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Attorney Grievance Commission v. Randy A. Weiss

Misc. Docket AG No. 15, September Term, 2004 Headnote: It is a well settled principle of Maryland law that in reciprocal discipline cases this Court often applies a similar sanction to that of the original jurisdiction. This principle, however, is not an absolute requirement. In cases were the conduct of the attorney involves theft, misappropriation, fraud, or deceit, this Court generally will not impose a sanction lesser than disbarment, absent compelling extenuating circumstances as the root cause of the misconduct. Theft by members of this bar, whether from clients, partners, or third parties, will not be tolerated. Such conduct is a violation of MRPC 8.4 and disbarment is the appropriate sanction.

Circuit Co urt for Mo ntgomery C ounty Case # 19089M

IN THE COURT OF APPEALS OF MARYLAND Misc. Docket AG No. 15 September Term, 2004

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND

v.

RANDY A. WEISS

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

Opinion by Cathell, J. Bell, C. J. and Raker, J. dissent

Filed: November 22, 2005

Bar Counsel, on behalf of the Attorney Grievance Commission, petitioner, pursuant to Maryland Rule 16 -773(b), 1 filed a Petition for Discip linary or Remedial Action against Randy A. Weiss, respondent, for violation of the Maryland Rules of Professional Conduct (MRPC ).2 The petition alleged that the respondent violated M RPC 8.4 section s (b), (c) and (d)3 by converting funds du e to his law f irm in fifty-fou r separate tran sactions fro m 1993 to 1996, in the total amount of $676,465.99.

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Maryland Rule 16-773(b) provides:

"(b) Petition in Co urt of A ppea ls. Upon receiving and verifying information from any source tha t in another jurisdiction an attorney has been disciplined or placed on inactive status based on incapacity, Bar Counsel may file a Petition for Disciplinary or Remedial Action in the Court of Appeals pursuant to Rule 16-751(a)(2). A certified copy of the disciplinary or remedial order shall be attached to the Petition, and a copy of the Petition and order shall be served on the a ttorney in a ccorda nce w ith Rule 16-75 3." This Court adopted a new version of the Maryland Lawyer's Rules of Professional Condu ct, effective 1 July 2005. Th e MR PC sectio ns applicab le to this case are ide ntical to the sections they replaced.
3 2

MPRC 8 .4 provides:

"Rule 8.4. M isconduct. 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; [or] (d) engage in conduct that is prejudicial to the administration of justice" (alteration added).

In accordance with Maryland Rule 16-752(a)4 this Court assig ned the m atter to Judge Louise G. Scrivener of the Circuit Court for Montgomery County for an evidentiary hearing and to make findings of fact and conclusion s of law. In accordan ce with Maryland Rule 16757,5 Judge Scrivener held a hearing and issued findings of fact and conclusions of law. There is no dispute as to the facts of this case and neither party filed exceptions to Judge Scrive ner's fin dings. I. FACTS Respondent was adm itted as a mem ber of the B ar of this Court on May 1, 1982. He maintained an office in Washington, D.C. for the practice of law and presently works in the same firm in the position of a legal clerk. The Petition for Disciplinary or Remedial Action is based upon the District of Columbia Court of Appeals' finding that respondent violated the rules of professional conduct of that jurisdiction when he conve rted funds belonging to

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Maryland Rule 16-752(a) states:

"(a) Order. Upon the filing of a Petition for Disciplinary or Remedial Action, the Court of Appea ls may enter an order desig nating a jud ge of any circ uit court to hear the action and the clerk responsible for maintaining the record. The order of d esignation s hall require th e judge, afte r 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 he aring."
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Rule 16-7 57 provid es in pertinen t part:

"(c) Findings and conclusions. The judge sha ll prepare an d file or dictate into the record a statement of the judge's findings of fact, including findings as to any evid ence re gardin g reme dial actio n, and c onclus ions of law." -2-

his law firm. That cou rt suspende d him from the practice of law in the District of Columbia. Judge Scrivener's findings of fact and conclusions of law are as follows: "At the hearing it was determined that the underlying facts leading to the suspension of Respondent, Randy A. Weiss, by the District of Columbia C ourt of Appea ls are not in dispute. Also not in dispute are certain remedial actions taken by respondent both before and after the hearing before the District of Columb ia Court of Appeals Board on Professional Responsibility, which made Findings of Fact relied upon by the District of Columbia Court of Appeals. "FINDINGS OF FACT

"These findings of fact are based upon the undisputed Findings of Fact of the District of Columbia Board on Professional Responsibility, Respondent's Designation of Documents, and argument by counsel. "1. Respondent was admitted to the District of Columbia Bar in December 1981. He also is a member of the Maryland, Virginia, Florida, and Colorado Bars. Respondent has not been subject to any prior disciplinary proceedings. "2. At the time of the conduct at issue here, Respondent was a partner in the law firm [] (the `Firm'), where he specialized in real estate, refinancings, and real estate settlements. Respondent was also a licensed underwriting title attorney and serves as an agent for title insurance companies represented by the Firm. "3. The misconduct found concerns the conversion of funds owed to the Firm as a result of Respondent's involvement as title insurance agent on real estate transactions. When Respondent served as counsel to a party in a transaction involving the sale of real property, his Firm was paid a fee for his work. The fee would be reflected on the settlement sheet summarizing the payments involved in the transaction. On some, but not all, real estate sale transactions on which he performed legal work, Respondent also served as the title insurance agent. On such transactions, Respondent was compensated by the title insurance company through the insurance premiums paid by the entity acquiring the insurance. These payments also were reflected on the settlement sheet. Under the agreements with the title insurance companies, Respondent retained 80% of the premium and 20% was passed on to the insurance company to cover the risk. Because the premiums were based on the selling price of the real estate, in large commercial transactions the amount was substantial. Respondent acknowledges that all of the legal fees and title
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insurance fees paid to Respondent were due and payable to the Firm. "4. Starting in April, 1993, Respondent converted a portion of the title insurance fees in a number of transactions he handled to his own money market account. The record is not clear as to precisely how Respondent diverted the funds, since he indicated that at times checks were made payable to him personally, while other evidence indicates that the funds were placed in a Firm escrow account over which Respondent had effective control. Respondent further testified that, on several occasions, he deposited the title insurance fees into his own professional corporation operating account. The checks from the Firm were signed by Respondent and/or one of Respondent's partners in the Firm. During the period from 1993 to 1996, Respondent paid to the Firm the legal fees that resulted from the real estate transactions but retained for himself the title insurance fees in approximately one third of the transactions. The Firm's account receivable system did not tie into the system that produced the settlement sheets and title insurance premiums are negotiable and, therefore, vary by transaction. So, for example, on a real estate sale transaction on which Respondent performed legal work and served as the title insurance agent, if Respondent turned over to the Firm the check for the legal fees, the Firm would not detect a shortfall if Respondent simply kept a portion of the check for the title insurance fee. The Respondent testified that there was never a time that he took the entire title insurance premium for himself. The Respondent always gave the firm some of the premium and, according to the Respondent's testimony, the firm was `not able to determine, because of the volume of work, whether or not [he was] gypping them on that, whether or not [he was] not turning over the correct amount.'[Brackets in original.] "5. Respondent took funds due to the Firm a total of 54 times from April 1993 through September 1996. The amounts covered ranged significantly, from under $1,000 to $128,745.21. According to the report of an auditor the Firm retained to examine Respondent's activities, the total converted equaled $676,465.99. None of the funds involved client funds; they were all funds due to the Firm. "6. Respondent placed the converted funds in a money market account and paid taxes on the funds. The money market account in which Respondent deposited these funds also contained funds from other sources. Respondent stated that he never spent the money he diverted, although, it is not clear from the record [that] the Respondent was aware of the full amount taken. The Respondent testified that he was unable to readily identify the total amount that had been diverted from the firm as the account into which the diverted funds were deposited also contained other funds and from at least one of those
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accounts, withdrawals were made for living or other purposes. "7. The record shows that he did not use the funds to change his lifestyle. He remained in the same house, drove the same car, took the same vacations and otherwise continued to live as he had prior to taking the money. His wife continued to work at the job she had prior to Respondent's conversion of funds. He, however, was secretive about the funds, and did not disclose to his wife the existence of the money market account. There is no evidence that Respondent has a drug, alcohol, or gambling addiction. "8. After the Jewish High Holidays in 1996, Respondent began to come to terms with his conduct and why it was wrong. Respondent was an adult Bar Mitzvah in 1996, and has involved himself increasingly as an adult in the religious aspects of his Jewish heritage. After consultation with his Rabbi, in May 1997 he advised his Firm, through counsel, of his conversion of funds. The Firm was unaware of Respondent's misconduct. Respondent also suggested that the Firm advise D.C. Bar Counsel. Upon learning of his conduct, the Firm retained an accountant, paid for by Respondent, to audit the relevant books and an outside counsel to advise the Firm. On May 27, 1997, Respondent and the Firm advised Bar Counsel of Respondent's misconduct. "9. When Respondent advised the Firm of his diversion of funds, he expressed his intention to return the money. He believed, based on his own limited review of his records, that he had taken between $300,000 and $450,000. He immediately returned $450,000 to the Firm in May 1997, pending the audit results. The audit revealed, however, that he had taken an additional $226,465.99, which Respondent promptly paid in August and October 1997. He also paid for the costs of the audit and the fees of the Firm's outside counsel. Respondent also did not retain the 17.2% to which he would have been entitled as his partner share if he had paid the money into the Firm initially. "10. After advising the Firm of his conversion of funds, Respondent was instrumental in revising the Firm's financial practices to reduce the risks that similar conduct might occur again. Respondent insisted the Firm adopt a two-signature practice for checks and took the steps necessary to make that change when others in the Firm were slow to do so. Respondent no longer has check signing authority with the Firm. "11. In January 1998, as the result of the events, Respondent ceased to be a partner in the Firm. He has remained associated with the Firm since the day he gave notice to his partners. . . . ... "13. According to the Report of Dr. Thomas C. Goldman, a
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psychiatrist retained by Respondent, Respondent's decision to confess voluntarily of his offenses is rooted in his discussion with his Rabbi and his `sense of himself as a religious man.' Respondent claims, supported by his Rabbi and both of the psychiatrists who examined him, that he has fully accepted responsibility for his misdeeds, is sincere in his desire to make amends, and has taken meaningful steps to avoid repeating his admittedly wrongful conduct. Beginning in 1997, Respondent undertook personal psychotherapy with Ralph Barocas, Ph.D. and has voluntarily placed himself under the professional supervision of [the Firm's managing partner]. "14. The reports of D.C. Bar Counsel's psychiatrist, Dr. Richard A. Ratner, and Respondent's psychiatrist are basically consistent. Both stated that Respondent suffers from no mental disease or illness. Both relate Respondent's conversion of funds to a psychological need for security borne of his father's depression-era fear of poverty. Because of psychological ties to his father, Respondent felt that it was his responsibility to help others in his family, including his parents, his older brother who suffers from schizophrenia, and his sister. Both psychiatrists describe Respondent as someone who could not say no and is overly solicitous towards friends. His willingness to help his family has been a cause of friction in his marriage as has his secrecy in financial matters, particularly with respect to the funds at issue here. "15. D.C. Bar Counsel's psychiatrist, Dr. Ratner, summarized: `I find it impossible to avoid the conclusion that Mr. Weiss' misdeeds represent an extended period of acting out of his psychological conflicts. Mr. Weiss, though on the surface a stable member of the community and his profession, was clearly beset by conflicting emotions within himself and conflicting claims on his loyalties and his resources by his family.' [Indentation and numbering in original.] "Both psychiatrists also state that Respondent has made significant changes in his life since he took the funds and both indicated that it was unlikely that he would repeat these misdeeds. Dr. Ratner stated in his report that Respondent has learned to say no and to place more confidence in others, which has made him more secure. "15. [sic] After hearings on March 18 and May 6, 1999 before the Hearing Committee of the Board on Professional Responsibility (the `Hearing Committee'), the Committee determined that Respondent had violated the rules as charged. The D.C. Bar Counsel initially sought a suspension of six
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months based upon Respondent's voluntary disclosure, remorse, cooperation, restitution, and rehabilitation. Thereafter, the Committee issued its recommendation that Respondent be suspended for one year, with no fitness requirement, and then be placed on two years of probation with conditions. The full D.C. Board of Professional Responsibility (`the Board') considered the matter and recommended Respondent be suspended for three years with one year suspended in favor of probation for a period of two years or until his therapist advises the D.C. Bar Counsel that therapy is no longer necessary. The Board did not impose any additional conditions for reinstatement to the Bar. The District of Columbia Court of Appeals then considered the matter and adopted the recommendation of the Board and ordered that Randy A. Weiss, be suspended from the practice of law for a period of three years, with one year suspended in favor of probation for a period of two years or until his therapist concludes that therapy is no longer necessary, for illegally taking funds from his law firm. The suspension does not require a showing of fitness. Judge Ruiz dissented and noted the unusual facts of the Respondent's case. ... "17. After his voluntary disclosure, Mr. Weiss sought counseling from psychotherapist, Dr. Ralph Barocas. In relation to the charges brought by D.C. Bar Counsel, Mr. Weiss sought an independent psychiatric evaluation by Dr. Thomas Goldman, who concluded that while Mr. Weiss `does not suffer from a major mental illness or from a substance abuse disorder, he does suffer from a significantly neurotic personality disorder which provides a basis for understanding both his offenses and his need for self-examination and personal growth.' Dr. Goldman opined that `at the time of his commission of the offenses with which he is charged, he was acting under a sense of compulsion without any understanding of his own unconscious appreciation of the enormous self-destructive risk he was undertaking.' "18. The psychiatrist for D.C. Bar Counsel, Dr. Richard Ratner, reported that `though the illegal diversion of funds took place over a very substantial period of time, the entire episode would appear to be an aberration in the context of Mr. Weiss's life.' "19. Mr. Weiss's actions would likely not have been discovered if he had not come forward to inform his Firm and D.C. Bar Counsel of his conduct. ... "22. Mr. Weiss has been cooperative with the Attorney Grievance Commission of Maryland and the Office of Bar Counsel . . . .
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... "26. The United States Court of Appeals for the District of Columbia, the United States Court of Appeals for the Federal Circuit, the Virginia State Bar Disciplinary Board, the Supreme Court for the State of Colorado, and the United States District Court for the District of Maryland imposed a sanction reciprocal to the discipline imposed by the D.C. Court of Appeals.[6]. . . "FINDINGS OF LAW "1. Respondent's conduct violated the following provisions of the Maryland Rules of Professional Conduct: "(i) Rule 8.4(b), in that Respondent committed a criminal act (theft) that reflects adversely on his honesty, trustworthiness, or fitness of a lawyer in other respects; and Rule 8.4(c), in that Respondent engaged in conduct involving dishonesty, fraud, deceit, and/or misrepresentation." [Alterations added.][Citations omitted.]

(ii)

Because the facts of this case are undisputed, and the parties did not file exceptions, we are left to determine the proper sanction for respondent's violation of the MRPC.
After Judge Scrivener's findings of fact and conclusions of law, respondent and petitioner filed recommen dations for sanctions pursu ant to Rule 16-758 (b).7 Respondent

The Supreme Court of Florida has also imposed a sanction reciprocal to the discipline imposed by the D.C. Court of Appeals.
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That rule provides:

" Rule 16-758. Post-hearing proceedings. ... (b)Exceptions; recom mend ations . Within 15 days after service of the notice required by section (a) of this Rule, each party may file (1) exceptions (continued...) -8-

asks us to impo se a sanctio n reciprocal to the District of Columbia Court of Appeals' sanction. He argues that such a result is warranted because the District of Columbia C ourt of Appeals and this Court share identical goals in discipline, that the District of Colu mbia Court of App eals carefu lly considered all the mitigating circumstances, and that, as a matter of public p olicy, attorneys shou ld be enco uraged to s elf-report w rongful co nduct. Petitioner, on the other hand, asks for disb arment. It is undisputed that, over a period of three years and in fifty-four separate transactions, respondent stole over $670,000 from his law firm v iolating Ru les 8.4(b) an d (c). Petitione r argues tha t, although w e ordinarily give deference to the decisions of the court of original jurisdiction in reciprocal discipline cases, this Court's pronoun cements concern ing misappropriation an d theft require substantially different discipline in this case. We agree. II. Standard of Review It is clear that "[t]h is court has o riginal and c omplete jurisdiction over attorney disciplinary proceedings." Attorney Grievan ce Comm 'n v. Tayback, 378 Md. 578, 585, 837 A.2d 158, 162 (2003); Attorney Grievance Comm'n v. Blum, 373 M d. 275, 293, 818 A.2d 219, 230 (2003 ); Attorney G rievance C omm'n v. Harris , 371 Md. 510, 539, 810 A.2d 457, 474 (2002); Attorney G rievance C omm'n v. White , 354 Md. 346, 354, 731 A.2d 447, 452 (1999); Attorney Grievan ce Com m'n v. G avin , 350 Md. 176, 189, 711 A.2d 193, 200 (1998);

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(...continued) to the findings and conclusions of the hearing judge and (2) recommendations conce rning th e appro priate di spositio n unde r Rule 1 6-759 (c)." -9-

Attorney Grievance Comm'n v. Adams, 349 Md. 86, 93, 706 A.2d 1080, 1083 (19 98); Attorney Grievance Comm'n v. Glenn, 341 Md. 448, 470, 671 A.2d 463, 473 (1996); Attorney Grievance Comm'n v. Kent, 337 Md. 361, 371, 653 A.2 d 909, 91 4 (1995); Attorney Grievance Comm 'n v. Pow ell , 328 Md. 276, 287, 614 A.2d 102, 108 (1992). We conduct an independent review of the record and "determine whether the findings of the hearing judge are based on clear and convincing evidence." Tayback , 378 Md. at 585, 837 A.2d at 162; Attorney Grievance Comm'n v. Monfried, 368 Md. 373, 388, 794 A.2d 92, 100 (2 002); Attorney Grievance Comm'n v. Alison, 349 Md. 623, 629, 709 A.2d 1212, 1214-15 (1998) (quoting Attorney Grievance Comm'n v. Kemp, 335 Md. 1, 9, 641 A.2d 510, 514 (1994)). In reciprocal discipline cases, the findings of fact and conclusions of law in the original jurisdiction are conclusive evidence of an attorney's misconduct. Maryland Rule 16773(g); see Attorney Grievance Comm'n v. Scroggs, 387 Md. 238, 249, 874 A.2d 985, 992 (2005); Attorney G rievance C omm'n v. Ayres-F ountain , 379 Md. 44, 56, 838 A.2d 1238, 1245 (2003); Attorney G rievance C omm'n v. Cafferty , 376 Md. 700, 703, 831 A.2d 1042, 1045-46 (2003). In our independen t review of the record, w e accept the hearing judg e's findings of fac t unless t hey are cle arly erron eous. Tayback , 378 Md. at 585, 837 A.2d at 162; Attorney Grievance Comm'n v. Garfield , 369 Md. 85, 97, 797A.2d 757, 763 (2002); Attorney Grievance Comm'n v. Wallace, 368 M d. 277, 288 , 793 A.2d 535, 542 (2002); White , 354 Md. at 365, 731 A.2d at 45 8; Attorney G rievance Comm'n v. Garland , 345 Md. 383, 392, 692 A.2d 465, 469 (1 997). Con clusions of la w ar e rev iewed "e ssen tially de novo ." Tayback ,

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378 Md. at 585, 837 A.2d at 162; Attorney Grievance Comm'n v. McLaughlin, 372 Md. 467, 493, 813 A.2d 1145, 1160 (2002); Attorney Grievance Comm'n v. Dunietz , 368 Md. 419, 428, 795 A.2d 706, 711 (2002). As a result, it is this Court who decides whether a lawyer has violated the MRPC. Tayback , 378 Md. at 585, 837 A.2d at 162; White , 354 Md. at 365, 731 A.2d at 458; Garland, 345 M d. at 392, 69 2 A.2d a t 469; Attorney Grievance C omm'n v. Breschi, 340 Md. 590, 599, 667 A.2d 659, 663 (1995 ). III. Discussion Respondent admits that he has violated the provisions of MRPC 8.4 sections (b) and (c). The only issue in dispute is the extent of the sanction to be imposed . In answe ring this question we must balance our tendency to follow the original jurisdiction's sanction under our reciprocal d iscipline doc trine, against o ur prior case s and the sa nctions im posed upon members of this Bar for similar misconduct committed in this jurisdiction, a lways with a view towards the protection of the public. A. Reciprocal Sanctions The Maryland C onstitution ha s vested this Court w ith the power to "adopt rules and regulations concerning the practice and procedure in and the administratio n of the ap pellate courts and in the o ther courts o f this state." M d. Const a rt. IV,

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