In re Krame ( 2022 )

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 19-BG-674
IN RE EVAN J. KRAME, RESPONDENT.
A Member of the Bar of the District of Columbia Court of Appeals
(Bar Registration No. 370772)
On Report and Recommendation of the
Board on Professional Responsibility
(Bar Docket Nos. 2007-D040 & 2012-D449)
(Board Docket No. 16-BD-14)
(Argued June 24, 2021 Decided November 3, 2022)
Andrew H. Marks for respondent.
Becky Neal, Senior Assistant Disciplinary Counsel, with whom Hamilton P.
Fox, III, Disciplinary Counsel, was on the brief, for the Office of Disciplinary
Counsel.
Stephen H. Marcus filed an amicus curiae brief on behalf of respondent’s
clients, David Abramowitz, David Farber, Debra Friedmann, Peter Friedmann, Alan
Golden, Neil Kishter, James A. Klein, Laurence Kline, Paul Rosengard, Steven
Solomon, Jeffrey O. Spiegel, Ellen B. Kagan Waghelstein, Charles Weinberg, and
Rabbi Shohama Wiener, in support of respondent.
Rachel F. Cotton filed an amicus curiae brief on behalf of District of Columbia
Bar members Barry Coburn, Sherman L. Cohn, Anne W. Coventry, Myrna L.
Fawcett, Leslie G. Fein, Steven W. Jacobson, Alban Salaman, Raymond J. Sherbill,
Frederick J. Tansill, and Stefan F. Tucker, in support of respondent.
2
Before MCLEESE and DEAHL, Associate Judges, and THOMPSON,∗ Senior
Judge.
DEAHL, Associate Judge: The Board on Professional Responsibility
recommends we disbar Evan J. Krame based on his conduct as trustee of three
special needs trusts. That recommendation stems from two central conclusions.
First is the Board’s conclusion that Krame “engaged in a pervasive dishonest
scheme for personal gain” by knowingly making false statements to the Probate
Division of the D.C. Superior Court when seeking compensation for administering
the trusts. Krame’s alleged scheme related to his persistent efforts to be
compensated based on a percentage of the trust funds he administered, with Krame
sometimes resorting to dishonesty to evade court orders directing that he instead be
compensated on an hourly basis.
Second is the Board’s conclusion that, on two separate occasions, Krame
misappropriated entrusted client funds when he issued duplicate payments to himself
(from the trusts) for the same services. While Krame maintained that those double
payments resulted from the administrative oversights of his staff, and not any
Senior Judge Thompson was an Associate Judge of the court at the time of
∗
argument. She began her service as a Senior Judge on February 18, 2022.
3
wrongdoing on his part, the Board found that Krame himself acted negligently with
respect to those duplicate payments. Disciplinary Counsel goes one step further and
now contends that a “culpable state of mind is not an element of misappropriation,”
which it deems “essentially a per se offense,” (quoting In re Cloud, 939 A.2d 653,
660 (D.C. 2007)), so that “[a]ny unauthorized use of entrusted funds is
misappropriation.”
Krame takes exception to the Board’s recommendation, as does Disciplinary
Counsel to a more limited extent. See infra Part III.E (addressing the lone exception
taken by Disciplinary Counsel). Krame contends the Board usurped the Hearing
Committee’s role as factfinder when it repeatedly rejected the Hearing Committee’s
factual findings. For instance, while the Hearing Committee credited Krame’s
testimony that he was not deliberately or intentionally dishonest with the probate
court in relation to the trusts he administered, the Board reached the opposite
conclusion. Krame contends the Board thereby improperly intruded into the Hearing
Committee’s exclusive role as factfinder. Krame also argues that Disciplinary
Counsel did not present clear and convincing evidence that he negligently
misappropriated funds because it failed to show his conduct fell below a standard of
reasonable care when he caused (and later corrected) the duplicate payments
described above. He disputes Disciplinary Counsel’s contention that
4
misappropriation is a per se offense that requires no finding of a culpable mindset.
Rather than disbar him, Krame asks that we impose a thirty- to sixty-day suspension.
We partly agree with Krame’s contentions that the Board improperly intruded
into the Hearing Committee’s role as factfinder. Namely, the Board failed to accept
certain credibility findings made by the Hearing Committee, and some of the more
serious violations found by the Board were infected by that misstep. As for the
negligent misappropriation charges, we agree with the Board that Krame engaged in
negligent misappropriation in at least one instance, and therefore do not need to
resolve the parties’ disagreement about the extent to which misappropriation is a per
se offense that can be found in the absence of a culpable mindset. Ultimately, based
on the type and number of Rule violations we sustain, we consider the Board’s
recommended sanction of disbarment to be too harsh. We instead suspend Krame
from the practice of law in the District of Columbia for eighteen months.
5
I.
Not long after Krame joined the District of Columbia Bar in 1983, he
developed an expertise in administering special needs trusts. 1 He preferred to be
compensated based on a flat percentage of trust assets, typically 1%, determined
annually. While that was once a fairly standard compensation scheme, by 2005,
much to Krame’s chagrin, judges in the Probate Division of the D.C. Superior Court
indicated that he and other trustees should instead be paid on an hourly basis. Krame
resisted that change in various ways, which eventually drew the attention of
Disciplinary Counsel and prompted an investigation into his handling of three
special needs trusts. The trusts at issue were for the benefit of severely disabled
minors: Vernice Seay (Seay trust), De’Shawn Mecco Brown (Brown trust), and Dion
Baker (Baker trust).
At the conclusion of its investigation, Disciplinary Counsel charged Krame
with violating seven Rules of Professional Conduct, most of them several times over.
1
Special needs trusts allow beneficiaries to “maintain their eligibility for
need-based government benefits such as Medicaid and Supplemental Security
Income (eligibility for which is tied to the applicant’s income and assets), while at
the same time preserving their own assets to provide for supplemental items or
services not covered by government programs.” In re D.M.B., 979 A.2d 15, 16 n.1
(D.C. 2009).
6
They largely stemmed from Krame’s efforts to continue being paid based on a
percentage of trust assets, contrary to the probate court’s directions, and the
dishonesty he engaged in to further that pursuit. After a ten-day evidentiary hearing,
the three members of the Ad Hoc Hearing Committee were ultimately divided as to
which violations Krame had committed and as to what sanction should be imposed.
There was some limited unanimity among the committee members, however.
The Hearing Committee unanimously found that Krame violated Rule
3.4(c)—knowingly violating an obligation to a tribunal—on two occasions. The first
was when he submitted a fee petition seeking thousands of dollars in compensation
for his personal crusade to be paid on a percentage basis, despite a court order
directing him not to do so. And the second was when he failed to promptly return
$200 in compensation following a court order to do so. The Hearing Committee also
unanimously found that Krame made a false claim in an appellate brief about the
non-existence of time records that could support an hours-based fee request, thereby
violating Rules 3.3(a)(1) (making a false statement to a tribunal), 8.4(c) (dishonesty),
and 8.4(d) (serious interference with the administration of justice). Finally, it
unanimously found that Krame again violated Rules 8.4(c) and 8.4(d) when he
recklessly (but not intentionally) submitted four altered time entries in support of a
trustee fee petition.
7
A majority of the Hearing Committee then determined that the remaining Rule
violation charges were not supported by clear and convincing evidence. One
Hearing Committee member, however, would have found additional violations of
Rules 3.3(a)(1), 3.4(c), and 8.4(c), including that the violations were made
intentionally, not recklessly, and that Krame also violated Rule 1.5(a) for charging
an unreasonable fee. A different Hearing Committee member would have found two
violations of Rule 1.15(a) for negligent misappropriation. Because the three Hearing
Committee members did not reach consensus on the charged violations, they
recommended three different sanctions, ranging from a suspension of six months to
eighteen months.
Both Krame and Disciplinary Counsel took exception to the Hearing
Committee’s report and recommendation. Disciplinary Counsel contested the
Hearing Committee’s determination that Krame did not commit negligent
misappropriation, charge an unreasonable fee, or commit additional knowing and
intentional violations of Rules 3.3(a)(1) and 8.4(c). It also argued that the Rule
8.4(c) violations that were found were intentional, not reckless. Krame, for his part,
conceded the violations of Rule 8.4(c) and 8.4(d) relating to the reckless alteration
of certain time entries, as well as the Rule 3.4(c) violations for disobeying a
8
tribunal’s order. But he contested the Rule 3.3(a)(1), 8.4(c), and 8.4(d) violations
relating to him making a false claim in an appellate brief.
On review, the Board largely agreed with Disciplinary Counsel. It determined
that Krame negligently misappropriated entrusted client funds on two occasions
when he paid himself twice for the same work in violation of Rule 1.15(a); that he
charged for the time he spent litigating the fee issue in violation of Rule 3.4(c); that
he committed additional and intentional (rather than reckless) violations of Rules
3.3(a)(1), 8.4(c) and 8.4(d); and that he charged an unreasonable fee in violation of
Rule 1.5(a). It did, however, agree with Krame that he did not make a false statement
in an appellate brief. As a sanction, the Board recommends we disbar Krame.
Krame has now filed exceptions to the Board’s report and recommendation
with this court. He challenges a variety of the violations found by the Board along
with its recommended sanction of disbarment. Because this appeal raises a host of
fact-intensive questions, we flesh out the facts more below, in the context of the
particular rule violations they relate to.
9
II.
Before delving into the particular rule violations, the parties spar over an
overarching question that affects much of the analysis below: Whether the Board
relied upon its own de novo factual and credibility findings regarding Krame’s state
of mind, contrary to the factual findings of the Hearing Committee, and thereby
impermissibly intruded upon the Hearing Committee’s purview as factfinder.
Krame asserts that the Board so intruded into the Hearing Committee’s role, while
Disciplinary Counsel maintains it did not do so, as the Board is free to review
questions of “ultimate fact” de novo.
Two principles in this arena are clear, but in some tension. First, the Board
“must accept the Hearing Committee’s evidentiary findings, including credibility
findings, if they are supported by substantial evidence in the record.” In re Klayman,
228 A.3d 713, 717 (D.C. 2020) (quoting In re Bradley, 70 A.3d 1189, 1193 (D.C.
2013)). Second, “[t]he Board . . . owe[s] no deference to the Hearing Committee’s
determination of ‘ultimate facts,’ which are really conclusions of law and are thus
reviewed de novo.” Id. (quoting In re Bradley, 70 A.3d at 1194). What is less clear
from our precedents is how these two principles interact. Some factual questions,
like whether an individual acted with knowledge or intent, at least resemble legal
10
questions of “ultimate fact,” so that both the Hearing Committee and the Board have
a claim to being the final arbiter of such facts. To reconcile these principles, it helps
to examine what our precedents mean when they speak of questions of ultimate fact.
An “ultimate fact” is a term of art that was first introduced to our Bar
disciplinary jurisprudence in a case called In re Micheel, 610 A.2d 231 (D.C. 1992). 2
In that case, this court was confronted with the question of how much, if any,
deference was owed to the Hearing Committee’s finding that respondent’s
misappropriation was negligent as opposed to reckless. Id. at 234-35. Because we
had never addressed that question in a Bar discipline matter, we turned to
administrative case law for guidance, given the similar governing standards between
this court’s review of Bar discipline matters and agency actions. Id. at 234 & n.10.
More specifically, we turned to Washington Chapter of American Institute of
Architects (AIA) v. D.C. Department of Employment Services, 594 A.2d 83 (D.C.
1991), in which this court explained the difference between how “ultimate facts” and
2
The phrase appears in just one of our prior disciplinary cases, albeit in a
dissent (and only in a parenthetical quotation of another case). In re Dwyer, 399
A.2d 1, 15 (D.C. 1979) (Mack, J., dissenting) (“We will nevertheless give serious
consideration to the findings and recommendations of the trier of fact when the
determination of ultimate facts rests on the weight and credibility of witnesses who
have testified in person before that committee.” (cleaned up) (quoting In re Lurie,
546 P.2d 1126 (Ariz. 1976))).
11
“subsidiary findings of basic fact” are reviewed by an appellate body. In re Micheel,
610 A.2d at 234 (quoting AIA, 594 A.2d at 87). The former are facts that have a
“legal consequence,” which are reviewed de novo, id. at 235 (quoting AIA, 594 A.2d
at 86-87), while the latter are facts “which, taken together, lead to an ultimate
fact/legal conclusion,” and which must be accepted by the reviewing body unless
unsupported by substantial evidence. AIA, 594 A.2d at 87. Relying on this guidance,
we concluded in In re Micheel that a Hearing Committee’s finding of negligence
was an ultimate fact that the Board owed no deference to. 610 A.2d at 235. That
was because a finding of negligence, as opposed to recklessness, had a “clear ‘legal
consequence’: it directly affected the severity of the action to be imposed.” Id. In
re Micheel, therefore, makes clear that the question whether a respondent possessed
a certain state of mind is at least sometimes a question of ultimate fact that the Board
reviews de novo.
That does not mean that a Hearing Committee’s factual and credibility
findings have no bearing on, or are never controlling as to, a respondent’s state of
mind. In re Micheel makes clear that neither we nor the Board can simply brush
such findings aside because they affect determinations of ultimate fact. In that case,
we did not ignore the Hearing Committee’s findings; we accepted them and
determined that, as compared to other disciplinary cases, those findings showed that
12
respondent’s conduct was reckless rather than negligent. Id. at 235-37. This point
was also crucial to the outcome in AIA, the case that informed In re Micheel’s
analysis. See AIA, 594 A.2d at 87 (“[The reviewing body] did not overrule the
appeals examiner’s subsidiary factual findings. Rather, [it] accepted the essential
facts, including credibility determinations, in the [factfinder’s] ruling.” (internal
quotation marks and citation omitted)).
As this court has reasoned since In re Micheel, sometimes a Hearing
Committee’s factual and credibility findings preclude the Board from reaching a
particular conclusion regarding an ultimate fact. That point is illustrated by In re
Temple, 629 A.2d 1203 (D.C. 1993), decided the year after In re Micheel. In In re
Temple, the ultimate fact at issue was whether respondent had been significantly
rehabilitated so as to support a mere probationary sanction. Id. at 1208. Although
we agreed with the Board that it owed no deference to the Hearing Committee’s
conclusion that respondent was rehabilitated given that it was an ultimate fact, we
faulted the Board for supplanting the Hearing Committee’s factual and credibility
findings with its own when conducting its de novo review. Id. at 1208-09 (“The
factfinder who hears the evidence and sees the witnesses is in a better position to
make [credibility] determinations, having the benefit of those critical first-hand
observations of the witness’ demeanor or manner of testifying which are so
13
important to assessing credibility.”). After applying the correct deference, we
accepted the Hearing Committee’s credibility findings as supported by “substantial
evidence,” and ruled that those findings compelled the conclusion that the
respondent had been significantly rehabilitated. Id.In re Evans teaches the same lesson. 578 A.2d 1141, 1142 (D.C. 1990). 3
There, the ultimate fact at issue was whether respondent had an intentional state of
mind when he misappropriated client funds. Id. Both the Board and this court
reasoned that because the Hearing Committee credited respondent’s belief that he
had permission to disburse the client funds that were ultimately misappropriated,
respondent could not have acted intentionally. Id. As In re Temple and In re Evans
show, although a respondent’s state of mind might be an ultimate fact that is
reviewed de novo, a Hearing Committee’s credibility findings can still constrain the
determination of ultimate fact. 4
3
In re Evans predates In re Micheel by two years, and does not speak in terms
of questions of “ultimate fact,” but of an “ultimate conclusion.” In re Evans, 578
A.2d at 1149. While it is perhaps less informative than In re Temple because it did
not grapple with In re Micheel’s later pronouncement that the Board does not owe
deference on questions of ultimate fact, we nonetheless think it informative, if only
as presaging our later analysis in In re Temple.
4
See also In re Martin, 67 A.3d 1032, 1050-51 (D.C. 2013) (credibility
finding compelled conclusion that respondent made false statements); In re Godette,
919 A.2d 1157, 1163-66 (D.C. 2007) (rejecting Board’s finding that respondent’s
14
With that said, as we recently observed in In re Tun, “in some circumstances,
a Hearing Committee’s finding as to a respondent’s credibility ‘does not warrant the
normal deference.’” 195 A.3d 65, 73 (D.C. 2018) (quoting In re Anderson, 778 A.2d
330, 341-42 (D.C. 2001)). In re Tun highlighted two such scenarios. The first occurs
when the Hearing Committee’s findings are not supported by substantial evidence.
Id. (citing In re Bradley, 70 A.3d 1189, 1194-95 (D.C. 2013) (rejecting Hearing
Committee’s conclusion that respondent “seemed honest” because there was “no
factual support in the record” for the Hearing Committee’s credibility conclusion
and other evidence directly contradicted it)). The second occurs when the Hearing
Committee’s credibility findings are based upon a mistake of law, as opposed to the
witness’s demeanor or manner of testifying. Id. (“[T]he Hearing Committee’s
conduct was not deliberate because the Hearing Committee’s contrary finding was
supported by substantial evidence and was thus owed deference); In re Cloud, 939
A.2d 653, 661 (D.C. 2007) (Hearing Committee credited respondent’s testimony,
which precluded Disciplinary Counsel from proving misappropriation was reckless);
In re Kline, 11 A.3d 261, 264 (D.C. 2011) (Hearing Committee credited
respondent’s belief that the money he withdraw from a trust account belonged to
him, which precluded a finding of intentional misappropriation); In re Mba-Jones,
993 A.2d 1071, 1073 (D.C. 2010) (“factual and credibility determinations in the
Maryland proceedings” precluded a finding of intentional or reckless
misappropriation); In re Pye, 57 A.3d 960, 973 (D.C. 2012) (adopting appended
Board report) (Hearing Committee’s conclusion that misappropriation “was a
mistake based on its assessment of Respondent’s credibility” compelled finding of
negligence where Board had “no basis to question the Hearing Committee’s
credibility determination”).
15
disbelief was based on an ‘analysis . . . in the nature of a legal conclusion.’” (quoting
In re Anderson, 778 A.2d at 341-42)); see also In re Martin, 67 A.3d 1032, 1050
(D.C. 2013) (“We do not give deference to a Hearing Committee’s credibility
determination where that determination is predicated upon a conclusion of law rather
than the demeanor of testifying witnesses.” (citing In re Anderson, 778 A.2d 341-
42)). 5
Our recognition of those limited bases for revisiting the Hearing Committee’s
credibility determinations does not affect our prior rulings that credibility findings
must be accepted and can have a foreclosing impact on ultimate facts and legal
conclusions, so long as they are supported by substantial evidence and uninfected by
legal error. For instance, In re Tun accepted as settled the Hearing Committee’s
credibility findings where substantial evidence supported them, and rejected only
those that could not be reconciled with the record evidence. 195 A.3d at 73-74
5
In re Tun also cited In re Romansky, 938 A.2d 733, 739 (D.C. 2007), for the
general principle established by this court in In re Micheel: that an ultimate fact (such
as state of mind) is a legal conclusion reviewed de novo. In re Tun, 195 A.3d at 73.
As we have already explained, that general principle does not detract from the
Board’s obligation to accept the Hearing Committee’s factual and credibility
findings that inform the Board’s legal conclusions. Like In re Micheel, In re
Romansky merely considered the facts found by the Hearing Committee that were
supported by substantial evidence and determined whether those facts demonstrated
intentionality as opposed to recklessness. 938 A.2d at 740-42.
16
(accepting Hearing Committee’s finding that respondent made an intentionally false
statement in a court filing because that finding was based on substantial evidence);
id. at 75 (rejecting Hearing Committee’s finding that respondent gave intentionally
false testimony because that finding was not based on substantial evidence or
respondent’s demeanor in testifying).
Neither we nor the Board have carte blanche to revisit the Hearing
Committee’s credibility determinations simply because we disagree with them and
they speak to some ultimate fact. To hold otherwise would “endanger th[e] basic
allocation of decisionmaking responsibility” between the Board and the Hearing
Committee. In re Anderson, 778 A.2d at 341. While our precedents have admittedly
not always been clear on this point, we are not aware of any that conflict with the
principles articulated above—stemming from In re Micheel, In re Temple, and In re
Evans—and Disciplinary Counsel points to no genuinely conflicting authority. 6
6
Of the cases Disciplinary Counsel relies upon, only In re Berryman, 764
A.2d 760 (D.C. 2000), appears to be in some superficial tension with the principles
we have articulated above. That tension dissipates upon scrutiny. In Berryman, the
Hearing Committee found respondent had negligently misappropriated funds, but
both the Board and this court determined the misappropriation was in fact
intentional. Id. at 764-65, 772-74. That would present some tension with our
analysis only if the Hearing Committee’s determination in Berryman were grounded
in a credibility finding, but nothing in Berryman suggests that it was. Instead, it
appears that the Hearing Committee, on the one hand, and the Board and this court,
on the other, simply disagreed about the legal import of a set of circumstantial facts,
17
We therefore conclude that Disciplinary Counsel paints with too broad a brush
when it asserts that Krame’s “intent is an ultimate fact for the Board and Court to
consider de novo,” at least to the extent it suggests that review is free from the
constraints of the Hearing Committee’s credibility findings. It is not. Both the
Board and this court must accept the Hearing Committee’s credibility findings as
determinations of subsidiary fact, so long as substantial evidence in the record
supports them and they are not infected by any mistake of law.
III.
We turn now to the charged Rule violations relating to Krame’s administration
of the Brown and Baker trusts, which is where Krame directs his argument that the
Board impermissibly ignored the Hearing Committee’s credibility findings related
to his state of mind. Our consideration of the negligent misappropriation charges,
related to the Seay trust, is addressed in Part IV of this opinion.
which unlike a credibility finding, is a legal question subject to de novo review. Id.
at 772-73. In fact, Berryman distinguished a case finding that a misappropriation
was merely negligent—In re Chang, 694 A.2d 877 (D.C. 1997)—on the basis that
in Chang, “[t]he Hearing Committee credited the respondent’s [exonerating]
explanation and Bar Counsel found it ‘entirely credible,’” Berryman, 766 A.2d at
771, suggesting the same was not true of the respondent in Berryman, and if it had
been, there likely would have been a different result.
18
A. False/dishonest statements to the Probate Court (Brown trust)
Factual Background
In 2003, the probate court approved the following compensation provision for
the Brown trust:
A Trustee shall be entitled to reasonable compensation for
his or her services as Trustee hereunder, consistent with
industry standards, which may be expressed as a
percentage of Trust assets. All trustee compensation is
subject to review by the Superior Court, to be approved if
reasonable and modified if unreasonable. In
considering the reasonableness of fees reported in the
accounting by the Trustee, the Court may consider the
industry practice and any other factors.
A year later, Krame filed his first accounting reflecting the services he performed as
trustee on behalf of the Brown trust during the course of that year, as well as the
costs for those services. In accordance with the compensation provision above, the
petition calculated Krame’s fees as a percentage of the total trust assets. Krame’s
fees were approved by the probate court.
Krame filed his second accounting about a year later, again reflecting his
services for the preceding year. As he had done with the first accounting, Krame’s
fees equated to 1% of the trust’s assets. By that point, the probate division had
19
started moving away from compensating trustees on a percentage basis. Judge Peter
H. Wolf, the judge assigned to the Brown trust at that time, rejected the accounting
and ordered Krame to file “a thorough explanation of the ‘quarterly fees’ . . . so that
the court [could] determine their reasonableness.” Krame objected and filed a
twenty-page memorandum arguing that “his fees calculated as one percent of the
trust assets and paid quarterly were reasonable.” He further argued that because “[a]
percentage fee was agreed upon by the parties,” and because “a percentage fee of
one percent was previously approved by [the probate court] when it approved the
first accounting,” it had “not been necessary to keep detailed time records for” the
Brown trust.
Judge Wolf again denied Krame’s request that he receive compensation based
on a 1% fee and ordered him “to file a petition for compensation . . . with full
documentation of time expended and hourly rates.” Krame, through counsel, 7 then
filed a document entitled “Trustee’s Explanation of Services,” which gave an
overview of the services Krame provided during the relevant time period. It did not,
however, include any time records because, as Krame explained, he had “not kept
time for specific services as trustee in this case.” Judge Wolf interpreted that
7
Krame verified under oath that the facts provided in the “Explanation of
Services” were true and correct.
20
statement to mean that Krame could not “provide an hourly statement of services.”
Without the aid of time records, Judge Wolf resigned himself to determining
reasonableness based on a 1% fee, the very compensation structure he had
previously rebuffed. From that starting block, Judge Wolf then approved $5,320.41
of Krame’s $6,737.88 request for fees.
During its investigation, Disciplinary Counsel discovered that Krame had in
fact kept time records via his billing software called PCLaw, and that those records
justified time-based fees of $5,600, not the $6,737.88 Krame had sought. Believing
Krame intentionally misrepresented to Judge Wolf the non-existence of his time
records so that he could collect his desired 1% fee, which exceeded the amount
reflected in his time records, Disciplinary Counsel charged Krame with violating
Rule 3.3(a)(1) (knowingly making a false statement to a tribunal), Rule 8.4(c)
(dishonesty), and Rule 8.4(d) (interference with the administration of justice).
Before the Hearing Committee, Krame testified that his limited time records
were incomplete, and that those he had kept did not reflect all of the services he was
seeking compensation for in the second fee petition. He also claimed that he made
no misrepresentations to Judge Wolf because his statement that he had “not kept
time for specific services” was “a completely truthful statement” “for specific
21
services [he] had not kept track” so it “was not an all-inclusive statement.” Lastly,
he testified that he did not produce his time records because he “was being an
advocate for the proposition that . . . [a] percentage fee compensation was
appropriate” and had he “presented time records” he would have “conced[ed] the
point.”
The Hearing Committee found that Disciplinary Counsel did not provide clear
and convincing evidence to establish the charged violations of Rules 3.3(a)(1),
8.4(c), and 8.4(d). It credited Krame’s testimony that he did not believe he made
any false statements to Judge Wolf because what he said was technically true, and
concluded that Disciplinary Counsel did not present any direct or circumstantial
evidence to show that Krame’s statements were intentionally false or inaccurate.
The Board disagreed as to the first two charged violations. 8 It first
emphasized that “technically true” statements may nonetheless violate Rules
3.3(a)(1) and 8.4(c) if those statements omit material information with the intent to
mislead. See In re Shorter, 570 A.2d 760, 768 (D.C. 1990) (dishonesty includes
8
Disciplinary Counsel did not take exception to the Hearing Committee’s
conclusion that this charged Rule 8.4(d) violation was not supported by clear and
convincing evidence, so the Board did not consider that violation, and neither do we.
22
suppression of the truth, not just affirmative misrepresentations); In re Samad, 51
A.3d 486, 499 n.8 (D.C. 2012) (Rule 3.3(a)(1) is violated where an omission of
information is “the equivalent of an affirmative misrepresentation” (quoting Board
Prof. Resp. R. 3.3(a)(1), cmt. 2)). Given the context in which Krame’s statements
were made (“the court’s explicit and repeated efforts to assess the time [Krame]
spent as a trustee”), as well as the reason Krame did not disclose his time records
(because he did not want to compromise his 1% fee advocacy), the Board concluded
that Krame’s “statements were deliberately crafted to skirt the truth so as not to
jeopardize his hoped-for percentage fee recovery.”
Legal Analysis
We agree with the Board that, although Krame’s statement that “he had not
kept time for specific services” was true in one technical sense, Krame violated
Rules 3.3(a)(1) and 8.4(c) by not divulging the time records he did have. Judge Wolf
twice rejected Krame’s request that he receive compensation on a percentage basis
and twice requested that Krame submit detailed records to support his fee petition.
When Krame failed to do so, Judge Wolf reasonably understood that Krame did not
have the kind of records that would have been useful for a reasonableness inquiry.
This is evident both from Judge Wolf’s stated belief that Krame could not “provide
23
an hourly statement of services,” and from Judge Wolf’s lament that the “total lack
of information supplied by [Krame]” meant his review of Krame’s requested fees
would involve an “appearance of arbitrariness.” But Krame did have useful time
records. In fact, his time records accounted for the vast majority of the costs
reflected in the second fee petition. He simply chose not to provide them because
doing so would have hurt his chances at obtaining the percentage-based fee that he
wanted.
These facts are similar to the evasive conduct we reprimanded in In re Shorter.
There, respondent drew the attention of the IRS after he failed to pay his income
taxes for over a decade. 570 A.2d at 763. During the course of that investigation,
IRS agents met with respondent on several occasions to inquire about his personal
assets to determine what was available for the IRS to seize. Id. Respondent told
them truthfully that he had no personal assets, but omitted that the reason for that
was because all of his expenses were paid by his firm from accounts held solely in
the name of his law partner. Id. at 763-64. He explained he did not offer that
information to the agents because they never asked about anything except his
personal assets. Id. We concluded that although respondent’s answers to the IRS
agents’ questions were “technically true,” respondent still acted dishonestly because
he “knew what information the IRS was after, but for his own benefit refrained from
24
supplying that information even when asked questions that grazed the truth.” Id. at
768. In other words, “[a]s long as the IRS did not ask just the right questions,
respondent was prepared to deprive it of the right answers.” Id. Krame’s conduct is
similar. What he informed the court may have been “technically true” on one
reading, but it was sufficiently misleading for him not to disclose the time records
he had. He knew those records would have aided Judge Wolf, but opted not to
provide them because it would have jeopardized his chances of receiving his 1% fee.
That omission amounted to a material misrepresentation in violation of Rules
3.3(a)(1) and 8.4(c).
Krame contends the Hearing Committee’s factual and credibility findings
precluded the Board, and prevent us, from reaching that conclusion. Not so. The
only credibility finding rendered by the Hearing Committee was that it believed
Krame thought he was technically telling Judge Wolf the truth about not having time
records as to all of the services he rendered. But it would be a legal mistake to
conclude, from that premise, that Krame did not violate Rules 3.3(a)(1) and 8.4(c)
because technical truths may still violate those rules where they are intentionally
misleading via omission. That credibility finding says nothing about whether Krame
knowingly misled Judge Wolf by failing to notify the court that he could have
produced time records as to some of the services he rendered. As for the Hearing
25
Committee’s finding that there was “no . . . evidence” that Krame’s statements were
made with an intention to mislead Judge Wolf, we agree with the Board that the
record is in fact replete with such evidence, so that the Hearing Committee’s finding
lacks substantial evidence in the record. For instance, as the Board emphasized,
Judge Wolf’s order—ultimately resigning to paying Krame on a percentage basis—
made clear his understanding that Krame could not “provide an hourly statement of
services” putting the court in a quandary due to “the total lack of information
supplied by” Krame. By that point at the latest, Krame’s failure to correct the court’s
clear misimpression that he had no hourly records cannot be chalked up to good
faith, and can only be explained by Krame’s deliberate and successful design to
mislead the court. See generally In re Ukwu, 926 A.2d 1106, 1116 (D.C. 2007)
(“[I]n assessing intent, the court must consider the entire context. ‘A play cannot be
understood on the basis of some of its scenes, but only on its entire performance.’”
(quoting Andrews v. City of Philadelphia, 895 F.2d 1469, 1484 (3d Cir. 1990))).
B. False/dishonest statements to the Probate Court (Baker trust)
Factual Background
In March 2005, a petition was filed in probate court to establish the Baker
trust, naming Krame as trustee. The compensation provision of the trust instrument
26
was originally the same as the one entered in the Brown trust, which allowed for
compensation to be expressed “as a percentage of Trust assets.” Before approving
the Baker trust, Judge Franklin Burgess, Jr., the judge assigned to the matter at the
time, held a two-day hearing to address the issue of trustee compensation. During
the hearing, Judge Burgess said he did not want compensation “expressed as a
percentage” and that it should instead be “judged on the standard of reasonableness.”
In light of this preference, Judge Burgess amended the compensation provision in
the trust instrument to say:
A Trustee shall be entitled to reasonable compensation for
his or her services as Trustee hereunder, consistent with
industry standards, not to exceed one percent (1%) of the
trust corpus, determined annually. . . . In considering the
reasonableness of fees reported in the accounting by
the Trustee, the Court shall consider the custom of the
community; the trustee’s skill, experience and
facilities; the time devoted to trust duties; the amount
and character of the trust property; the degree of
difficulty, responsibility and risk assumed in
administering the trust, including in making
discretionary distributions; the nature and costs of
services rendered by others; and the quality of the
trustee’s performance and any special skills in support
of that performance.
Krame later testified before the Hearing Committee that he understood the cap of
1% as permitting him to calculate his fees at a 1% rate rather than on an hourly basis.
27
A majority of the Hearing Committee credited Krame’s testimony regarding his
interpretation of the provision.
Over a year later, Krame filed his first fee petition for his work performed on
the Baker trust. The petition requested $17,264.18 in fees, “calculated at 1% of the
value of the trust.” Around the same time, Krame generated a document from
PCLaw that set forth the time records for the services claimed in the fee petition.
That document showed a total of $12,350.59 for fees and costs—$4,913.59 less than
what was requested in the fee petition. He did not attach these time records to his
fee petition or at any point alert the probate court to their existence. According to
Krame, the amounts were different because the time entered into PCLaw was
incomplete and did not capture all of the work he did. A majority of the Hearing
Committee credited this explanation.
Judge Ronald P. Wertheim, the judge overseeing the Baker trust at the time
the first fee petition was submitted, denied Krame’s fee request and ordered him to
supply “accompanying information establishing the reasonableness of such fees.”
Krame filed a response to Judge Wertheim’s order, stating that he “receives
compensation for his services, set by agreement of the parties at one percent (1%) of
the trust corpus, per year, payable quarterly.” He further stated that, according to
28
his records, “at least 40 hours of service was” performed, for which a 1% fee was
“reasonable compensation.” Krame later testified before the Hearing Committee
that he believed the requested fees were “appropriate compensation for” the work he
was doing, and that he was “entitled to take a percentage fee” since the “language of
[the] trust allowed for [that].” The Hearing Committee credited this testimony.
Judge Wertheim found that Krame acted contrary to Judge Burgess’s
direction, which he believed to be that “no fixed percentage was to be used as a
standard or measurement of reasonableness.” He then expressed frustration at the
lack of documentation supporting Krame’s fee request, stating that Krame provided
no breakdown for the forty hours of service he claimed to have provided. With no
other way to determine the reasonableness of Krame’s fees, Judge Wertheim divided
the total costs requested ($17,264.18) by the number of hours Krame claimed to have
worked (40), which calculated to a $431.60 hourly rate; a rate that Judge Wertheim
found unreasonable. Applying what he thought was a more reasonable hourly rate
($210), Judge Wertheim then approved $8,400 of the requested fees.
Disciplinary Counsel again charged Krame with violating Rules 3.3(a)(1),
8.4(c), and 8.4(d), contending that Krame (1) intentionally misled Judge Wertheim
into believing he did not have useful time records and (2) misrepresented his
29
understanding of the trust instrument as permitting him to collect a flat 1% fee. The
Hearing Committee disagreed with both points. It concluded that Disciplinary
Counsel produced no evidence for its argument that Krame intentionally withheld
his time records to mislead the court into granting his desired 1% fee. It then found
the compensation provision of the Baker trust unclear as to whether Krame could
charge a 1% fee and credited Krame’s belief that he could. The Board disagreed
with both of those Hearing Committee conclusions. 9 The Board found that Krame
intentionally “misled Judge Wertheim into believing that [Krame] had ‘scant
information about his time’” when he failed to disclose his time records, and then
“misrepresented to Judge Wertheim” his understanding “that his compensation had
been set at 1%.” We agree with the Board on the first point, but disagree with it on
the second.
Legal Analysis
For largely the same reasons discussed supra in Part III.A, we agree with the
Board that Krame intentionally misled the court by not disclosing his time records
9
The Board did not, however, find a Rule 8.4(d) violation for this conduct,
because, as with the Brown trust, supra note 7, Disciplinary Counsel did not take
exception to the Hearing Committee’s conclusion that the Rule 8.4(d) violation had
not been established by clear and convincing evidence.
30
after Judge Wertheim expressed frustration over having no information to calculate
the reasonableness of Krame’s requested fees. It was clear from Judge Wertheim’s
orders that time records—or really any records—would have aided the court in its
reasonableness analysis. Krame had those records but chose not to disclose them,
not because he believed they would be of no use to the court, but per his own
testimony, because he was taking a “righteous stand” and “standing up for a
principle” that he was entitled to the 1% compensation he sought. The Hearing
Committee made no credibility finding that we must defer to on this question; it
merely concluded that Disciplinary Counsel did not present sufficient evidence to
support the charge, a legal conclusion that is at odds with the record. We therefore
conclude that Krame violated Rules 3.3(a)(1) and 8.4(c) by failing to disclose his
time records to Judge Wertheim.
However, we cannot agree with the Board’s conclusion that Krame
misrepresented his understanding that the trust instrument permitted him to collect
a flat 1% fee. Even if that is not a reasonable interpretation of the trust instrument,
the Hearing Committee credited Krame’s testimony that he nonetheless interpreted
it that way. The Board was not free to reject that credibility finding—which has
substantial evidentiary support (Krame’s testimony) and is not premised on any legal
mistake—and neither are we. The Board was obligated to accept that credibility
31
finding in determining whether Krame intentionally violated Rules 3.3(a)(1) and
8.4(c). It did not do that. Had it done so, it would have been precluded from
determining that Krame made knowing misrepresentations to Judge Wertheim in
saying his compensation for the Baker trust was “set by agreement of the parties at
one percent (1%) of the trust corpus, per year, payable quarterly.” Neither the Board
nor Disciplinary Counsel argues the Hearing Committee’s credibility finding lacked
substantial support in the record, nor do they suggest it was infected by any legal
mistake. It is therefore not for us, or for the Board, to second guess that credibility
finding.
C. Disobeying court orders
Factual Background
As the facts recounted above make clear, Krame was persistent in resisting
the probate division’s decision to shift from percentage-based to hours-based
compensation for trustees. Krame believed his advocacy in this arena was a service
to the beneficiaries of the trusts he was administering, and so he thought he was
entitled to reimbursement for his time in advocating this position. Judge Wolf
disagreed and ordered him not to include his litigation-related fees or costs in his fee
petitions. Despite that order, Krame tried to expense litigation fees and costs to the
32
Brown trust on two occasions: once on November 17, 2006, when he billed the
Brown trust for a $200 litigation filing fee, and again on November 22, 2006, when
Krame filed a requested $8,700 worth of fees for advancing the position that he was
entitled to be paid on a percentage basis. Judge Wolf disallowed both amounts.
Because the $200 filing fee had already been paid out to Krame, Judge Wolf also
ordered Krame to “reimburse the filing fee ‘forthwith.’” Krame did not comply with
that order until two and a half years later.
Legal Analysis
Both the Hearing Committee and the Board concluded that clear and
convincing evidence existed to support the conclusion that Krame twice refused to
obey a court order, each a separate violation of Rule 3.4(c). He violated the court’s
initial order not to include his litigation-related fees or costs in his fee petitions, and
then violated its order to return the $200 “forthwith” when he failed to comply with
that order for more than two and a half years. Krame concedes on appeal that he
committed those violations, so we adopt the Board’s conclusion that Krame violated
Rule 3.4(c) in both instances.
33
D. Altering time records
Factual Background
Krame directly appealed three orders discussed above: (1) Judge Wolf’s
disallowance of $1,417.47 worth of requested fees in Krame’s second accounting
for work performed on the Brown trust; (2) Judge Wertheim’s approval of only
$8,400 in fees for work on the Baker trust—a reduction from the $17,264.18 Krame
requested; and (3) Judge Wolf’s order prohibiting Krame from expensing litigation-
related costs. See In re D.M.B., 979 A.2d 15, 17-21 (D.C. 2009). Krame was unsure
how those appeals would pan out, so while they were pending he did not file any fee
requests for the work he performed on behalf of the Brown and Baker trusts. He did,
however, start tracking his time more diligently in PCLaw in case his appeals were
unsuccessful and he had to then submit time-based fee petitions. Several years later,
in In re D.M.B., this court affirmed each of Judge Wolf’s and Judge Wertheim’s
orders. Id. at 21-26.
Following that loss, Krame filed his outstanding fee requests (covering several
years) for the Brown and Baker trusts. Attached to both fee petitions was a PCLaw-
generated document titled “Pre-Bill” which contained time entries for the work
Krame had performed on behalf of the Brown and Baker trusts from 2006 to 2009.
34
Both petitions were approved by the probate court ($43,055.00 in fees for the Brown
trust and $47,642.50 in fees for the Baker trust).
During its investigation, and with the aid of PCLaw’s built-in audit feature
(tracking changes to billing statements), Disciplinary Counsel discovered that four
of the Pre-Bill time entries submitted in support of the Brown and Baker fee petitions
were altered by Krame after he lost his appeal in In re D.M.B. The altered entries
omitted any reference to work Krame performed for his litigation-related activities
(which Krame was not permitted to receive compensation for per Judge Wolf’s then-
affirmed order), but offered alternative justifications for the same fees, totaling $860.
For instance, one line item in Krame’s contemporaneous time entries noted $525 for
1.5 hours of “work on notice and petition for fees,” but after Krame lost his appeals,
that entry was altered to the same $525 for 1.5 hours of “work on notice and petition
for fees on accounting.” Believing that and three similar alterations were a deceptive
way for Krame to circumvent Judge Wolf’s order and obtain compensation for his
litigation fees, Disciplinary Counsel charged Krame with violations of Rules
3.3(a)(1) (“Making a false statement of fact or law to a tribunal”); 8.4(c)
(“Engag[ing] in conduct involving dishonesty, fraud, deceit, or misrepresentation”);
8.4(d) (“Engag[ing] in conduct that seriously interferes with the administration or
justice”); and 1.5(a) (charging an unreasonable fee). Krame testified that, for each
35
of the four alterations, he reviewed his files and determined that he had performed
equivalent compensable work that he had previously failed to record, and simply
substituted that work for the now-omitted amounts for litigation fees.
The Hearing Committee “credited [Krame’s] testimony regarding [his]
preparation of the [time entries].” But because it recognized the “unlikelihood” and
“implausibility” of Krame’s ability to reliably remember work he performed years
after the fact, it concluded that he recklessly (but not intentionally) violated Rules
8.4(c) and (d). See, e.g., In re Ukwu, 926 A.2d at 1113-14 (Rule 8.4(c) may be
violated recklessly). In concluding that Krame’s deception was merely reckless, the
Hearing Committee opined that Krame did not intentionally falsify time records, but
instead sloppily pieced through his records without adequate regard for their
accuracy. Because it did not believe Krame intentionally falsified the four time
entries or that he gave intentional false testimony about his preparation of those
entries, the Hearing Committee concluded that Krame did not violate Rule 3.3(a)(1),
which requires a knowing mens rea. It also found that Krame did not violate Rule
1.5(a) because Disciplinary Counsel presented no evidence showing that the fees
charged in the recklessly submitted time entries were ultimately unreasonable.
36
The Board disagreed that Krame did not deliberately falsify his time records,
concluding that Krame’s “justifications [for the alterations were] not credible.”
Having determined Krame acted intentionally, rather than recklessly, the Board then
found that Krame also violated Rule 3.3(a)(1) when he submitted the altered time
entries and that his testimony before the Hearing Committee “seeking to justify that
conduct was intentionally false.” It also found that Krame, by billing the Brown and
Baker trusts for impermissible litigation costs in violation of Judge Wolf’s order,
charged an unreasonable fee in violation of Rule 1.5(a).
Krame concedes that he acted recklessly in violation of Rules 8.4(c) and (d)
when he altered the four time entries, but he argues the Board impermissibly ignored
the Hearing Committee’s credibility findings when it elevated his conduct to
intentional and then found additional violations of Rules 3.3(a)(1) and 1.5(a). We
agree with him as to Rule 3.3(a)(1) but disagree as to Rule 1.5(a).
Legal Analysis
For the reasons explained supra, Krame’s state of mind is a question of
ultimate fact that the Board was permitted to review de novo. But, as we have also
explained supra, in doing so, the Board was obligated to accept the Hearing
Committee’s subsidiary credibility findings, especially given that those findings
37
were based on Krame’s demeanor while testifying. See, e.g., In re Temple, 629 A.2d
at 1208-09. That did not happen here. Rather than accept the Hearing Committee’s
finding that Krame testified credibly regarding how he prepared the four time
entries, and thus did not intentionally falsify his time records, the Board conducted
its own de novo review of the record and determined Krame’s “justifications [were]
not credible.” That was not a determination for the Board to make, even if it found
Krame’s explanation implausible.
Had the Board accepted the Hearing Committee’s credibility finding—that
Krame did not intentionally falsify his time entries, but instead tried to recreate them
based on his experience and records (however misguided that attempted recreation
might have been)—it would have had no choice but to accept that Krame’s conduct
was no more than reckless, rather than intentional. The only way around that would
have been for the Board to conclude that the Hearing Committee’s credibility finding
was not supported by substantial record evidence or was infected by some legal
error. The Board made neither of the predicate determinations that would permit it
to revisit the Hearing Committee’s credibility findings, and Disciplinary Counsel
does not urge us to do so on appeal. We therefore conclude that Krame’s alteration
of his time entries was reckless, but not intentional, in violation of Rules 8.4(c) and
38
(d). Because we cannot say that Krame knowingly falsified his time entries, we
further conclude that he did not violate Rule 3.3(a)(1).
Finally, we turn to the alleged violation of Rule 1.5(a), which prohibits
charging an unreasonable fee. The Hearing Committee declined to find a violation,
stating that it had “no District of Columbia authority for [the] proposition” that
“recklessly dishonest” time entries are “unreasonable per se.” Yet, in In re Cleaver-
Bascombe, we said “[i]t cannot be reasonable to demand payment for work that an
attorney has not in fact done,” with no reference to any requirement that this demand
be intentionally false. 892 A.2d 396, 403 (D.C. 2006). Relying on In re Cleaver-
Bascombe, the Board found that Krame had violated Rule 1.5(a) based on the fact
that he had “submitted two fee petitions that included false and dishonest entries . . .
that the Hearing Committee found to be ‘baselessly inflat[ed].’” Whether Krame’s
recklessly dishonest time entries were unreasonable is a question of law that the
Board was entitled to review de novo. In concluding that they were, the Board
credited the Hearing Committee’s finding that the entries were “baselessly
inflat[ed]” and did not rely on its own opinion that the inflation was intentional. We
agree with the Board that to demand payment for work not done, even if the demand
is merely reckless and not intentional, is to demand an unreasonable fee, and so
Krame violated Rule 1.5(a).
39
E. Supplemented time entries
Factual Background
Disciplinary Counsel also discovered during its investigation that after Krame
lost his appeal in In re D.M.B., he added new charges and services to his time entries
within PCLaw before submitting his outstanding fee requests for the Brown and
Baker trusts. As described by Disciplinary Counsel, “[t]hese additional time charges
were for services [Krame] claimed to have completed six months to three years
earlier—over 50 additional time charges in Brown and over 40 additional time
charges in Baker.” The additional time charges increased the fees claimed for the
Brown trust by $10,800, which roughly approximated the $10,317.47 in fees Judge
Wolf disallowed in Krame’s various fees requests relating to the Brown trust
($1,417.17 in the second fee petition, $8,700 in the third fee petition, and the order
to return a $200 litigation-related expense). They also increased the charged fees
for the Baker trust by $8,775, which brought his total request to “about 1% of the
original [trust] corpus . . . when annualized”—1% being the compensation fee
Krame had requested and been denied in In re D.M.B. Believing the additional
charges were a way for Krame to collect his desired 1% fee as well as his litigation
40
costs related to that desired fee, Disciplinary Counsel charged Krame with violating
Rules 3.3(a)(1) and 8.4(c). 10
While both the Hearing Committee and the Board expressed concern over
Krame’s ability to accurately and reliably recall services he performed months and
years after the fact, they concluded that Disciplinary Counsel did not carry its clear
and convincing burden on these charges. Disciplinary Counsel takes exception to
this finding, arguing that the Hearing Committee and the Board “ignore[d] common
sense and personal experience” when determining there was no evidence to support
Disciplinary Counsel’s charges. We agree, to an extent.
Legal Analysis
We agree with Disciplinary Counsel that clear and convincing evidence exists
to conclude that Krame supplemented his time entries recklessly and in violation of
Rule 8.4(c), and that the Hearing Committee and Board’s contrary conclusion is not
10
It is not entirely clear if Disciplinary Counsel charged this conduct as also
violating Rules 8.4(d) (conduct that is prejudicial to the administration of justice)
and 1.5(a) (charging an unreasonable fee). But neither the Hearing Committee nor
the Board considered such an argument, and Disciplinary Counsel does not appear
to assert these violations on appeal, contending only that Krame “dishonestly padded
both fee petitions.” We therefore do not consider whether Krame violated Rules
8.4(d) or 1.5(a) on account of these supplemental time entries.
41
supported by substantial evidence. The Board and the Hearing Committee were too
wary of applying their common sense in a way that cannot be reconciled with our
(and their) earlier conclusions that Krame’s altered time entries were at least
reckless. As we made clear in In re Godette, the Hearing Committee and the Board
are “not precluded from using their common sense in evaluating the record.” 919
A.2d 1157, 1165-66 (D.C. 2007). And here, commonsense is paramount.
Both the Board and Hearing Committee acknowledged that “delayed
recordation inevitably diminishes the accuracy and credibility of time entries.”
While parties might reasonably debate the reliability of time entries submitted at the
conclusion of a month’s worth of work, there can be little debate regarding the
diminished reliability of entries first recorded several months or years after the work
was completed. That reality, in tandem with (i) the lack of detailed record evidence
substantiating Krame’s work on the Brown and Baker trusts during the appeals
period, (ii) the “implausibility” of several of Krame’s explanations for how he was
able to remember certain services he conducted years earlier noted by the Hearing
Committee, and (iii) the fact that the additional charges to the Baker trust gave
Krame his desired 1% fee, and that the additional charges to the Brown trust offset
the various fees disallowed by Judge Wolf, clearly establishes that Krame’s
supplemented time entries were recklessly submitted in violation of Rules 8.4(c).
42
We cannot say that those time entries were intentionally falsified so as to
constitute violations of Rule 3.3(a)(1), however. For the reasons explained supra
regarding the Hearing Committee’s crediting Krame’s explanation of how he
prepared the supplemented time entries for the Brown and Baker fee petitions, we
would have to reject the Hearing Committee’s credibility findings to find a violation
of 3.3(a)(1), and we have no basis for doing so. We thus agree with the Hearing
Committee and the Board that Krame did not violate Rule 3.3(a)(1) in submitting
these supplemented time entries.
* * *
In sum, with respect to Krame’s oversight of the Brown and Baker trusts, we
conclude that Krame violated Rules 3.3(a)(1) and 8.4(c) when he intentionally
misled Judge Wolf into believing he did not have useful time records pertaining to
the first fee petition filed in relation to the Brown trust; Rules 3.3(a)(1) and 8.4(c)
when he intentionally did the same to Judge Wertheim pertaining to the second fee
petition filed in relation to the Baker trust; Rule 3.4(c) when he defied Judge Wolf’s
orders by expensing litigation costs to the Brown trust and failing to promptly repay
certain of those costs; and Rules 1.5(a) and 8.4(c) and (d) when he recklessly
submitted altered time entries.
43
IV.
We turn now to the negligent misappropriation charges, which stem from two
duplicate disbursements Krame made to himself from the Seay trust.
Factual Background
The first duplicate payment occurred on January 2, 2002, when Krame
disbursed $7,178.80 to himself from the Seay trust after the probate court approved
his fourth fee petition. That payment was duplicative of services Krame had already
paid himself a year earlier on February 21, 2001 when he first submitted the fourth
fee petition. Krame testified that the duplicate payment occurred as a result of the
“passage of time between February 12, 2001 [the date he submitted the fourth fee
petition and made the first disbursement] and January 2, 2002 [the day the probate
court approved the fourth fee petition and he made the duplicate disbursement],”
“personal and administrative difficulties” at his firm, as well as his reliance on
instructions from his administrative staff for when disbursements were appropriate.
The Hearing Committee credited this testimony.
The second duplicate payment occurred on September 18, 2002, when Krame
disbursed $6,770.38 to himself from the Seay trust after the probate court approved
44
a portion of his fifth fee petition. That payment was duplicative because Krame had
already disbursed the approved amount to himself on February 5, 2002, the day he
submitted the fifth fee petition. Krame again testified that the error occurred given
the passage of time between the submission of the fee petition and the court’s
approval order, his “continued press of heavy work,” as well as instruction by his
administrative staff to disburse the funds. The Hearing Committee credited this
testimony as well.
On February 24, 2003, Krame discovered the second duplicate payment while
preparing the sixth accounting for the Seay trust, and two days later he reimbursed
the trust for the errant double-billing and notified the probate auditor of the error.
The first duplicate payment, however, was not discovered until seven years later, on
November 30, 2010, when Krame was reviewing his records in response to
Disciplinary Counsel’s investigation. Krame testified that discovery of the first
duplicate payment was delayed “because [the payment] fell into separate accounting
periods, so it wasn’t readily apparent in preparing accountings that there had been a
double payment.”
A majority of the Hearing Committee found that the duplicate payments did
not amount to negligent misappropriation. It emphasized that the erroneous
45
disbursements were the result of innocent mistakes “made not by [Krame] but by his
employees,” and that Disciplinary Counsel had presented no argument or evidence
to establish that Krame’s bookkeeping system or supervision of his staff were
inadequate. Under such circumstances, the Hearing Committee reasoned that
misappropriation had not been proven.
The Board disagreed for two reasons. First, it found that the erroneous
disbursements were not a mistake made only by Krame’s staff. It noted that Krame
not only “personally signed [the] checks disbursing” the excessive funds, but
“reviewed and signed the accountings that listed the improper payments.” Had
Krame been more diligent in those responsibilities, the Board determined, the
duplicate payments would not have occurred. Citing In re Robinson, 74 A.3d 688,
695 (D.C. 2013), it also concluded that Krame was negligent for not discovering the
first duplicate payment sooner because discovery of the second duplicate payment
should have been “a serious wake-up signal” for Krame to review his records for
other erroneous payments. Second, the Board reasoned that misappropriation is
essentially a nondelegable per se offense, so even if the duplicate payments were an
honest mistake made entirely by Krame’s staff, Krame would still be at fault. Based
on these findings, the Board determined that Krame violated Rule 1.15(a) by
misappropriating the Seay trust funds.
46
Legal Analysis
Krame takes exception to the Board’s negligent misappropriation findings.
He argues the Board was wrong on both the law and the facts. As to the law, he
contends that while this court has referred to misappropriation as “essentially a per
se offense,” it is not a strict liability offense; some level of negligent culpability is
still required to establish a violation of Rule 1.15(a). Thus, if the erroneous duplicate
payments were the product of an innocent, good faith mistake that did not violate a
standard of reasonable care, by law, he could not have negligently misappropriated
the Seay trust funds. As to the facts, Krame argues his conduct did not fall below a
reasonable standard of care because Disciplinary Counsel presented no evidence to
indicate that he did not have adequate bookkeeping practices in place, that he did not
adequately train or supervise his staff, or that it was negligent for Krame to rely upon
his staff to inform him when it was appropriate to disburse funds from the Seay trust.
While we might agree with Krame’s legal contention, 11 we need not resolve
it because we disagree with his contention that none of his conduct fell below a
11
This court has suggested that misappropriation is “essentially a per se
offense,” but we have never sustained a Rule 1.15(a) charge absent some finding of
a culpable mindset at least rising to the level of negligence. See In re Haar, 698
A.2d 412, 427, 428 & n.7 (D.C. 1997) (Ruiz, J., dissenting) (collecting cases); see
47
standard of reasonable care. Krame reviewed the single-page sixth accounting for
the Seay trust after discovering one duplicate payment, and that accounting showed
three legal fees listed as disbursements to himself: one for $7,178.50 disbursed on
January 2, 2002; one for $6,835.38 disbursed on February 6, 2002; and one for
$6,770.38 disbursed on September 18, 2002. 12 The three disbursements should have
been an immediate tip-off that something was amiss. After all, these were annual
fees—meaning, there generally should have been only one per annual accounting.
Krame recognized that oddity with respect to the $6,770.38 disbursed on September
18, 2002, concluding that it was a duplicate payment of the amount disbursed on
also generally Nancy J. Moore, Mens Rea Standards in Lawyer Disciplinary Codes,
23 Geo. J. Legal Ethics 1 (2010) (providing overview of mens rea requirements in
disciplinary rules). Nor have we ever held that an attorney can violate Rule 1.15(a)
based on a third party’s actions absent some negligent contributory conduct by the
attorney (e.g., failing to adequately supervise said third party as required under Rule
5.3). See, e.g., In re Robinson, 74 A.3d 688, 694 & n.12 (D.C. 2013) (deferring on
question whether non-negligent supervision of a third party can amount to a violation
of Rule 1.15(a)); cf. In re Beauregard, 189 A.3d 1236, 1246-47, 1252 (Del. 2018)
(where recordkeeping duties have been delegated to a third party, an attorney cannot
violate Rule 1.15(a) unless negligent in training or supervising third party). Those
questions remain for another day, however, because we conclude Krame was
negligent.
12
The $65 difference between these latter two duplicative payments was the
result of an additional cost that Krame had initially reimbursed himself for in the
February disbursement, but later concluded was in error. He reimbursed the trust
with the higher amount upon detection of the double payment, i.e., the full amount
of the February disbursement, inclusive of the errant $65 in costs.
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February 6, 2002. But he did not recognize the same regarding the $7,178.50
disbursement, and his failure to investigate further under these circumstances was at
least negligent.
If Krame had merely glanced back at the fifth accounting from the prior year
he would have seen what he ultimately did not learn until seven years later: that the
$7,178.50 disbursement in January 2002 was also a duplicate of a disbursement he
received in February 2001. 13 Having already been put on notice of one duplicate
payment in that very same year, a reasonably diligent attorney should have taken the
five minutes to review the fifth accounting to make sure he had not made the same
error before. That is especially so here where the sixth accounting reflected three
“annual” fees, not just two, and where Krame described his law firm at the time of
these disbursements as being in “turmoil” and experiencing “administrative
difficulties,” which further increased the likelihood that more than one duplicate
error existed. Particularly when an attorney is aware that their office is in
13
As with the September 2002 duplicate payment, there was a slight
discrepancy between the January 2002 duplicate payment and the original amount
disbursed, to the tune of $88. We do not attribute any importance to that, because
to the extent Krame believed the January 2002 payment was for services rendered
in the prior year, a brief review of the prior year’s single-page accounting should
have immediately notified him that he had already reimbursed himself for those
services.
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administrative turmoil, they ought to be especially diligent in ensuring that one
substantial accounting error is, in fact, just the one.
As the Board correctly recognized, Krame’s less-than-diligent response to his
review of the sixth accounting is analogous to the negligent misappropriation that
occurred in In re Robinson. There, respondent entrusted an employee with managing
the firm’s trust account, which held client funds. 74 A.3d at 691. After five years
without incident, the trust account’s funds were mistakenly overdrawn when the
employee managing the account accidentally placed client funds in the operating
account rather than the trust account. Id. Respondent’s bank notified him of the
overdraft, but respondent did not take the appropriate steps to investigate or rectify
the issue. Id. at 692-93, 695. As a result, the firm’s trust account was overdrawn a
second time. Id. at 693. This court found that respondent’s failure to investigate
and fix the overdraft issue “in a more diligent fashion,” despite being “clearly . . . on
notice that something was amiss,” caused the second overdraft, which amounted to
negligent misappropriation. Id. at 695-96. The same is true here. Krame’s
discovery of the second duplicate payment in the sixth accounting should have been
“a serious wake-up signal” that “something was amiss.” Id. His failure to respond
accordingly by investigating his records to determine whether other duplicate
payments had been made delayed his discovery of yet another duplicate payment by
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seven years. That unreasonably delayed detection turned what could have been a
non-culpable mistake into negligent misappropriation. 14
V.
We turn now to the appropriate sanction. The Board and Disciplinary Counsel
recommend that we disbar Krame. That is a far harsher sanction than either the six-
to eighteen-month suspensions recommended by the members of the Hearing
Committee or the “brief suspension” of thirty to sixty days that Krame advances as
appropriate. Considering the Rule violations detailed above, we conclude that an
eighteen-month suspension—the harshest sanction recommended by a member of
the Hearing Committee—is the appropriate sanction.
Although “we normally adopt the Board’s recommendation as long as it ‘falls
within the wide range of acceptable outcomes,’” In re Ekekwe-Kauffman, 210 A.3d
775, 797 (D.C. 2019) (quoting In re Martin, 67 A.3d 1032, 1053 (D.C. 2013)), that
14
The Board and Disciplinary Counsel put forth several other arguments for
why the two erroneous payments resulted in negligent misappropriation, including
that the disbursements themselves were negligent. We can put those theories aside,
because Krame’s substantially delayed detection of one duplicate payment suffices
to conclude that Krame engaged in negligent misappropriation, and we would not
think a stiffer sanction is warranted even if we were to find a second negligent
misappropriation. See In re Robinson, 74 A.3d at 695 n.14; id. at 694 n.12.
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deference is not warranted here where we have rejected some of the most serious
violations found by the Board. See id. (no deference given where we disagreed with
the Board’s misappropriation finding). The Board erred when it rejected several of
the Hearing Committee’s credibility findings, causing it to find more intentional and
egregious violations of certain Rules. If not for those additional and more severe
violations that we do not sustain—each of which involved the intentional submission
of fabricated documents—we think it unlikely the Board would have recommended
disbarment.
The Board relied heavily on those now-rejected violations as animating its
recommendation, citing a host of cases where disbarment was the appropriate
sanction for deliberately submitting fraudulent documents. See In re Cleaver-
Bascombe, 986 A.2d 1191 (D.C. 2010) (attorney disbarred for intentionally
submitting a fraudulent voucher and then later lying about it); In re Goffe, 641 A.2d
458 (D.C. 1994) (attorney disbarred for manufacturing evidence and lying to both
the Tax Court and the Hearing Committee); In re Howes, 39 A.3d 1 (D.C. 2012)
(attorney disbarred for deliberate and repeated false sworn statements and
certifications to the government that resulted in the misuse of public funds). Because
we conclude that Krame recklessly, but not intentionally, submitted dishonest time
records to the probate court, we do not consider those cases animating the Board’s
52
recommendation especially analogous to Krame’s conduct, and thus find disbarment
inappropriate.
So we are left to fashion our own sanction, and do so knowing that this “is not
an exact science but may depend on the facts and circumstances of each particular
proceeding.” In re Goffe, 641 A.2d at 463. Non-disbarment sanctions this court has
imposed for Rule violations involving false or dishonest statements “range from a
suspension of thirty days to a suspension of three years,” In re Guberman, 978 A.2d
200, 207 (D.C. 2009); see also id. at 207 n.7 (collecting cases), and a six-month
suspension is the usual discipline “meted out in this jurisdiction for negligent
misappropriation,” In re Mirsky, 860 A.2d 363, 365 (D.C. 2004). Given the number
of Rule violations committed here, some of which were the product of intentional
conduct meant to mislead the probate court and circumvent its orders, we think the
brief suspension that Krame urges us to impose is not appropriate and would not
serve a strong enough deterrent for future misconduct. See In re Martin, 67 A.3d at
1053 (more severe sanction is appropriate “where dishonesty is accompanied by
other serious violations or is protracted”). This is particularly so when we consider
the vulnerability of the trust beneficiaries Krame was serving as a trustee for.
53
However, we also acknowledge the following substantial mitigating factors:
Krame’s otherwise unblemished record; his cooperation with Disciplinary Counsel’s
investigation; his long history of serving the disabled and elderly communities; the
significant time Krame has devoted to the profession, including his service on the
steering committee of the Bar’s Estates, Trusts, and Probate Section; and the amicus
brief that over a dozen of Krame’s longstanding clients filed on his behalf, attesting
to his valuable services, professionalism, upstanding character, and ethical conduct.
On balance, we conclude that these aggravating and mitigating considerations
counsel in favor of an eighteen-month suspension for Krame’s violations of Rules
1.5(a), 1.15(a), 3.3(a)(1), 3.4(c), 8.4(c), and 8.4(d).
VI.
It is therefore ORDERED that Evan J. Krame is suspended from the practice
of law in the District of Columbia for eighteen months. For purposes of
reinstatement, we refer Krame to the requirements under D.C. Bar R. XI, § 16(c),
and further direct his attention to D.C. Bar R. XI, § 14, governing the responsibilities
of suspended attorneys.
So ordered.