Attorney Grievance v. Cappell

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Attorney Grievance Commission of Maryland v. Robert E. Cappell Misc. Docket AG No. 55, September Term, 2004 HEADNOTE Conditional Diversion Agreements may be appropriate in situations where there are allegations that an attorney s misconduct was not solely the result of wilful and dishonest conduct. Bar Counsel and the Attorney Grievance Commission have the discretion to enter into Conditional Diversion Agreements where there is competent evidence presented that an attorney s misconduct was not solely the result of wilful or intentionally dishonest acts. In the Circu it Court for P rince Geo rge s Cou nty Case No. AG 55-04 IN THE COURT OF APPEALS OF MARYLAND Misc. Docket AG No. 55 September Term, 2004 ____________________________________ ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. ROBERT E. CAPPELL ____________________________________ Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. ____________________________________ Opinion by Greene, J. ____________________________________ Filed: November 15, 2005 The Attorney Grievance Commission, through Bar Counsel and in con formanc e with Maryland Rule 16-7 51, filed a Petition for Disciplinary or Remedial Action against responde nt, Robert E. Cappell, alleging violations of the Maryland Rules of Professional Conduct (MRPC ) 1.15(a), (b), and (c) (Safekeepin g Property), 1 and 8.4(b), (c), and (d) 1 Rule 1.15 provides: (a) A lawyer sh all hold prop erty of clients or th ird persons that is in a lawyer s possession in connection with a representation separate from the lawyer s ow n property. Fu nds shall 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. Comp lete records of such account funds and of other property shall be kept by the lawyer an d shall be preserved for a period of five years after termination of the representation. * * * * (d) Upon receiving funds or other property 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 clien t, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third p erson is entitled to receiv e and, u pon req uest by the client or third pe rson, shall prom ptly re nder a fu ll acc ounting rega rding suc h pro perty. (e) When in the course of representation a lawyer is in possession of property in which two or more persons (one of whom may be the lawyer) claim interests, the property shall be kept separa te by the lawyer until the dispute is resolved. T he lawyer sh all promptly distribute all portions of the property as to which the interests are not in dispute. * * * * (Misconduct). 2 We referred the petition to Judge Cathy H. Serrette, of the Circuit Court for Prince George s County, to conduct a hearing and submit to this Court her proposed findings of fact and conclusions of law. Judge Serrette con ducted a h earing on A pril 5, 2005, and on May 9, 2005, submitted her findings and conclusions. She concluded that respondent had violated MRPC 1.15(a), (b), (c), 8.4(b) , (c), a nd (d ). Wi th regard to mitiga tion, Jud ge Serrette fo und, by a preponderance of the evidence, that Mr. Cappell was suffering from a major depressive disorder at the time of the miscon duct, with a secon dary diag nosis o f perso nality diso rder. She further found that, [a]lthough Mr. Cappell understood the w rongfulness of his b ehavior, but for his illness, Mr. Cappell would not have committed the misconduct, his illness having 2 Rule 8.4 p rovides in re levant part: * * * * It is professional misconduct for a lawyer to: * * * * (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. * * * 2 * been the root cause of his wrongdoing. Neither petitioner nor respondent filed exceptions to the jud ge s fin dings o r conclu sions o f law. BACKGROUND The fac ts of this case are not in dispute. Respondent was admitted to the District of Columb ia Bar on June 16, 1980, the Maryland Bar on June 4, 1986, and the Virginia Bar in 1992. In addition to his Juris Doctor s degree, he holds a Masters of Law de gree in taxation from Georgetown University Law School. W hile attending u ndergrad uate schoo l, during his sophomore year, he became ill and was diagnosed with and treated for Hodgkin s disease.3 He married into a wea lthy family in 1987 and appa rently had diff iculty trying to provide his wife w ith a comfortable standard of living. In 1993, his wife requested that he move out. She divorced Mr. Cap pell in 1995 . In 1997, he began a ro mantic relatio nship with a woman he had met through his church. At the request of his new la dy friend, M r. Cappell obtained a life insurance policy and named her a s the benefic iary. As part of the process to obtain life insurance, Mr. Cap pell was tes ted and lear ned that he was infe cted with H epatitis C,4 his second potentially-fatal illness. Upon receiving that diagnosis, he obtained medical 3 Hodgkin s disease is an alternative name for lymph oma [cancer o f the lymph nodes], which is [m]arked by chronic enlargement of the lymph nodes, often local at the onset and later generalized, together with enlargement of the spleen and often the liver, . . . and commo nly anemia and continuous or remittent . . . fever. Stedman s Medical Dictionary 516 (27th ed. 2000). 4 Hepatitis C is characterized as, [i]nflammation of the liver, due usually to viral (contin ued...) 3 treatment and took daily shots of interferon.5 The hearing judge found that respondent lost his health in suranc e [cov erage], . . . [sought trea tment at] a ho meless she lter clinic [but only obtained] enough medication for a period of five month s. Instead of taking the medication, Mr. Cappell prayed for his health to improve. Unable to pay for his own medical necessities, nonetheless, Mr. Cappell managed to pay for groceries and rent for his lady friend and her two children. That relationship, however, ended abruptly when another man moved in with Mr. Cappell s girlfriend, and she and the new gentleman friend decided to get married. Thereafter, Mr. Cappell moved out of his apartment. The hearing judge further fou nd that, in February 1999, [Mr. Cappell] suffered paralysis of the right side of his face and was diagnosed with Bell s [P]alsy. 6 In addition, the hearing judge found that rather than pursue further diagnostic te sting or me dical care, [Mr. Cappell] stayed home for several months during which time he took folic acid and antibiotics as his only form of treatment. 4 (...continued) infection, and sometimes to toxic agents. Stedman s Medical Dictionary 808 (27th ed. 2000). Hepatitis C is the principal form of transfusion-induced hepatitis, a chronic active form that often develops. See id. Acute inf ection with hepatitis B o r C has a h igher mor tality rate than hepatitis A. See id. 5 Medication to induce enzymes, suppress cell proliferation, inhibit viral proliferation, enhance the phagocytic activity of macrophases, and augment the cytotoxic activity of T lymphocytes. Alpha interferons are used in the treatment of chronic . . . hepatitis C, leukemias, [and] malignant melanoma . . . . Stedman s Medical Dictionary 911 (27th ed. 2000). 6 Bell s Palsy cau ses, [p]ares is or paralysis, usually unilateral, of the facial muscles, caused by dysfunction of the 7 th cranial nerv e; probably du e to a viral infe ction; usually demyelinating in type. Stedman s Medical Dictionary 1301 (27th ed. 2000). 4 In 1997, he began experiencing sleep disturbances and other depression symptoms. Mr. Cappell believed he would die from the Hepatitis C infection. Although he did not follow throug h with m edical tre atmen t, Mr. C appell in dicated that, he believed that God was punishing him and that God would save him. At times, according to Mr. Ca ppell, [h]e f elt anxious and agitated and contemplated suicide on a number of occasions. Respondent did not seek psychiatric or psychological assistance of any type. Instead, Mr. Cappell stated that he, talked to an elder at his church and to God. His church directed him to pray . . . . The professional conduct which gave rise to disciplinary charges in W ashing ton, D.C ., Virginia, and Maryland began in 1998. A $7,000 check from the Hartford Insurance Com pany, payable to respondent and his client Ernest Tyrone Williams was deposited by respondent into his Trust Account in August 1998. The check represented payment for a personal injury settleme nt. Subse quently, respondent properly disbursed from that account a check in the amount of $3,191 representing payment for Mr. Williams s share of the settlement. In addition, respondent drew a check in the amount of $2,333 representing payment for his own attorney fees. The sum of $ 1,476 sho uld have b een held in escrow to pay J. Richard L illy, MD and A ssoc., to c over M r. William s s med ical exp enses. The hearing judge concluded that, in violation of the MRPC, the checks written by respondent and drawn on the Trust Account from October 6, 1998, through June 7, 1999, were not issued to or on behalf of Mr. Williams or Dr. Lilly, the medical provider, but rather were knowin gly drawn by Respondent for his business and perso nal expenses, or for client m atters 5 unrelated to Mr. W illiams s claim . . . . O n June 11 , 1999, resp ondent dr ew a che ck on his Trust Account, in the am ount of $1,476 payable to J. Richa rd Lilly, M D and Assoc ., represe nting p ayment f or med ical serv ices ren dered to Mr. W illiams. In addition, respondent deposited a check in the amount of $8,000 from the Continental Insu ranc e Co mpa ny into his Trust Account on January 21, 1999. Respondent properly disbursed the following checks: check number 1249 to his client, Ms. Herold, in the amount of $2,520.20, representing her share of the settlement proceeds; check number 1258 payable to himself in the amount of $2,000, representing a portion of his legal fees in the case; check nu mber 12 66 payable to Howa rd Unive rsity Hospital in the amount of $349.90, representing payment fo r hospital serv ices rendere d to Ms. Herold; and check number 1268 payable to Dr. Joseph in the amount of $401.25, representing a partial payment for medical services rendered to Ms. Herold. From January 28 through March 16, 1999, respondent drew checks on the Tru st Accou nt for his business and personal expenses or for matters unrelated to Ms. H erold o r her cla im. Respondent paid the balance due to Dr. Joseph with a cashier s check in the amount of $2,200. From January 28 through March 11, 1999, the balance in respondent s Trust Account was below the amount that should have been there to pay Howard University Hospital, Dr. Joseph and HCC for the c ost of m edical re cords. HCC was never paid its b ill of $29 .10 fro m resp onden t s Trus t Acco unt. Respondent s Trust Account was o verdra wn on Marc h 19 an d 30, 19 99. These instances of misappro priation were the only acts of m isconduct reported. Th ere 6 were no prior disc iplinary procee dings filed against respondent. Disciplinary proceedings were filed first in the District of Colu mbia by the D istrict of Colu mbia Ba r Counse l. Marylan d and V irginia B ar Cou nsel fo llowed with se parate d isciplina ry actions . Judge Se rrette found that, [o]n July 22, 2004 , the District of Columb ia Court of Appea ls ordered that Mr. Cappell be disbarred from the practice of law in the District of Columbia, but that operation of the disbarment be stayed and Mr. Cappell be placed on three-years probation subject to the conditions impose d by the Board of Professional Responsibility. Those conditions required that Mr. Cappell: 1) not engage in further mis conduct; 2) continue to receive regular treatment; 3) be monitored by a financial practice monitor appointed by the Board ; and 4) sub mit quarterly me dical and psychiatric reports to the B oard. An y failure to com ply with medical or psychiatric advice, or violation of any term of probation will subject Mr. Cap pell to the revocation of probation and impo sition of disb arment. The District of Columbia Bar notified Maryland Bar Counsel that a disciplinary action had been filed against respondent. On November 16, 2004, Maryland Bar Counsel filed a petition for Disciplinary or Remedial Action in the Circuit Court for Prince Geo rge s Co unty, while proceedings were pending in the District of Columbia. It is not clear from the record when the District of C olumbia Bar Counse l notified the Virginia State Ba r of its disciplinary action against respondent. Shortly after Maryland filed disciplinary proceedings against responde nt, and while disciplinary proceedings were pending in Virginia against responde nt, Seth Guggenheim, Virginia State Assistant Bar Co unsel, recommended to the Board of the Virginia State Bar Disciplinary System that, an Order be entered b y the Board vacating M r. 7 Cappell s interim suspension, canceling the currently scheduled hearing date, and dismissing the matter with out prejudic e. Mr. G uggenh eim conferring with Virg inia Bar C ounsel, Barbara Ann Williams, reasoned that be cause Mr. C appell s license to practice law in the District of Columbia has been neither revoked nor suspended, reciprocal action by the Virginia State Bar is not appropriate. Reciprocal action in Virginia will be appropriate in the event the D.C. Court of Appeals . . . revok[es resp ondent s] license in the District of Colum bia bec ause he has no t fulfilled the term s of pro bation in effect in that ju risdiction . Mr. Cappell s psychiatric history was w ell docum ented in the District of C olumbia disciplinary proceedings. That history was stipulated to and filed in the disciplinary action in Maryland and found by the hearing judge to have been established by clear and convincing evidence. Judge Serrette found that respondent did not meet with a psychiatrist until the District of Columb ia Bar Counse l referred him to Dr. Rich ard A. Ratner. In add ition to Dr. Ratner, D.C. Bar Counsel referred Mr. Cappell to Dr. Thomas C. Goldman for an independent evaluation and Maryland Bar Counsel referred Mr. Cappell to Dr. Joanna Brandt for evaluation in connection with the Maryland disciplinary proceedings. The hearing judge held that, [a]ll three doctors concluded that at the time of the profession al misconduct, M r. Cappell was suffering from a Major Depressive Disorder, as set forth in the Diagnostic and Statistical Manual of M ental D isorders , Fourth Edition , Text R evision (DSM -IV-T V). Further, the hearing judge found that, Mr. Cappell experienced a depressed mood most of the day, nea rly every day, and experienced significant sleep disorder [sic], feelings of 8 worthlessness and guilt, [a] d iminished a bility to concentra te, and thoughts of death or suicide . The hearing judge determined that Mr. Cappell met the criteria for having a person ality disord er. In Dr. Ratner s o pinion, M r. Cappell s illn ess caused the profes sional misco nduct and that had Mr. Cap pell not been ill, he would n ot have made the same choices. D r. Ratner advised the District of Columbia Bar Counsel that based upon (Mr. Cappell s) conduct througho ut this inquiry . . . he ha s hidden n othing and attempted a t all times to be as forthcom ing as he is a ble to be, based upon his attitude toward treatment and his following through with it, I feel strongly that Mr. Cappell is not in any danger of recidivism. The hearing judge found that Dr. Goldman s testimony supported Dr. Ratner s diagnosis: Dr. Goldman, testifying on behalf of Bar Counsel before the Board of Professional Responsibility of the District of Colu mbia Court of Appeals, opined that at the time Mr. Cappell committed the offenses, he was barely able to carry on the functions of his life due to the severity of the symptoms of his illness. Dr. Goldman characterized Mr. Cappell as a person whose functioning was very compromised and a person who would not have done this sort of thing if he was not in a state of significant depres sion. He cited Hodgkin s Lymphoma, and Bell s Palsy as additional significant medical conditions affecting Mr. Cappell. He concluded, [t]here is no clear evidence to suggest any antisocial intent (that is to rob or defraud his clients). Dr. Goldman maintained that while Mr. Cappell is at risk of a future recurrence of dep ression , it was unlik ely that he wo uld again engage in miscond uct. Judge Serrette stated in her finding s of fact tha t, Dr. Bran dt agreed w ith the diagn osis [of Drs. Ratner and Goldman]. [Dr. Brandt] testified, however, that Mr. Cappell s mental 9 illness had not rendered him utterly debilitated. The hearing judge concluded that respon dent recog nized the im propriety of his conduct and that he has consistently demonstrated remorse and has cooperated with the District of Columbia Board of Professional Responsibility and Attorney Grievance Com mission of M aryland. DISCUSSION Respondent admits that he has violated the provisions of Rules 1.15 an d 8.4(a), (b), and (c) of the MRPC. Petitioner recommends disbarment and respondent proposes that we adopt the recom mendatio n of the Maryland Peer Review Panel and impose corresponding disciplin e similar to the D istrict of C olumb ia and V irginia. At the outset we note that this is not a case of reciproca l discipline un der Md . Rule 16-773.7 Here, Bar Counsel did not wait until disciplinary proceedings in the District of 7 Maryland R ule 16-77 3(e)(3) and (4) provide s, in relevant p art: * * * * (e) Exceptio nal circum stances. Re ciprocal disc ipline shall not be ordered if Bar Counsel or the attorney demonstrates by clear and convincin g evidenc e that: * * * * (3) the impo sition of corr espondin g discipline w ould result in grave injustice; (4) the condu ct established does not c onstitute (contin ued...) 10 Columbia had concluded before litigating a proceeding in Maryland . The rules a pplicable to reciprocal discipline matters are not applicable in situations where the Attorney Grievance Commission does not initiate or process the disciplinary proceeding as a reciprocal discipline matter. See Attorn ey Grie v. Comm n v. Steinberg, 385 Md. 696, 703, 870 A.2d 603, 607 (2005). Although, in the present proceedings, Bar Counsel and respondent agreed to a stipulation of the facts entered in the District of Columbia disciplinary proceedings and conducted the hearing on the basis of those previously proven facts, there was no opinio n from the District of Columbia Court of Appeals when the present case was docketed in Maryland, and Bar Co unsel did n ot rely on Rule 1 6-731 in p resenting its ca se. Even if this were a matter of reciprocal discipline, as to the appro priate sanctio n we ha ve said that th is Court is inclined, bu t not required , to impose th e same san ction as that im posed by the state in which the misc onduc t occurr ed. We are required to assess for ourselves the propriety of the sanction imposed by the other jurisdiction and that recommended by the Co mmiss ion. Attorney Griev. C omm n. v. Scr oggs, 387 Md. 238, 254, 874 A.2d 985, 995 (2005) (internal citations omitted). Thus, the disciplinary proceedings conducted in the District of Columbia, including the sanction imposed, while relevant to our consideration of this case, are not entitled to the same weight a s if this were a proceeding pursued as a reciprocal discipline matter. 7 (...continued) misconduct in this State or it warrants su bstantially differe nt discip line in th is State . . . . 11 In addition, matters which took place at the Peer Review Panel hearing are relevant in this case only because respondent raises the matter of the Panel s recomm endations in support of his argument for the appropriate disposition. Ordinarily the conduct of the Peer Review Panel is confid ential an d inadm issible in any proc eeding . See Md. Rule 16-723 (a) (Confid entiality of peer review meetings). The Peer Review Panel met and recommended to Bar Counsel that because respondent s misconduct occurred when [he] was acting under both mental and physical disabilities, as supported by the u ncontradicte d me dica l testi mon y, he shou ld not b e disba rred[,] but[,] his actio ns should be monito red in a ma nner similar to that imp osed b y the D.C . Board on Pro fession al Resp onsibilitie s. In Attorney Griev. Comm n v. Lee, 387 M d. 89, 10 8, 874 A.2d 897, 908 (200 5), in discussing the Peer Review process, we pointed out that t he pro cess fe atures a panel o f . . . attorneys and . . . non-attorney[s], that make[] a preliminary determination as to whether formal charges should be filed against the respondent attorney. Judge Harrell writing for the Court explained: [T]he Peer Rev iew Pan el proceed ing is an info rmal, nonadversarial meeting d esigned to allow Bar Counsel, the respondent attor ney, the complainant, and other invited persons to meet and discu ss the issues p resented in the complaint in an environment similar to a med iation pr ocess . . . . The Pan el is not governed by any formal rules of evidence, but must respect lawfu l privileg es . . . . The purpose of the Peer Review Panel is not principa lly to make recommendations as to the appropriateness of formal charge s . . . . 12 If a Peer Review Panel concludes that the complaint has a substantial basis indicatin g the need for s ome remedy, some behavioral or operational changes on the part of the lawyer, or som e discipline short of suspension or disbarment, part of the peer review process can be an attempt through both evaluative and facilitative dialogue, (A) to eff ectuate direc tly or suggest a mechanism for effecting an amicable resolution of the existing dispute between the lawyer and the complain ant, and (B) to encourage the lawyer to recognize any deficiencies on his or he r part that led to the problem a nd take ap propriate rem edial steps to address those defic iencies. The goal, in this setting, is not to punish or stigmatize the lawyer or to create a fear that any admission of deficiency will resu lt in substantial harm, but ra ther to create an ambience for a constructive solution. The objective views of two fellow lawyers and a lay person, expressed in the form of advice an d opinion rather than in the form of adjudication, may assist the lawyer (and the complain ant) to retreat from confrontational positions and look at the problem more realistically. [Committee note to R ule 16- 743(a) .] If, however, after hearing statements, the Panel determines that the Statement of Charges has a su bstantial basis and that there is reason to believe that the [respondent] attorney has committed professional misconduct or is incapacitated, the Panel may . . . make an appropriate recommendation to the Commission or . . . inform the parties of its determination and allow the attorney an opportunity to consider a reprimand or a Conditional Diversion Agreement. The Panel is authorized to recommend to the Commission that either a Petition for Disciplinary or Remedial Action be filed, the Statement of Charges be dismissed, or that a Conditional Diversion Agreement or reprimand is appropriate. Although the purpose of the Panel proceeding is not to generate any formal findings of fact, the Panel must accompany its recommendation with a brief explanatory statement. 13 Lee, 387 Md. at 10 8-09, 874 A.2d at 908-09 (internal citations omitted). In the present case, the Peer R eview Panel co nsidered Bar Co unsel s evidence against respondent and concluded that there was a substantial basis for a finding that respondent violated Rules 1.15, 8.4(b), 8.4(c), and 8.4(d) of the MRPC; that respondent admitted the conduct; and that there was a substantial b asis for mitiga tion in the pu nishmen t imposed in these violations. The Panel asked Bar Counsel to consider entering into a Conditional Diversion Agreemen t with respondent bec ause responden t was acting under a se vere disability at the time of the misapp ropriation as a result of the breakdown of his marriage, problems with the IRS and mental and physical disabilities. In the Panel s view, a similar sanction to that imposed in the District of Columbia could be achieved in a diversion agreement and would be appropriate because of the mitigating evidence in this case. Bar Counsel declined that invitation indicating that it was not authorized to enter into such an agreeme nt. Assistant Bar Counsel explained during oral argum ent in this case that, in light of Bar Counse l s duty to investigate complaints of misconduct and our decisio n in Attorney Griev. Comm n. v. Vanderlinde, 364 Md. 376, 773 A.2d 46 3 (2001), d iversion ag reements are inappropriate in matters involving misappropriation of client funds or other dishonest conduct. Because, for reas ons to b e expla ined, infra, we believe Ba r Counsel and there fore the Commission may have misinterpreted the scope of Md. Rule 16-736, we shall remand this case for reconsideration. Effective July 1, 200 1, the M aryland Rules of Practice and Procedure, for the first 14 time contained a conditional diversio n rule. M d. Rule 16-73 6. See Attorney G riev. Comm n v. Olver, 376 M d. 650, 652 , 831 A.2d 66, 67 (20 03). Rule 1 6-736 pro vides, in part: (a) When Appropriate. Upon completing an investigation, Bar Counsel may agree to a Conditional Diversion Agreement if Bar Counse l conclude s that: (1) the attorney committed professional misconduct or is incapacitated; (2) the profession al miscond uct or incap acity was not th e result of any wilful or d ishonest conduct and did not involve conduct that could be the basis for an immediate Petition for D isciplinary or Remedial Action pursuant to Rules 16-771,8 16-773,9 or 16774;10 (3) the cause or basis of the professional misconduct or incapac ity is subject to remediation or resolution through alternative programs or mechanisms, including (A) medical, ps ychological, or other professional treatment, counseling, or assistance, (B) appropriate educational courses or programs, (C) mentoring or 8 Rule 16-771, titled Disciplinary or remedial action upon conviction of crime, requires Bar Counsel to file a Petition for Disciplinary or Remedial Action in the Court of Appea ls when it learns and verifies that an attorney has been convicted of a serious crime. The Rule further provide s that, after a hearing, this Court may suspend the attorney from the practice of law until final disposition of the disciplinary or remedial action if it determines that the attorney has been convicted of a serious crime. 9 Rule 16-773 addresses reciprocal or inactive status cases in which, [a]n attorney who in another ju risdiction (1) is disbarred, suspended, or otherwise disciplined, (2) resigns from the bar while disciplinary or remedial action is threatened or pending in that jurisdiction, or (3) is placed on inactive status based on incapacity . . . . 10 Rule 16-7 74 involv es attorneys su mmarily place d on inactiv e status for an indefinite period if the attorney has been judicially determined to be mentally incompetent or to require a gu ardian of the pers on for an y of the reasons stated in Code, Estates and Trusts Article, § 13 -705 (b), or, in accordan ce with law , has been in voluntarily adm itted to a facility fo r inpatie nt care tr eatmen t of a m ental dis order. 15 monitoring services, or (D) dispute resolution programs; and (4) the public interest and the welfare of the attorney s clients and prospective clients will not be harmed if, instead of the matter proceeding immedia tely with a discip linary or remedial proceeding, the attorney agr ees to and c omplies w ith specific measures that, if pursued, will remedy the immediate problem and likely prev ent any re curren ce of it. We said in Olver, that the purpose for promulgating the diversion rule was to give Bar Counse l and the Commission the flexibility to resolve or remediate certain kinds of misconduct or incapac ity, without resort to the full panoply of resources required for resolution of formal disciplinary proceedings. Id. at 658, 831 A.2d at 71. The Committee note to Rule 16-736 provides some examples of conduct that may be appropriate for conditional diversion: Examples of conduct that may be susceptible to conditional diversion include co nduct arising from (A ) unfamilia rity with proper methods of law office management, record-keeping, or accounting, (B) unfa miliarity with particular areas of law or legal procedure, (C) negligent management of attorney trust accounts or other fina ncial matters, (D ) negligent f ailure to maintain proper communication with clients, (E) negligent failure to provide p roper supe rvision of employees, or (F) emotio nal stres s or crisis or abus e of alc ohol or other d rugs. In Olver, we focused our discussion on the spe cific types of im pairments which w ould qualify attorneys for the conditiona l diversion p rogram. In that regard, Chief Jud ge Bell, writing for the Court, sa id: This case seems to fall within the Rule, to be the kind of case that the Court had in mind when it approved a diversion alternative to be adm inistered outs ide of, and without the 16 supervision of, judicial proceedings the Comment to Rule 16736(a) lists emotional stress or crisis or abuse of alcohol or other drugs as an [e]xample of conduct that may be suscep tible to co ndition al divers ion. Olver, 376 Md. at 656, 831 A.2d at 70. Although the hearing judge in Olver had made factual findings and drew conclusions of law, we elected not to consider the merits of the proceedings and remanded the case to the Attorney Grievance Commission in order for Bar Counsel to determine whether to propose a conditional diversion agreement or inactive status. See Olver at 659, 8 31 A.2 d at 71- 72. In Olver, however, we considered the testimony regarding the attorney s mental disorder and the hearing judge s factual findings pe rtaining thereto. Id. In our discussion of the attorney s alleged misconduct which the hearing court concluded violated Rules 1.1, 1.3, 1.4, and 8.4(d), we placed considerable emphasis on the attorney s misconduct stemming from his mental illne ss or infirmity. Mr. Olver s misconduct was characterized by Bar Counsel s witness, a board certified general psychiatrist and forensic psychiatrist, as Major Depression, a chronic illness, punctuated by episodes of severe d epression, a nd a Perso nality Disorder, a lifelong condition resulting in the [lawyer] experiencing persistent and consistent interactions that will get the patient into difficult situations . . . . Olver at 657, 831 A.2d at 70. Bar Counsel acknowledged that Mr. Olver was unable to render adequate legal services by reason of menta l illness o r infirm ity. Id. Moreover, the doctor in Olver concluded that the [attorne y s] mental con dition cause d him to ac t as he did in h is representation of the complainant . . . that [O lver wa]s n ot capable o f rendering adequate 17 legal services. Id. The psychiatrist, however, pointed out that if Mr. Olver to ok his medication, remain[e d] in psychiatric therapy and [was] supervised weekly, he may be able to practice. Olver, 376 Md. at 657, 831 A.2d at 70-71. In remanding this case for consideration of conditional diversion, we placed substantial emphas is on Mr. O lver s mental impairment rather than on his professional miscond uct. We acknowledged that the hearing judge concluded that Mr. Olver violated Rule 8.4(d) conduct prejudicial to the administration of justice and that Mr. Olver s alleged misconduct was characterized as unusual and strange. Olver, 367 Md. at 657, 831 A.2d at 70. In chara cterizing the n ature of M r. Olver s m isconduc t, we relied u pon allega tions in the complaint that the petitioner indicated that the respondent s unusual and odd behavior . . . stemmed from one or more psychiatric disorders and that . . . respondent was una ble to render adequate legal services by reason of [his] mental illness or infirmity. Id. Similarly, in the present case, the hearing judge found that Mr. Cappell s alleged misconduct was preju dicial to the ad ministration o f justice. Unlike Mr. Olve r, however, respondent s alleged misconduct violated Rule 8.4(b) and (c). Although Mr. Cappell s conduct involved allegations of dishonesty and misappropriation of client funds, under the circumstances, the present case is not materially different from the circumstances in Olver since Mr. Cap pell s misco nduct w as the root ca use of his w rongdoin g. The D istrict of Columb ia Court of Appeals and the hearing judge in this case concluded that, at the time of his misconduct, respondent suffered from a mental disorder, and but for that illness the 18 misconduct would not have occurred. The hearing judge found from the evidence that respondent was depressed most of the day, nearly every day, and was unable to concentrate. As explained by Dr. Goldman, the psychiatrist engaged to give an in depende nt psychiatric examination, [t]he depression contributed substantially to [M r. Cappell] g etting into a tight cash-flow situation and also impaired his ability to come up with more adaptive solutions to the bind, and to make an accurate assessment of the risk he was incurring in acting as he did. Althoug h, Dr. Bran dt, who w as engag ed by Mar yland Bar C ounsel to g ive a psychiatric examination, concluded that Mr. Cappell s mental impairment did not result in his utter inability to confo rm his con duct in accordance with the law and the [MRPC]. Dr. Brandt stated that Mr. Cappell suffered from symptoms of Major Depressive Disorder at the time of his misconduct, and that the symptoms included depressed mo od, sleep disorder, diminished interest in activities, feelings of hopelessness and suicidal ideation, which impaired to some extent his social and occupational functioning. In attorney disciplinary matters, conditional diversion 11 is a disposition to be 11 Rule 16-712(b)(3) grants Bar Counsel the authority to enter into and implement Conditional Diversion Agreements . . . . We acknow ledged in Attorney Griev. Comm n v. Harlan, 320 Md. 571, 580, 578 A.2d 1196, 1200 (1990), that Bar Counsel exercises prosecutorial discretio n in the p erform ance o f his du ties. See also Attorney Griev. Co mm n v. Fezell, 361 Md. 234, 250, 760 A.2d 1108 (2000) (noting that Bar Counsel is empowered, inter alia, to investigate all matters involving possible misconduct called to his attention and to prosecu te disciplinary cas es ). Not u nlike a prosecutor, Bar Counsel, in the performance of his duty, does not act in a purely ministerial capacity. His function involves the exercise of discre tion. See Brac k v. Wells, 184 Md. 86, 40 A.2d 319 (1944) (noting generally that the State s Attorney institutes any particular prosecution as a matter of discretio n) (intern al citation s omitte d). 19 distinguished from that of imposing a sanction. When deciding the issue of whether conditional diversion is appropriate, the initial question for Bar Counsel is whether the filing of a discip linary or re media l action is necess ary. Upon completion of an investigation, Bar Counsel may, among other dispositions, recommend to the Commission either the approval of a Conditional Diversion Agreement or the immediate filing of a Petition for Disciplinary or Reme dial Ac tion. See Rule 16-734.12 Neither Bar Co unsel nor th e Comm ission is required to determine the appropriate sanction or predict which sanction we might impose on the merits. The issue of assessing the appropriate sanction to be imposed after review of the merits of a d isciplinary action is a matter left sole ly to the provinc e of this Co urt. Attorney Griev. Comm n v. Kent, 337 Md. 361, 653 A.2 d 909 (19 95); see also Md. Rule 16- 12 Rule 16-734. Procedure upon completion of investigation. Upon completion of an investigation, Bar Counse l shall take one of the following actions: (a) recomm end to the C ommissio n dismissal o f the com plaint or termination of the proc eeding w ithout disciplin e, with or w ithout a warning, in accordance with Rule 16-735; (b) recomm end to the Commission approval of a Conditional Diversion Agreement signed by Bar Counsel and the attorney in accordance with Rule 16-736; (c ) recommend to the Commission a reprimand in accorda nce with R ule 16-737; (d) file with the Commission a Statement of Charges with an election for peer review in accordance with Rule 16-741; or (e) recommend to the Commission the immediate filing of a Petition for Disciplinary or Remedial Action, with or without collateral remedial procee dings in accod ance w ith Rule s 16-77 1, 16-7 73, or 1 6-774 . 20 721(a) (sanctions imposed by the Court of Appeals include disbarment, suspension or reprim and). An attorney may be eligible for conditional diversion when his or her professional misconduct was not th e result of an y wilful or dish onest con duct; the cause or basis of the misconduct can be resolved through remediation or alternative programs or mechanisms; and the disposition is in the best interest of the public and the a ttorney s clients both present and prospective. See Rule 16-736 . Accord ingly, consistent with the eligibility requirements of conditional diversion,13 and Rule 16-736(a) (2), Bar Counsel could have concluded, in this 13 Eleven other states and the District of Columbia (Rule XI, Section 8.1)) have adopted diversion programs: Alabama (Rule 8(h)), Arizona (Rule 55), Colorado (Rule 251.13), Kansas (Rule 203(d)), Louisiana (Rule XIX, Section 10(A)(9)), N evada (R ule 105.5), New Hampshire (Rule 37A(g)), New York (Rule 691.4(m)), Oregon (Rule 2.10), Wiscon sin (Rule 22.10), and W yoming (Section 14, D isciplinary Code). Some states have adopted other non-disciplinary proceedings the equivalent of diversion p rograms: Delaw are (Rule 9(b)(2)(C)), Florida (Rule 3-5 .1(b)(2)), Georgia (Rule 4 -102(b)(5) ), Hawa ii (Rule 2.3(a)(6)), Michigan (R ule 9.106(6)), Missou ri (Rule 16.01), New Jersey (Rule 1:20-14(a)), and Texas (R ule 2.14(C )). Generally, the jurisdictions do not allow participation in a diversion program where the misconduct is severe, or involves theft of client funds, dishonesty, fraud, or deceit, or where th e attorney has been previous ly disciplined (or has previously entered into a diversion program). See Kristy N. Bernard & Matthew L. Gibson, Current Development, Professional Misconduct By Mentally Impaired Attorneys: Is There A Better Way to Treat An Old Problem?, 17 GEO. J. LEGAL ETHICS 619 (2004) ( Diversion Programs assist attorneys while preserving the public s trust, and thereby conform to the go als of discipline ). The exception to the general rule of ineligibility for participation in the diversion program because of se rious misco nduct is fou nd in the W isconsin R ule. That R ule specifically provides, however, that if good cause is shown an attorney can participate in the diversion program even if his or her misconduct involves misappropriation of client funds. In Oregon , in addition to the general rule, the exception specifically provides for participation (contin ued...) 21 case, that Mr. Cappell s misconduct was not solely the result of any wilful or dishonest condu ct. Moreover, in our view, the hearing judge s factual findings tend to cast doubt on whether responde nt s miscon duct was wilful and intentionally dishonest. Although respondent appeared to concede facially at every level of the disciplinary process that he knew his conduct was wrong, the medical evidence supports the hearing judge s conclusion that, during the time of M r. Cappell s m isconduc t, his cognitive abilities were substantially impaired. Mental impairment is a mitigating factor and may tend to negate the wilful or intentional nature of an a ttorney s m iscond uct. Attorney Griev. Co mm n v. Hayes, 367 Md. 504, 789 A.2d 119 (2002) (stating that a hearing judge s factual findings with regard to mitigating factors tend ed to nega te any dishone st or fraudu lent intent); Attorney Griev. Comm n v. Tomanino, 362 M d. 483, 498 , 765 A.2d 653, 661 (2001) (no ting that the s tate of mind of th e attorney at the tim e of the vio lation [is] imp ortant in the context o f mitigation ); Attorney Griev. Comm n v. Sheridan, 357 Md. 1, 29, 741 A.2d 1143, 1158 (1999) (noting that th e state of mind at th e tim e the [atto rney] violated the [disciplinary] rules is important in the context of mitigation); see State ex rel. Oklahoma Bar Ass n. v. Southern, 15 P.3d 1, 7 (Oklahoma 2000) (finding no willful or voluntary misconduct in behavior of an attorney with a severe, untreated vitamin B-12 deficiency which impaired his short-term 13 (...continued) in the div ersion p rogram if the atto rney s mi scond uct is the result of a men tal cond ition. 22 memory and exasperated his depression). In light of our construction of Rule 16-736, conduct involving emotiona l stress or crisis or abuse of alcohol and drugs . . . may be susceptible to conditional diversion. Because of our interpretation of the eligibility requirements of Rule 16-736, an attorney may be eligible for conditiona l diversion ev en in situations w here his or h er condu ct is allegedly wilf ul or dishon est. The Vanderlinde standard of mitigation is a separate standard and is not a fa ctor in deciding whether a case qualifies for disposition under Rule 16-736. It does not preclude the Attorney Grievance C ommission or B ar Counsel from entering into conditional diversion agreements. The Vanderlinde standard should not be determinative of the Commission s or Bar C ounse l s decis ion to en ter or no t to enter into con ditional diversio n. Recently in Attorney Griev. Comm n v. James, 385 Md. 637, 87 A.2d 229 (2005), we held that disbarm ent was th e approp riate disciplinary sanction for an attorney s misappropriation of client fund s and othe r miscond uct. Our decision to disbar the attorney had no bearing, and, should have h ad no bearing on the Comm ission s or Bar Coun sel s decision to enter into conditional diversion w ith Mr. Jam es. In that case , two com plaints were filed agains t Mr. Jam es for prof essional misconduct. Apparently after the first complain t, but before the second complaint, Bar Counsel and Mr. James entered into a Conditional Diversion Agree ment, o n Nov embe r 18, 20 02. James, 385 Md. at 646, 870 A.2d at 234-35. After approximately 18 months, however, Mr. James was found to have violated the agreem ent. Id. After revo cation of th e agreem ent, we tran smitted the m atter to 23 this Court to h ear the cha rges contain ed in the ple adings, pu rsuant to Rule 16-757. Id. Thereafter, Bar Counse l filed a Petition for Disciplinary or Remedial action against Mr. James. The matter came for hearing before a judge of the Circuit Court for Princ e George s County who made findings of fact and conclusion s of law conclud ing that Mr. James violated the MRPC, 1.1, 1.3, 1.4, 1.15(a), 8.1(b) and 8.4(a), (c), and (d); Md. Rule 16-604, 16-607, 16-609; and §§ 10-304 and 10-306 of the Business Occupations and Professions Article. James, 385 Md. at 662, 870 A. 2d at 244. Bar Counsel charged Mr. James with violating differe nt sectio ns of th e MR PC in e ach co mplain t. Id. Only the complaint involving allegations that Mr. James misused his attorney escrow account between January 2000 and August 2001 is relevant to our discussion. Bar Counsel charged Mr. James with violating MRPC 1.1, 1.15(a), 8.4(a) and (d), Rules 16-607 and 16609 and Business Occupations and Professions Arti cle §§ 10-3 06 and 1 0-307. Th e facts which support the allegations of misappropriation and commingling of trust money predated the Condition al Diversio n Agree ment ente red into on November 18, 2002. Although, the attorney s misconduct involved misappropriation and commingling of trust money, he could have b een bu t was n ot charg ed with violatin g Rule 8.4(c) (a cts of d ishone sty). The hearing judge found that in January 2000, Mr. James intentionally stopped using his personal account and started using his attorney escrow account for personal and business matters. James, 385 Md. at 648, 870 A.2d at 236. For examp le, on January 10, 2000, M r. James wrote escrow check number 1063 to Directv , represe nting a p ersona l expen diture. Id. 24 On June 1 8, 2001, M r. James s escrow account had a negative running balance of $38.39. This was app arently due to his overpayment by $10 to his client, Shelia Smith, of her portion of the proceeds from an arbitration award and a bank fee of $30 assessed for insufficient funds. Id. On Jun e 19, 2001 , Mr. Jame s deposited $8,000 into his escrow account o n behalf of his client, Catherine A. Davis. He mishandled Ms. Davis s $8,000 settlement by failing to maintain her money in tact due to several negative account balances which went below the amount of monies he was suppose to hold in trust for the client. The net proceeds of Ms. Davis s settlement ($ 1,774.75), w hich M r. James he ld in escrow, fell below that amount on at least three occasions. Id. On April 22, 2002, three o f Mr. James s escro w checks w ere presented to his bank for payment and [a]ll three checks caused an overdraft in a combined total amount of $70. James, 385 Md. at 648, 870 A.2d at 236. The hearing judge concluded that [Mr. James s] mishandling of his escrow account and his failure to keep Ms. Davis s monies intact until disbursed [were] prejudicial to the administration of justice in violation of Rule 8.4(d). James, 385 Md. at 649-650, 870 A.2d at 236. Upon our review of the case, we determined that Mr. James misappropriated Ms. Davis s funds in escrow . . . and . . . use[d] client funds for personal purposes. We pointed out that [i]ntentional [m]isappropriation, by an attorney, of funds entrusted to [an attorney s] care is an act infected with deceit and dishonesty. James, 385 Md. at 665-66, 870 A.2d at 246. By comparison, Mr. James s behavior in handling his escrow account was not materially different than Mr. Cappell s behavior in handling his escrow account. Both cases 25 involved attorneys failing to keep client funds in tact until they were disbursed and using client funds for personal purposes. Although Mr. James was not charged with violating Rule 8.4(c), his handling of his escrow account, specifically the misappropriation of client funds, involv ed wilf ul and d ishone st acts in v iolation of that R ule. For whatever reasons, in James, Bar Counsel and the Commission opted to attempt resolution of the matter first by conditional diversion. We were not privy to that decision. In making that decision, ho wever, Bar Coun sel and the C ommissio n were n ot required to predict what our disposition might have been on the merits of the case prior to e ntering into conditional diversion. Bar Counse l and theref ore the Co mmission had the be nefit of R ule 16-736 and its own discretion to enter into conditional diversion. It appears that in James, Bar Counsel was not guided by the Vanderlinde standard of mitigation and entered into an agreement with Mr. James for conditional diversion notwithstanding our holding in Vanderlinde. Because it was determined that Mr. James had violated the agreement, it was appropriate in accorda nce with the Md. Rules, that the matter was brought to our attention for disc iplinary ac tion. In Vanderlinde, we held: In cases of intentional dishonesty, misappropriation cases, fraud stealing, serious criminal conduct and the like, we will not accept, as compelling extenuatin g circums tances, anythin g less than the most serious and utterly debilitating mental or physical health conditions, arising from any source that is the root cause of the m isconduc t and that also result in an attorney s utter inability to conform his or her conduct in accordance with the law and the MRPC. 26 364 Md. at 413-14 , 773 A.2d at 485 (emphasis in original); Attorney Griev. Co mm n v. Christopher, 383 M d. 624, 648 -49, 861 A .2d 692, 70 6 (2004) (f inding com pelling extenuating circumstances when an attorney s severe major depress ion and alcoholism w ere the root cause of his misconduct and resulted in his utter inability to conform his conduct in accordance with the law and the M RPC ). See also A ttorney G riev. Com m n v. Alsa fty, 379 Md. 1, 17-18, 838 A.2d 1213, 1223 (2003) (stating that before Vanderlinde and post Vanderlinde we con tinue to reco gnize a d istinction betw een intention al conduc t, as in Vanderlinde . . . and negligent or unintentional conduct ) (internal citations omitted). In those situations where we have applied the Vanderlinde standard, it was after a determination on the merits and for th e purpose of impos ing a sanctio n. We ha ve never s aid that satisfaction of the Vanderlinde standard is a necessary precondition for conditional diversion. Rule 16-736 (b) contains the eligibility requirements for conditional diversion. Based upon our construction of that rule, if there is competent evidence presented from which Bar Counsel and therefore the Commission may conclude that an attorney s unprofessional conduct was not solely the result of wilful or intentionally dishonest conduct, conditional diversion may be an appropriate disposition. Because Bar Counsel believed that our decision in Vanderlinde precluded respondent s eligibility for conditional diversion, we decline to consider the merits of these proceedings at this time. We remand this case for the Attorney Grievance Commission and Bar Counsel to reconsider entering into a Conditional Diversion Agree ment e ven tho ugh dis ciplinar y procee dings h ave be gun. 27 IT IS S O O RDE RED . . 28