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Attorney Grievance Commission v. James, Misc. D ocket, A G No . 1, Sept. T erm 20 04. [M aryland Rules o f Prof essiona l Cond uct 1.1 ( Com petenc e), 1.3 (D iligence ), 1.4 (Communication), 1.15 (Safekeepin g Property), 8.1(b) (Bar admission and disciplinary matters), 8.4(a), (c), and (d) (Misconduct); Maryland Rules 16-604 (Trust Account Deposits), 16-607 (Comming ling of Funds), 16-60 9 (Prohibited Transac tions); Maryland Code (2000, 2004 Repl. Vol.), Sections 10-304(a) (General Requirement), 10-306 (Misuse of trust money), and 10-30 7 (Disc iplinary A ction); h eld: Re spond ent viola ted M RPC 1.1 by failing to provide legal knowledge, skill, thoroughness and preparation necessary for representation. Respondent violated Maryland Rule 16-607 and Sections 10-306 and 10-307 of the Business Occupations and Professions Article of the Maryland Code by using the attorney trust account for personal expenses. Respondent violated MRPC 1.15(d) and 8.4(a), (c) and (d) and Maryland Rules 16-604 and 16-609 and Sections 10-304 and 10-306 of the Business Occupations Article when he failed to depo sit trust m onies. R espon dent vio lated M RPC 1.3 and 1.4 requiring diligent representation and communication with clients. Respondent violated MRP C 8.1 w hen he fa iled to respond to communications from Bar Counsel. For these v iolation s, Resp onden t shall be disbarre d.]

IN THE COURT OF APPEALS OF MARYLAND Misc. D ocket A G No . 1 September Term, 2004 __________________________________

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND V. CHAR LES M . JAMES , III

__________________________________

Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ.

Opinion by Battaglia, J.

Filed: March 16, 2005

The Attorney Grieva nce Comm ission of Maryland ("Pe titioner" or "Bar Coun sel"), acting through Bar Counsel and pursuant to Maryland Rule 16-7 51(a), 1 filed a petition for disciplinary or remedial action against respondent, Charles M. James, III, Esquire, on March 15, 2004, afte r revoking a Conditional Diversion Agreement2 ("CDA") with respondent. The Petition alleged that James, who was admitted to the Bar of this Court on January 4, 1993, violated seve ral of the Maryland Ru les of Pro fess iona l Conduct ("M RPC "), sp ecif ically,

Maryland Rule 16-751(a) provides: "Commencement of disciplinary or remedial action. (1) Upon approva l or direction of [the Attorney Grievance] Commission, Bar Counsel shall file a Petitio n for D isciplina ry or Rem edial A ction in t he Co urt of A ppeals ."
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Maryland R ule 16-73 6 provide s in part: (a) When A ppropriate. Upon completing an investigation, Bar Counsel may agre e to a Conditional Diversion Agreement if Bar Co unsel con cludes that: (1) the attorney committed professional misconduct or is incapacitated; (2) the professional misconduct or incapacity was not the result of any wilful or dishonest conduct and did not involve conduct that could be the basis for an immediate Petition for Disciplinary or Reme dial Action pursuant to Rules 16- 771, 16773, or 16-774; (3) the cause o r basis of the profession al miscond uct or incapacity is subject to remediation or resolution through alternative progra ms or m echan isms, including (A ) medical, psychologica l, or other professional treatment, counseling, or assistance, (B) appropriate educational courses or programs, (C) mentoring or monitoring services, or (D) dispute resolution programs; and (4) the p ublic inte rest a nd th e we lfare of th e atto rney's clients and prospective clients will not be harmed if, instead of the matter proceeding immediately with a disciplinary or remedial proceeding, the attorney agrees to a nd comp lies with specific measures that, if pursued, will remedy the im mediate problem a nd likely preve nt any recurren ce of it.

1.1(Competen ce),3 1.3 (Diligence), 4 1.4 (Commu nication),5 1.15 (Safekee ping Property), 6 8.1

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Rule 1.1 provides: A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroug hness and prepara tion reasonably necessary for the representation.
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Rule 1.3 provides: A lawyer shall act with reasonab le diligence a nd prom ptness in rep resenting a c lient. Rule 1.4 provides: (a) A lawyer shall keep a client reasonably informed about the status of a matter a nd prom ptly comply with reasonable requests for information. (b) A lawyer shall explain a matter to the extent reasonab ly necessary to permit the client to make informed decisions regarding the representation. Rule 1.15, in relevant part, provides: (a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account m aintained p ursuant to T itle 16, Chapter 600 of the Maryland Rules. Other property shall be identified as such an d approp riately safeguard ed. Com plete 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 ha s an interest, a law yer shall promp tly notify the client or third person. Ex cept as stated in this Rule or otherwise permitted by law or by agreement with th e client, a lawyer shall prom ptly 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 prom ptly re nder a fu ll acc ounting rega rding suc h pro perty. 2

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(b) (Bar admission and disciplinary matters),7 and 8.4(a), (c) and (d) (M isconduct). 8 Violations of Maryland Rules 16-604 (Trust A ccount Depo sits),9 16-607 (Commingling of

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Rule 8.1 (b) provides: An applicant for admission or reinstatement to the bar, or a lawyer in connection with a bar admission application or in connectio n with a dis ciplinary matter, sh all not: *** (b) fail to disclose a fact necessary to corr ect a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority, except that this Rule does not require disclosure of information otherwise protected by Rule 1.6. Rule 8.4, in r elevant par t, provides tha t: It is professional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional Condu ct, knowingly assist or induce another to do so, or do so through the acts of an other; *** (c) engage in conduct involving d ishonesty, fraud , deceit or misrepresentation; (d) engage in conduct that is prejudicial to the admin istration o f justice . . . .

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Rule 16-604 provides: Except as otherwise permitted b y rule or other law , all funds, including cash received and accepted by an attorney or law firm in this State from a client or third person to be delivered in whole or in part to a client or third person, unless received as payment of fees owed the attorney by the client or in reimbursement for expenses properly advanced on behalf of the client, shall be deposited in an attorn ey trust account in an approved financial institution. This Rule does not apply to an instrument received b y an attorney that is m ade payable s olely to a client or third person and is transmitted directly to the client (contin ued...) 3

Funds), 10 16-609 (Prohibited transa ctions),11 and Maryland Code (2000, 2004 Repl. V ol.),

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(...continued) or third p erson. Rule 16-607 provides: a. General Prohibition. An attorney or law firm may deposit in an attorney trust account only those funds required to be depos ited in that account by Rule 16-604 or permitted to be depos ited by sec tion b o f this R ule. b. Excep tions. 1. An attorney or law firm shall either (A) deposit into an attorney trust account funds to pay any fees, service charges, or minimum balance required by the financial institution to open or maintain the account, including those fees that cannot be charged against interest due to the Maryland Legal Services Corpora tion Fund pursuant to Rule 16-610 b 1(D), or (B) enter into an agreement with the financial institution to ha ve an y fees or charges deducted from an operating account m aintained by the attorney or law firm. The attorney or law firm may deposit into an attorney trust account any funds expected to be advanced on behalf of a client and expec ted to be reimbu rsed to th e attorne y by the clien t. 2. An attorney or law firm may deposit into an attorney trust account f unds belo nging in p art to a client an d in part presently or potentially to the attorney or law firm. The portion belonging to the attorney or law firm shall be withdrawn promptly when the attorney or law firm becomes entitled to the funds, but any portion disputed by the client shall remain in the accou nt until th e dispu te is reso lved. 3. Funds of a client or beneficial owner may be pooled and commin gled in an a ttorney trust acco unt with the funds he ld for oth er clients or bene ficial ow ners. Maryland Rule 16-609 provides: An attorney or law firm may not borrow or pledge any funds required by these Rules to be deposited in an attorney trust account, obtain any remuneration from the financial institution for depositing any funds in the account, or use any funds for any unauthorized purpose. An instrument drawn on an attorney trust (contin ued...) 4

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Sections 10-304 (a), 12 10-306,13 and 10-30714 of the Business Occupations and Professions Article. In accordance w ith Maryland Rules 16 -752(a) and 16-75 7(c), 15 we referred the

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(...continued) account may not be d rawn payable to cash o r to bearer. Section 10-304 (a) of the Business Occupations and Professions Article provides: General Requirem ent. Except as provided in subsection (b) of this section, a lawyer expeditiously shall deposit trust money into a n attorney trust ac count.

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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 money is entrusted to the lawyer.

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Section 10-307 of the Business Occupations and Professions Article provides: Disciplinary action. A lawyer who willfully violates any provision of this Part I of this subtitle, except for the requirement that a lawyer deposit trust moneys in an attorney trust account for charitable purposes under

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