Attorney Grievance v. Cherry-Mahoi

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Attorney Grievance Commission v. Ada Elizabeth Cherry-Mahoi, Misc. Docket, AG No. 45, Sept. T erm 20 04. [Maryland Rules of Profes sional Conduct 1.3 (D iligence), 1.5 (Fees), 1.15(a) and (b) (Safekeeping Property), 1.16(d) (Declining or Terminating Representation), 8.4(a), (c) and (d) (Miscon duct); Ma ryland Rules 1 6-606 (N ame and Designa tion of Account), 16-609 (Prohibited Transactions), Maryland Code (2000, 2004 Repl. Vol.), Section 10-306 of the Business Occupations and Professions Article (Misuse of Trust Money); held: Respondent violated MRPC 1.15(a) and (b), 1.3, and Md. Code, §10-306 of the Business Occupations and Profession s Article by com mingling h er persona l funds w ith client fund s and failing to promptly pay medical providers. Respondent violated MRPC 1.5 and 1.16(d) by charging unreasonable fees to her client and converting client funds for personal use. Respondent violated Maryland R ule 16-60 6 by failing to properly title her attorn ey trust accoun t. Respondent violated MRPC 16-609 when she wrote a check payable to cash from her trust account and willfu lly misuse d trust m oney. Respondent violated MRPC 8.4(a), (c) and (d) by intentionally misappropriating client funds and third party fund s held in her trust acc ount. For the se viola tions, R espon dent sh all be dis barred .] IN THE COURT OF APPEALS OF MARYLAND Misc. Docket AG No. 45 September Term, 2004 ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. ADA ELIZABETH CHERRY-MAHOI Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. Opinion by Battaglia, J. Bell, C.J., dissen ts Filed: July 21, 2005 The Attorney Grievance Commission of Maryland ( Petitioner or Bar Coun sel ), acting through Bar Counsel and pursuant to Maryland Ru le 16-751(a), 1 filed a petition for disciplinary or remedial action against Respondent, Ada Elizabeth Cherry-Mahoi, on September 15, 2004. Th e Petition alleg ed that Re sponden t, who was admitted to the Bar of this Court on December 18, 1990, violated several Maryland Rules of Professional Conduct ( MRPC ), specifically, 1.1 (Competence), 2 1.3 (Diligence), 3 1.4 (Comm unication), 4 1.5 1 Maryland Rule 16-751(a) provides: (a) Comm encement of disciplinary or remedial action. (1) Upon approval or direction of the [Attorney Grievance] Commission, Bar Counse l shall file a Petition for Disciplinary or Remedial Action in the Court of Appeals. 2 Rule 1.1 provides: A lawyer shall provide competent re presentation to a client. Comp etent representatio n requires th e legal kno wledge, sk ill, thoroughness and preparation reasonably necessary for the representation. 3 Rule 1.3 provides: A lawyer shall act with reaso nable diligen ce and pro mptness in representing a client. 4 Rule 1.4 provides: (a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly com ply with reaso nable requests for information. (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. -2- (Fees), 5 1.15 (Safekeeping P roperty),6 1.16(d) (Declining or Terminating R epresentation), 7 8.1 (Bar Admission and Disciplinary Matters), 8 8.4 (Miscondu ct),9 Maryland Rule 16-606 5 Rule 1.5 p rovides in re levant part: A lawyer s fee shall be reasonable. 6 Rule 1.15 provides in relevant pa rt: (a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in conne ction with a representation separate from the law yer's own proper ty. Funds sh all be kept in a separate account maintained pursuant to Title 16, Chapter 600 of the Maryland Rules. Other property 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 receiving funds or other property in which a client or third person has an i nterest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreem ent with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third p erson, shall p romptly render a ful l accounting rega rding suc h pro perty. 7 Rule 1.16(d) provides: Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client s interests, such as giving reasonable notice to the client, allowing time for employment of other coun sel, surrende ring papers and prop erty to which the client is entitled and refunding any advance payment of fee that has not been earned. T he lawyer m ay retain papers relating to the client to the extent permitted by other law. 8 Rule 8.1 provides: (contin ued...) -3- (Name and Designation of Acco unt),10 Maryland Rule 16 -609 (Prohibited Tran sactions), 11 8 (...continued) An applicant for admission or reinstatement to the bar, or a lawyer in connectio n with a ba r admission application o r in connectio n with a dis ciplinary matter, sh all not: (a) knowingly make a false statement of m aterial fact; or (b) fail to disclose a f act necessa ry to correct a misapprehension known by the person to have arisen in the m atter, or know ingly fail to respond to a lawful demand for information from an admissions or disciplinary authority, except that this Rules does not require disclosure of information otherwise protected by Rule 1.6. 9 Rule 8.4 p rovides in p art: It is professional misconduct for a lawyer to: (a) violate or attem pt to violate the Rules of Professio nal Conduct, knowingly assist or induce another to do so, or do so through the acts of an other; (b) commit a criminal act that reflects adversely on the lawyer s honesty, trustworthiness or fitness as a lawyer in other respects; (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; (d) engage in conduct that is prejudicial to the administration of justice . . . . 10 Maryland Rule 16-606 provides: An attorney or law firm shall maintain each attorney trust account with a title that includes the name of the attorney or law firm and that clearly designates the account as Attorney Trust Account , Attorney Escrow A ccount , or Clients Funds Accou nt on all checks and deposit slips. T he title shall distinguish the account from any other fiduciary account that the attorney or law firm may maintain and from any personal or busine ss acco unt of th e attorne y or law f irm. 11 Maryland Rule 16-609 provides: (contin ued...) -4- and Section 10-306 of the Business Occupations and Professions Article of the Maryland Code (2000 , 2004 Repl. Vo l.) (Misuse of Trust M oney).12 In accordance with Maryland Rules 16-752(a) and 16-757(c), 13 we referred the petition to Judge M ickey J. Norm an of the C ircuit Court for Baltimore County for an evidentiary hearing and to make findings of fact and conclusions of law. On February 2, 2005, Judge Norman held a hearing and on March 10, 2005, issued Findings of Fact and 11 (...continued) An attorney or law firm may no t borrow or pledge any funds required by these Rules to be deposited in an attorn ey 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 on an attorney trust account may not be d rawn payable to cash o r to bearer. 12 Section 10-306 of the Business Occupations and Professions Article provides: Misuse of trust money. A lawyer may not use trust money for any purpose other than the purpose for which the trust mone y is entrusted to the lawyer. 13 Maryland Rule 16-752(a) states: (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 is 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 extent of discovery and setting dates for the completion of discovery, filing of motions, and hearing. Maryland Rule 16-7 57(c) states in pertinent pa rt: The judge shall prepare and file or dictate into the record a statemen t of the judg e s finding s of fact, inclu ding findin gs as to any eviden ce rega rding re media l action, a nd con clusion s of law . . . . -5- Conclusions of Law, in which he found, b y clea r and convinc ing e vide nce, that C herr yMahoi had violated M RPC 1.3, 1.5, 1.15(a) a nd (b), 1.16(d), 14 8.1, 8.4, Maryland Rules 16606 and 16-609, and Section 10-306 of the Business Occupations and Professions Article: Background This matter arises from the Respondent s representation of Ms. Clark and her two c hildren w ho were victims in a p ersonal injury au tomobile accident. In May 2002, the Respondent settled the claims, received settlement funds and distributed the proceeds to the parties. The Respondent also received and wa s to hold in trust, persona l injury protection f unds (PIP ) to pay certain unpaid medical providers. Ms. Clark did not immediately authorize the payment of those medical expenses. In October 2002, when those same medical expenses we re to be paid, because the Respondent had depleted funds from her trust account, there were insufficient funds in the Respondent s account to satisfy the outstanding medical bills. The Respondent deposited personal funds into her trust acco unt in order to pay the me dical bills when they came due. Ms. Clark filed a complaint with the Attorney Grievance Commission. As a result of their investigation the Respondent has been charge d with v iolating the Ru les of P rofessi onal C onduc t. 14 The hearing judge found a violation of MRPC 1.16(c), but in his conclusions cited the language of MRPC 1.16(d), for which Bar Counsel had alleged a violation. Thus, for purposes of our discussion we refer to section (d) of Rule 1.16. -6- Findings o f Fact The Petitioner alleges that the Respondent was admitted as a member of the Bar of this Court on Dec ember 18, 1990 (¶, 2) and (T. 27, lines 21-22). 1 She testified that the majority of her legal work had been in public interest law starting with the Maryland Disability Law Center (T. 59, line 5). From there, she went into private practice for two years and also, on a contractual basis, represented clients for the Public Defender's office (T .58). Primarily she has worked as a subcontractor for a private attorney who represented children, who were, or alleged to have been, abused a nd neglec ted (T. 49, line s 13-16). W hile working as a subcontractor, the Respondent also maintained an office for the practice of law at 9 722 Gro ffs Mill D rive, Suite 116, Owings Mills, Maryland 21117 (¶ 2). How ever, on he r attorney trust account, w hich is impro perly labeled IOLTA, she lists an address of 220 E. Lexington Street, Suite 904, 1 The Respondent also said that she had been practicing since December 1989 (T.58, line 5). Baltimore, Marylan d 2120 2-352 5. The Respondent testified that, around the time of the incident, which gave rise to the petition, she did not have an active private practice (T. 46, lines 6-9), and in July 2002, she was making an eff ort to elimin ate her p rivate pr actice o f law (T . 51, lines 17-25 ). In the Petition for Disciplinary or Remedial Action, Pe titioner asserts that Respon dent enga ged in professional misconduct, as defined by Maryland -7- Rule 16-70 1(I). This allegation arises from the C omplaint filed by Mary Emma Clark who the Respondent represented. The Respondent filed an Answer admitting some of the factual allegations but generally denied any intentional wrongdoing. In its findings of fact, the Court incorporates the allegations listed in this Co mplaint, ou tlined by Petitioner in ¶ 4-16 of the Petition for Disciplinary or Rem edial A ction. At the hea ring befor e the Cou rt, the Petitioner called both the Respondent and John DeBone to testify. The Respo ndent a lso testifi ed on h er beha lf. As alleged in the complaint of Mary Clark , and in acco rdance w ith the Respondent's own admission, the Court finds as a fact that the Respondent represented Mary Emma Clark and her two children, Rashaad and Ebony Kelly (hereinafter, Clark case ). That repr esentation so ught com pensation for injuries arising out of an automobile accident. The case was settled in May 2002 ( T. 28, lin es 1-10 ). By her own admission, during May 2002, the Respondent settled the Clark case for an aggregate amou nt of $11,000.00 (¶ 5 ) (T. 28, lines14-15). On May 15, 2002, the Respondent deposited that settlement check, into her escrow account, which she improperly labeled IOLTA (¶ 6). The Respondent admitted at tria l that the account in which she deposited the settlement funds was labeled IOLT A (T. 29, lines 1-3). However, she denies culpability stating she was not familiar with setting up and maintaining escrow -8- accounts (T. 59 line 24 to T. 60 line 3). The Respondent testified that she went to Provident Bank, explaine d her nee d to e stablish a n atto rneys escrow account in compliance with the IOLTA rules, and the account was improperly titled by the bank employee who set up the account. The Respondent claims that she relied on the experience of Provident Bank employees and therefore believed that it was permissible for an attorney trust account to carry that title (T. 43, lines 2-1 9). The Respondent admitted, that in addition to receiving the settlement check in the Cla rk ca se, G overnment E mployees Insurance Company (GEICO) also issued personal injury protection (PIP) checks to be paid to the Respondent's clients. Thes e checks w ere forw arded to the Respon dent in May 2002 (¶ 7). In her answers the Respondent admitted that on or about May 24, 2002, she deposited $4,019.75 representing the PIP benefits into her escrow account. Again on May 28, 2002, the Respondent deposited an additional $117.35 in PIP ben efits into that same account (¶ 8). These admissions were corroborated by the testimony of John DeBone a paralegal for the Attorney Grievance Commission. Mr. DeBone has worked for the Attorney Grievance Commission for ten years. His responsibilities include performing attorney trust account a nalysis, and the a ttorney trust overd raft program on overd rafts of attor ney trust accounts (T. 8, lines13-23). Mr. DeBone reviewed the Respondent's bank records and prepared a spreadsheet (Petitioner's exhibit 2) -9- analysis o f her atto rney trust a ccoun t (T. 9, line s 1-5). Mr. DeBo ne testified that he reviewed Ms. Cherry-Mahoi s escrow account and the related bank records, and confirmed that during May 2002, GEICO issued PIP checks for Ms. Clark and her two children, totaling four thousand, one hundred and thirty-seven dollars and ten cents ($4,137.10) from deposits on the two d ates listed above (T. 15, lines 12-1 6). Furthermore, the Respondent testified that, in May 2002, she received PIP benefits on behalf of the Clark family, which she deposited in her trust account (T. 28, lines 16-20). Copies of the Respondent's Provident Bank Reco rds we re adm itted into eviden ce (Petitioners e xhibit 1 , sub-ex hibit 8). Petitioner alleges that, althou gh the mo ney was de posited into Respondent's account, the Respondent failed to notify Ms. Clark of the receipt of the personal injury protection payments from GEICO (¶ 9). Respondent denies this allegation. The respondent testified that: I had shared with [Ms. Clark] that I had received the check s from he r PIP prov ider . . . she told me not to pay the bills because the bills had already been p aid. (T. 44, lines 19-23). A review of the personal injury settlement sheets, which were signed by Ms. Clark (sub-exhibits 1-3 of Petiti oner's ex hibit 1), d elineate s the PIP funds . The Court finds that the Petition er has not p roven that th e Respo ndent failed to notify M s. Clark that she had rec eived p ersona l injury pro tection p ayments . The Petitioner also alleges that the Respon dent endo rsed the che cks in -10- her client's name p rior to their dep osit. This allega tion is corroborated by Petitioner's exhibit 1, sub-exhibit 8. The GEIC O PIP check s made out to M ary E. Clark, and those made out to her as guardian of Ebony and Rashaad Kelly, were endorsed in Mary Clark's and A da Cherr y-Mahoi's na mes by Res ponden t. Petitioner claims that the Respo ndent failed to make tim ely payments to medical providers from the funds she maintained in trust for that purpose (¶ 10), and the R esponde nt failed to maintain funds in trust for the payment of medical providers p rior to the payment of said prov iders (¶ 11). The Provident Bank records (Petitioner's exhibit 1, sub-exhibit 8), and the spreadsheet prepared by Mr. DeBone (Petitioner's exhibit 2), reveal that between May 2002 and the end of September 2002, the Respondent converted funds from her trust account to her personal use. The Respondent does not deny these facts, however she denies any intentional fraud or misappropriation. Further the Respondent testified that Ms. Clark asked the Respondent to reserve paying certain medical providers, believing that she or her h usba nd's insurance might have paid all or part of the b ills (T. 31, lines 7-10). W hile waiting to learn if the medical bills had been paid from some other source, the Respondent did not pay the providers (T. 31, lines 17-23). The Respondent does not dispute that she withdrew funds between May and September 2002, and converted them to her personal use. She testified that she was under the belief that any money remaining in the account would have been my fees -11- because norm ally my procedure was to go ahead and pay bills almost immedia tely after receiving the funds. (T. 46 lines 11-14) and (T. 55, lines 225). The Respondent testified that, due to her poor record keeping, and that she generally did not keep excessive amounts of money in the account, she believed the money she withdrew belonged to her. The Respondent's belief that any funds remaining in her IOLTA account must hav e belonged to her, is incons istent w ith the ev idence in this ca se. The settlement ch eck and P IP paymen ts for the Cla rk case w ere all deposited in the Re spon dent's trust acco unt d uring M ay, 2002. The settlement check was deposited on May 15, 2002, and all PIP benefits were deposited by May 28, 2002. The re spondent testified that, within two to three weeks of disbursing the proceeds from the settlement, Ms. Clark directed her not to pay medical providers (T. 29 , lines 17-25). Petitioner: And yo u recall th at Ms. C lark told you, at least at some point, not to pay the providers? Resp onden t: Yes, I d o. Petitioner: And isn't it true that she told you that roughly at the time that you disbursed money to her in settlement of the case? Resp onden t: It was a fter that, a fter the d isburse ment. Petitioner: How long after? Resp onden t: Maybe two or three w eeks late r. -12- The disbursement of the proceeds from the settlement was made on May 20, 2002. The PIP checks were deposited after that. Three weeks after paying the proceeds from the settlement would have been sometime during the second week of June, 2002. It was at that time that the Respondent learned that Ms. Clark did not want the Respondent to pay some of the medical providers. Ms. Clark and the Responden t both knew there was approximately four thousand, one hundred and thirty-seven dollars and ten cents ($4,137.10) in PIP funds held in the Respondent's trust account. Those funds were the subject of the discussion between the Respondent and Ms. Clark to refrain, at that time, from paying certain medical benefits. For the Respondent to say that she was under the belief that any money remaining in the account would have been my fees boggles the mind. Especially when she just had a conversation with her client who told her no t to pay medical providers from the PIP fees, which the Respondent was th en hold ing in h er trust ac count. By the end of May, 2002, the Respondent had already paid herself more fees from the Clark case than she was entitled. During June, 2002, the same time that she is having the discussion with Ms. Clark about not paying some medical providers with fees from the trust acco unt, the Responden t withdraws twen ty four hundred dollars ($2,400.00) from that account. The Respondent had already taken her fee for settling the Clark case. Having just dis cussed w ith Ms. C lark her des ire to refrain, at least temporarily, from paying certain medical bills (T. 55, lines 2-13- 25), the Respondent knew that she was holding, in her trust account, monies that would eventu ally be paid to medical providers or surrendered to her clients. The Court finds as a matter of fact that the Respondent knew that she was m isappro priating funds that we re held in her trust accou nt. The Respondent testified that her full-time position was affecting her ability to maintain a private practice (T .52, lines 1-4). She also testified that she was exp eriencing p rofessiona l stress; felt that she was overwhelmed because of the demands of her full-time job. She also claimed to have physical issues; hypertension and an in jured leg (T .61). The Court does not believe that the Respondent has proven, by a preponderance of the evidence, that these factors are mitig ating pu rsuant to Marylan d Rule 16-75 7(b). In October, 2002, when the outstanding medical bills from the C lark case needed to be paid , there were insufficient funds in the Respondent's trust account to satisfy those bills. In order to pay those medical bills, the Respondent testified that she relied on a fee generated by a legal matter she handled for her mother on behalf of a family member. On October 10, 2002, Respondent deposited, into her attorney trust account, a four thousand dollar ($4,000.00) money order (Petitioner exhibit 1, sub-exhibit 8, page 27) provid ed by Be rnice C herry, Re spond ent's mo ther (T. 3 4, lines 3 -14). The Respondent testified that she was una ware that it was imp roper to place a fee into her attorney trust account (T. 34, lines 12-19). -14- The Respondent admits that, but for the four thousand dollars ($4,000.00) received from Bernice C herry, she wo uld have been unable to pay the outstanding medical bills due from the Clark case (T. 36, lines 5-13). The court finds, as a fact, that the Respondent failed to maintain funds in trust for the payment of medical providers, and that she used her personal funds to pay those providers when the bills became due. The Petitioner asserts that the Respondent took a fee greater than that to which she was entitled and that she failed to reimburse to her clients amounts to which she was not entitled (¶ 12). The evidence reveals that the Respondent was entitled to a total fee of $3,663.00 (Petitioner's exhibit 1, subexhibits 1-3; and T. 16, lines 16-17). As a fee the Respondent received $1,731.60 for s ettlin g M ary Clark's claim and $965.70 per client for settling the claims for Ebony Kelly and Rashaad Kelly. From the Clark case trust account, the Respondent w ithdrew $ 4,225.00 in May 200 2 and $2 ,400.00 in June 2002 (T . 17-18; Pe titioner's exhibit 1 , sub-exhib it 8, and Petitio ner's exhibit 2 ). On June 17, 2002,2 the Respondent wrote a check, in the amount of $400, made out to cash (¶ 15), a violation of Maryland Rule 16-609. As a result of Respondent s withdrawal of monies from her attorney trust account in excess fees due her, she was forced to pay medical providers with funds she received from her mother, a person not associated with the Clark case (¶ 13). The Court finds as a fact that the Respondent took an amount of money greater -15- than that to which she was entitled, and that she failed to reimburse to her clients' am ounts to which she w as not e ntitled. There seems to be no dispute that once Ms. Clark filed her complain t, the Respondent paid the outstanding medical bills (T. 64, line 20-22). The Respondent also testified that, since the complaint was filed, she has taken remedial action to co rrect her errors . She still has a p rivate practice with a few cases pending. However, she has taken steps to have other counsel step in to represent her clients should the results of this proceeding prevent her from doing so (T. pgs. 65-6 6). Petitioner alleges, and the Court finds as fact, that the Respondent willfully and knowingly misappropriated and used for her own business and/or person al use, th e fund s of he r clients (¶ 14). 2 The check was written on June 15th and posted on June 17th 2002. CONCLUSIONS OF LAW The Petitioner alleged that the Respondent committed professional misconduct in violation of Maryland Rule 16-701(I), as delineated in the complaint of Mary Emma Clark. Pursuant to the facts of said complaint, and the findings of fact laid forth above, this Court finds that Respon dent did commit Professional Misconduct in violation of Maryland Rule 16-701(I). -16- Furthermore, Petitioner represents and charges that, by her actions and omissions as set forth above, the Respondent unethically and unprofe ssionally violated certain R ules of Profe ssional C onduc t. 1. The Petitioner alleges tha t the R espon dent v iolated Rule 1 .1 - Competence, which states a lawyer shall provide co mpetent re presentation to a client. Competent represen tation requires the lega l knowled ge, skill, thoroughness and preparation reasonably necessary for the representation . The comment to that rule suggests that the court consider: whether a lawyer emp loys the requisite k nowled ge and sk ill in a particular matter, relevant factors including the relative com plexity and specialized nature o f the matter, the lawyer's general experience, the lawyer's training and experience in the field in question. The basis for the Petitioner's allegations is that the Respon dent intention ally converted c lient funds to her own use. T here is no suggestion or evidence that the Respondent did not handle the subject matter of the action, an automob ile tort, with lawyerly sk ill and ab ility. This Court finds that the Respondent did not violate Rule 1.1. 2. The Petitioner alleges that the Respondent violated Rule 1.3 - Diligence, which states: A lawyer shall act with reasonable diligence and promptness in representing a client. Among other things, a lawyer should act with commitment and dedication to the interests of the client and with zeal in advocacy upon the client's beha lf. Ms. C lark directed the Respo ndent to -17- refrain from paying some of the medical providers. She alleged that some of the medical providers may have been compensated by other insurance and directed the Respondent not to pay those providers. The circumstance, which spawned Ms. Clar k's complain t, was the R esponde nt's failure to pay medical expenses for which Ms. Clark was receiving delinquency notices. Ms. Clark was getting stressed about the fact that letters were coming to her from collection agencies for unpaid bills. (Petitioner's sub-exhibit 5, Respondent's October 15, 2002 letter to Bar C ounse l, pg. 2, 2 nd paragraph). It is clear from the reasonable inferences which can be drawn from the evidence in this case, that prior to Ms. Clark's complaint to Bar Counsel, there were insufficient funds in the Responde nt's escrow account fro m the Clark case to satisfy outstanding claims for reimbursement by certain medical providers. On one hand, the Respondent was complying with her client's wishes in not surrendering payment to certain medical providers. However, if on or about October 1, 2002, Ms. Clark had directed the Respondent to pay the outstanding medical providers, the Respondent would have been unable to do so because she had converted to her own us e funds w hich shou ld have be en held in trust from the Clark case. This Court finds by clear and convincing evidence that th e Resp onde nt did v iolate R ule 1.3 . 3. The Petitioner alleges that the Responde nt viola ted R ule 1.4 - Comm unication, w hich states: -18- (a) a lawyer shall k eep a client re asonably info rmed abo ut the status of a matter a nd prom ptly comply with reasonab le requests for info rmation . (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regard ing the r eprese ntation. The Respondent kept Ms. Clark well informed concerning the subject matter of the c ase. The Respondent filed for PIP benefits in the matter, communicated with Ms. Clark about the settlement offer and prepared and executed settlement sheets (Petitioner's sub-ex hibit 1-3), wh ich her clients signed. There is nothing in the evidence to suggest that the Respo ndent did not keep her clients informed about the status of their cases or did not provide them with the necessary information to make informed decisions about the subject matter of the cases. This Court finds that the Respondent did not violate Rule 1.4. 4. The Petitioner alleges that the Respondent violated Rule 1.5 - Fees, wh ich states that: (a) a lawyer's fee shall be reasonable. The factors to be considered in determin ing the reasonableness of a fee include the follow ing: (1) the time and labor required, the novelty and difficulty of the questions involved, a nd the skill req uisite to perfo rm the legal service pro perly; (2) the likelih ood, if a pparen t to the clie nt, that the acceptance of the particular e mploymen t will preclud e other em ployment by the lawyer; (3) the fee customarily charged in th e locality for similar legal services; (4) the amount involved and the results obtained; -19- (5) the time limitations imposed by the client of by the circumstan ces; (6) the nature and length of the professional relationsh ip with the client; (7) the experience, reputation, and a bility of the lawyer or lawyers performing the services; and (8) wheth er the fee is f ixed or con tingent. The Respon dent know ingly violated this r ule by taking for herself a fee greater than that which she had agreed upon. The Respon dent agree d to accept 33.3% of the settlement proceeds. The settlement totaled $11,000.00. The Respondent was entitled to a f ee of three tho usan d, six hundred and sixtythree dollars ($3,663.00) (Petitioner's sub-exhibit 1-3, personal injury settlement sheets). The Respondent received and deposited the $11,000.00 settlement check on M ay 15, 20 02. Prio r to that d eposit, there was only $41.73 in the Respondent's escrow account. From that account the Respondent wrote the f ollowing checks: Date Written Check # Payee - description Amount Balance from settlement check 5-12-02 235 Respondent-reimbursement $ 150.00 $10,891.73 5-18-02 233 Ms. Clar k-Rasha ad Kelly $1,934.30 $ 8,957.43 5-18-02 234 Ms. Clar k-Ebon y Kelly $1,934.30 $ 7,023.13 5-18-02 232 Mary Clark $3,468.40 $ 3,554.73 5-18-02 236 Ada Cherry-Mahoi $2,000.00 $ 1,554.73 5-20-02 238 Ada Cherry-Mahoi $ 975.00 $ -20- 579.73 5-28-02 239 Ada Cherry-Mahoi $ 500.00 $ 79.73 By May 18 , 2002, the parties in the Clark case had been fully compensated from the settlement proceeds. On the memo line of checks 236 and 238 made payable to the Respondent, she wrote Comp-P.I. On May 28, 2002 the Respondent wrote herself a check (# 239) for fees in the amount of $500.00. On the memo line of that check she wrote P.I. Comp. At that time, the Respondent had only $18 8.00 rema ining in fee s left to be w ithdrawn for her work on the Clark case. Thereafter the Respondent received PIP checks from GEIC O. Date Received Total PIP received for: Amount Account Balance 5-24-02 Rashaad Kelly $1,086.75 $1,666.48 5-24-02 Mary Clark $1,621.00 $3,287.48 5-24-02 Ebony K elly $1,312.00 $4,599.48 On May 28, 2002, the Respondent wrote a check (#240) payable to herself for three hundred dollars ($300.00) which at that point represented one hundred and twelve dollars ($112.00) more than she was e ntitled to take. Two days later on M ay 30, 2002, th e Respo ndent w rote check 241 payable to herself for three hundred dollars ($300.00). The next day, May 31, 2002, she wrote herself a one th ousan d dollar s ($1,00 0.00) ch eck (#2 42). Check numbers 240 through and including 242 had no notations on the memo line. -21- At that t ime t he only fu nds i n the Respondent's escrow account, other than $41.73, were from the C lark case. Within two weeks of receiving the eleven thousand dollar ($11,000.00) settlement check, and within one week of receiving the first PIP payments, the Respondent had withdrawn five thousand seventy-five dollars ($5,075.00) which was fourteen hundred and twelve dollars ($1,412.00) more than she was entitled. By June 3, 2002, two and one half weeks after receiving the settlement check, the account balance for the Clark case, which was the only escrow account the Respondent was managing, was two thou sand, six hu ndred an d sixteen do llars and eigh ty-three cents ($2,616.83). The Respondent continued to withdraw funds from her escrow accou nt in wh ich there were n o depo sits othe r than fr om the Clark c ase. Date Written Check # Payee - description Amount Clark Balance 5-31-02 242 Ada Cherry-Mahoi $1,000.00 $3,575.10 6-4-02 243 Ada Cherry-Mahoi $ 250.00 $2,366.83 6-12-02 244 Ada Cherry-Mahoi $ 350.00 $2,016.83 6-15-02 246 Cash $ 400.00 $1,616.81 6-20-02 247 Ada Cherry-Mahoi $ 200.00 $1,416.81 6-26-02 248 Ada Cherry-Mahoi $ 200.00 $1,316.81 7-2-02 249 Ada Cherry-Mahoi $ 500.00 $ 816.81 7-2-02 250 Affiliated Premium Finance $ 210.08 $ 606.73 Between the time the settlement check and P IP payments were deposited, and when Respondent eventually paid the medical providers, she -22- withdrew and paid herself a total of six thousand, six hundred and twenty-five dollars ($6,625.00) which was two thousand, nine hundred and sixty-two dollars ($2,962.00) more than to which she was entitled. Because the Respondent took more fees than she had agreed upon, and by failing to inform her clients' of her w ithdrawal o f those add itional fee s, the Court finds by clear and convincing evidence that, the Respondent did violate Rule 1.5. 5. The Petitioner alleges that the Respond ent violated Rule 1.15 - the Safek eeping of Property, states tha t: (a) A lawyer sh all hold property of clients or third personal that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kep t in a separate ac count ma intained pu rsuant to Title 16, Chapter 600 of the Maryland Rules. Other property 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 pres erved for a period of five years after termina tion of th e repres entation . (b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or agreement w ith the client, a law yer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full ac countin g regar ding su ch prop erty. When holding property for a c lient, including money, a lawyer acts as a fiduciary. Money must be placed in an appropriate trust account or accounts if more than one account is warranted. The Responden t claimed tha t she did not know that it was improper to commingle fees with her escrow account, -23- nevertheless she did commingle funds. The evidence is that, on or about October 10, 2002, the Respondent receive d, from her mo ther Be rnice C herry, a fee of $4,000.00, in the form of a money order. The Respondent deposited that amou nt into her trus t account, thereby commingling it with the funds from the Clark case. At that time, the Clark funds in the trust account had been depleted to approximately two hundr ed and twenty-f ive dolla rs ($22 5.00). On July 9, 2002, the Respond ent deposited sixty-one hundre d dollars ($6,100.00) into her escrow account. That sum was for the settlement of a personal injury case she handled for her husband Kenneth Mahoi (T. 35, lines 12-24 ). Petitioner: did you have a fee with your husband? Respo ndent: Well, because it was my husband, what he had said was we would use the money to pay necessary expenses. It wasn't as if I said I will charge your thirty-three percent and a third. It was whatever we recover. Petitioner: But you did the work? Respondent: Yes I did the work. Petitioner: So any fee associated with that would be with in the sixtyone hun dred, is that righ t? Respo ndent: Rig ht. -24- The sequencing o f the check s written afte r receiving th e Kenn eth Maho i settlement is as follows: Date posted Check # Payee-description Amount Settlement check deposited 7-9-02 Kenneth Mahoi Settlement Balance $6,100 7-9-02 252 EZ Storage $ 98.00 $6,002 7-9-02 253 Ada Cherry-Mahoi $ 200.00 $5,802 7-11-02 254 Ada Cherry-Mahoi $2,200.00 $3,602 7-11-02 255 Ada Cherry-Mahoi $1,900.00 $1,702 7-15-02 256 Kenneth Mahoi $ 800.00 $ 902 7-22-02 257 Ada Cherry-Mahoi $ 600.00 $ 302 7-23-02 258 Ada Cherry-Mahoi $ 300.00 $ 2 The Respondent testified that the recovery from the Kenneth Mahoi personal injury case was income to the Respondent and her husband we [empha sis added] would use the money to pay necessary expenses. Because those funds were personal funds, they sh ould not h ave been commin gled with other funds in th e escrow account. The funds rela ted to the C lark case, sho uld have been kept in a properly labeled attorney trust account, and not commingled with any personal funds belonging to the Respondent. The Respondent failed to keep funds in a separate account pursuant to Title 16, Chapter 600 of the M aryland R ules. The Court finds by clear and convincing evidence that the Respondent did violate Rule 1.15. -25- Subsection (b) of Rule 1.15 requ ires a lawyer to prom ptly deliver to a party or third person, any funds that the client or third person is entitled to receive. The Re sponden t testified that afte r receiving th e PIP che cks in May of 2002, Ms. Clark directed her to withhold paying certain medical expenses because those expenses may have been covered by other health insurance policies (T. 31, lines 7-20). The total PIP benefits received in the Clark case were $4,137.10. By the end of September, 2002, the Respondent had taken $2,962.00 more than she w as entitled to from the Clark c ase. In the beginning of October, 2002, when the outstanding medica l providers needed to be paid, there were insufficient funds from the C lark trust account to satisfy those bills. It was at that time that the Respondent's mother paid a fee for some undisclosed type of legal w ork previo usly complete d. It is more tha n a little suspicious that the allege d fee of f our thousa nd dollars ($4,000.00) was infused into the Respondent's trust account at a time she needed to pay three thousand, one hundred and eighty-nine dollars and thirty-five cents ($3,189.35) in outstanding medical bills (T.36, lines 14-17). The Respondent does not deny that but for the m oney order fr om her m other, she w ould have had insufficient funds in the trust account to pay the outstanding medical expenses (T. 16, lines 9-13). Because the Respondent had depleted the funds from the Clark case, which should ha ve been h eld in trust, she was u nable to pay the medical bills when Ms. Clark requested her to do so. Because the -26- Respondent was una ble to prom ptly deliver to the medical provide rs that to which they were entitled, the Court finds by clear and convincing evidence that the Respondent did violate Rule 1.15. 6. The Petitioner alleges that the Respondent violated Rule 1.16 - Declining or Termin ating Rep resentation, w hich states, in re levant part: c) Upon termina tion of r eprese ntation, a lawyer shall take steps to the extent rea sonably practicable to protect a client's interest, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and prop erty to which the client is entitled and refunding any advance payment of fee that has not been earned. T he lawyer m ay retain papers relating to the client to the extent permitted by other law. The Respondent did not protect her client's interest when she converted funds from th e Clark case to h er own use. Therefore, the Court finds by clear and con vincing evidenc e that the Resp ondent did v iolate Rule 1.16. 7. The Petitioner alleges that the Resp onde nt viola ted R ule 8.1 - Bar Admission and Disciplinary Matters, which states: An applicant f or adm ission o r reinstate ment to the bar, or a lawyer in connec tion with a b ar admission application o r in connection with a discip linary matter, shall not: (a ) knowin gly make a false s tateme nt of m aterial fa ct. In her answer to the Petition for Disciplinary or Remedial Action, the Respondent denies labeling her trust accou nt as an IOLT A account (¶ 6 ). At the hearing , the Respo ndent did not dispute that her trust account was -27- labeled IOLTA. She relied on bank personnel to properly title the account (T .43). Having been made aware of her error, the Respondent has closed her IOLTA account and reopened an account that is properly titled attorney escrow account (T.66, 17 lines 10-11). The Co urt finds that the Respondent was woefully uninformed about properly establishing and labeling an attorney trust account, but does not believe that she intentionally made a false statement when she initially denied mislabeling her escrow account. The Respondent denies that she failed to maintain funds in trust for the payment of medical providers prior to the payment of those p roviders (¶ 11). She denies taking a greater fee than that to which she was entitled (¶ 12) and she d enies willfu lly misappropriating funds (¶ 14). She also claims that she was unaware that it was im proper to com mingle fees w ith trust ac count f unds. There was only forty-one dollars and thirty seven cen ts ($41.37) in her trust account at the time the R espondent depo sited the funds from th e Clark case into that account. The Respondent's fee for her services in the Clark case was three thousand, six hundred and six ty three dollars ($3,663.00 ). The only funds deposited in her escrow account up to June 20, 20023 were derived from the Clark c ase. As of that date there was no other source of funds in her trust account other than fro m the C lark cas e. By June 20, 2002, she had withdrawn and made payable to herself a total of five thousand , four hun dred and fifty dollars ($5,450.00) which was one thousand seven hundred and eighty-seven -28- dollars ( $1,787 ) more t han the fee she agreed upon. On that day, had M s. Clark dir ected the Respondent to pay the outstanding medical providers there would h ave been insufficien t funds to do so. The Respondent admitted that she was winding down her civil practice and testified that she was not reconciling her trust account (T. 46, lines 24-25 and T. 48, lines 5-10). During the months of May and June 2002, with the exception of one hundre d dollars ($100.00, see fo otnote 3), the Clark case was the only source of funds in the Respondent's trust account. Handling the funds in the Respo ndent's trust acc ount from the Clark case was not complicated. The Clark case was the single and sole contributor to the Respondent's trust 3 On June 20, 2002 the Responden t deposited one hun dred dollars ($100.00) small estate bond for Dexter Caruth. account. Yet, in a little over a month, May 15, 2002 to June 20, 2002 the Respondent had taken from the Clark trust account more money than to which she was entitled. The Court finds that the Respondent intentionally converted funds in excess of her fee to h er personal use. Hav ing done so, there w ere insufficient funds in the trust account to satisfy outstanding medical expenses. In her answ ers to the Petition for Disciplinary or Remedial Action, the Respondent denies paying medical providers with funds she received from a person or persons not associated with the Clark case. After receiving a -29- complaint from the P etitioner, on O ctober 10, 2 002, the R esponde nt deposits a four thousand dollar ($4,000.00) money order into her trust account. The Respondent testified that the money order was from her mother as a fee for doing some legal w ork . . . on behalf of my ne phew , her grandson (T. 34, lines 6-8). Th ere is no do ubt that, but for that contribution there would have been insufficient funds in the trust account to pay the outstanding medical expenses, related to the Clark case (T. 16 , lines 9-13). It is more than mere coincidence that the allege d four tho usand do llar ($4,000.0 0) fee paid my the Respondent's mother was infused into the trust account at a time when the Respondent needed to pay and subsequently did pay $3,189.35 in outstanding medical bills (T. 36, lines 14-17). The Respondent does not deny that, but for the deposit received from her mother, she would have had insufficient funds in the trust account to pay the outstanding Clark medical expenses (T. 16, lines 9-13). The Court finds that the Respondent intentionally obtained and used the contribution from her mother to pay for the delinquent m edical expenses, which could not be satisfied from the trust account because the Respondent had converted those funds to her own use. The Court finds that the Respondent knowingly and intentionally paid medical providers with her personal funds. The Court further finds that Respondent denied doing so and as such, that constituted an inte ntional misre presentation of material f act in connection with a disciplinary matter and therefore the Court finds by clear -30- and c onvin cing ev idence that th e Resp onde nt viola ted R ule 8.1 . 8. The Petitioner alleges th at the R espon dent v iolated Rule 8 .4 - Miscon duct, whic h states, in relev ant part: It is profession al miscond uct for a law yer to: (a) violate or attempt to violate the rules of profession al conduc t, knowin gly assist or induce another to do so, or do so through the acts of ano ther; (b) commit a criminal act th at reflects adversely on th e law yer's honesty, trustworthiness, or fitness as a lawyer in other respects; (c) engage in conduct involving dishonesty, fraud, deceit, or misreprese ntation; (d) engage in conduct that is prejudicial to the administration of justice. By finding that Respondent s actions were intentional, the Court necessarily finds th at she v iolated R ule 8.4, relating to Professional Misconduct. The testimony in the case revealed that Respondent knew what fees were owed to her as a result of the Clark case; she knew how much money she withdrew over the pe riod of time prior to paying the medical bills, and she knew that, when the time came to pay them, that there were insufficient funds in her attorney trust account to do so. At that time, Respondent inapprop riately deposited personal funds, not client trust funds, into her attorney trust account, for the purpose of covering the deficit and paying off the outstanding medical bills on behalf of Ms. Clark. Based on the above evidence and findin gs of fact, this Court finds by clear and convincing eviden ce that the R espon dent v iolated Rule 8 .4. -31- 9. The Petitioner alleges that the Respondent violated Maryland Rule 16-606 - Name and Designation of the Account, which states: An attorney or law firm shall maintain each attorney trust account with a title that includes the name of the attorney or law firm and that clearly designates the account as Attorney Trust Acco unt, Attorney Escrow Account, or Client's Funds Account on all checks and deposit slips. The title shall distinguish the account from any other fiduciary account that the attorney or law firm may maintain and from any personal or busine ss acco unt of th e attorne y or law f irm. Respondent titled her attorne y trust account a s an IOL TA acc ount. While she denies any intentional wrongdoing, the Court finds that the responsibility to properly designate the account, in accordance with this Rule, lay solely with Respondent. Therefore, by failing to designate the account as Attorney Trust Account, Attorney Escrow Account, or Client's Funds Acco unt, the Court finds by clear and convincing evidence that the Respondent Violated Maryland Rule 16-606. 10. The Petitioner alleges that the Respondent violated Maryland Rule 16-609 - Prohibited Transactio ns, which states: 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 on an attorney trust accou nt may no t be draw n payabl e to cash or to be arer. As explained in the abov e findings o f fact, Resp ondent ac ted in violation of this rule by withdrawing funds greater than the amount of the fee -32- owed to her. Not only d id the Respondent mislabel her Attorney Trust account, she took money from that account and misappropriated it for her own personal use. On June 17, 2002, the Respondent wrote and endorsed a check for cash (Petitioner's exhibit 1, sub-exhibit 8, page 14) (T. 7, line 25; page18, lines 1-4) . Her clie nts d id no t auth orize the Respondent's personal use of funds in excess of her fees, and writing a check for cash was also improp er. For the reasons stated h erein, the Court finds by clear and convincing evidence that the Respondent violated Maryland Rule 16-609. 11. The Petitioner alleges that the Respondent violated §10-306 by misusing trust money. Business Occupations and Professions Article, Maryland C ode, states: A lawyer may no t use trust money for any purpose other than the purpose for which the trust mon ey is entrusted to the lawyer. Upon consideration of the findings of facts stated herein, the Court finds by clear and c onvincing evidence that the Res ponden t intentionally converted to her own use money entrusted to her as an attorney in violation of §10-3 06 of th e Busin ess Oc cupatio ns and Profe ssions A rticle. STANDARD OF REVIEW In proceedin gs involvin g attorney discip line, this Cou rt has original a nd comp lete jurisdiction and conducts an independent review of the record . Attorney Grievan ce Comm n v. Zuckerman, 386 Md. 341, 363, 8 72 A.2d 693, 706 (2005); Attorn ey Grie vance Com m'n -33- v. James, 385 Md. 637 , 654, 843 A.2d 2 29, 239 (2005); Attorney Grievance Comm'n v. O Too le, 379 Md. 595, 604, 843 A .2d 50, 55 (2004). In our review of the record, the hearing judge s findings of fact gen erally will be accepted unless they are clearly erroneous. Attorney Grievance Comm 'n v. Gore, 380 M d. 455, 468, 8 45 A.2d 120 4, 1211 (2004); Attorney Grieva nce C omm 'n v. Potter, 380 Md. 12 8, 151, 844 A.2d 367, 380-381 (2 004). As to the hearing judge s conclusions of law, such as whether provisions of the MR PC were violated, our con sideratio n is essen tially de novo. Attorney Grievance Comm'n v. McLa ughlin, 372 Md. 467 , 493, 813 A.2d 1 145, 1160 (200 2). DISCUSSION The hearing judge found violations of MRPC 1.3, 1.5, 1.15(a) and (b), 1.16(d), 8.1, 8.4, Maryland Rules 16-606 and 16-609, and Section 10-306 of the Business Occupations and Professions Article and did not find violations of MRPC 1.1 and 1.4, as alleged by Bar Counse l.16 Both Petitioner and Respondent took exceptions to the hearing judge s findings, each of which we shall address. A. Petitioner s Exceptions to Findings of Fact and Conclusions of Law Bar Counse l in its Petition cha rged Res ponden t with a viola tion of Rule 8.1 for answering the complaint of Ms. Clark with correspondence which contained statements that were m isleading an d/or false b y indicating in he r correspon dence tha t, 16 We shall not discu ss the he aring ju dge s f inding s with re spect to Rules 1 .1 and 1 .4 because the judge found no violations of these Rules, to which Bar Counsel did not take exception. See Attorney G rievance C omm n v. Harris, 371 Md. 510, 517 n.6, 810 A.2d 457, 462 n.6 (2002 ). -34- she had maile d payments on behalf of her clients to the medical providers, ostensibly with checks drawn from escrow, which she should have maintained to make those payments. The Respondent failed to advise tha t the paymen ts were m ade only after an infusion of funds into her [trust] account from another independent source. The hearing judge, however, determined that Rule 8.1 had been violated based upon the Responden t s Answer to the Petition for Disciplinary or Reme dial Action filed in this C ourt. Bar Counsel has excepted to this finding, because no allegation was made, nor could be made, in the Petition th at Respon dent s An swer to that Peti tion wa s mislea ding. We susta in this excep tion. See Attorney Grievance Comm n v. Seiden, 373 Md. 409, 419, 818 A.2d 1108, 1114 (20 03) (sustainin g Bar C ounsel s ex ception to the hearing judge s findings w here Petitioner did not charge the Respondent for violations of the MRPC) (internal citations omitted ). B. Respondent s Exceptions to Findings of Fact and Conclusions of Law Respondent takes exception to the hearing judge s finding that she knowingly and willfully misappropriated funds held in her trust account by alleging that she was [mis take nly] under the b elief that any m oney remain ing in the ac count w ould have been [he r] fees and that she mismanaged the account, rather than purposefully misappropriated funds. The hearing jud ge found to the contrary and concluded that, the Respondent knew that she was misappropriating funds that were held in her trust account. The evidence adduced during the hearing clearly and convincingly established that the Respondent received a settlement check and personal injury protection (P IP) paymen ts -35- for the Clark case, the proceeds of which were deposited into her trust account. Respondent testified that, although she knew her fee for the Clark case was 33.3% of the settlement proceeds, which amou nted to $ 3,663.0 0, she withdrew $2,962.00 beyond the $3,663.00, even though she knew those monies were to be maintained for payment of various medical bills. The bank statements for the account re flect that Re sponden t wrote a m ultitude of ch ecks to herself and a che ck for cash on the escro w accou nt, totaling $6,625.00, between the time the settlement check and PIP payments were deposited and when Respondent paid the medical providers: Date Written Check # Payee - description Amount 5-15-02 235 Ada Cherry-Mahoi-Reimbursement $ 150.00 5-18-02 236 Ada Cherry-Mahoi $2,000.00 5-20-02 238 Ada Cherry-Mahoi $ 975.00 5-28-02 239 Ada Cherry-Mahoi $ 500.00 5-28-02 240 Ada Cherry-Mahoi $ 300.00 5-30-02 241 Ada Cherry-Mahoi $ 300.00 5-31-02 242 Ada Cherry-Mahoi $1,000.00 6-4-02 243 Ada Cherry-Mahoi $ 250.00 6-12-02 244 Ada Cherry-Mahoi $ 350.00 6-15-02 246 Cash $ 400.00 6-20-02 247 Ada Cherry-Mahoi $ 200.00 6-26-02 248 Ada Cherry-Mahoi-Reimbursement $ 200.00 Essen tially, Respon dent withd rew near ly double the a greed up on fee tha t she was entitled to receive, when funds should have been maintained in the trust account to pay the -36- medical providers, a nd used p ersonal fu nds to pay the o utstanding b ills only after Ms. Clark filed a complaint with Bar Counsel. Respondent also has admitted that the checks made payable to her from the account were used for . . . business and personal purposes. We, therefore, conclude that the hearing judge s findings that the Respondent knowingly and willfully misappropriated entrusted funds are supported by clear and convincing evidence and overrule Respondent s exception. C. Conclusions of Law The hearing judge determined that Respondent acted in violation of MRPC 1.15(a) when she deposited personal funds into her trust account, thereby comm ingling her client s funds with he r own . MRPC 1 .15(a) states: A lawyer shall ho ld property of clients or third persons tha t is in a lawyer's posses sion in con nection with a representation separate from the la wyer 's ow n pro perty. Funds sh all be kept in a separate ac count ma intained pu rsuant to Title 16, Chapter 600 of the Maryland Rules. Other property 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 termina tion of th e repres entation . On July 9, 2002, the Respondent deposited $6,100.00 into her trust account, which was for the settlement of a personal injury case that she had handled for her husband. During the hearing, the Respondent testified that the recovery from the case was income to her and her husba nd and that they would use the mone y to pay nec essary ex penses . Sub sequ ently, on October 10, 2002, the Respondent received a fee of $4,000 from her mother for legal -37- services performed on a matter unrelated to the Clark case, which she then deposited into her trust accou nt. On both occasions, Respondent commingled personal funds with monies from the Clar k cas e, which wer e in th e only trust account being maintained by the Respo ndent. As such, she failed to keep her personal funds in a separate account from her trust account in violat ion of M RPC 1.15(a) . See Zuckerman, 386 Md. at 370-71, 872 A.2d at 711-12. The hearing judge a lso con cluded that the R espon dent vio lated M RPC 1.15(b ) and 1.3 in her handling of the Clark matter when she failed to promptly pay medical providers. Respondent claims that Ms. Clark had directed Respondent to refrain from paying some of the medical providers because the bills already may have been paid. Nevertheless, as the hearing judge f ound, t here were insufficient funds in Respondent s escrow account to pay the outstanding claims by the me dical providers should M s. Clark have directed Respondent to do so, and that once the bills became due and Ms. Clark began receiving delinquency notices from the m edical providers, Respondent failed to promptly pay those outstanding bills. Whether Ms. Clark clearly directed payment of the bills, it is apparent that Respondent could not pay the providers from insufficient funds. We have previously held that an attorney who does not pay a client s debts from settlement funds violates Rule 1.15(b), which states: Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by ag reement w ith the client, a law yer shall promptly deliver to the client or third person any funds or other property that the client or third p erson is entitled to receive and, upon request by the client or third person, shall promptly render -38- a ful l accounting rega rding suc h pro perty. Zuckerman, 386 Md. at 369-70, 872 A.2d at 710; Attorney Grievance Comm n v. Stolartz, 379 M d. 387, 3 99-40 0, 842 A .2d 42, 4 9 (200 4). In addition, an attorney s failure to pay medical providers demonstrates a lack of diligence in violation o f Rule 1.3 , which state s that a lawyer s hall act with re asonable diligence and promptness in representing a client. Attorney Grievance Comm n v. Gallagher, 371 Md. 67 3, 710, 810 A.2d 996, 1018 (200 2). Because Respondent was una ble to promptly pay the medical providers the monies that they were entitled to receive, she violated both R ules 1.1 5(b) an d 1.3. The same behavior also violates Section 10-306 of the Business Occupations and Professions Article, which provides that [a] lawyer may not use trust money for any purpose other than the purpose for which the trust money is entrusted to the lawyer. Attorney Grievance Comm n v. Prichard, 386 Md. 238 , 246-47, 872 A .2d 81, 85-86 (200 5); Attorney Grievance Comm n v. Glenn, 341 Md. 448, 481-82, 671 A.2d 463, 479-80 (1996). We have held that funds withheld by an attorney from the settlement proceeds of a client for payment to third party medical providers constitutes trust money. Prichard, 386 Md. at 246, 872 A.2d a t 85. We agree with the hearing judge s conclusion that the Respondent violated MR PC 1.5 requiring a lawyer to charge reasonable fees and MRPC 1.16(d) requiring that a lawyer take reasonab le steps to prote ct a client s intere st. The Respondent was entitled to receive $3,663.00 for hand ling the Clar k matter, bu t withdrew $6,625.00 from her trust accoun t, -39- which at that time solely consisted of Clark s settlement p roceeds. N ot only did Respondent take subs tanti ally m ore fees than agreed upon, she failed to inform her client of her withdrawal of thos e additio nal fee s. We hav e previous ly held that ch arging an u nreasona ble fee and failing to communicate the basis for the fee con stitute violations of Rule 1 .5, as well as a violation of 1.16(d) by converting client funds and collecting an unearned fee. See Attorney Grievance Comm n v. Miliken, 348 M d. 486, 5 15, 704 A.2d 1 225, 12 39 (19 98). The evidence clearly and convincingly establishes that the Res ponden t also acted in violation of Maryland Rule 16-606 w hen sh e nam ed her a ttorney tru st accou nt IOL TA. Maryland Rule 16-606 states: An attorney or law firm shall maintain each attorney trust account with a title that includes the name of the attorney or law firm and that clearly designates the account as Attorney Trust Account , Attorney Escrow Account , or Clients Funds Account on all check s and dep osit slips. The title s hall distinguish the account from any other fiduciary account that the attorney or law firm may maintain and from any personal or busine ss acco unt of th e attorne y or law f irm. Respondent failed to title her attorney trust account in compliance with this Rule. See Attorney Grievance Comm n v. Blum, 373 Md. 275, 299, 818 A.2d 219, 234 (200 3); Attorney Grievan ce Com m n v. Be rnstein, 363 M d. 208, 2 21-22 , 768 A .2d 607 , 614 (2 001). Maryland Rule 16-609 provides in part that an attorney may not use any funds required by these Rules to be deposited in an attorney tru st accou nt . . . for any unauthorized purpo se. We hold that Respondent s knowing an d willful misuse of trust m oney for a purpose other than that for which the trust money was entrusted to her violates Rule 16-609. -40- See Prichard, 386 Md. at 246-47, 872 A.2d at 85-86; Glenn, 341 Md. at 481-82, 671 A.2d at 479-80. Respondent also violated Rule 16-609 when she w rote a check to cash from her trust account because [a]n instrument drawn on an attorney trust account may not be drawn payable to cash or to bearer. Bernstein , 363 M d at 223 , 768 A .2d at 61 5. Fina lly, Respon dent s intentional misappropriation of trust funds violates Rule 8.4, which sta tes in relevan t part: It is unprofessional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of an other; *** (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; (d) engage in conduct that is prejudicial to the administration of justice . . . . Because we have held that Respondent has violated several Rules of Professional Condu ct, she necessarily violated Rule 8.4(a) as well, which finds professional misconduct where a lawyer violates or attempts to violate the Rules of Professional Conduct. James, 385 M d. at 663, 87 0 A.2d a t 245; Gallagher, 371 M d. at 712 , 810 A .2d at 10 13. This Court consistently has found an attorney s misappropriation of client fun ds to violate MRPC 8.4(c). James, 385 Md. at 66 4-65, 870 A.2d at 24 5; Gallagher, 371 Md. at 713, 810 A.2 d at 1020; Attorney Grievance Comm n v. Snyder, 368 Md. 242, 793 A.2d 515 (2002); Attorney Grievance Comm n Vanderlinde, 364 Md. 376, 381, 773 A.2d 463, 466 (2001); Attorney Grievance Comm n v. Sheridan, 357 Md. 1, 741 A.2d 1143 (1 999); Attorney Grievan ce Com m n v. H ollis, 347 Md. 547, 702 A.2d 223 (1997). In this case, -41- Responden t s conduct w as dishone st and dece itful in violation of Rule 8.4(c) in that she willfull y and kn owing ly misapp ropriate d client f unds th at were to be he ld in trus t. This Court also has found conduct constituting the misappropriation of client or third party funds to b e prejudic ial to the adm inistratio n of jus tice in v iolation of Ru le 8.4(d ). See Zuckerman, 386 Md. at 374-75, 872 A.2d at 713; James, 385 Md. at 663, 870 A.2d at 245; Attorney Grievance Comm n v. Brown, 380 M d. 661, 8 46 A.2d 428 (2004 ); Attorney Grievance Comm n v. Som erville, 379 Md. 586, 593 , 842 A.2d 811 , 815 (2003); Gallagher, 371 Md. at 713, 810 A.2d at 10 20; Attorney Grievance Comm n v. Santos, 370 Md. 77, 803 A.2d 505 (200 2); Attorney Grievan ce Com m n v. Po well, 369 Md. 462, 800 A.2d 782 (2002); Attorney Grievance Comm n v. McCoy, 369 M d. 226, 798 A.2d 11 32 (2002 ); Snyder, 368 Md. at 242, 793 A.2d at 515; Vanderlinde, 364 M d. at 381, 77 3 A.2d a t 466; Sheridan, 357 Md. at 1, 741 A.2d at 1143; Hollis, 347 Md. at 547, 702 A.2d at 223. We have recognized that public confidence in the legal profession is a critical facet to the proper administration of justice and conduct that negatively impacts on the public s image or the perception of the courts or the legal profession violates Rule 8.4(d). Attorney G rievance C omm n v. Sheinbe in, 372 Md. 224, 252-53 n.16, 812 A.2d 981, 996 n.16 (2002), quoting Attorney Grievance Comm n v. Richardson, 350 Md. 354, 368, 712 A.2d 525, 532 (1998 ). Respondent s misconduct in handling her trust account was harmful to the legal profession because her behavior undermines the pu blic s confiden ce that attorne ys properly will maintain entrusted funds as expecte d and req uired und er the Rule s. As such and cons istent with this Court s well-established preceden t, we hold th at Respon dent violated Rule 8.4(d ) by engaging in -42- behavior that was prejudicial to the administration of justice. SANCTIONS As this Court recently stated in Attorney Grievance Comm n Zuckerman, 386 Md. at 375, 872 A.2d at 713, the appropriate sanction for a violation of the Rules of Professional Conduct depends on the facts and circumstances of each case, including consideration of any mitigating factors . Attorney Grievance Comm n v. Awuah, 374 Md. 505, 526, 823 A.2d 651, 663 (2003); Attorney G rievance C omm n v. McC lain, 373 Md. 196, 211, 817 A.2d 218, 227 (2003). Primarily, we se ek to prote ct the public, to deter othe r lawyers from engaging in violations of the Maryland Rules of Professional Conduct, and to maintain the integrity of the legal pro fession . Awuah, 374 Md. at 526, 823 A.2d at 663 (quoting Blum, 373 Md. at 303, 818 A.2d at 236). To achieve the goal of protecting the public, we impose a sanction that is commensurate with the nature and gravity of the violations and the intent with which they were committed. Id. Petitioner has recommended a sanction of disbarme nt, while R esponde nt represen ts that she only should be suspended. Although the hearing judge did not find any mitigation, the Respondent offers in support of her recommendation of suspension that she has no prior disciplinary record and that she has fully cooperated with Bar Counsel throughout these proceedings. She also submits tha t she wa s overwh elmed at the time of this in cident and has taken corrective measures by properly labeling her trust account and limiting her private practice . Respondent has violated MRPC 1.3, 1.5, 1.15(a) and (b), 1.16(d), Maryland Rules 16-43- 606 and 16-609 and Section 10-306 of the Business Occupations and Professions Article, although it is the violation of Rule 8.4, S ections (c) an d (d), that com pels this Court to agree with Bar Co unsel that disb arment is the appropriate sanction. We have often stated that the misappropriation of entrusted funds is an act infec ted with de ceit and dishonesty, and, in the absence of compelling extenuatin g circums tances justifying a lesser sanc tion, will result in disbarm ent. James, 385 Md. at 666, 870 A.2d at 245; Prichard, 386 Md. at 238, 872 A.2d at 81; Attorney Grievance Comm n v. Sperling, 380 Md. 180, 191-92, 844 A.2d 397, 404 (2004); Attorney G rievance C omm n v. Smith, 376 Md. 202, 238, 829 A.2d 567, 588-89 (2003); Attorney Grievance Comm n v. Spery, 371 Md. 560, 568, 810 A.2d 487, 491-92 (2002); Vanderlinde, 364 Md. at 410, 773 A.2d at 483. Such a sanction is warranted because attorneys must remember that the en trustment to them of the money and property of others involves a responsibility of the highest order. They must carefully administer and account for those funds. Appropriating any part of those funds to their own use and benefit without clear authority to do so cannot be tolerated. Attorney Grievance Comm n v. Owrutsky, 322 M d. 334, 3 45, 587 A.2d 5 11, 516 (1991 ). The hearing co urt s finding s and con clusions esta blish that the R esponde nt acted willfully and intentionally when she depleted the funds that were su pposed to be held in trust for her client, which act was d ishonest an d harmfu l to the legal profession. In light of these findings, the appropriate sanction fo r the Resp ondent s c onduct is d isbarmen t. IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY THE CLERK OF THIS COURT, INCLUDING -44- COSTS OF ALL TRAN SCRIP TS, PURSUANT TO MA RYLAN D RULE 16715(c), FOR WHICH SUM JU DGM ENT IS ENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMMISSION. -45- IN THE COURT OF APPEALS OF MARYLAND Misc. Docket AG No. 45 September Term, 2004 ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. ADA ELIZABETH CHERRY-MAHOI Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. Dissenting Opinion by Bell, C.J. Filed: July 21, 2005 Bell, C.J. I would impose a period of suspension. -4-

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