Attorney Grievance v. Theriault
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IN THE COURT OF APPEALS OF MARYLAND Misc. Docket AG No. 48 September Term, 2004 ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. MICHAEL J. THERIAULT Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. Opinion by Bell, C.J. Filed: December 15, 2005 In a Petition For Disciplinary Action, filed pursuant to Maryland Rule 16-751,1 Bar Counse l, acting at the direction of the A ttorney Grievance Commission Of Maryland, the petitioner, alleged that Michael John Theriault, the respondent, engaged in misconduct as reflected in his violation of certain of the Rules of Professional Con duct, as adopted by Maryland Rule 16-812, other Maryland rules and statutes, including criminal statutes. Most of the allegations, pertaining to the alleged commingling and misappropriation of trust funds, were the result of an investigation, prompted by Bar Counsel s receipt of a report from the respondent s bank that a check draw n on the responde nt s IOLTA Attorney Trust Account had been returned f or insufficie nt funds. T hey included : theft, 2 misuse of trust 1 Maryland Rule 16-751, as relevant, provides: (a) Commencement of Disciplinary or Remedial Action. (1) Upon Approval of Commission. Upon approval or direction of the Commission, Bar Counsel shall file a Petition for Di sciplina ry or Rem edial A ction in t he Co urt of A ppeals . 2 Bar Counsel charged violations of Maryland Code (2002) § 7-104, the general theft provisions, and § 7-113, Embezzlement--Fraudulent misappropriation by fiduciaries, of the Criminal Law Article, as well as Maryland Code (1957, ___ Replacement Volume) Article 27, § 132, the predecessor to § 7-113, and § 342, the predecessor to § 7-104. mon ey, 3 violation of Rule 16-609, Prohibited Transactions,4 and violation of Rules of Professional Con duct 1.15 , Saf ekee ping Prop erty, 5 and 8.4, Misconduct. 6 The other 3 Maryland Code (1989, ____ Replacemen t Volume) § 10-306 of the Business Occupations and Professions Article, which provides: A lawyer may not use trust money for any purpose other than the purpose for wh ich the tr ust mo ney is entr usted to the law yer. 4 Maryland 16-609 provides: An attorney or law firm may not borrow or pledge any funds required by these Rules to be deposited in an attorney trust account, obtain any remuneration from the financial institution for depositing any funds in the account, or use any funds for any unauthorized purpose. An instrument drawn o n an attorne y trust account m ay not be draw n payable to ca se or to bearer. 5 As relevant, Rule 1.15 provided: (a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account maintained pursuant to Title 16, Ch apter 600 o f the Ma ryland Rules. O ther proper ty shall be identified as such and appropriately safeguarded. Complete records of such account funds and of other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation. (b) Upon receiv ing funds or other pro perty in which a client or third person has an interest, a law yer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds o r other prop erty that the client or th ird person is entitled to rece ive and, up on reque st by the client or third person, sha ll promp tly render a full acc ountin g regar ding su ch prop erty. Effective July 1, 2005, as a result of Court action on February 8, 2005, Rule 1.15 was amended. As amended, among changes, subsection (b) has been renumbered subsection (d). 2 allegation related to a domestic violence charge brought by the respondent s spouse and the resultant protective order entered in the case. It was that the respon dent assau lted her in the second degree and, in so doing, violated Maryland Code (2002) § 3-203 of the criminal Law Article.7 We referred the case, pursuant to Rules 16 -752 (a), 8 to the Honorable Maurice W. 6 Rule 8.4, as pertinent, provides: * * * * (b) com mit a crim inal a ct tha t refl ects adverse ly on the la wyer 's hon esty, trustworthin ess or fitness as a lawyer in o ther respects ; (c) engage in conduct involving dishonesty, fraud, deceit or misreprese ntation; (d) engage in conduct that is prejudicial to the administration of justice * * * * 7 Md. C ode (200 2) § 3-201 (b) of the C riminal Law Article prov ides that A ssault means the crimes of a ssault, battery, and a ssault and b attery, which reta in their judicially determ ined m eaning s. 8 Rule 16-752 (a) provides: (a) Order. Upon the filing of a Petition for Disciplinary or Remedial Action, the Court of Appeals may enter an order designating a judge of any circuit court to hear the action and the clerk responsible for maintaining the record. The order of designation shall require the judge, after consultation with Bar Counsel and the attorney, to enter a scheduling order defining the 3 Baldwin, Jr., of the Circuit Court for Harford County, for hearing pursuant to Rule 16-757 (c).9 Although he was served, the responde nt did not file a response, re sulting in the entry of an order of default. Rather than move to vacate order of default, the respondent filed an untimely answer to the Petition, which prompted the petitioner to file a Motion to Strike Responden t s Answ er. Follo wing a hearing on that m otion, at which the respondent appeared, in proper person, and participated, the hearing court granted the petitioner s motion and, proceeding to the default hearing, accepted the petitioner s proposed findings of fact and conclusion s of law a nd adop ted them a s its own. T hey are: [I]t is the finding of this court, as being established by clear an[d] convincing evidence that Michael John Theriault was admitted to the Bar of this Court on December 14, 1995 and presently stands decertified by order of the Court of Appeals dated April 4, 2005 for non payment of his mandatory bar dues.10 extent of discovery and setting dates for the completion of discovery, filing of motions, and hearing. 9 Maryland Rule 16-757 (c) provides: (c) Findin gs and co nclusions. T he judge s hall prepare and file or d ictate into the record a statement of the judge's findings of fact, including findings as to any evidence regarding remedial action, and con clusions of law. If dictated into the record, the statement shall be promptly transcribed. Unless the time is extended by the Court of Appeals, the written or transcribed statement shall be filed with the clerk responsible for the record no later than 45 days after the conclusion of the hearing. The clerk shall mail a copy of the statement to each party. 10 There are no m andatory bar dues in M aryland, since we do not ha ve a mandatory bar. Th e refere nce he re is to the mand atory asse ssmen t of the C lient Pro tection F und. Dece rtificatio n is the sa nction f or the fa ilure to p ay those a ssessm ents. See Maryland 4 BC DO CKET NO. 2003 -252-3-6 COMPLAINANT: BAR COUNSEL The court finds that on December 27, 2002 the Petitioner received notice from First Union N ational Ban k, pursuan t to Maryland Rule 16-610 b 1 (B) and Rule 16-610 b 1 (C). That notice indicated the account in the name of Michael J. Theriault, Esquire, IOLTA Attorney Trust Account No. 2044004481 812 was charged with a check drawn against insufficient funds in the amount of $ 8,000 when the available balance was only $ 5, 829. The check, number 162 was drawn on December 14, 2002 payable to the order of Baltimore Sun, Inc. and Marshall Grier in the amount of $ 8, 000 bearing the signature of the account holder, and Respondent herein, Michael J. Theriault, Esquire. The Respondent was placed upon notice by letter dated January 8, 2003 and was asked to provide a f ull explana tion for the o verdraft as w ell as to provide copies of his client ledger cards, depo sit slips, canceled checks, and monthly bank statements for the period beginning July, 2002 through and includin g Dec embe r, 2002 . By letter dated January 16, 2003 the Respondent provided a response and docume nts which, upon review precipitated a docketed disciplinary file being opened against Respondent bearing BC Docket No. 2003253-03-6 . In connec tion with that disciplinary investigation a notice letter was sent to the Respondent dated January 27, 2003 stating a review of his previously provided financial records indicated th e possibility of commingling in his fiduciary account as well as a Rule 16-811 (f) (4 ). 5 possibility of misuse of fiduciary funds entrusted to him. He was asked to provide an explanation for each of the payees noted on the checks provided with his earlier January 16th response and specifically asked to address payments made to an individual as payee, name ly Coy Condon, which appeared to be for personal purposes. By response dated February 5, 2003 the Respondent provided further documents and explanation. An analysis of Re sponden t s explanatio ns, respons e, and reco rds of his fiduciary account revealed the Respo ndent rece ived fund s in his fiduciary account, by December 16, 2002, on behalf of the Estate of Ethel Brenner totaling $ 2, 750 but made no disbursement attributable to that estate during the time within which he held these funds in a fiduciary capa city. On December 31, 2002 the balance in Respo ndent s trust a ccount w as reduced to only $ 211.44 which constituted an out of balance position in his fiduciary account in excess of $ 2,500 attributed to that client alone. Further analysis of Respondent s response and financial records revealed he received a settlement of $ 8, 000 on behalf of the Emkay Distributors Account on October 23, 2002. By check number 162, on December 31, 2002 he made full distribution of that amount but the balance in his escrow account had diminished on December 10, 2002 to the amount of $ 4, 611.44. T his constitute d a misappropriation of fiduciary fun ds in the app roximate amount of $ 3, 388.56 attributed to that client alone. Also disclosed upon an alysis of Respondent s financial records was that he received an insurance settlement in th e amoun t of $1, 642 on behalf of his client Thuy Ta on August 6 21, 2002. For the period within which financial records were reviewed there was no distribution of these funds on behalf of the clien t. Noneth eless, the balan ce reflected on his account statement on December 31, 2002 was diminished to only $ 211.44 thereby evidencing an out of balance position of more than $ 1,400 attribute d to that c lient alon e. The Respondent was, by letter dated July 7, 2003 asked to respond to the result of this analysis e videnc ing app arent m isappro priation of fidu ciary fun ds. The court finds that upon further explanation from the Respondent dated July 20, 2003 an additional request for information and explanation was forwarded to Respondent by letter dated July 31, 2003. That request was responded to by letter dated August 14, 2003 and Respondent provided additional information on the matter of his client Thuy Ta and the Estate of Ethel B renner. Su bsequen tly a meeting between the Respo ndent, Assistant Bar Counsel and a para legal of the Petitioner, was scheduled to take place on September 24, 2003. At the meeting scheduled for September 24, 2003 the Respondent was requested to provide additional documentation and explanation in connection with the matters addressed in the earlier corr esponde nce of Ju ly 31, 2003 representing the inquir[i]es into three different areas of his handling of fiduciary funds. During that meeting Respondent admitted and acknowledged he did not handle fiduciary funds properly and misappropriated, at least, the estate funds entrusted to him in the matter of the Estate of E thel Brenner. On January 12, 2004 the Respondent was arreste d and cha rged in Har ford Cou nty, 7 Maryland, at his home, with second degree assault (domestic) and was the subject of a Final protective Order dated January 20, 2004 in the District Court of Maryland for H arford County in Case No. 0901SP001682004. The cou rt finds that the Respon dent did ass ault Katrin a Rose , his wif e, in the s econd degree in violat ion of C riminal S ection 3 -203. On those factual findings, the hearing court concluded that the Respondent violated each of the Maryland Rules and statutes charged. It also determined that there was no mitigation in this case, that the evide nce to wh ich the respo ndent direc ted the cou rt to look and which consisted of a few self-serving letters relating to some problems in his personal life, [did] not establish any medical, psychiatric, or other condition which would act to mitigate the find ings of fact or c onclus ions of law fo und.... Neither the petitioner nor the respondent took exceptions to the hearing court s Findings of Fact or Con clusions of Law . The petitioner did, howe ver, file Petitioner s Recommendation For Sanction, in which it urged this Court to order the respondent disbarred. Although the respondent did not file a written recommendation, it is fair to say that he does not agree with th e petition er s san ction rec omm endatio n. He appeared at the argumen t, urging, despite the failure to file excep tions, that he d id not intention ally misappropriate any trust funds and that intentional misappropriation had not been proven. The hearing court found that, for the period for which the respondent s trust account records were reviewed, the respondent, on more than one occasion, received client funds, which were plac ed in his trust a ccount, bu t not disburse d to the client timely. In addition the 8 hearing court determined that the respon dent was out of trus t, and signif icantly so, with respect to each of the clients whose cases were reviewed. Moreover, and necessarily, the hearing court held, the respondent used these funds for purposes other than for which they were entrusted. Based on these fin dings, and including th e respond ent s adm ission that, with respect at least to the estate matter, he did not handle fiduciary funds properly and misappropriated the estate funds entrusted to him, it conclude d that the resp ondent no t only misused trust funds, b ut that he stole , embezzle d and frau dulently misap propriated client funds. On our independent review of the record, we are satisfied the hearing court s findings of fact are supported by clear and co nvincin g evide nce, Attorney Griev. Co mm'n v. D avis, 375 Md. 131, 157-58, 825 A.2d 430, 445-46 (2003); Attorney Griev. Comm n v. Link, 380 Md. 405, 420, 844 A.2d 1197, 1207 (2004). Moreover, reviewing the hearing court s conclusions of law de novo, as we must, Attorney Griev. Comm n v. Kreamer, 387 Md. 503, 519, 876 A.2d 79,89 (2005), it is clear that they follow from the facts fo und. Link, 380 Md. 405, 420, 844 A.2d 1197, 1207 ( the ultimate question , whether a lawyer has violated the professional rules, what, in othe r words, to make o f those facts, rests with this Cou rt ). Although [t]he primary purpose in imposing discipline on an attorney for violation of the Rules of Professional Conduct is not to punish the lawyer but rather to protect the public and the public's confidence in the legal pro fession , Attorney Griev. Comm'n v. Stein, 373 Md. 531, 533, 819 A.2 d 372, 37 5 (2003), a nd that mo st appropria tely and likely will 9 occur when sanctions commensurate with the nature and gravity of the violations and the intent with w hich the y were co mmitte d are im posed , Attorney Griev. Comm'n v. Awuah, 346 Md. 420, 43 5, 697 A .2d 446 , 454 (1 997). See Attorney Griev. Comm 'n v. Sheinbe in, 372 Md. 224, 255 , 812 A.2d 981, 999 (2002); Attorney Griev. Comm'n v. Hess, 352 Md. 438, 453, 722 A.2d 90 5, 913 (19 99); Attorney Griev. Comm'n v. Webster, 348 Md. 662, 678, 705 A.2d 1135, 1143 (1998), we have long since made clear the seriousness with which we view acts of misappropriation. They are, we have said, and repeated often, act[s] infe cted with deceit and dishonesty, and, in the absence of compelling extenuating circumstances justifying a lesser sanction, will resu lt in disba rment. Attorney Griev. Comm'n v. Bakas, 323 Md. 395, 403, 593 A.2d 1087, 1091 (1991). See Attorney Griev. Comm'n v. Sp ery, 371 Md. 560, 568, 810 A.2d 48 7, 491-92 (2002); Attorney Griev. Comm'n v. Sullivan, 369 Md. 650, 655-56, 801 A.2d 1077, 10 80 (2002 ); Attorney Griev. Comm'n v. Vanderlinde, 364 Md. 376, 410, 773 A.2d 4 63, 483 (2001 ). It is the respondent's burden to establish compelling extenuating circumstances justifying a lesser sanctio n. Attorney G riev. Com m'n v. Sabg hir, 350 Md. 67, 84-85, 710 A.2d 926, 934 (199 8); Bakas, 323 Md. at 403, 593 A.2d at 1091. That showing must b e by a pre ponde rance o f the ev idence . Sabghir, 350 Md. at 85, 710 A.2d at 934. The responde nt directed the hearing co urt s attention to the petitioner s exhibit 1, in which he maintained could, and wo uld be fou nd, eviden ce favora ble to the resp ondent, that would mitigate the findings of fact or conclusions of law. The hearing court accepted the respondent s invitation to review that exhibit, but unfortunately for the respondent, it found 10 it lacking in mitigating value and so found. Consequently, this record does not contain any compelling extenuating circumstances that justifies a lesser sanction. Accordingly, the petitioner s recommendation is accepted, the respondent is ordered disbarred. IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY THE CLERK OF THIS COURT, INCLUDING THE COSTS OF ALL TRANSCRIPTS, PURSUANT TO MARYLAND RULE 16-761 (c), FOR WHICH SUM JUDGMENT IS ENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMMISSION AGAINST MICHAEL JOHN THERIAULT. 11
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