
his client had made for purposes of satisfying the settle-
ment agreement, He subsequently misinformed the client
as to the reasons for the court's setting aside of the
settlement agreement, The scienter requisite to a disci-
plinary code violation can be inferred from respondent's
conduct. See Geffen u. State Bar of California, 14
Cal. 3d 843, 122 Cal. Rptr. 865, 537 P.2d 1225 (1975)
(knowledge of employee's improper solicitations); In re
Vincent, 347 N. E. 2d 40 (Ind. 1978) (intent to prejudice
or damage client). Thus there is substantial evidence of
dishonest behavior in violation of professional standards.
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Respondent disputed much of this testimony, particu-
larly as regards the nature of the agreement concerning
the use of the client's monthly payments, but the Board
is not required to accept his version of the events. The
Hearing Committee found the client's testimony to be
credible, While that of respondent contained incon-
sistencies and was sometimes evasive. The Board acted
well within the bounds of its authority in accepting this
assessment. Accordingly, we conclude that the Board’s
finding of dishonest conduct, in contravention of DR
1~102(A)(4), was supported by substantial evidence.
III. STATE OF MIND REQUISITE TO A
VIOLATION OF DR 5-104(A)
Respondent's only challenge relating to the Scott case
involves the finding that he violated DR 5-104(A), which
provides:
A lawyer shall not enter into a business transaction
with a client if they have differing interests therein
and if the client expects the lawyer to exercise his
professional judgment therein for the protection of
his client, unless the client has consented after full
disclosure,
The principal issue is a question of law: whether an
improper intent is an element of a violation of this rule.
It is not disputed that respondent entered into the land
transaction in good faith, without intending to defraud
or overreach his clients, and that the transaction may
have been in the client’s best interest. Respondent argues
that his misdeeds, if any, were unwitting and at most
negligent. He argues that the rule must be applied on
the basis of his “subjective understanding” and that,
accordingly, his good faith is a defense.
We reject that contention. The Rule creates an un-
qualified obligation to provide “full disclosure” before
entering a business transaction like that involved in the
Scott case. The rule contains no words indicating that
discipline may not be imposed except when scienter is
shown. This contrasts with other Disciplinary Rules,
which contain explicit scienter standards. See, e. g., DR
4-101(B) (A] lawyer shall not knowingly ... . ).
The evident intent of DR 5-104(A) is not merely to
deter and punish actual fraud against clients. That is
already proscribed by other rules. Rather it is to ensure
that clients get full disclosure on which to base their
decisions in every case involving differing interests,
including those in which the attorney is acting in good
faith. Accordingly, we hold that failure to provide the
full disclosure required by DR 4-101(B) constitutes a
violation of that rule regardless of whether the attorney
intended to defraud the client or acted with other im-
proper motives. This conclusion is in accord with those
reached in numerous other jurisdictions. In re Weiner,
120 Ariz. 349, 586 P.2d 194, 197 (1978); People v.
Denious, 118 Colo. 342, 196 P.2d 257, 263, 266-67
(1948); Committee on Professional Ethics v. Baker, 269
N.W.2d 463, 466 (Iowa 1978); In re Brown, 277 Or.
121, 559 P.2d 884, 887-91 (1977); In re Boivin, 271
Or. 419, 533 P.2d 171, 175-76 (1975).
“Full disclosure” includes a clear explanation of the
differing interests involved in the transaction and the
advantages of seeking independent legal advice. It also
requires a detailed explanation of the risks and disad-
vantages to the client entailed in the agreement, including
any liabilities that will or may foreseeably accrue to him.
However, in this case, the Board found that respondent
failed to review in adequate detail both “the nature
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of the proposed agreement“ and “the nature of the
potential conflict of interest.” The record is adequate
to support the conclusion that the disclosure provided
by respondent, including both the documents and the
discussion of them, was inadequate to permit the clients
to make a fully informed decision,
IV. PROCEDURAL ISSUES
Respondent contends that his right to due process
was violated by a failure to give him adequate notice of
charges that ultimately formed the basis for the finding
that he had engaged in conduct prejudicial to the adminis-
tration of justice, in violation of DR 1-102(A)(5). He
also alleges that the lack of notice contravened D.C. App.
R. XI, § 7(2), which specifies that the charging petition
“shall be sufficiently clear and specific to inform the
respondent of the alleged misconduct.”
Paragraph 10(b) of the Specification of Charges
clearly put respondent on notice of the Disciplinary Rule
with whose violation he was charged:
Respondent violated the following provisions of
the District of Columbia Code of Professional
Responsibility:
(b) Disciplinary Rule 1-102(A)(5) by engaging
in conduct prejudicial to the administration of
justice as alleged in paragraph 7;.... [Specifica-
tion of Charges, J 10]
Paragraph 7 clearly identifies respondent’s behavior at
the hearing on the motion to set aside the settlement in
the Coverdale case as the basis for the alleged violation.
However, that paragraph does not mention false or
misleading statements or omissions with regard to the
payments made by his client.
10a
On February 29, 1980, plaintiff filed a Motion
for Relief From Order requesting the Court to set
aside the settlement entered on October 15, 1979
and permit the plaintiff to proceed to trial. In
opposing this motion on behalf of Ms. Coverdale,
respondent represented to the Court that he had
been unaware of the plaintiff’s whereabouts. That
statement was false and respondent knew or should
have known that it was false. [Specification of
Charges, J 7.]
When respondent appeared before the Hearing Com-
mittee, he was informed of the Committee’s concern
about his statement and omission regarding Mrs. Cover-
dale’s payments, and asked to respond to those concerns
in a written memorandum after the oral hearing. There-
fore, in order to prevail, respondent would have to
establish both that he was not on adequate notice of
the charges before the oral hearing, and that the oppor-
tunity to respond in written form was inadequate to
satisfy due process.
We need not decide the merits of this issue.“ however,
because respondent has not preserved his right to raise it
3 We note, however, that the two cases principally relied on by
respondent would not be dispositive of his claim. In Jn re Ruffalo,
390 U.S. 544, 550, 88 S.Ct. 1222, 1225, 20 L. Ed. 2d 117 (1968),
the charges against the attorney were amended to add a count
based on a defense that the attorney had presented during his
testimony. The Supreme Court held that “the absence of fair
notice as to the reach of the grievance procedure and the precise
nature of the charges deprived petitioner of procedural due
process.” Id. at 552, 88S. Ct. at 1226. However, as we explained
in In re Smith, D.C. App., 403 A.2d 296 (1979), Ruffalo rests
on the premise that the amendment of charges created an imper-
missible trap since, at the time of the proceedings, the attorney
could not have known that the defense he asserted would subject
him to disbarment. Such a situation is not present in the case at
[footnote continued]
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in this court. Respondent could have objected to the
lack of notice during the proceedings before the Hearing
Committee, or at any time thereafter. He had several
opportunities to do so, none of which he accepted. No
objection or request for an additional oral hearing was
made during the evidentiary hearing. Neither was the
issue raised in the respondent’s post-hearing brief, which
addressed the merits of the Committee’s charge. Nor did
he raise the issue before the Board, Finally, there was no
mention of the lack of notice as to the charged violation
in respondent’s exceptions to the Board Report and
Recommendation as filed in this court. Under similar
circumstances, courts have held the respondent to have
waived the right to raise his objection on appeal. Athearn
v. State Bar of California, 20 Cal. 3d 232, 142 Cal. Rptr.
171, 172-73, 571 P.2d 628, 629-30 (1978) (Respondent
waived right to review of commission’s right to subpoena
his bank records); State Bar of Georgia v. Ellis, 116 Ga.
App. 721, 728, 158 S.E.2d 280, 285 (1968) (Respond-
ent lost right of review when he attempted to correct
alleged deficiencies for the first time at the appellate
stage); Committee on Professional Ethics and Conduct
of the Iowa State Bar Association v. Roberts, 246
N.W.2d 259, 260 (Iowa 1976) (Court rejects Respond-
ent’s contention that he was not provided timely notice
of hearing because it was not urged before the commis-
sion); In re Crane, 400 Mich. 484, 494, 255 N. W. 2d 624,
626 (1977) (Respondent waived his demand for docu-
ments, witnesses, and bill of particulars because he did
not bring it to the attention of the hearing panel or
Grievance Board).
bar. The instant case involves no amendment of charges. The
issues involve the scope of the original charges and whether the
Hearing Committee’s statements to respondent regarding the
matters of concern to them would suffice to vitiate any short-
comings in the charging document.
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Our consideration of Board findings and recommenda-
tions is similar to our review of administrative agency
decisions. In re Dwyer, D.C. App., 399 A.2d 1, 11
(1979). In the context of administrative appeals, we do
not address objections that could have been, but were
not raised prior to judicial review. DeLevay v. District
of Columbia Rental Accommodations Commission, D.C.
App., 411 A.2d 354, 358 (1980); Dietrich v. District
of Columbia Board of Zoning Adjustment, D.C. App.,
320 A.2d 282, 287 (1974); John D. Neumann Proper-
ties, Inc. v. District of Columbia Board of Appeals and
Review, D.C. App., 268 A.2d 605, 606 (1970). The
purposes of this policy are well known. First, when an
issue is timely raised before the administrative tribunal,
the problem may be corrected without the involvement
of the appellate court, thereby avoiding a possible
remand and subsequent appeal. Secondly, even when
the complaining party does not get satisfaction from the
administrative body, the appellate court’s task is facili-
tated by the record of the agency’s attention to the issue.
Both of these considerations apply with comparable
force in the context of disciplinary proceedings.*
We conclude that where respondent had a fair oppor-
tunity to raise the inadequacy of notice before the
Hearing Committee and the Board, and failed to take
advantage of it, he has waived his right to have that issue
resolved in this court.
Respondent’s other procedural objection is that he
was denied an adequate opportunity to offer evidence
4 The fact that disciplinary actions are punitive does not alter the
result. Even criminal defendants facing severe penalties may waive
rights or objections by failing to assert them in a timely manner.
See, e. g., Super. Ct. Cr. R. 12(d) (failure to move for the suppre-
sion of evidence before trial constitutes a waiver).
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in mitigation of his offense, testimony that might have
resulted in the recommendation of a lesser sanction.
The right to present such evidence is provided in D.C.
App. R. XI § 7. : |
At the hearing, the Chairman inquired about possible
mitigation evidence:
I guess what I thought was we would defer any
hearing on the issue of sanctions. At this time, do
you know whether you would propose presenting
any further witnesses on the subject of sanctions?
[Tr. 200-01].
James responded as follows:
. . » don't know, can I bring in 25 or 30 people
who think I’m a good guy? You know, there are
lots of them that think I am and lots of them that
think I’m not. And as for my professional responsi-
bility, I think it’s aboveboard. [Tr. 201].
The Committee then asked Bar Counsel and respondent
to address the issue of sanctions in their post-hearing
memoranda, and specifically asked respondent to include
any additional mitigating evidence therein. Respondent
did not object to this procedure in any way or ask that
he be allowed to present his mitigation evidence by
means of oral testimony rather than written statements.
Instead, he followed the procedure outlined and sub-
mitted testimonials to his integrity from six people.
However, in his post-hearing memorandum, respondent
included a request for an additional hearing on the
following matters:
5 Respondent also seeks to rely on a letter to him from the
Chairman dated December 9, 1980, which is attached to respond-
ent’s brief. However, that document is not in the record. In any
event, its substance regarding the deferral of mitigation evidence
is reflected in the Chairman's inquiry at the hearing.
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(a) mitigating circumstances; (b) respondent’s prior
good record and lack of disciplinary complaints; (c)
respondent’s previous good reputation as an attor-
ney; (d) the absence of evil or fraudulent intent
related to any disciplinary infraction; and (e)
respondent’s willingness to admit any negligence
or wrongdoing if such are found by this Committee.
[Respondent's Post-Hearing Memorandum at 24].
The request was denied by letter of the Committee
Chairman.
Respondent failed to raise the lack of a second oral
hearing as an issue before the Board. Accordingly, the
Board had no opportunity to order another hearing, and
did not address the issue in its report to this court. Thus,
for the reasons just discussed in connection with the due
process claim, respondent has waived his right to have
this contention reviewed by this court. See Athearn v.
State Bar of California, supra; State Bar of Georgia v.
Ellis, supra; Committee on Professional Ethics and
Conduct of the Iowa State Bar Association v. Roberts,
supra; In re Crane, supra.
V. SANCTION
D.C. App. R. XI § 7 provides 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 otherwise would
be unwarranted.” The Board recommendation clearly
indicated that while respondent’s conduct in the Scott
case might call for some sanction short of suspension, the
decision to recommend a two year suspension was largely
based upon the Coverdale matter. The Board’s findings
with respect to the latter case reflect serious misdeeds
which were unbecoming to the profession and prejudicial
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both to the client's interest and the administration of
justice. Misuse of client funds, dishonesty to the client,
and misleading a court were involved. These actions
occurred because respondent accorded a higher priority
to the collection of his fee than to serving his client or
complying with professional standards. Under these
circumstances, we cannot say that a two year suspension
is unwarranted. Nor has any inconsistent disposition
in a comparable case been brought to our attention.
Accordingly, the recommended sanction of a two year
suspension from practice is adopted.
So ordered.
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APPENDIX B
DISTRICT OF COLUMBIA. COURT OF APPEALS
BOARD ON PROFESSIONAL RESPONSIBILITY
Bar Docket Nos.
312-79, 319-79
IN THE MATTER OF:
RICHARD ALLEN JAMES
REPORT AND RECOMMENDATION
These two conslidated cases are here upon the Report
of Hearing Committee Number Nine, which concluded
that Respondent violated numerous disciplinary rules
in his representation of his clients in two separate and
unrelated matters. The Hearing Committee recom-
mended that Respondent should be suspended from the
practice of law for one year and one day, thus requiring
Respondent to bear the burden of proving rehabilitation
before he can be permitted to resume the practice of
law in this jurisdiction.
Respondent challenges the findings of fact of the
Hearing Committee as unsupported by clear and con-
vincing evidence, urges that the Committee erred in
certain of its conclusions of law, and argues that, in any
event, the recommended sanction is too harsh under the
circumstances here. Bar Counsel urges affirmance of the
Hearing Committee’s findings of fact and conclusions
of law, but argues that the appropriate sanction for the
violations found in these cases is disbarment.
17a
For the reasons that follow, we agree with the Hearing
Committee that Respondent committed numerous, very
serious violations of the disciplinary rules, and we
recommend he be suspended from the practice of law
for two years.
FACTS
1. The Scott Case, No. 312-79
In November 1979 Walter and Sandra Scott retained
Respondent to assist them in renegotiating the terms of
a lease on a residential dwelling the Scotts owned in
Washington, D.C. The Scotts were experiencing sub-
stantial losses on this rental property and also sought
Respondent’s assistance regarding a possible sale of the
property. The Scotts’ tenant, however, had retained an
attorney who was imposing significant legal roadblocks
in opposition to the Scotts’ efforts either to increase the
rent or to sell their property.
In December 1979, after several other approaches to
resolving these problems had been unsuccessful, and the
Scotts’ losses had reached an unacceptable level, Mr.
Scott suggested that Respondent himself purchase the
property. Respondent initially indicated that he did not
wish to do so, but in January 1980 Respondent pre-
sented to the Scotts two proposed contracts which
Respondent had drafted. The first contract provided
that Respondent would pay $40,000, the approximate
appraised value of the property, and the Scotts would
convey the property to him. The second document,
1 The facts in these two cases are set out in fuller detail in the
excellent and comprehensive report of Hearing Committee Number
Nine, which report contains citations to the record for all the facts
set forth herein.
18a
however, suggested that while Respondent would obtain
legal title, the Scotts would retain an equitable interest
in the property. That document specified that the sale
proceeds remaining after satisfaction of existing liens
would be placed in a special account for use by Re-
spondent to maintain and improve the property. The
agreement further provided that “upon later disposition
and sale of the property,” the net proceeds would be
divided equally between the Scotts and Respondent.
The Scotts met with Respondent on January 2, 1980,
for approximately one hour, reviewing these documents
and ultimately executing them. The Scotts and Respond-
ent agreed that they would not disclose to third parties
the existence of the second contract, so as to avoid
informing the Scotts’ tenant of the true nature of the
sale. The Scotts also agreed with Respondent that his
50% share of the profits on the sale of the property
would be in lieu of the prior agreement under which the
Scotts were to pay Respondent $75 per hour for his time
spent on this matter.
The parties have different recollections as to whether
Respondent ever suggested that the Scotts should consult
independent counsel concerning this proposed agree-
ment.? In any event, the Scotts believed at the time,
and apparently continue to believe, that Respondent's
proposal was fair and constituted a “viable program” to
help them out of a difficult problem.
2 Respondent and his associate testified at the hearing that
Respondent did make such a suggestion, Tr. 67, 102, although
Respondent's Answer to the Petition in this case had admitted that
no such suggestion was made. See Specification of Charges, filed
October 20, 1980, at 95; Answer to specification of Charges,
filed October $1, 1980, at 45. The Scotts both testified that they
recalled no such suggestion, although they could not categorically
rule out the possibility it might have occurred. See Tr. 50, 89.
19a
The contract drafted by Respondent did not establish
any time frame for rehabilitating or reselling the property
and did not expressly require that Respondent ever sell
the property. It was silent regarding whether the Scotts
would be entitled to any portion of any future rent that
might be collected. In addition, it made no provision
for unanticipated contingencies, such as the death of
Respondent prior to sale of the property.
Because of continuing problems in obtaining necessary
approvals from the D.C. Rental Accommodations Office,
the contracts between the Scotts and the Respondent
never were carried out. Ultimately, for reasons unrelated
to the contracts between them, the Scotts discharged
Respondent, and they requested an itemization of his
fees. Respondent informed the Scotts that the fee for
his services and those of his staff would be $5,000,
although he stated that in view of the Scotts’ financial
problems he would not expect his fee to be paid until
the property had been sold.“ To date Respondent has
However, after institution of the instant proceedings, Respond-
ent filed suit against the Scotts for recovery of attorney's fees,
despite the fact that the property still had not been sold. That
suit ultimately was settled by the Scotts’ payment of $3,500 to
Respondent.
Respondent implied in his testimony before the Hearing Com-
mittee that the reason he decided to sue the Scotts may well have
been related to the pending disciplinary proceedings. See Tr.
103-04 (emphasis added):
If would push that thing through, they'd owe me $20,000.
I don’t want their money. I want paid [sic] a reasonable
amount for the hours that I put in on this case, and I'm not
even getting that. If I charged them $75 an hour for 150
hours, I'd be asking $10,000 for them. I don't want their
$10,000. All I want is a little bit of payment for what I did.
I probably would have never done that, if you want to know
the truth, if all this hadn't come up, but I'm entitled to it.
At a minimum, I'm entitled to it.
20a
failed to provide any itemization of his fee to the Scotts
or to the office of Bar Counsel. Respondent testified
at the hearing in this matter that he and his staff spent
approximately 150 hours working on the Scotts’ case
over a period of two-three months. Respondent stated
that in view of his $75 per hour charge for all work
done by his office, he could have charged substantially
more than $5,000. Respondent testified that he and
his staff did not keep any time records of the services
provided to the Scotts, and that he could only estimate
how much of the alleged 150 hours was performed
by himself and how much by his law clerk or others.
Respondent stated at the hearing that if the Scotts
continued to insist on an itemization of his bill, he
would feel it appropriate to raise his fee from $5,000 to
510,000.“
The Hearing Committee concluded that Respondent
violated Disciplinary Rule (DR“) 5-104 (A)s in that he
failed to take appropriate steps to protect the Scotts
from the potential conflict of interest inherent in the
4 See Tr. 117:
If they insist on me itemizing this and charging them a full
fee, | would say that my bill will be in excess of $10,000.
I choose not to do this. If you want to talk them into doing
that, you're going to cost them $5,000, simple as that,
because if I itemize this, I’m going to charge for the full
amount. Sure, I can go back through my calendars; it would
take me about a half a day, but it would be well worth it if
I want the extra $5,000, but no, my position right now is
not to charge them a full fee.
5 Disciplinary Rule 5-104(A) reads as follows:
A lawyer shall not enter into a business transaction with a
client if they have differing interests therein and if the client
expects the lawyer to exercise his professional judgment
therein for the protection of the client, unless the client has
consented after full disclosure.
n
21a
contracts Respondent drafted between himself and his
clients. The Hearing Committee concluded with regard
to Respondent's fee that under all the circumstances,
including Respondent's failure to have appropriate office
procedures by Which to measure his hours, his fee was
inappropriate and might be deemed to be “clearly exces-
sive“ within the meaning of DR 2-106(A). Nevertheless,
the Committee apparently concluded that no disciplinary
violation was clearly proven with regard to Respondent’s
fee. See Hearing Committee Report at 24.
2. The Coverdale Case, No. 319-70
In September 1978 Respondent was retained by Mrs.
Louvenia Coverdale to represent her in a personal injury
action filed against her by a Mr. John Stevenson. In
October 1979 Respondent and counsel for Mr. Stevenson
jointly filed a praecipe dismissing Mr. Stevenson’s case
in consideration for Mrs. Coverdale’s agreement to pay
Mr. Stevenson $1,250. At the time the praecipe was
filed, Respondent advised Mrs. Coverdale that she would
be required to pay the $1,250 within fifteen days. At
about the same time, Respondent submitted to Mrs.
Coverdale a bill for his legal services, showing an amount
due (above the original $500 retainer paid to Respond-
ent) of $1,500.
Mrs. Coverdale promptly informed Respondent that
she was unable to satisfy this entire debt immediately,
but that she could pay installments of $400 per month,
of which half would be paid toward her settlement obli-
gation and half toward the attorney’s fee bill. When
Respondent later informed Mrs. Coverdale that Mr.
Stevenson was unwilling to accept payment in install-
ments, Mrs. Coverdale suggested that the full amount of
her initial installment payments be applied to the amount
22a
owed to Mr. Stevenson, with Respondent obtaining his
attorney’s fee from the subsequent installments paid after
satisfaction of the settlement obligation to the plaintiif.
Mrs. Coverdale testified that Respondent indicated he
agreed to this arrangement and was planning to imple-
ment it with Mr. Stevenson’s counsel. Mrs. Coverdale
sent Respondent a check for $350 in November 1979 and
made payments to Respondent of $400 in December,
January and February.
In the meantime, Respondent took no further action
to attempt to work out any instalment payment arrange-
ment with Mr. Stevenson or his counsel. On November
19, 1979, Mr. Stevenson’s original counsel withdrew from
the representation and Respondent testified that he did
not know how to contact Mr. Stevenson. Respondent
proceeded to deposit Mrs. Coverdale’s November, Decem-
ber and January checks in his professional account, and
not his client escrow account.? Respondent did not
inform Mrs, Coverdale that he was applying these pay-
ments toward his bill for attorney’s fees, rather than
applying them toward the settlement obligation, as Mrs.
Coverdale had understood.
In December 1979 or January 1980 a new attorney
was retained by Mr. Stevenson. That attorney contacted
© As will be discussed in detail below, Respondent's explanation
of the understanding between himself and Mrs, Coverdale regarding
these installment payments differs substantially from Mrs. Cover-
dale’s testimony.
7 Although Mrs. Coverdale’s November 3, 1979, check contained
a notation that $50 of that check was to be paid to the plaintiff,
see Bar Ex. 38(b), Respondent deposited the full amount of
that check in his professional account. However, following Bar
Counsel’s inquiry concerning this matter, Respondent deposited
the full amount of Mrs. Coverdale’s February 1980 check into his
escrow account. See Bar Ex. 38(b); Tr. 133-36; Resp. Ex. 3.
23a
Respondent and indicated that Mr. Stevenson intended
to file a motion with the court seeking relief from the
order of dismissal. Respondent subsequently advised
Mrs. Coverdale that, in view of Mr. Stevenson’s position,
she should suspend her monthly installments after
February until the court resolved the matter.
A hearing was held before Judge Fauntleroy in D.C.
Superior Court on April 30, 1980, concerning plaintiff
Stevenson’s motion for relief from the order, At that
hearing, Respondent represented to the court that Mrs.
Coverdale had paid only $350 toward the settlement
obligation, that he had not received a payment from her
in three months, that she was unable to pay any faster,
and that Mr. Stevenson was free to attach her property
to enforce the judgment. Respondent agreed with the
plaintiff’s argument that Mrs. Coverdale had breached
her agreement to pay, although Respondent argued that
the court should deny the requested relief. The judge
twice stated that he would deny the motion if Mrs.
Coverdale would immediately pay the $1,250 amount.
Respondent asked for 15 days to attempt to raise the
money, suggesting that he might be willing to pay it from
his fee. At no time, however, did Respondent offer to
pay the settlement amount immediately, nor did he
inform the court that Mrs. Coverdale’s prior payments
to him were sufficient to cover the entire settlement.
Respondent also failed to inform the court that Mrs.
Coverdale had ceased making monthly payments on
Respondent’s advice. The judge then granted plaintiff's
motion to set aside the settlement.
In informing Mrs. Coverdale of the court’s ruling,
Respondent indicated that the basis for the judge’s
decision was Mrs. Coverdale’s failure to pay the full
obligation within fifteen days of the October settlement.
24a
Respondent never informed Mrs, Coverdale that the
judge indicated he would deny the requested relief if
arrangements could be made to pay promptly the full
amount of the settlement.
The Hearing Committee concluded that in the Cover-
dale matter Respondent had violated DR 1-102(A)(4),
by engaging in conduct involving dishonesty, fraud,
deceit and misrepresentation, The Committee also found
that Respondent violated DR 1-102(A)(5) (engaging in
conduct prejudicial to the administration ofjustice), by
making misleading statements to the judge at the hearing
on plaintiff’s motion for relief from the settlement. The
Hearing Committee further found that Respondent’s
failure to apply Mrs. Coverdale’s funds to the settlement
violated DR 6-101(A)(3) (neglect of a legal matter
entrusted to him) and DR 7-101(A)(1)-(3) (intentionally
failing to seek the lawful objectives of his client, failing
to carry out a contract of employment for legal services,
and prejudicing or damaging his client during the course
of a professional relationship). Finally, the Hearing
Committee concluded that Respondent violated DR
9-102 (A) by failing to maintain his client’s funds in an
identifiable account separate from his own professional
account,
DISCUSSION
1. The Scott Case
The sole issue® raised by Respondent with regard to
the Scott case is whether the Hearing Committee erred
8 Respondent also argues that the Hearing Committee's criticisms
of Respondent's fee~setting practices were unfounded. Since we
read the Hearing Committee as having concluded that Bar Counsel
failed to establish by clear and convincing evidence a disciplinary
[footnote continued]
25a
as a matter of law in concluding that Respondent vio-
lated DR 5-104(A), in view of the Hearing Committee’s
findings of fact that there was no fraudulent intent by
Respondent, and that indeed the agreements he drafted
may well have been generally in his clients’ best interest.
We reject Respondent's argument that a showing of fraud
or overreaching is a necessary element for violation of
DR 5-104(A).
Respondent in his brief cites numerous cases which
he contends stand for the proposition that a showing of
fraud or overreaching by the attorney is an essential
clement of a DR 5-104(A) violation. See, e. g., Eschwig
v. State Bar of California, 1 Cal. 3d 8, 81 Cal. Rptr. 352,
459 P.2d 904 (1969); Yale v. State Bar, 16 Cal. 2d 175,
105 P.2d 112, 114 (1940); Ex Parte McDonald, 112
Mont. 129, 113 P.2d 790 (1941); In re Egan, 37 S.D.
159, 157 N.W. 310 (1916); Gelders v. Haygood, 182
F. 109 (C.C.S.D. Ga. 1910).9 In our view, while fraud
and overreaching obviously are important in determining
the appropriate sanction for a DR 5-104(A) violation,
they are not essential elements in the demonstration of
an improper conflict of interest under that rule.
violation with regard to Respondent’s fee practices, see Hearing
Committee Report, at 24, and since we share that view, we find
it unnecessary to reach Respondent's argument that his fee in fact
was “appropriate” under the circumstances here.
9 With one possible exception, all the cases cited by Respondent
appear to have involved fraud or dishonesty, but cannot fairly
be read to require such a showing for a DR 5-104(A) violation.
However, Gelders u. Haygood, 182 F. 109 (C. C. S. D. Ga. 1910),
might be read to suggest such a proposition, at least by implica-
tion, The Gelders decision, a 70-year old case, arose under a
different disciplinary code thar. that in effect today. In any event,
to the extent Gelders stands for a different rule than announced
in text, we decline to follow that decision from a different juris-
diction.
Respondent's suggestion that fraud or overreaching is
an essential element of DR 5-104(A) finds no support
whatever from the language of the rule, which absolutely
prohibits a lawyer from entering into a business transac-
tion with his or her client if they have differing interests,
“unless the client has consented after full disclosure”:
A lawyer shall not enter into a business transaction
with a client if they have differing interests therein
and if the client expects the lawyer to exercise his
professional judgment therein for the protection of
the client, unless the client has consented syed full
disclosure.
Moreover, numerous courts in other jurisdictions have
made clear that an attorney need not intend to defraud
anyone, to gain an unfair advantage, or to damage his
or her client (or anyone else) in order to violate this
rule, See In re Weiner, 120 Ariz. 349, 586 P.2d 194, 197
(1978):
[1] When an attorney enters into a business
transaction with his client, he must not only insure
that the transaction is fair, but he must also fully
disclose all conflicts inherent in such dealings and
all pertinent fact... The duty to disclose is not
obviated by a showing that the outcome of a trans-
action was fair to the client. Full disclosure of all
pertinent information, including the presence of
any conflicts of interest, is independently required.
Accord, e. g., In re Brown, 277 Ore. 121, 559 P.2d 884,
887-91 (1977); In re Bowin, 533 P.2d 171, 175-76 (Ore.
1975); People ex rel Kent v. Denious, 118 Colo, 342,
196 P.2d 257, 263, 266-67 (1948). Thus, even if the
business transaction between attorney and client arguably
is in the client’s best interest, the attorney nevertheless
must fully describe to the client the nature of the trans-
action, explain all foreseeable or potential conflicts, and
27a
obtain the client’s informed consent. See In re Wolk, 82
N. J. 326, 413 A.2d 317, 320-21 (1980); In re Weiner,
supra, 586 P.2d at 197; In re Brown, supra, 559 P.2d at
888-91; In re Boivin, supra, 533 P.2d at 175-76; In re
Staples, 486 P.2d 1281, 1283 (Ore. 1971); People ex
rel. Kent v. Denious, supra, 196 P.2d at 266-67.
In the instant case, the evidence is in conflict con-
cerning whether Respondent advised his clients that
they should consult independent counsel regarding this
contract. 10 Even assuming he did so, however, Respond-
ent knew or should have known that his clients were in
difficult financial and emotional straits at the time, see,
e. g., Tr. 31-32, 55, and thus would be quite likely to
follow Respondent’s advice concerning the transaction.
Under these circumstances, we hold that Respondent
had a duty to use special care in drafting this agreement
between himself and his clients, so as not to unfairly
prejudice their interests. Moreover, we hold that in such
circumstances a lawyer has a duty to review with his
clients in considerable detail the nature of the proposed
agreement, so that their consent to the potential conflict
is fully informed. The record in this case is clear that
Respondent did not take these precautions. The agree-
ment he drafted was exceedingly vague in several impor-
tant respects, failing to provide any detail about such
key questions as how the judgment should be made
regarding when (or whether) to sell the property.!!
10 See note 2, supra.
11 Contrary to Respondent’s suggestion, we are not finding him
guilty of negligence or malpractice. Instead, we are holding that
under the circumstances here a lawyer has a duty to use special
care in drafting an agreement between himself and his clients;
such a contract is not the usual arms-length transaction in which
[footnote continued]
N
mf. 7
Thus, while the Scotts apparently intended to convey to
Respondent only “straw title, the agreements may well
have gone far beyond that. In addition, there is no
indication in the record that Respondent discussed in
any detail with the Scotts the nature of the potential
conflict of interest between them and himself. Thus,
we conclude that the consent which the Scotts gave to
Respondent to proceed in this action was not the type
of “informed consent” required by DR 5-104 (A).
2. The Coverdale Case
We turn next to the Coverdale case, in which the facts
are very seriously in dispute, and which, we believe,
presents far more serious charges against Respondent.
Respondent attacks many aspects of the Hearing Com-
mittee’s findings and conclusions concerning his conduct
in the Coverdale matter, We begin our analysis by
considering what we believe to be the fundamental
question in this case: What was the initial understanding
between Mrs. Coverdale and Respondent concerning the
intended disposition by Respondent of Mrs. Coverdale’s
monthly installment payments?
Mrs, Coverdale testified that she and Respondent
initially agreed that half of each of her monthly install-
ment payments would be credited toward her bill for
attorney’s fees and half toward the settlement obli-
gation. 12 Mrs. Coverdale further testified that after
the contracting parties can be expected to look after their own
interests—clients appropriately should expect their own lawyer
to use special care in considering their interests as he proceeds
with such an agreement between attorney and client.
12 Mrs. Coverdale testified that the first check of $350 was
intended to be paid $300 toward the $1,500 attorney's fee obli-
[footnote continued]
29a
Respondent informed her that plaintiff was unwilling to
accept installment payments, she and Respondent agreed
that the full amount of her installment payments should
be credited toward the settlement obligation in order to
pay it more quickly, with the attorney’s fees bill being
paid from the later monthly payments, She further
testified that she understood that Respondent had agreed
to this arrangement and that it was being implemented.
Respondent disagrees with Mrs, Coverdale’s recollec-
tion of their understanding and challenges the Hearing
Committee’s finding in that regard. Respondent appar-
ently’? takes the position that Mrs. Coverdale’s first
$350 check was to be credited toward the settlement
obligation, while her next three $400 checks were
intended to be credited solely toward her attorney’s fees
bill,
Faced with this clear conflict between witnesses’ testi-
mony, the Hearing Committee concluded that it “has no
hesitancy in concluding that Mrs. Coverdale’s testimony
is to be credited and respondent's is not.’ Hearing
Committee Report, at 19. We have held in the past that
this Board normally should give great weight to a Hearing
Committee's assessment of credibility, since the Commit-
tee observes the witnesses and is in a far better position
to assess their demeanor and credibility than can this
Board based upon a cold record. See, e. g., In re Carter,
Nos. 70-77, 193-77, at 6 (Bd. Prof. Resp., Oct. 27,
1978) (Board gives “great deference to the findings of
gation, and $50 toward the $1,250 settlement obligation, thus
resulting in the equalization of the balance on the two obligations.
Thereafter, half of each $400 check was to be credited to each of
the two obligations.
13 See pp. 15-16, infra.
30a
fact of its Hearing Committee... A Hearing Committee
has the opportunity to observe the demeanor of the
witnesses and to hear the tone and nuances of the testi-
mony which can never be captured fully from a written
record.“). Moreover, in the instant case our independent
review of the record convinces us that the Committee
correctly rejected Respondent's version.
First, as the Committee noted, Mrs. Coverdale is a
particularly credible witness. She is a former assistant
principal in the District of Columbia school system,
She did not initiate the instant complaint against Re-
spondent'* and, according to the Committee, she bore
no apparent grudge against Respondent. Moreover,
Mrs. Coverdale’s testimony was corroborated by other
evidence of record,
On the other hand, the Hearing Committee found that
“respondent’s testimony was highly evasive, inconsistent,
and frequently non-responsive. His story was inherently
unbelievable in many respects and he contradicted
himself on numerous occasions.’ Hearing Committee
Report, at 19, Indeed, Respondent’s testimony on this,
the most critical issue in the case, not only was incon-
sistent with documentary evidence in the record, i“ but
also was self-contradictory.
14 The disciplinary complaint was filed by Mr. Stevenson, plaintiff
in the civil action, who claimed that Respondent had diverted
from Mrs, Coverdale funds that were intended for Mr. Stevenson.
Mrs. Coverdale testified at the hearing only upon the request of
Bar Counsel,
18 Respondent's explanations on this issue conflict not only with
the notation placed by Mrs. Coverdale on her November 1979
check deposited by Respondent, but also with the notation on
Mrs. Coverdale’s February 1980 check, See note 7, supra; page
16, infra.
31a
In Respondent's first filing with Bar Counsel on this
matter, he stated that following the settlement agreement
he “received $350 from Mrs. Coverdale to be applied
toward this judgment, with the understanding that the
remainder of the amount would be paid at the rate of
$100 per month.” Bar Ex. 27. In a letter Respondent
sent to his client on February 20, 1980, after Bar Coun-
sel’s inquiry, he implies that the first $350 paid was
intended to be used for the settlement, while none of
the subsequent monthly payments was so intended,
making no mention of the $100 per month notion
expressed to Bar Counsel, See Bar Ex. 33.1% In Re-
spondent’s testimony before the Hearing Committee in
this matter, he initially implied that he divided Mrs.
Coverdale’s payments in accordance with the notations
that she entered on her checks, see Tr. 159; then he
suggested that payment of the settlement obligation was
not part of his duties, implying that the full amount of
16 Respondent argues that Mrs. Coverdale’s failure to contradict
or respond to his February 20 letter confirms the accuracy of
his version. We reject this argument for three reasons. First,
Respondent's letter is somewhat ambiguous, and Mrs. Coverdale
may well not have understood it to suggest that the two $400
checks were being applied to attorney's fees only. Second, Mrs.
Coverdale had written Respondent a letter on February 18 express-
ing her understanding of the use of her monthly installment
checks, see Bar Ex. 29(a); since Respondent apparently had not
received her letter when he wrote his February 20 letter - Respond-
ent’s February 20 letter makes no mention of Mrs. Coverdale’s
February 18 letter; indeed, Respondent in his letter lists the
checks he has received to date from Mrs. Coverdale, and he does
not mention the check which she had enclosed with her February
18 letter Mrs. Coverdale may well have assumed no further
response was needed. Finally, we decline to rely on a client's
failure to respond to such a self-serving letter, especially when the
documentary evidence (the written notations on Mrs. Coverdale's
checks) clearly refutes it.
322
all Mrs. Coverdale’s monthly installments was intended
for his fees, see Tr. 160; but ultimately Respondent
categorically stated that the monthly checks he con-
tinued to receive from Mrs. Coverdale (after plaintiff
Stevenson indicated he would not accept installment
payments) were intended to be used solely to pay Re-
spondent’s fee, see Tr. 169-72. Unfortunately, each
one of Respondent's versions conflicts not only with
Mrs. Coverdale’s testimony, but also with the notations
made by Mrs. Coverdale on checks which she sent to
Respondent in regard to this matter. Bar Exhibit 38 (b).
Mrs. Coverdale's November 3, 1979, check to Respond-
em in the amount of $350, which Respondent endorsed
and deposited in his professional account, expressly
noted on the face of the check that $300 was to be
paid toward the attorney's fees bill and $50 was to be
paid toward the settlement obligation to the plaintiff.
Respondent has never explained how his understanding
of the division of Mrs. Coverdale’s payments could be
consistent with those notations. Moreover, on Mrs.
Coverdale’s February 18 check for $400, she included
the following notation on the front of the check: “Re:
Att Fee & Plaintiff Acceptance Fee Original cost for
both $2,750%, Bal for both 51, 20022,“ While Mrs.
Coverdale’s notation failed to specify the precise divi-
sion of this check as between the two obligations, it is
extremely difficult to square that notation with Respond-
ent's contention that none of these $400 checks was
intended to be used for payment of Mrs. Coverdale’s
settlement obligation to the plaintiff.
Finally, our review of Respondent’s testimony as a
whole confirms the Hearing Committee’s conclusion that
Respondent’s account was evasive and lacking in credi-
bility, See generally Tr. 155-95. Accordingly, we agree
33a
with the Hearing Committee that the evidence is clear
and convincing that, as Mrs. Coverdale testified, she
and Respondent had agreed that her monthly payments
would be devoted solely toward her settlement obligation
to the plaintiff until that was satisfied, and only then
would those payments be applied toward her outstanding
bill for attorney's fees.
Having reached that conclusion, the nature and seri-
ousness of Respondent’s violations become clear, and
we have little difficulty rejecting Respondent’s other
challenges to the Hearing Committee’s conclusions.
Indeed, it is simply impossible to justify or rationalize
Respondent’s conduct at the April 30, 1980, hearing
on plaintiff's motion to set aside the settlement.
At that hearing, the judge made it clear that he would
reject plaintiff’s motion and would enforce the settle-
ment if Mrs. Coverdale would promptly pay the full
settlement obligation. Since we have concluded that
Respondent was aware that Mrs. Coverdale intended her
payments to be so applied, and since by the time of the
April hearing she had paid plaintiff $1,550 in monthly
payments—$300 more than the settlement obligation—
Respondent's failure to so inform the court, or otherwise
to agree on Mrs. Coverdale’s behalf to pay the settlement
obligation promptly, is totally unjustifiable. Respondent
argues to this Board that his statements to the judge did
suggest that Mrs. Coverdale had paid certain attorney’s
fees to Resondent, and Respondent also offered, if given
fifteen days’ time, to try to arrange for payment of the
settlement amount, even if that required using some of
his attorney's fees in order to do so. Our review of the
transcript of that hearing, Bar Ex. 36, however, con-
vinces us that Respondent's statements to the court were,
if not direct falsehoods, so evasive and far from the truth
342
as to amount to mis representation. When asked by the
court “How much have you accumulated now“ for
payment to the plaintiff, Respondent stated “I think
there is $350 at this time. ... I haven't gotten a payment
in three months from her.” Bar Ex, 36 at 5. Respondent
went on to recite Mrs. Coverdale’s financial problems,
saying “that’s all I can get from her.” Id. Knowing that
Mrs. Coverdale expected her money to be paid to satisfy
the settlement obligation, and knowing that the judge
would enforce the settlement if the money were so
used, Respondent clearly made a conscious choice not
to inform the court that he had diverted for his own use
the funds which his client thought were being paid to
implement the settlement. Respondent also implied
to the judge that Mrs. Coverdale had ceased making
monthly payments due to her financial problems, appar-
ently choosing not to advise the court that her action
was based upon Respondent’s advice. Respondent then
compounded his misrepresentations by telling Mrs.
Coverdale, following the hearing, that the judge had
granted plaintiff’s motion for relief from the settlement
because she had failed to pay the settlement amount
when it was due in October. Thus, Respondent con-
cealed from his client the fact that the judge offered,
but the Respondent failed to accept, the opportunity to
pay the settlement amount promptly after the hearing
in order to conclude the matter.
Respondent argues strenuously that no matter what
the initial understanding with Mrs. Coverdale, Respond-
ent should not be faulted for failing to pay to the plaintiff
any of Mrs. Coverdale’s monthly installments, since
Respondent had been given reason to believe that plain-
tiff no longer wished to honor the settlement. An
alternative version of the same argument put forward
35a
by Respondent is that Mrs. Coverdale herself was respon-
sible for breaching the original settlement by failing to
pay the amount due in a lump sum, and in view of that
breach Respondent should not be faulted for applying
toward his attorney’s fees bill the full amount of her
subsequent monthly installments. Ihe short answer to
these contentions is that they suggest that Respondent
still fails to understand the nature of his ethical duties.
Whether or not Mrs. Coverdale had breached her obliga-
tion to the plaintiff, and whether or not the plaintiff
would accept her monthly installment payments, there
is simply no justification for Respondent's allowing Mrs.
Coverdale to believe that he was applying these payments
toward her obligation to the plaintiff, while in fact he
was simply converting them to his own use. Even more
importantly, once Mrs. Coverdale’s payments had reached
the total amount owed to the plaintiff, there were several
courses of action obviously available to Respondent
in order to attempt to finalize the settlement, which
Respondent knew was Mrs. Coverdale’s desire.
Despite the fact that plaintiff’s counsel had indicated
that he intended to file a motion for relief from judg-
ment, it of course was open to Respondent to tender to
the plaintiff the full sum of the settlement amount in
satisfaction of Mrs. Coverdale’s obligation. Such a tender
might have been accepted by the plaintiff; in any event,
the tender obviously would have been highly relevant and
beneficial to Mrs. Coverdale at such time as the plaintiff
did file a motion for relief from judgment. Finally, as
indicated above, there simply can be no excuse for
Respondent's failing affirmatively to state to the judge
at the April 30 motions hearing that Respondent had
received from Mrs. Coverdale sufficient funds by that
time to pay the settlement obligation in full, and that she
wished to do so,
36a
Under these circumstances, it is clear that Respondent
engaged in conduct involving dishonesty, fraud, deceit
and misrepresentation, in violation of DR 1~102(A)(4).
Moreover, Respondent’s evasiveness or deception before
the motions judge constituted conduct prejudicial
to the administration of justice, in violation of DR
1-102(A)(5). It is also clear that Respondent violated
DR 9-102(A) by failing to maintain Mrs. Coverdale’s
funds in an identifiable account separate from his own
professional account.!“
SANCTION
Were we faced with the Scott case alone, we doubtless
would conclude that Respondent’s violation of DR
5-104(A) requires some sanction, but that Responent’s
good faith in this transaction, as found by the Hearing
Committee, see page 9, supra, militates against any
suspension from practice. Respondent’s conduct in the
Coverdale matter, however, reflects a total lack of the
candor and care—indeed, the fundamental honesty—
which the public should be able to expect from a member
of the legal profession. We conclude that such serious
violations of the disciplinary rules demand a very serious
sanction.
17 We also affirm the Hearing Committee's conclusions that
Respondent's conduct violated DR 7-101(A)(3), by intentionally
failing to seek the lawful objectives of his client within reasonable
available means, failing to carry out a contract of employment for
legal services, and prejudicing his client during the course of his
professional relationship, The Hearing Committee also concluded
that Respondent's conduct, as described above, violated DR
6-101(A), in that he neglected a legal matter entrusted to him.
We find it a close question as to whether the course of conduct
described herein amounts to “neglect.’’ In view of our conclusions
on the other issues, we find it unnecessary to reach that issue.
37a
We have previously held that while intentional mis-
appropriation of a client’s funds generally warrants
disbarment, see, e. g. In re Burka, 423 A.2d 181 (D.C.
App. 1980), commingling of funds based on a good
faith misunderstanding may call for a much less severe
sanction. See In re Dwyer, Nos. 356-78, 374-78 (Bd.
Prof. Pesp., Dec. 4, 1980) (three-month suspension);
In re O’Bryant, No. 320-78 (Bd. Prof. Resp., June 13,
1980) (six-month suspension). We view Respondent’s
commingling here as far more serious than in Dwyer or
O’Bryant, since we have concluded that Respondent
knew of his client’s intention that these funds be used
first to pay her settlement obligation. On the other hand,
the facts here do not rise to the level of a typical mis-
appropriation case, such as Burka, since Respondent did
not take any money to which he ultimately would not
have been entitled; instead, his main misdeed came in
unilaterally deciding to pay himself first, despite his
client’s intent to defer his payment and to use these
funds for other, more pressing purposes. Thus, based
upon the commingling alone, we would probably recom-
ment a suspension of approximately one year. In our
view, however, Respondent seriously compounded his
wrongdoing by the evasions and misrepresentations he
engaged in with the court and his client in an apparent
effort to escape from the problems he had created for
himself,
But for Respondent’s lack of any prior disciplinary
record, and the character evidence considered by the
Hearing Committee, we would seriously consider recom-
mending disbarment in the instant case. Under all the
circumstances here, however, we recommend that
38a
Respondent should be suspended from the practice of
law for a period of two years. ls
BOARD ON PROFESSIONAL RESPONSIBILITY
By /s/
Allen R. Snyder
July 17, 1981
Date
All Members of the Board concur in this opinion.
18 While it is extremely difficult to draw precise lines, or strictly
to apply precedents, in recommending sanctions— since each case
turns to some extent on its unique facts—we note that in our view
Respondent's offenses here were more serious than those which
justified an eighteen-month suspension in Jn re Smith, 403 A.2d
296 (D.C. App. 1979), but were somewhat less serious than those
which justified a three-year suspension in Jn re Haupt, 422 A.2d
768 (D.C, App. 1980).
39a
APPENDIX C
DISTRICT OF COLUMBIA COURT OF APPEALS
BOARD ON PROFESSIONAL RESPONSIBILITY
Bar Docket Nos.
$12-79, 319-79
IN THE MATTER OF:
RICHARD ALLEN JAMES
REPORT OF HEARING COMMITTEE
NUMBER NINE TO THE BOARD ON
PROFESSIONAL RESPONSIBILITY
The above-captioned cases were heard on Decem-
ber 16, 1980, before Charles A. Miller, Esq., Chairman,
Earl J. Silbert, Esq., Member, and Linda W. Cropp,
Member, Hearing Committee Number Nine. The Office
of Bar Counsel was represented by Martha J. Tomich,
Assistant Bar Counsel. Respondent was not represented
by counsel at the hearing but appeared pro se.
Proposed findings and conclusions and a supporting
legal memorandum were submitted by bar counsel on
January 16, 1981. Respondent’s proposed findings and
conclusions and supporting brief were forwarded on
February 10, 1981, by Geoffrey P. Gitner, who was
retained to represent respondent subsequent to the sub-
mission of bar counsel’s proposed findings. On March 6,
1981, at the Committee’s invitation, four letters or affi-
davits were submitted pertaining to respondent’s prior
record and reputation. Both sides have filed post-hearing
motions to submit additional evidence, and respondent
40a
has moved in the alternative to reopen the hearing. These
matters are discussed in Part IV of this report.
While the two cases covered by this proceeding had
separate origins, and the legal representations which they
involve were largely unrelated, there are connections
between the two matters and it is appropriate to treat
them in a single report. The Committee’s recommenda-
tion is based upon its review of the record as a whole
and the overall performance and behavior of respondent
during the time when the two representations were active.
Respondent is charged in Case No. 312-79 (the Scott
case) with a conflict-of-interest in that he entered into
a business transaction with his client in which their
interests differed without obtaining his clients’ consent
based on full disclosure of all potential adverse interests.
He is also charged with seeking an excessive fee.
In Case No. 319-79 (the Coverdale case) respondent
is charged with dishonesty, fraud and misrepresentation,
with conduct prejudicial to the administration of justice,
with neglect of a legal matter entrusted to him, with
intentional failure to seek his client’s lawful objectives
and to carry out his contract of employment to his
client’s prejudice, and with failing properly to maintain
his client’s funds in a separate account. This is the more
serious case of the two. The crucial issue is whether
respondent in effect misappropriated his client’s funds by
applying them to his fee knowing that his client thought
the funds were being used to satisfy a consent judgment.
Based on the conclusion that such a misappropriation
has been established, bar counsel recommends that
respondent be disbarred. If it is found that respondent’s
conduct in this case was unintentional but based on
misunderstanding, bar counsel recommends a two-year
4la
syspension. In addition, bar counsel seeks “restitution”
to both the clients in both cases.
Respondent denies the essential charges, admitting
only the possibility of a minor infraction in the Cover-
dale case. He asserts that he acted throughout in good
faith and attempted to serve his client’s interests. If a
violation is found, he recommends that a formal repri-
mand is the appropriate remedy.
I, FINDINGS OF FACT.
No. 319-79 (Coverdale Case)
1. On or about September 13, 1978, John A. Steven-
son, a/k/a John Marshall, a former tenant of Mrs. Lou-
venia A. Coverdale, filed a personal injury action against
Mrs. Coverdale. Shortly thereafter, Mrs. Coverdale
retained respondent to defend her. Mrs. Coverdale paid
respondent a $500 retainer, and he filed an Answer to
the Complaint for Damages on or about October 5, 1978.
[BE 37(a); 37(b); 38(a); Tr. 127-28; 143-47
2. Approximately one year later, on October 15,
1979, a praecipe was filed dismissing Mr. Stevenson’s
case. The praecipe stated the case had been settled for
$1,250 and was signed by respondent on behalf of Mrs.
Coverdale and by Michael Rankin, Esq., Mr. Stevenson’s
attorney. Neither Mrs. Coverdale nor Mr. Stevenson was
a signatory to the praecipe. [BE 25(b)]
3. At the time the praecipe was filed, respondent
advised his client that she would have to pay the settle-
ment amount within 15 days. [Tr. 149, 157]
4. On or about October 15, 1979, respondent sub-
mitted to Mrs. Coverdale a bill in the amount of $1,500
for his services, over and above his original retainer.
42a
Mrs. Coverdale then calculated that she owed a total of
$2,750. [BE 27(a); 37(c); Tr. 128-31; 135; 147-49]
5. Mrs. Coverdale was unable to satisfy this entire
debt at once. She therefore determined to satisfy it in
installments of $400 per month, and she so informed
respondent, It was Mrs. Coverdale’s initial intention that
the installments would be applied both to the settlement
obligation and respondent's fee. [BE 29(a); 31(a); Tr.
128; 130]
6. Mrs. Coverdale was given no information about
payment of the settlement amount, and she did not
know the whereabouts of the plaintiff Stevenson. She
therefore sent her installment checks to respondent,
believing that he would arrange for payment to Mr.
Stevenson, [BE 29(a); Tr. 128; 131]
7. After learning of Mrs. Coverdale's intentions,
respondent contacted Mr. Stevenson’s attorney, Mr.
Rankin, and proposed that the settlement amount be
paid at the rate of $100 per month, After consulting
with Mr. Stevenson, Mr. Rankin advised respondent that
this proposal was unsatisfactory and demanded full
payment, [BE 25 (a)]
8. Respondent in the interim had received Mrs. Cover-
dale’s first check, which was for $350. On the face of
the check she wrote that $300 of this amount was for
respondent's fee and $50 was for the settlement. This
division was made to equalize the balance of the two
obligations, [BE 38(b); Tr. 129-30]
9. After receiving this check, respondent telephoned
Mrs. Coverdale and informed her that Mr. Stevenson
had rejected an installment payment proposal, Mrs.
Coverdale restated her inability to pay the amount due
at once, She proposed that her $400 per month pay-
43a
ments be applied to the balance due on the Stevenson
claim first until it was satisfied and thereafter to the
balance due on respondent’s bill. She thought that
respondent had agreed to this arrangement and would
implement it with Mr. Stevenson’s counsel, Mrs. Cover-
dale thereafter made payments of $400 per month to
respondent in December, January, and February. [BE
$8(c); 38 (e); Tr. 130-35]
10. Respondent took no further steps to work out
a payment agreement with Mr. Stevenson’s counsel.
On November 19, 1979, Mr. Rankin withdrew as Mr.
Stevenson’s counsel, and respondent was aware of this.
Respondent did not know how to contact Mr. Stevenson.
[BE 25 (a); Tr. 157-58]
11. Respondent deposited Mrs. Coverdale’s first
check, for $350, in his professional account, not his
client escrow account. He likewise deposited Mrs.
Coverdale’s December and January checks in his profes-
sional account. He made no effort to make any payment
against the settlement obligation, He did not inform Mrs.
Coverdale that he was not transmitting any sums to Mr.
Stevenson or that he was retaining all of the amounts
paid by her to settle his fee bill. [BE 42-44; Tr. 160]
12. In December 1979 or January 1980, Daniel
Slattery, Esq., was retained by Mr. Stevenson in con-
nection with his tort claim, Mr, Slattery contacted
respondent by telephone and stated that he would be
filing a motion for relief from the judgment. Mr. Steven-
son, whose reliability and motives seem suspect, had told
Mr. Slattery that he thought the settlement amount was
$12,500, not $1,250. Mr. Slattery may have mentioned
this to respondent. [RE 4; 5]
13. In January 1980, Mr. Stevenson called Mrs.
Coverdale to obtain payment of the settlement amount.
44a
Mrs. Coverdale referred him to respondent, saying that
she had forwarded payments to respondent that were due
to Mr. Stevenson. Mr. Stevenson did call respondent, but
the record does not reliably disclose what he was told by
respondent. [BE 33; Tr. 132-33]
14. On or about February 5, 1980, Mr. Stevenson
filed a complaint with the Office of Bar Counsel. The
complaint was docketed as james / Stevenson, No. 319-79,
and respondent was notified of the pending investigation
by letter dated February 13, 1980. Mr. Stevenson's
complaint, which was sent to respondent, contains a
statement that Mr. Stevenson had spoken by telephone
with respondent several weeks earlier at Mrs. Coverdale's
suggestion and that respondent had promised to remit
to him the amounts received from Mrs. Coverdale.
Respondent answered the complaint by letter dated
February 20, 1980. On or about February 10, 1980,
respondent received from bar counsel the complaint in
the Scott case (No. 312-79). [BE 2; 3; 25; 26; 27]
15. On or about February 15, 1980, Mrs. Coverdale
and respondent had a telephone conversation about the
amount of money she had sent to him. Thereafter,
on or about February 18, 1980, Mrs. Coverdale sent
respondent a letter confirming this telephone conversa-
tion and her agreement with respondent regarding the
money she owed. Mrs. Coverdale enclosed with the letter
another check issued to respondent in the amount of
$400. On the front of this check Mrs. Coverdale noted:
“Re: Att Fee & Plaintiff Acceptance Fee, Original cost
for both 52,7502, Bal for both 51,200.“ It appears
that respondent deposited this check in his escrow
account. [BE 27; 29 (a); 38 (c); Tr. 133-36; RE 3]
16. On February 20, 1980, a motion to set aside the
settlement was filed on Mr. Stevenson's behalf by a new
45a
attorney, Daniel Slattery, on the ground that the settle-
ment amount had not been paid. On February 29, 1980,
respondent filed an answer to this motion on behalf of
Mrs. Coverdale, opposing the motion, [BE 37(e) and (f)]
17. The plaintiff’s motion was scheduled to be heard
on March $1, 1980. The hearing was continued to April
23 and then to April 30. On or about April 22, 1980,
respondent wrote Mrs, Coverdale that “Mr. Stevenson
has requested that the settlement be set aside and that his
slip and fall case is set down for trial (sic) on April 28,
1980, .. . Respondent further advised Mrs. Coverdale
that her presence in Court was not necessary. The record
is unclear as to whether respondent advised Mrs. Cover-
dale of the filing of the motion prior to his April 22
letter. She had been told by respondent that the motion
was going to be filed, and respondent advised her, in
light of this anticipated move, to suspend her monthly
installment payments after February. [BE 27; 34; 37;
Tr. 136-38]
18. At the hearing on the motion, respondent repre-
sented to the Court that Mrs. Coverdale had paid only
$350 since the settlement, that this amount had been
deposited into respondent’s escrow account, that he had
not received a payment from Mrs. Coverdale in three
months, that she was unable to pay any faster, and that
Mr. Stevenson was free to attach her property to enforce
his judgment. Mr. Slattery, on behalf of Mr. Stevenson,
argued that the settlement should be set aside because
Mrs, Coverdale had breached her agreement to pay.
Respondent agreed expressly that Mrs, Coverdale did not
carry out the agreement, but he opposed the requested
relief. The Judge twice stated that if the settlement
amount ($1,250) were then paid, he would deny the
motion. Respondent asked for 15 days to attempt to
46a
raise the necessary amount, failing which he would
pay it from his own funds “just to get id of the case.“
This was objected to by Mr. Slattery. At no time did
respondent offer to pay the settlement amount at once,
nor did he inform the Court that the four payments
made by Mrs. Coverdale to him since the settlement were
sufficient to cover the entire settlement amount, nor did
he inform the Court of the contents of Mrs. Coverdale’s
letter of February 18, 1980, nor of the fact that Mrs.
Coverdale had ceased making monthly payments on
respondent's advice, Based on the record before him,
the Judge granted the motion to set aside the settlement,
[BE 36; 37(g)]
19. Respondent informed Mrs, Coverdale by letter
dated May 6, 1980, of the Court’s ruling. On May 15,
1980, Mrs, Coverdale met with an Assistant Bar Counsel,
at the latter's invitation, to discuss her situation. On
May 20, 1980, Mrs. Coverdale discharged respondent and
requested a full refund of the $2,050 she had paid to
him. [BE 30; 31(a); 35; Tr. 137-39]
20. Thereafter, respondent wrote to Mrs. Coverdale,
requesting a conference to discuss her correspondence of
May 20, 1980, Mrs, Coverdale did not respond, [BE 39;
Tr. 139-40]
21. On or about June 9, 1980, respondent again
wrote to Mrs, Coverdale enclosing a check for $50 which
respondent stated “represents money over and above the
legal fee you paid to me,“ To date, Mrs, Coverdale has
not cashed this check, [BE 39; 39(a); Tr. 140-41]
No. 312-79 (Scott Case)
22. At all relevant times, Walter and Sandra Scott
have owned a residential dwelling located at 558 - 14th
47a
Street, S.E., Washington, D.C, Although the building
contains two units, the entire house has been occupied
by the Scotts’ tenant, Ms. Katie Morris and her family,
since the summer of 1979, [BE 8(b); 15; Tr. 10; 15-17]
23. Mrs. Scott is the daughter of Mrs, Coverdale, The
Scotts were aware of respondent's representation of Mrs.
Coverdale, and in November 1979 the Scotts retained
respondent to renegotiate the terms of their lease with
Ms. Morris with the goal of eventually selling the prop-
erty. The Scotts agreed to pay respondent $75 per
hour and remitted a $500 retainer to him on or about
November 12, 1979. [BE 8(d); Tr. 9-10; 12; 45-46;
49; 81-82; 97; 112]
24. On or about November 15, 1979, respondent
prepared a Claim of Exemption Statement for the Scotts’
signature which was filed with the District of Columbia
Rental Accommodations Office (R. A. O.) on or about
November 19, 1979, listing the property as having two
units. [BE 16; Tr. 16; 99]
25. Subsequent to November 12, 1979, the utilities
for the residence at 558 ~ 14th Street, S.E., were inter-
rupted and Ms. Morris sued the Scotts. Mr. Scott con-
tacted respondent who agreed to defend the Scotts in
that lawsuit. [Tr. 10-12; 18-19; 47]
26. Respondent drafted a new lease and, with the
Scotts’ approval, submitted the proposal to Ms. Morris.
Ms. Morris rejected the proposed lease. Respondent
advised the Scotts that he had reached an impasse on
renegotiating the lease. [Tr. 10; 14-15; 18]
27. On or about November 29, 1979, respondent,
with the Scotts’ approval, offered the property for sale
to Ms. Morris at $70,000, pursuant to Section 601(a)
of the District's Rental Accommodations Act. [BE 1(f);
18; Tr. 20-22]
48a
28. On or about November 29, 1979, respondent,
with the Scotts’ approval, also offered to Ms, Morris,
through her attorney, a monetary incentive in exchange
for Ms. Morris’ quitting the premises, Neither Ms, Morris
nor her attorney answered respondent's letters of Novem-
ber 29, 1979. [BE (e); Tr. 21-23]
29. On or about December 2, 1979, the Scotts exe-
cuted a contract for sale of the subject property with a
third party at a purchase price of $55,000. Notice was
not given to Ms. Morris. The Scotts did not inform
respondent of this contract, and respondent was unaware
of its existence until the Scotts later informed respond-
ent of this contract in or around late December 1979 or
January 1980, [RE 1; Tr. 53-54; 68]
30. Frustrated over his experience with the house,
Mr, Scott suggested during December of 1979 that
respondent purchase it. At that time respondent indi-
cated that while he did not wish to purchase the house,
he would consider it. [Tr. 23-24; 31-32; 46-48; 55;
83; 101]
$1, Subsequently, during a conference on January 2,
1980, respondent presented the Scotts with two docu
ments which he had prepared, One document was a
contract for the sale of the 558 - laAth Street, S.E.,
property from the Scotts to respondent at a purchase
price of $40,000, approximately the appraised value of
the property, [BE 1(b); 8; Tr. 24-25; 82-83; 103]
32. The other document was a contract between
respondent and the Scotts, Under the terms of this
second contract, the Scotts were to convey the subject
property to respondent. The proceeds, other than
amounts needed to satisfy existing liens, were to be
placed in a special account for use by respondent to
49a
manage and improve the property. The agreement
further provided that “upon later disposition and sale
of the property,” the net proceeds were to be divided
equally between the Scotts and respondent. The Scotts
and respondent further agreed not to disclose to third
parties the existence of this second contract so as to
avoid informing the tenant of the nature of the proposed
transaction. [BE 8(b); Tr. 25; 33-35; 82-83; 102]
$3. The Scotts reviewed both documents with re-
spondent on January 2, 1980, for approximately one
hour before executing them. The Scotts and respondent
also altered their fee arrangement. Respondent’s legal
fee was to be satisfied from his 50 percent share of the
profits on the sale of the house. [Tr. 25; 30; 88; 112;
114-15]
34. The parties have different recollections as to
whether respondent suggested at the January 2 meeting
that the Scotts consult independent counsel, but all
agree that the Scotts were not then in a financial position
to do so and were relying on respondent’s advice and
judgment, [BE 11; 12; Tr. 27-35; 50; 74-76; 86-89;
92; 118-19
35. At the time the contracts referred to in para-
graphs 31 and 32 were executed, Mr. Scott thought they
were fair and did not think that they were fraudulent
or surreptitious. Rather, he and Mrs. Scott thought
respondent had come up with a “viable program.” [Tr.
26; 32; 97-98; 101-03]
36. Mr. Scott described the contemplated title trans-
fer to respondent as a straw sale, under which legal title
would be held by respondent. Mr. Scott wanted the
proceeds of the loan that respondent was to obtain to
be placed in a “‘three-party escrow account,” but he only
expressed this wish to his wife, not to respondent. Mr.
50a
Scott also understood that the first trust on the property
was to be retired with a portion of this money. The
balance of the loan, along with any rental income, would
go to managing and rehabilitating the house once Ms.
Morris had been relocated, After the house had been
renovated, Mr. Scott understood that the property was
to be listed for resale at an asking price of $125,000. Mr.
Scott also understood that expenses of the renovation
would be deducted from the resale proceeds and the net
profit would then be divided equally between respondent
and the Scotts. Lastly, Mr. Scott understood that the
only provisions affecting the transaction between re-
spondent and the Scotts were those contained in the
documents described in paragraphs 31 and 32, above.
[BE 8; Tr. 19; 25-33; 39; 82]
37. Mrs. Scott understood that under the two con-
tracts, title to the property was to be transferred to
respondent; respondent would also manage the property,
collect the rent and obtain financing to rehabilitate the
house. Mrs. Scott also contemplated that the house
would ultimately be offered for resale and the profits
divided between respondent and the Scotts. [Tr. 85-88]
38. The contract described in paragraph 32 did not
establish a time frame for rehabilitating and reselling
the property and did not expressly require that re-
spondent ever sell the property. It did not provide for
unanticipated contingencies, such as the failure to sell the
property. [BE 8 (b)]
39. On or about January 3, 1980, respondent wrote
to Ms. Morris, notifying her of the contract of sale
between himself and the Scotts, and her right of first
refusal. [BE I (a): 8; Tr. 20; 37-39; 113-14] .
40. On or about January 29, 1980, Ann E. Wilson,
Chief of Evictions for the R.A.O., informed respondent
5la
that in her opinion the November 29, 1979, and January
3, 1980, notices to Ms. Morris did not meet the require-
ments of Section 602 (a) of the Rental Accommodations
Act and the R.A.O. would require the Scotts to serve
a new notice. In addition, Ms. Wilson’s letter stated
“you will be unable to complete the settlement or seck
an eviction until this matter is resolved.” [BE I; 1(c);
1(d); 8]
41. The position of the R. A. O. prevented consumma-
tion of the contracts described in paragraphs 31 and 32,
and they were never carried out. [BE 8; 10; Tr. 35-37;
103-04]
42. Asa result of the failure to consummate the con-
tracts, the Scotts discharged respondent on or about
February 14, 1980, and requested an itemization of his
fees. On or about February 15, 1980, Mr. Scott filed
anoter Claim of Exemption Form with the R. A. O.,
listing the subject property as having one unit. [BE 8;
8 (a); 17; Tr. 20; 38-41]
43. On or about February 20, 1980, respondent
informed the Scotts that the fee for his services and those
of his staff would be $5,000 and asked them to execute
an irrevocable assignment of funds. Respondent stated
that in light of the Scotts’ financial problems he would
not expect his fee until the subject property had been
sold. [BE 8; 8(e); 8(f); Tr. 41-43; 120]
44. To date, respondent has failed to provide an
accounting of his fee to the Scotts or the Office of Bar
Counsel, The subject property has not yet been sold and
respondent made no additional request to the Scotts for
his fee. However, in November 1980, respondent sued
the Scotts in the District Court of Maryland for Prince
Georges County for a fee in the amount of $5,000. On
52a
or about December 29, 1980, the Scotts agreed to pay
respondent $3,500 for the legal services he rendered to
them in settlement of this suit. [BE 8; 13; 14; 40; Tr.
40-44; 88; 92; 117; 120-21]
45. Respondent testified that he and his staff rendered
approximately 150 hours of work to the Scotts over a
two~ to three-month period. Those hours included time
spent preparing the documents described in paragraphs
31 and 32, above. Respondent assessed the Scotts at
an hourly rate of $75 for work done by his office.
Respondent and his staff did not keep time records of
the services provided to the Scotts. At the hearing on
December 16, 1980, respondent produced no records in
support of his fee and could only estimate the portion
of work done by himself and that done by his law clerk.
[Tr. 52; 61; 70; 72-74; 92; 98; 105-08; 115-17; 197]
II. CONCLUSIONS,
One of the ironies of this case is that two apparently
independent complaints were filed against the same
attorney at approximately the same time arising out of
completely different legal transactions, and in neither
case was the complaint filed by the respondent’s client.
In both cases, the complaint was filed by or on behalf
of the adversary party. It may well be, as respondent
argues, that these complaints were filed for the purpose
of obtaining an advantage in connection with then
pending legal matters. Nevertheless, the Board’s duty
is to evaluate the conduct of respondent as reflected in
the record, without regard to who the complaining party
was,
No. 319-79 (Coverdale Case)
The Committee believes that bar counsel has estab-
lished by clear and convincing evidence that respondent's
53a
conduct in this matter was reprehensible. Based on the
entire record, it is clear to us that respondent knew that
Mrs. Coverdale expected him to satisfy the settlement out
of the funds that she was remitting to him periodically.
Respondent did not do so. He then compounded his
misconduct by allowing and even leading the Court to
conclude that Mrs. Coverdale had basically defaulted
in her obligation, thus causing the Court to vacate the
settlement and to put Mrs. Coverdale at substantial risk
of further loss.*
We are convinced that respondent acted deliberately or
with gross negligence in declining to use Mrs. Coverdale’s
funds to satisfy her settlement, and that he was aware
that his conduct was ethically questionable. Respond-
ent’s evasive and contradictory testimony did not rebut
the clear and consistent account given by Mrs. Coverdale
reflected in the findings set forth above. Respondent’s
letter to bar counsel, dated February 20, 1980, conceded
that he received funds from Mrs, Coverdale “to be
applied toward [the] judgment.” [BE 27]. His letter
of the same date to Mrs. Coverdale [BE 33], prepared
at a time when he was aware that his conduct was under
scrutiny, appears to be an ef. rt to justify his failure to
date to pass on Mrs. Coverdale’s funds to the plaintiff.
Respondent’s decision to return $50 to Mrs. Coverdale
on June 9, 1980, after he had been discharged by Mrs.
Coverdale and had received a second inquiry from bar
counsel, appears also to reflect his awareness that his
conduct was improper. [BE 39]
* Fortunately for Mrs. Coverdale, it appears likely that her ex-
posure to additional liability has been extinguished. Both the
plaintiff in the tort action, Mr. Stevenson, and his girlfriend and
apparent sole witness, have died, and there is apparently no way
that a case of liability can be made.
54a
Respondent’s basic defense is twofold: (1) he had
no obligation to assist Mrs. Coverdale in satisfying the
settlement obligation, and (2) he had received a phone
call from an unidentified attorney claiming that Mr.
Stevenson thought the settlement amount should have
been $12,500. The first justification is belied by re-
spondent’s actions in attempting to negotiate for Mrs.
Coverdale an installment repayment arrangement and
by his later explanations that he failed to remit Mrs.
Coverdale’s funds because he did not know to whom to
send them.
His account concerning the mysterious phone call is
contradictory and uncorroborated.“ Even if respondent
had received the call in question, it does not explain nor
justify his converting funds intended for the plaintiff to
his own use,
The Committee believes that respondent’s performance
before Judge Fauntleroy was especially egregious, The
hearing was held in late April 1980. Respondent there-
fore had ample time to investigate the facts, if that
was necessary. He had had for over two months Mrs.
Coverdale’s letter of February 18 [BE 29(a)], which
clearly set forth her understanding of the funds she had
transmitted to respondent. Respondent never challenged
Mrs. Coverdale’s February 18 letter. Yet he never advised
the Court of Mrs. Coverdale’s understanding of the situa-
tion as reflected in her letter, and he directly represented
to the Court that she had failed to pay the settlement
* Respondent, through newly retained counsel, has sought to
reopen the record to include certain affidavits apparently intended
to support respondent's account of the phone call from an uniden-
tified source. [RE 4; 5]. However, these proffered exhibits permit
only the slimmest of inferences and do not substantially support
respondent's story.
55a
amount. He also seriously misstated the extent to which
she had paid funds to him (he referred to one $350
payment when, in fact, by that time he had received
$1,500 from Mrs. Coverdale in periodic payments), and
he never told the Court that Mrs. Coverdale had ceased
making payments on his advice. Judge Fauntleroy
repeatedly stated that he would not vacate the settlement
if Mrs. Coverdale would immediately satisfy it. Despite
having received from Mrs. Coverdale more than enough
funds to satisfy the judgment and knowing that Mrs.
Coverdale thought these funds would be used to satisfy
the judgment, respondent suppressed these facts, and by
his conduct induced the Court to vacate the settlement
and reinstate the claim against Mrs. Coverdale.
Furthermore, respondent then gave a highly misleading
account of the Court’s action to Mrs. Coverdale [BE 35],
asserting that the judgment was reopened because the
Court felt the money should have been paid within 15
days after settlement.” Respondent failed to inform Mrs.
Coverdale that Judge Fauntleroy was willing to deny the
motion were the settlement satisfied.
The Committee is aware that respondent’s account,
to the extent it can be comprehended, differs from that
of Mrs. Coverdale. However, the Committee has no
hesitancy in concluding that Mrs. Coverdale’s testimony
is to be credited and respondent’s is not. Mrs. Coverdale
is a former Assistant Principal in the District of Columbia
public school system. [Tr. 126]. Though close to 70
years of age, she appeared to be in full possession of
her faculties. She bears no apparent grudge against
respondent. She did not initiate the complaint against
him and supplied information to bar counsel only at the
latter’s request. Moreover, her account is corroborated
in all significant respects by other evidence of record.
56a
By contrast, respondent’s testimony was highly evasive,
inconsistent, and frequently non-responsive. His story
was inherently unbelievable in many respects, and
he contradicted himself on numerous occasions. The
Committee is unable to place any reliance on his account
of the matters in dispute. Even his written accounts,
reflected in BE 27 and 33, cannot be squared with his
testimony at the hearing.
The Committee concludes that each of the charges
contained in the complaint have been established by clear
and convincing evidence. In particular, respondent vio-
lated Disciplinary Rule 1-102(A)(4) by engaging in
conduct involving dishonesty, fraud, deceit, and mis-
representation. Respondent’s conduct involved each of
the four listed prohibited acts. Respondent’s overall
performance, and in particular his conduct before Judge
Fauntleroy on the motion to set aside the settlement,
was prejudicial to the administration of justice in viola-
tion of Disciplinary Rule 1-102(A)(5). By not applying
Mrs. Coverdale’s funds to the settlement,* respondent
violated Disciplinary Rule 6-101(A)(3) by neglecting a
legal matter entrusted to him, and Disciplinary Rule
7-101(A)(1-3) by intentionally failing to seek the lawful
objectives of his client through reasonably available
means, by failing to carry out a contract of employment
for legal services, and by prejudicing his client during
the course of his professional relationship. Finally,
respondent violated Disciplinary Rule 9-102 (A) by
* Whether or not it is true, as respondent alleges, that he could
not forward Mrs. Coverdale’s funds because he did not know
the whereabouts of plaintiff or his lawyer, this does not excuse
respondent’s failure to proffer Mrs. Coverdale’s funds in response
to Judge Fauntleroy’s repeated statement that such a proffer
would cause him to deny the motion to vacate the settlement.
57a
failing to maintain Mrs. Coverdale’s funds in an iden-
tifiable account separate from his own professional
account.
No. 312-79 (Scott Case)
This case presents no significant factual dispute. The
question is one of interpretation of conceded facts.
Two interpretations are conceivable: (1) that re-
spondent was intent on cheating the Scotts out of their
property; (2) that respondent was genuinely attempting
to help the Scotts and was merely sloppy and insensitive
to the need to make appropriate arrangements given his
relationship with them.
The Committee adopts the second interpretation. If
respondent did harbor fraudulent designs, they were not
apparent. The Scotts did not think at the time that
respondent had improper motives and still do not think
so. They discharged him because the actions of the
Rental Accommodations Office, for which respondent
arguably bore some responsibility, had frustrated their
intended transaction.*
However, respondent was clearly inattentive to his
responsibilities. In so concluding, we recognize that it
was not inappropriate in the circumstances for respond-
ent to have made a business arrangement with the Scotts.
The arrangement seemed in general to be in their best
interests. We also think it is essentially irrelevant whether
or not respondent urged the Scotts to seek independent
counsel, That would not have been necessary had re-
spondent fully discharged his obligations, and if they
No question has been raised about the competence of respond-
ent in connection with the filings with the Rental Accommodations
Office.
58a
had done so it would not have excused respondent’s
failure to meet his responsibilities.
Respondent had an obligation to be scrupulous in his
dealings with his clients so as to avoid any appearance or
possibility of taking advantage of them. While he may
not have intended to take advantage of the Scotts, he
did not take care to avoid the possibility. The contract
that he drafted made no provision for such contingencies
as the inability to dispose of the property as contem-
plated, and the transfer of legal title to respondent
subjected the Scotts to substantial risks in the event that
respondent died, became incapacitated, or found himself
in financial difficulties.
Under all the circumstances, the Committee believes
that respondent’s conduct constituted a violation of
Disciplinary Rule 5-104(A) in that he entered into a
business transaction with his clients where the clients
expected him to exercise his professional judgment for
their protection, without making full disclosure to them
of the risks involved, Had another client brought to
respondent the contract he proffered to the Scotts and
asked him for his advice, respondent would have been
expected to counsel against entering into the transaction
on the basis of the documents as drafted.
Disciplinary Rule 2-106(A) states that a lawyer shall
not charge a clearly excessive” fee. In this case respond-
ent’s fee arrangement with the Scotts was $75 per hour
with a $500 retainer. We do not believe that this was
an excessive rate for respondent’s time. We observe
that respondent’s apparent practice is to charge $75 per
hour for the time devoted to a case by his office, which
includes the time of his law clerk. We believe that $75
per hour is clearly excessive for a law clerk. However,
it does not appear that respondent in fact based his bill
to the Scotts on this rate for his law clerk.
59a
Subsequent to being discharged, respondent rendered
a bill to the Scotts for $5,000. He testified at the hearing
that his office devoted between 100 and 150 hours to the
matter, although his bill, at the rate of $75 per hour,
reflects charges for approximately 73.3 hours (taking
into account the $500 retainer). Considering the period
of the representation (less than three months), the poor
outcome,* and the fact that some of the time was spent
on arrangements for a transaction in which respondent
stood to benefit, there is at least a question whether
his performance merited a fee of $5,500. We are also
concerned that the rendition of the bill for $5,000 may
have been retaliatory as a result of being discharged by
the Scotts. [Tr. 104]
But the real concern in this area is with respondent’s
office procedures and his inability to account for his
time. Although he quoted a rate of $75 per hour to the
Scotts at the time he was retained, he at no time had
any office procedures or system for recording his time.
Thus, there was no way in which he could establish the
hours spent on any particular matter. He conceded that
he had no way of knowing with any degree of specificity
how much time he devoted to the Scotts’ affairs. [Tr.
105-07; 115]
Moreover, we cannot condone respondent’s stated
position at the hearing that if forced to itemize his bill
to the Scotts he would double it to $10,000. [Tr. 117]
* Whether or not the actions of the Rental Accommodations
Office that frustrated the transaction were the fault of respondent,
it is clear that his handling of the Scotts’ submissions to that Office
was not impressive. He filed a notice of exemption under one
section of the law and later gave the notice required by a different
tac oni which apparently triggered the Office’s actions. [Tr.
104-05
60a
We conclude that respondent's $5,000 bill was, in the
circumstances, most inappropriate, and it may well have
met the standard of “clearly excessive““ However, the
discipline recommended in this report is not predicated
on a finding of a violation of Disciplinary Rule 2-106(A),.
III. DISCIPLINE
Our recommendation is based on the entire record and
is influenced by respondent's approach to this proceed-
ing. He was totally unprepared for the hearing, despite
having received ample notice. He made no effort even
to retrieve pertinent documents from his files, including
those he claimed would support his defense, and he
apparently did not seek out any corroborating evidence.“
Respondent's cavalier attitude about this proceeding
mirrors his manner of representing his clients, as reflected
on the record in this case, Moreover, his undisciplined,
rambling and often contradictory account of the facts,
particularly in the Coverdale case, does not reflect a
habit of care and concern in the handling of his client's
affairs,
Most significantly, respondent seems not to be aware
of his responsibility as a lawyer faithfully to uphold
his client's interests so long as he is acting on a client's
behalf, His repeated expression that he had no respon-
sibility for assisting Mrs. Coverdale in satisfying the
settlement judgment is a forceful indication of this
tendency.
* After bar counsel's proposed findings were submitted, respond-
ent retained counsel who subsequently presented several affidavits
to support respondent's defense, These are the subject of a motion
to reopen the record or to admit additional evidence.
6la
Overall, respondent gives the impression of an attorney
with an insufficient appreciation of his duties under the
Canons of Ethics.
Notwithstanding this, if we were confronted only
with the Scott case, we would not contemplate severe
discipline. We think respondent was trying to help the
Scotts out of a difficult situation. Both Mr. Scott, a
printer with the Department of Defense, and Mrs. Scott,
a schoolteacher, thought so. They appeared to have a
reasonable understanding of what respondent proposed
to do, and they supported his approach, While respond-
ent’s handling of their affairs did not comport with the
requirements of the canons, we prefer to think that a
relatively modest sanction would have brought home to
respondent his obligations as an attorney to conform to
the Canons of Ethics and his duty faithfully to protect
and advance the interests of clients that are entrusted
to him.
But respondent's behavior in the Coverdale case adds
a different dimension to the case, There, respondent
evidenced a readiness and willingness to sacrifice his
client’s interests for his own personal gain, and even to
be the instrument of that sacrifice. We cannot condone
this behavior. Not only does it bring disrepute on the
Bar as a whole, it subjects those who place trust in
attorneys to the risk of prejudice and loss through abuse
of that trust.
For these reasons, we conclude that the appropriate
discipline in this case should be suspension from practice
for one year and one day, The Committee gave careful
consideration to the recommendation of bar counsel
that respondent either be disbarred or be suspended for
a two-year period, We think disbarment is too harsh
in the circumstances, for we think that there is a prospect
62a
that respondent could, after an appropriate period of
discipline and recommitment to the standards of practice
in this jurisdiction, make a substantial contribution to
the Bar and the public, We recognize that suspension
for a greater period than that recommended might be
justified on the facts set forth above. The Committee
has concluded, however, that the interests of justice
would not be served by any greater suspension, The
Committee feels quite strongly, however, that respondent
demonstrate proof of rehabilitation before he is per-
mitted to resume practice in this jurisdiction, and for this
reason believes that suspension for a year and a day is
the minimum appropriate sanction,
We have also considered the recommendation of bar
counsel for restitution, Section 3 of Rule XI of the
District of Columbia Court of Appeals permits an order
of restitution to persons financially injured by the
conduct of the respondent attorney, We do not think
that there has been such injury in this case. Accordingly,
no restitution is recommended.“
In reaching its recommendations, the Committee has
reviewed decisions in other cases, including those cited
in the briefs of the parties. We have found no case that
is closely analogous on the facts. However, we do believe
that the suspension recommended is consistent with dis-
cipline imposed in other cases involving similar charges,
In particular, in Matter of Fogel, M-35-80 (D.C,
1980), the respondent was suspended for a year and a
* Respondent should reimburse Mrs. Coverdale for the 350
received in excess of his fee, He sent Mrs, Coverdale a check in
that amount in June 1980. However, that check was never cashed
and would now undoubtedly be dishonored, He should be required
to send Mrs, Coverdale a new check in that amount,
*
*
63a
day for neglect, intentional failure to carry out his obli-
gations to his client and deceitful conduct. While the
facts are substantially different, in nature and severity
the misconduct in that case is like that of the present
case. Matter of O’Bryant, M-40-80 (D.C. 1980), and
other cases cited in that decision all involve misrepresen-
tations involving fees. In all three cases suspensions of
less than one year were ordered. Mrs. Coverdale’s case
involves an element of misrepresentation about fees, but
in the Committee’s view the additional elements of
neglect and intentional failure to carry out the client’s
lawful objectives warrant a more severe sanction.
We have also considered Matter of Haupt, M-36-80
(D.C. 1980) which involved a three-year suspension for
a series of improper actions that were described by the
Board as representing a “callous disregard” for clients
as well as “an almost total lack of understanding of the
ethical code.“ Likewise, Matter of Smith, 403 A.2d 296
(D.C. 1979), in which an 18-month suspension was
imposed, there had been a combination of neglect
and misconduct. We do not think that respondent’s
conduct was as reprehensible on a continuing basis as
that involved in the Haupt case, and we are inclined to
think that respondent did not display the same degree
of neglect of his client’s interests as was involved in the
Smith case.
Respondent relies most heavily on Jn re Dwyer, DN
374-78/356/78 (B.P.R. 1980). There respondent was
suspended for three months upon a finding of neglect and
co-mingling of funds. However, the Board concluded in
that case that there had been no acts of misrepresentation
or dishonesty. Respondent argues that he likewise did
not engage in such acts. Since the Committee has found
otherwise, the Dwyer case does not point the way to
our conclusion.
64a
Finally, we have taken into consideration the letters
supplied by respondent’s counsel from four members
of the Maryland bar offered in mitigation. Each letter
attests to respondent’s reputation in the legal community
and to his competence as an attorney.* These letters
have helped to persuade us that a suspension for no more
than the minimum period necessary to require proof of
reinstatement is sufficient in this case. However, they
do not overcome the evidence of misconduct, which to
this Committee strongly supports the conclusion that
a showing of rehabilitation should precede respondent’s
resumed practice in this jurisdiction.
IV. MOTIONS TO RECEIVE ADDITIONAL
EVIDENCE
Bar counsel has moved to admit additional evidence
[BE 40-44]. Bar Exhibit 40 is a letter from respondent
advising of the settlement of the fee dispute with the
Scotts. Bar Exhibit 41 relates to the existence of a
building at an address in Washington. Bar Exhibits 42-44
are copies of respondent’s bank records. No objection
has been interposed by respondent. The exhibits are all
relevant (with the possible exception of Exhibit 41).
The motions are granted, and the additional exhibits are
received in evidence.
Respondent has moved to admit additional evidence
or in the alternative to reopen the record. Seven exhibits
are offered. Bar counsel opposes the motion.
* On March 21, 1981, the Chairman of the Committee received
two additional statements from respondent's counsel—one from a
client, and one from a district court judge in Maryland attesting
to respondent's competence and integrity.
65a
RE-2 is an appraisal referred to in the testimony. [Tr.
102]. It will be received.
RE-3 is a copy of a page from respondent’s bank
statement. It is proffered to show that Mrs. Coverdale’s
February 18 check for $400 was deposited in respond-
ent’s escrow account. The account does show a deposit
of $400 on February 21, but the deposit is not identi-
fied. Moreover, the record shows a withdrawal of $400
on February 27. While this exhibit will be received, it is
not the best evidence of the fact sought to be proved.
Bar counsel had sought to obtain the actual deposit
records from the bank, but was apparently unsuccessful.
RE-4 is an affidavit of Michael Rankin, attorney for
Mr. Stevenson at the time the settlement was made. Para-
graphs 1-5 will be received. Paragraph 6, relating to
Mr. Rankin’s impressions of Mr. Stevenson and certain
charges brought by Mr. Stevenson against Mr. Rankin, is
not received since there is no showing that respondent
was aware of the matters there contained or that they
had any bearing on his behavior.
RE-5 is an affidavit of Daniel Slattery concerning
his dealings with Mr. Stevenson and respondent. It is
received, although we question the probative value of
paragraphs 4 and 5.
RE-6, an affidavit of Bernard Crane, is received as
rebuttal to Bar Exhibit 41.
RE-7, an unsworn statement of Terry McGill, is
virtually worthless in light of Mr. McGill’s admittedly
poor recollection and the absence of supporting records.
Moreover, if it is correct that respondent consulted an
investigator in the fall or winter of 1979 to locate a
building on Hayes Street (the last known address of Mr.
Stevenson), it would tend to undermine respondent’s
position since it would show that he felt some obligation
66a
to locate Mr. Stevenson. In any event, since the state-
ment is unsworn, it will not be received.
RE-8 is the criminal record of Mr. Stevenson. In the
absence of any showing that respondent was aware
of this record at the pertinent time or that it had any
bearing on his actions, this exhibit will not be received.
In light of the foregoing, there is no need to reopen
the hearing, and that portion of respondent’s motion is
denied.
Respectfully submitted,
HEARING COMMITTEE NUMBER NINE
/s/ Charles A. Miller
Chairman
/s/ Linda W. Cropp
Member
/s/ Earl J. Silbert
Member
67a
APPENDIX D
D.C. RULES ANNOTATED
RULE XI. DISCIPLINARY RULES.
eo
Section 2. Grounds for discipline. The license to
practice law in the District of Columbia is a continuing
proclamation by the Court that the holder is fit to be
entrusted with professional and judicial matters, and to
aid in the administration of justice as an attorney and as
an officer of the Court. It is the duty of every recipient
of that privilege to conduct himself at all times, both
professionally and personally, in conformity with the
standards imposed upon members of the Bar as condi-
tions for the privilege to practice law.
Acts or omissions by an attorney, individually or in
concert with any other person or persons, which violate
the attorney’s oath of office or the Code of Professional
Responsibility as from time to time is in effect in the
District of Columbia, shall constitute misconduct and
shall be grounds for discipline, whether or not the act
or omission occurred in the course of an attorney-client
relationship.
Conviction of a crime shall similarly be grounds for
discipline as set forth in § 15 of this Rule.
* * *
Section 7. Procedure.
(1) Investigation. All investigations, whether upon
complaint or otherwise, shall be initiated and conducted
by Bar Counsel. Upon the conclusion of an investigation,
Bar Counsel may dismiss, informally admonish the attor-
ney concerned, or institute formal charges upon prior
68a
approval of an attorney member of a hearing committee;
provided, however, that the respondent- attorney, follow-
ing an informal admonition, may demand a formal
hearing before a hearing committee, in which event the
admonition shall be vacated. If Bar Counsel and the
reviewing member of the designated hearing committee
disagree as to the disposition of the case, the case shall
be submitted to the full hearing committee on which the
member serves for a probable cause hearing. If that com-
mittee finds probable cause, it shall refer the matter to
the Chairman of the Board for assignment to another
hearing committee for a formal hearing. If the original
committee does not find probable cause, it shall dismiss
the action subject to the right of Bar Counsel to seek
review by the Board.
(2) Formal hearing. Formal disciplinary proceed-
ings before a hearing committee shall be instituted by
Bar Counsel by the filing of a petition with the Board
(with a copy to the Clerk of the Court) which shall be
sufficiently clear and specific to inform the respondent
of the alleged misconduct. A copy of the petition shall
be served upon the respondent, The respondent shall
serve a copy of his answer upon Bar Counsel and file
the original with the Board within 20 days after service
of the petition, unless the time is extended by the
Chairman. In the event the respondent fails to answer,
the charges shall be deemed admitted, provided, however,
that a respondent who fails to answer within the time
provided may obtain permission of the Chairman to file
an answer if the failure to file an answer was attributable
to mistake, inadvertence, surprise, or excusable neglect.
Following service of the answer or upon failure to
answer, the matter shall be assigned by the Chairman to
a hearing committee.
69a
A hearing committee member who has reviewed Bar
Counsel’s recommended disposition of a matter, as set
forth in paragraph (1) of this section, shall not take part
in any formal disciplinary proceeding regarding the same
matter, except for the probable cause hearing referred
to in paragraph (1).
If there are any issues of fact raised by the plead-
ings, or if the respondent requests the opportunity to be
heard in mitigation, the hearing committee shall serve a
notice of hearing upon Bar Counsel and the respondent,
or his counsel, stating the date and place of the hearing
at least 15 days in advance thereof. The notice of hearing
shall advise the respondent that he is entitled to be
represented by counsel, to cross-examine witnesses, and
to present evidence in his own behalf.
The hearing committee shall in every case submit
a report containing its findings and recommendation,
together with a record of its proceedings and briefs, if
any were submitted, to the Board within 60 days after
the conclusion of its hearing. In the event of a hearing
committee’s noncompliance with this provision, the
Board, in its discretion, may so advise the Court and
request intercession by the Court.
(3) Review by the Board and Court. Upon receipt
of a report from a hearing committee, the Board shall set
the dates for submission of briefs and for oral argument
before the Board. If neither the respondent nor Bar
Counsel objects to the findings and recommendation of
the hearing committee, oral argument and the submission
of briefs may be waived by stipulation, subject to the
approval of the Board, The Board shall promptly after
the conclusion of oral argument or waiver thereof either
affirm or modify the recommendation of the hearing
committee, remand the matter for further proceedings
70a
before the hearing committee, or dismiss the petition. In
the event the Board determines that the proceeding shall
be concluded by reprimand, it shall instruct Bar Counsel
to so notify the respondent in writing.
Unless the Board shall dismiss or remand the peti-
tion or the matter is concluded by reprimand, the Board
shall promptly submit a report containing its findings and
recommendation, together with the entire record, to the
Court. After the filing of the report, a copy thereof shall
be served on the respondent. The respondent may file
exceptions to the report within 20 days from the date of
service of a copy thereof, or within an additional period
not to exceed 20 days granted by this Court for good
cause shown,
If exceptions to the report are filed by the re-
spondent, the Court shall schedule the matter for the
submission of briefs and oral argument in accordance
with the general rules governing civil appeals. Upon
conclusion of the proceedings, or upon consideration
of the report if no exceptions thereto are filed by the
respondent, the Court shall enter an appropriate order
as soon as the business of the Court permits. In consider-
ing the appropriate order, the Court shall accept the
findings of fact made by the Board unless they are
unsupported by substantial evidence of record, and shall
adopt the recommended disposition of the Board unless
to do so would foster a tendency toward inconsistent
dispositions for comparable conduct or otherwise would
be unwarranted.
Proceedings before the Board and proceedings, if
any, before the Court shall be conducted by Bar Counsel.
The Court reserves the right with respect to all
disciplinary proceedings in which a dismissal, informal
admonition, or reprimand is contemplated or effectuated
71a
to review the matter and to enter an appropriate order
with respect thereto, including an order directing further
proceedings.
* * *
CODE OF PROFESSIONAL RESPONSIBILITY
1
DISCIPLINARY RULES
Ee Se
DR 1-102 Misconduct.
(A) A lawyer shall not:
(1) Violate a Disciplinary Rule.
(2) Circumvent a Disciplinary Rule through actions of
another.
(3) Engage in illegal conduct involving moral turpi-
tude that adversely reflects on his fitness to
practice law.“
(4) Engage in conduct involving dishonesty, fraud,
deceit, or misrepresentation.
(5) Engage in conduct that is prejudicial to the ad-
ministration of justice.**
R * *
DR 5-104 Limiting Business Relations with a Client.
(A) A lawyer shall not enter into a business transaction
with a client if they have differing interests therein
and if the client expects the lawyer to exercise his
professional judgment therein for the protection of
the client, unless the client has consented after full
disclosure.
Rx * *
72a
DR 6-101 Failing to Act Competently.
(A) A lawyer shall not:
(1) Handle a legal matter which he knows or should
know that he is not competent to handle, without
associating with him a lawyer who is competent
to handle it.
(2) Handle a legal matter without preparation ade-
quate in the circumstances.
(3) Neglect a legal matter entrusted to him.
* * *
DR 7-101 Representing a Client Zealously.
(A) A lawyer shall not intentionally:
(1) Fail to seek the lawful objectives of his client
through reasonably available means permitted by
law and the Disciplinary Rules, except as pro-
vided by DR 7-101(B). A lawyer does not violate
this Disciplinary Rule, however, by acceding to
reasonable requests of opposing counsel which do
not prejudice the rights of his client, by being
punctual in fulfilling all professional commit-
ments, by avoiding offensive tactics, or by treating
with courtesy and consideration all persons
involved in the legal process.
(2) Fail to carry out a contract of employment
entered into with a client for professional services,
but he may withdraw as permitted under DR
2-110, DR 5-102, and DR 5-105.
(3) Prejudice or damage his client during the course
of the professional relationship, except as required
under DR 7-102(B).
R * *
73a
DR 9-102 Preserving Identity of Funds and Property of
a Client.
(A) All funds of clients paid to a lawyer or law firm,
other than advances for costs and expenses, shall be
deposited in one or more identifiable bank accounts
maintained in the state in which the law office is
situated and no funds belonging to the lawyer or law
firm shall be deposited therein except as follows:
(1) Funds reasonably sufficient to pay bank charges
may be deposited therein.
(2) Funds belonging in part to a client and in part
presently or potentially to the lawyer or law firm
must be deposited therein, but the portion belong-
ing to the lawyer or law firm may be withdrawn
when due unless the right of the lawyer or law
firm to receive it is disputed by the client, in
which event the disputed portion shall not be
withdrawn until the dispute is finally resolved.
* * *
74a
APPENDIX E
DISTRICT OF COLUMBIA COURT OF APPEALS
BOARD ON PROFESSIONAL RESPONSIBILITY
Bar Docket Number: 319-79
IN THE MATTER OF:
RICHARD A. JAMES, ESQUIRE
Office:
115 Center Way
Greenbelt, Maryland 20770
Respondent
PETITION INSTITUTING FORMAL
DISCIPLINARY PROCEEDINGS
A. This Petition (including the attached Specification
of Charges which is made a part of this Petition) notifies
the Respondent that disciplinary proceedings are insti-
tuted pursuant to Section 7(2), of Rule XI, of the Rules
of the District of Columbia Court of Appeals (Rule XI).
B. Respondent is an attorney admitted to practice
before the District of Columbia Court of Appeals on the
date stated in the caption of the Specification of Charges.
C. A member of a hearing committee assigned by
the Board pursuant to Section 4(3)(d) of Rule XI,
has approved the institution of these disciplinary pro-
ceedings.
D. Under section 7(2) of Rule XI:
(a) Filing Answer — Respondent must answer the
Specification of Charges within twenty days of the date
75a
of service shown on page 3 of this Petition, unless the
time is extended by the Chairman of the Board on Pro-
fessional Responsibility. The Answer must be filed at the
address shown on page 3 of this Petition. The failure to
file a timely answer shall be deemed an admission of all
charges.
(b) Content of Answer—The Answer may be a
denial, a statement in exculpation, or a statement in
mitigation of the alleged misconduct. The charges not
rebutted by the Respondent shall be deemed admitted.
(c) Referral to Hearing Committee—Upon receipt
of the Answer or the expiration of time for Answer,
whichever is sooner, this matter will be presented to the
Board’s Chairman for referral to a Hearing Committee.
(d) Mitigation -- Respondent has the right to be
heard by the Hearing Committee in mitigation regardless
of whether the substantive allegations of this Petition are
admitted or denied.
(e) Process—Respondent is entitled to fifteen days’
notice of the time and place of hearing, to be repre-
sented by counsel, to cross examine witnesses and to
present evidence.
E. These proceedings are confidential to the extent
specified in section 23 of Rule XI.
F. In addition to the procedures contained in Rule XI,
the Board on Professional Responsibility has promulgated
Board Rules relating to procedures and the admission of
evidence which are applicable to these proceedings. A
copy of such rules is furnished Respondent with his copy
of this Petition.
WHEREFORE, the Office of Bar Counsel requests that
the Board consider whether the conduct of Respondent
has violated the standards governing the practice of law
—
76a
in the District of Columbia and, if so, that it further
consider the imposition of such discipline as may be
warranted.
Office of Bar Counsel
By: /s/ Martha J. Tomich
Assistant Bar Counsel
515 - 5th Street, N.W.
Building A
Washington, D.C. 20001
Telephone: 638-1501
CERTIFICATE OF SERVICE
A copy of this Petition with the Specification of
Charges attached to it and a copy of the Rules of The
Board were sent to the Respondent at the office address
shown in the caption to this Petition by certified mail
#PO2 6205121 on July 16, 1980. Also sent regular mail.
/s/ Martha J. Tomich
Assistant Bar Counsel
REFERRAL TO HEARING COMMITTEE
This matte: is referred to a Hearing Committee for
formal disciplinary proceedings.
By direction of
Lawrence J. Latto, Chairman
77a
Board on Professional Responsibility
D.C. Court of Appeals, Washington, D.C. .
Docket Clerk
Date:
Copy to: Hugh Kline, Acting Clerk
District of Columbia Court of Appeals
MJT:el
78a
DISTRICT OF COLUMBIA COURT OF APPEALS
BOARD ON PROFESSIONAL RESPONSIBILITY
Bar Docket Number: 319-79
IN THE MATTER OF:
RICHARD A. JAMES, ESQUIRE
Bar Number: 951160
Date Admission: May 31, 1978
Respondent
SPECIFICATION OF CHARGES
The disciplinary proceedings instituted by this Petition
are based upon conduct which violates the standards
governing the practice of law in the District of Columbia
as prescribed by Rule X of the District of Columbia
Court of Appeals. The conduct and the standards which
Respondent violated are:
1) In or about August 1978, Ms. Lovennia A. Cover-
dale retained respondent at a fee of 5500.00 to defend
her in a personal injury lawsuit filed in D.C. Superior
Court as Stevenson v. Coverdale, C.A. No. 9636-78.
2) On October 15, 1979, a consent praecipe, executed
by respondent and the plaintiff’s attorney was filed and
the action dismissed, That same day respondent pre-
pared a bill for his services, reflecting a balance due of
$1500.00 and submitted it to Ms. Coverdale.
3) Subsequently, Ms. Coverdale informed respondent
that she was unable to remit the $1250.00 settlement
in a lump sum but would make monthly payments of
$400.00, Respondent told Ms. Coverdale that he would
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inform the plaintiff of this arrangement. Respondent
then agreed to receive the monthly installments from
Ms. Coverdale and disburse the money to the plaintiff.
Respondent further indicated to Ms. Coverdale that he
would defer collecting his fee until the settlement had
been paid in full.
4) In the course of Bar Counsel’s investigation re-
spondent denied that he agreed to defer his fee until the
settlement was satisfied. This statement was false and
respondent knew or should have known it was false.
5) Respondent then told the plaintiff’s attorney that
Ms. Coverdale could not remit the settlement in a lump
sum but would pay $100.00 per month until it was
satisfied. Respondent was advised that the plaintiff
refused that offer and demanded immediate payment.
Respondent never informed Ms. Coverdale that the
plaintiff had rejected a proposal for monthly payments.
6) Between November of 1979 and February of
1980, Ms. Coverdale forwarded $1550.00 to respondent.
Respondent, however, did not promptly apprise the
plaintiff that Ms. Coverdale was making monthly pay-
ments nor did respondent distribute any money to the
plaintiff. Instead he applied most of the $1550.00 to
his fee.
7) On February 29, 1980 plaintiff filed a Motion for
Relief From Order requesting the Court to set aside the
settlement entered on October 15, 1979 and permit the
plaintiff to proceed to trial. In opposing this motion on
behalf of Ms. Coverdale, respondent represented to the
Court that he had been unaware of the plaintiff’s where-
abouts. That statement was false and respondent knew
or should have known that it was false.
8) On April 30, 1980, the Court granted the piain-
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tiff’s Motion to set aside the Court’s Order of October
15, 1979 which had dismissed the case as settled.
9) In the course of Bar Counsel’s investigation re-
spondent stated that following the settlement in October
of 1979, he was notified that the plaintiff believed the
settlement was for $12,500.00 not $1,250.00. Respond-
ent further stated that he informed Ms. Coverdale of
this development and advised her that none of the
settlement money should be disbursed until a motion
for new trial had been filed. Respondent also told Bar
Counsel that he had “never known the plaintiff's where-
abouts”. The latter two statements were false and
respondent knew or should have known that they were
false.
10) Respondent violated the following provisions of
the District of Columbia Code of Professional Respon-
sibility:
(a) Disciplinary Rule 1-102(A)(4) by engaging in
conduct involving dishonesty, fraud, deceit or misrepre-
sentation as alleged in paragraphs 3, 4, 5, 6, 7 and 9;
(b) Disciplinary Rule 1-102(A)(5) by engaging in
conduct prejudicial to the administration of justice as
alleged in paragraph 7;
(c) Disciplinary Rule 6-101(A)(3) by neglecting
a legal matter entrusted to him as alleged in paragraphs
5 and 6;
(d) Disciplinary Rules 7-101(A)(1)(2) and (3) by
actions evidencing an intentional failure to seek his
client’s lawful objectives and to carry out his contract of
employment to his client’s prejudice or oe as alleged
in paragraphs 5, 6 and 8; and
(e) Disciplinary Rule 9-102(A) by failing to main-
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tain his client’s funds in a local identifiable bank account
as alleged in paragraph 6.
PROBABLE CAUSE OATH
Upon information and belief, the undersigned states,
under oath, that probable cause exists to refer the fore-
going charges to a hearing committee.
/s/ Martha J. Tomich
Assistant Bar Counsel
Subscribed and sworn before me this 2nd day of July,
1980.
/s/ Fred Grabowsky
Bar Counsel
(Pursuant to authority vested in me by Rule XI, Section
13 of the Rules promulgated by the District of Columbia
Court of Appeals for the governance of members of this
Bar)
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APPENDIX F
COVINGTON & BURLING
888 Sixteenth Street, N.W.
Washington, D.C. 20006
December 9, 1980
Martha J. Tomich, Esq.
Assistant Bar Counsel
The Board on Professional
Responsibility
515 Fifth Street, N.W.
Building A, Room 127
Washington, D.C. 20001
Richard A. James, Esq.
115 Center Way
Greenbelt, Maryland 20770
Re: Bar Docket No. 312-79
Dear Ms. Tomich and Mr. James:
In preparation for the hearing in the above-captioned
docket to be held on Tuesday, December 16, 1980, at
the office of The Board on Professional Responsibility,
515 Fifth Street, N.W., Washington, D.C., I have spoken
with Ms. Tomich and asked her to consult with Mr. James
on certain procedural matters. Ms. Tomich has advised
me that she has had a conversation with Mr. James, who
indicates that he will not object to the admission of the
exhibits previously distributed by Bar Counsel, with the
exception of Exhibit Nos, 25 and 28. According to Ms.
Tomich, Mr. James further states that he may offer one
additional document in evidence. If this is so, I request
that Mr. James make copies of this document available
to Ms. Tomich and to members of the Hearing Commit-
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tee as quickly as possible, and in any event no later than
‘Friday, December 12, 1980. If the documents are made
available to Ms. Tomich, I believe she can arrange for
delivery of them to members of the Hearing Committee.
The Committee’s intention will be to hear the two
cases successively. This means that after hearing Bar
Counsel’s witnesses on the first case, we will hear all
evidence to be offered by Mr. James and conclude the
taking of the evidence on this case before hearing the
witnesses and receiving the evidence on the second
case. The order of the cases to be heard shall be deter-
mined by Bar Counsel who should notify the Committee
members and Mr. James in advance of the hearing, and
in any event no later than Friday, December 12, 1980.
Bar Counsel should also make arrangements so that the
public witnesses in the second case need not be present
at the beginning of the hearing but only when it is esti-
mated that the hearing on the second case will begin.
I ask both Ms. Tomich and Mr. James to inform us by
Friday, December 12, 1980, of the names of all witnesses
to be called at the hearing. Notice to the Committee may
be accomplished by mail to me,
In reviewing the file available to date, certain questions
occur to me, which I have listed below in the hope that
they can be dealt with during the hearing. This does not
necessarily represent an exhaustive list of all questions
nor do I mean to imply any advance judgments about
the case or about the significance of the questions listed.
This is simply to aid the parties in developing a full
record, |
The Case Involving Property of the Scotts
1. Were there one or two contracts of sale for the
property? What is the relationship between the contract
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reflected in Exhibit 1(b) and the contract reflected in
Exhibit 8 (b)?
2. Are there one or two rental units in the Scotts’
property? If there are two, was the second unit occupied
during any part of the period in question?
3. Why did the Scotts and Mr. James not go forward
with their agreement to transfer the property to Mr.
James?
4. When did Ms. Morris file suit against the Scotts?
What role did the Scotts ask or expect Mr. James to play
in defense of the suit, and what role did Mr. James play?
5. Did Ms. Morris purchase the property pursuant
to the offer reflected in Exhibit 8(c)? If not, has the
property otherwise been disposed of?
6. Was it part of the original arrangement between the
Scotts and Mr, James that Mr. James might acquire the
property, be responsible for refurbishing it, and share in
the proceeds of eventual sale?
7. What are the answers to the questions raised in Bar
Counsel’s letter of October 3, 1980 (Exhibit 13)?
8. A legal question—is there a right of first refusal
under Section 602 of the Rental Accommodations
Statute in favor of the tenant(s) after the landlord has
received a valid sales contract or other written offer to
purchase?
The Case of the Stevenson-Coverdale Litigation
1. What were the exact time, amount, and manner of
Ms. Coverdale’s payments to Mr. James?
2. What use or disposition has been made by Mr.
James of the payments from Ms, Coverdale?
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3. Itemize the time spent on the litigation by Mr.
James.
4. What instructions did Mr. James have from Ms.
Coverdale concerning the settlement of the litigation?
What did Mr. James tell Ms. Coverdale about the settle-
ment and the obligations it imposed on her after the
agreement was reached?
5. What was Ms. Coverdale’s understanding as to how
the funds she paid to Mr. James would be disbursed?
What instructions, if any, were given to Mr. James, when
and in what manner?
6. What has happened to the reopened litigation?
7. What is the effect of the Judge’s order reopening
the case on the settlement agreement?
In light of the fact that there are two separate matters
to be considered at the hearing, I think it appropriate
that the issue of the appropriate discipline, if any, should
be deferred until after the Committee makes a determina-
tion on the question of liability. If either Ms. Tomich or
Mr. James disagrees with this view, please so inform me
in writing no later than Friday, December 12, 1980.
If either party anticipates requesting an opportunity
to file a post-trial memorandum, please be prepared at
the hearing to advise as to the time that will be requested
for the submission of such memoranda. While the
Committee will be cognizant of the upcoming holidays,
it is most anxious that this case be resolved expeditiously.
Sincerely,
/s/ Charles A. Miller
mb Chairman,
cc: Earl J. Silbert, Esq. Hearing Committee No. 9
Ms. Linda W. Cropp
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COVINGTON & BURLING
888 Sixteenth Street, N.W.
Washington, D.C. 20006
February 20, 1981
Geoffrey P. Gitner, Esq.
Wadden, Scherr & Krebs
1000 Potomac Street, N.W.
Washington, D.C. 20007
Re: In the Matter of Richard Allen James
Dear Mr. Gitner:
In the Respondent’s Post-Hearing Memorandum in the
above-captioned case, at page 24, it is suggested that
Respondent may, in reliance on my prehearing letter of
December 9, 1980, suggesting that the issue of appro-
priate discipline be deferred until liability is determined,
have failed to proffer “mitigation” evidence at the
December 16 hearing. I did state at the close of the
hearing that the issue of discipline should be considered
in the post~hearing memoranda and that the Committee
intended to resolve all issues at one time. I specifically
invited Respondent to offer anything he chose bearing
on the question of mitigation in his post-hearing memo-
randum, (Tr. 204).
Nevertheless, in the interest of assuring a complete
record for the Board, the Committee will afford Re-
spondent 15 days from the date of this letter to make
any additional showing on the question of mitigation.
This opportunity is confined to Respondent’s prior
record and reputation (Items (b) and (c) at page 24 of
your memorandum), It appears to the Committee that
Items (a), (d), and (e) in your memorandum were fully
87a
covered in Respondent’s testimony and are adequately
dealt with in your memorandum.
Please send copies of any further submission to the
members of the Committee as well as to Bar Counsel.
Sincerely,
/ Charles A. Miller
mb
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.