Attorney Grievance v. Kotlarsky , 453 Md. 469 ( 2017 )


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  • Attorney Grievance Commission v. Mark Kotlarsky, Misc. Docket No. 30, September Term
    2016. Opinion by Hotten, J.
    ATTORNEY DISCIPLINE — SANCTIONS — DISBARMENT
    Court of Appeals disbarred from practice of law in Maryland lawyer who intentionally
    failed to disclose assets of his law firm’s pension plan in his bankruptcy petition, and failed
    to respond to Bar Counsel’s repeated lawful demands for information. Such conduct
    violated Maryland Attorneys’ Rules of Professional Conduct (“MARPC”) §19-308.1(b)
    (Disciplinary Matters), and §19-308.4(a), (c), and (d) (Misconduct).
    Circuit Court for Montgomery County
    Case No. 32608-M
    Argued: April 4, 2017                     IN THE COURT OF APPEALS
    OF MARYLAND
    Misc. Docket AG No. 30
    September Term, 2016
    __________________________________
    ATTORNEY GRIEVANCE
    COMMISSION OF MARYLAND
    v.
    MARK KOTLARSKY
    __________________________________
    Barbera, C.J.,
    Greene,
    Adkins,
    McDonald,
    Watts,
    Hotten,
    Getty,
    JJ.
    __________________________________
    Opinion by Hotten, J.
    __________________________________
    Filed: June 22, 2017
    Respondent, Mark Kotlarsky, was admitted to the Bar of Maryland on December
    15, 1992. On August 22, 2016, the Attorney Grievance Commission of Maryland (“the
    Commission”), through Bar Counsel, filed in this Court a Petition for Disciplinary or
    Remedial Action (“Petition”) against Respondent as a result of having received a notice
    from Citibank that Respondent had over-drafted his operating account ending in -3487.
    Upon investigation, the Commission discovered that Respondent had failed to disclose
    assets that were associated with his law firm’s pension plan in his bankruptcy petition, and
    that Respondent had outstanding federal and state tax liens totaling $35,092.72.1 In its
    Petition, the Commission alleged that Respondent violated Maryland Attorneys’ Rules of
    1
    The record reflects that the first lien was filed by the U.S. National Association on
    February 21, 2013 in the amount of $12,144.23. The second lien was filed by the
    Comptroller of Maryland on August 23, 2014 in the amount of $22,948.49. Both liens
    remain active.
    Professional Conduct (“MARPC”) §19-301.15(a) (safekeeping property),2 §19-308.1(b)
    (bar admission and disciplinary matters),3 and §19-308.4(a), (c), and (d) (misconduct).4
    2
    MARPC §19-301.15 provides, in relevant part:
    (a) An attorney shall hold property of clients or third persons that is in an
    attorney’s possession in connection with a representation separate from
    the attorney’s own property. Funds shall be kept in a separate account
    maintained pursuant to Title 19, Chapter 400 of the Maryland Rules, and
    records shall be created and maintained in accordance with the Rules in
    that Chapter. Other property shall be identified specifically as such and
    appropriately safeguarded, and records of its receipt and distribution shall
    be created and maintained. Complete records of the account funds and of
    other property shall be kept by the attorney and shall be preserved for a
    period of at least five years after the date the record was created.
    After the evidentiary hearing was held, Bar Counsel withdrew the allegation that
    Respondent violated Rule §19-301.15(a).
    3
    MARPC §19-308.1 provides, in relevant part:
    An applicant for admission or reinstatement to the bar, or an attorney in
    connection with a bar admission application or in connection with a
    disciplinary matter, shall not:
    *      *      *
    (b) fail to disclose a fact necessary to correct a misapprehension known by
    the person to have arisen in the matter, or knowingly fail to respond to a
    lawful demand for information from an admissions or disciplinary
    authority, except that this Rule does not require disclosure of information
    otherwise protected by Rule 19-301.6 (1.6).
    *      *      *
    4
    MARPC §19-308.4 provides, in relevant part:
    It is professional misconduct for an attorney to:
    (a) violate or attempt to violate the Maryland Attorneys’ Rules of
    Professional Conduct, knowingly assist or induce another to do so, or do
    so through the acts of another;
    *     *     *
    (continued . . . )
    2
    On September 1, 2016, this Court referred the matter to the Honorable Steven G.
    Salant (“the hearing judge”) in the Circuit Court for Montgomery County to conduct a
    hearing and issue findings of fact and conclusions of law pursuant to Maryland Rule 19-
    727(d).5 On February 10, 2017, the hearing judge conducted an evidentiary hearing
    regarding Respondent’s professional misconduct. Thereafter, the hearing judge issued
    Findings of Fact and Conclusions of Law, determining by clear and convincing evidence
    that Respondent violated MARPC §19-308.1(b) and MARPC §19-308.4(a),(c), and (d).On
    April 4, 2017, this Court entered a per curiam order disbarring Respondent, effective
    immediately. For the reasons stated below we hold that the hearing judge’s conclusions
    regarding Respondent’s violations of MARPC §19-308.1(b) and §19-308.4(a), (c), and (d)
    (. . . continued)
    (c)    engage in conduct        involving    dishonesty,   fraud,   deceit      or
    misrepresentation;
    (d) engage in conduct that is prejudicial to the administration of justice[.]
    5
    Maryland Rule 19-727(d) provides:
    The judge shall prepare and file a written statement which shall contain:
    (1) findings of fact and conclusions of law as to each charge;
    (2) findings as to any remedial action taken by the attorney; and
    (3) findings as to any aggravating or mitigating circumstances that exist.
    Unless the time is extended by the Court of Appeals, the statement shall be
    filed with the clerk responsible for the record no later than 45 days after the
    conclusion of the hearing. The clerks shall mail a copy of the statement to
    each party.
    3
    were supported by clear and convincing evidence and disbarment is the appropriate
    sanction.
    I.       BACKGROUND
    a. The Hearing Judge’s Findings of Fact
    In his Findings of Fact and Conclusions of Law, the hearing judge rendered the
    following factual findings:
    During the time covered by the [Petition], Respondent maintained a
    general solo practice in Montgomery County.
    On January 14, 2015, a check presented to Citibank account No.
    X3487 by the Respondent was dishonored for insufficient funds. On January
    26, 2015, Bar Counsel received notice from Citibank that Respondent had
    over-drafted account No. X3487 in the amount of $103.83. Bar Counsel
    informed the Respondent through letter dated January 27, 2015 that he
    should provide information and documentation relating to the overdraft
    within ten days of receipt of the letter. The letter was sent to the address
    maintained with the Client Protection Fund.
    Respondent wrote to Bar Counsel by letter dated March 12, 2015,
    stating the account was an operating account, not an attorney trust account,
    and the overdraft was due to a stop payment. Respondent provided a copy of
    the January 2015 statement for account Nos. X3487 and X1177. Account No.
    X1177 was Respondent’s attorney trust account. The statement showed that
    Respondent disbursed a sum of $53,484 to “6 Beachside LLC” (“LLC”) from
    his attorney trust account on January 7, 2015. The LLC is a Florida limited
    liability company owned by the Respondent. The LLC owns real property in
    Palm Coast, and the resident agent for the LLC is Alla March, aka, Alla
    Marchenko, who is Respondent’s girlfriend and paralegal.
    Respondent replied to Bar Counsel’s inquiries that the transactions to
    the LLC were for his law firm’s pension plan. After further investigation, Bar
    Counsel discovered that Respondent filed a Petition for Chapter 7
    Bankruptcy. Respondent failed to disclose all of his assets, as well as assets
    associated with his pension plan in the bankruptcy petition, which is signed
    under oath. Additionally, Bar Counsel learned that Respondent had
    outstanding state and federal tax liens in the amount of approximately
    $22,948.
    4
    Respondent was instructed to provide information and documentation
    about the tax liens and related tax liability by July 10, 2015 through a letter
    from Bar Counsel dated June 22, 2015. However, Respondent failed to
    respond in any manner after receiving the letter. Bar Counsel sent another
    letter on July 13, 2015 requesting a reply no later than July 27, 2015 and
    Respondent again failed to answer after receiving the second letter. On
    August 4, 2015, Bar Counsel sent a third letter to Respondent, which he did
    not answer.
    Bar Counsel received Respondent’s bank records from Citibank
    through a subpoena issued on June 22, 2015. Bar Counsel requested
    information about eight transactions pertaining to Respondent’s attorney
    trust account and relating to client ledgers for six named individuals through
    letter dated January 26, 2016. Respondent received the letter on about the
    same day and has failed to answer.
    b. The Hearing Judge’s Conclusions of Law
    Based on the aforementioned findings of fact, the hearing judge concluded that
    Respondent had violated MARPC §19-308.1(b) (bar admission and disciplinary matters),
    and 8.4(a), (c), and (d) (misconduct).
    MARPC §19-308.1(b)
    MARPC §19-308.1(b) prohibits a lawyer from
    [F]ail[ing] to disclose a fact necessary to correct a misapprehension known
    by the person to have arisen in the matter, or knowingly fail to respond to a
    lawful demand for information from an admissions or disciplinary authority,
    except that this Rule does not require disclosure of information otherwise
    protected by Rule 19-301.6 (1.6).
    The hearing judge concluded that Respondent violated MARPC §19-308.1(b) by
    failing to respond to Bar Counsel’s letters and requests for information dated June 22, 2015,
    July 13, 2015, August 4, 2015, and January 26, 2016.
    5
    MARPC §19-308.4
    MARPC §19-308.4 provides, inter alia, that “[i]t is professional misconduct for an
    attorney to:”
    (a) violate or attempt to violate the Maryland Attorneys’ Rules of Professional
    Conduct, knowingly assist or induce another to do so, or do so through the
    acts of another;
    *      *       *
    (c) engage in conduct involving dishonest, fraud, deceit or misrepresentation;
    (d) engage in conduct that is prejudicial to the administration of justice[.]
    The hearing judge determined that Respondent violated subsection (a) because
    Respondent had violated other Rules of Professional Conduct. See Attorney Grievance
    Comm’n v. Gallagher, 
    371 Md. 673
    , 710-11, 
    810 A.2d 996
    , 1018 (2002) (“As we have
    held that respondent violated several Rules of Professional Conduct, [the attorney]
    necessarily violated [MARPC] 8.4(a) as well.”); see also Attorney Grievance Comm’n v.
    Foltz, 
    411 Md. 359
    , 411, 
    983 A.2d 434
    , 465 (2009).
    The hearing judge held that Respondent violated MARPC §19-308.4(c) by failing
    to disclose assets associated with his pension plan when he filed his Petition for Chapter 7
    Bankruptcy on February 6, 2013. The hearing judge also concluded that Respondent’s
    conduct, taken as a whole, was prejudicial to the administration of justice in violation of
    Rule 8.4(d).6
    6
    We note the hearing judge cited Attorney Grievance Comm’n v. Walker Turner,
    
    428 Md. 214
    , 
    51 A.3d 553
     (2012), in support of his finding that Respondent’s conduct was
    prejudicial to the administration of justice in violation of Rule 8.4(d). Specifically, the
    hearing judge noted that we discussed in Walker Turner “that when an attorney violates
    several of the Rules of Professional Conduct, the attorney necessarily violates the Rule
    prohibiting attorneys from engaging in conduct prejudicial to the administration of justice.”
    (continued . . . )
    6
    The hearing judge also determined there were no mitigating factors in the case at
    bar.
    II.      STANDARD OF REVIEW
    In Attorney Grievance Comm’n v. Hodes, 
    441 Md. 136
    , 
    105 A.3d 533
     (2014), we
    articulated our oft-cited standards for reviewing attorney disciplinary proceedings, stating
    that:
    This Court has original and complete jurisdiction over attorney discipline
    proceedings in Maryland. We conduct an independent review of the record
    and we accept the hearing judge’s findings of fact unless shown to be clearly
    erroneous. Under our independent review of the record, we must determine
    whether the findings of the hearing judge are based on clear and convincing
    evidence. With respect to exceptions, upon our review of the record, the
    hearing judge’s findings of fact generally will be accepted unless they are
    clearly erroneous. A hearing judge’s factual finding is not clearly erroneous
    if there is any competent material evidence to support it. As to the hearing
    judge’s conclusions of law, such as whether provisions of the Maryland
    [Attorneys’] Rules of Professional Conduct were violated, our consideration
    is de novo.
    Id. at 168, 105 A.3d at 552 (citations, internal quotation marks, and footnote omitted).
    III.     DISCUSSION
    We note that Respondent did not appear for either the fact-finding or for oral argument
    before this Court and that neither Bar Counsel nor Respondent filed exceptions to the
    hearing judge’s findings of fact or conclusions of law. Accordingly, we conclude that the
    hearing judge’s findings of fact are thereby established.          See Maryland Rule 19-
    (. . . continued)
    Walker Turner, 428 Md. at 232, 51 A.3d at 564. This portion of our opinion addressed,
    however, the attorney’s violation of Rule 8.4(a), not 8.4(d), as the hearing judge suggested
    in his Conclusions of Law.
    7
    741(b)(2)(A) (“If no exceptions are filed, the Court may treat the findings of fact as
    established.”). We also agree that the findings of fact establish by clear and convincing
    evidence that Respondent violated MARPC §19-308.1(b) and §19-308.4(a), (c), and (d)
    when he failed to respond to lawful demands for information by Bar Counsel and failed to
    disclose assets associated with his law firm’s pension plan in his petition for bankruptcy.7
    IV.      SANCTION
    The Commission requests that this Court disbar Respondent from the practice of
    law. According to the Commission, Respondent’s repeated failure to respond to Bar
    Counsel’s inquiries regarding outstanding tax liens, his attorney trust account, and his
    failure to disclose assets associated with his law firm’s pension plan in his Petition for
    Chapter 7 Bankruptcy, warrant such a sanction. We agree.
    “In fashioning the appropriate sanction to be imposed, we are guided by our interest in
    protecting the public and the public’s confidence in the legal profession.” Attorney
    Grievance Comm’n v. Pennington, 
    387 Md. 565
    , 595, 
    876 A.2d 642
    , 660 (2005) (citing
    7
    The record before the hearing judge reflects that on November 18, 2010, Silver Spring
    Family Medical Center, LLC (“SSFMC”) filed a voluntary Petition for Chapter 7
    Bankruptcy in the Maryland Bankruptcy Court. On November 23, 2010, Respondent
    entered his appearance in the SSFMC bankruptcy case as counsel for the Law Office of
    Mark Kotlarsky, Esq. Pension Plan, alleging the Pension Plan was an unsecured creditor
    of SSFMC. Three years later, on February 6, 2013, Respondent filed a Petition for Chapter
    7 Bankruptcy, in his personal capacity, in the Maryland Bankruptcy Court. Although
    Respondent disclosed the Pension Plan in his bankruptcy petition, the record indicates that
    he failed to disclose the potential SSFMC claim as an asset. Upon discovery of the Pension
    Plan’s potential claim, Respondent’s bankruptcy trustee contested the Final Report and
    Account in the SSFMC bankruptcy. The SSFMC bankruptcy judge subsequently held that
    the funds due to Respondent’s Pension Plan would be distributed to Respondent’s
    bankruptcy trustee until ownership of the funds could be determined. On August 28, 2013,
    $41,148.55 was distributed to Respondent’s bankruptcy trustee.
    8
    Attorney Grievance Comm’n v. Powell, 
    369 Md. 462
    , 474, 
    800 A.2d 782
    , 789 (2002)). We
    have also noted that “the purpose of attorney disciplinary proceedings is not to punish the
    lawyer, but to protect the public as well as to deter other lawyers from engaging in similar
    misconduct.” 
    Id. at 596
    , 
    876 A.2d at
    660 (citing Attorney Grievance Comm’n v. Ellison,
    
    384 Md. 688
    , 714, 
    867 A.2d 259
    , 274 (2005)). In addition, “[t]he gravity of misconduct is
    not measured solely by the number of rules broken but is determined largely by the
    lawyer’s conduct.” Attorney Grievance Comm’n v. Siskind, 
    401 Md. 41
    , 74, 
    930 A.2d 328
    ,
    347 (2007) (quoting Attorney Grievance Comm’n v. Briscoe, 
    357 Md. 554
    , 568, 
    745 A.2d 1037
    , 1044 (2000)). To determine the proper sanction, we also consider the facts and
    circumstances of an individual case, including the “nature of the ethical duties violated[,]”
    and “any aggravating or mitigating circumstances.” Attorney Grievance Comm’n v.
    Shepard, 
    444 Md. 299
    , 339, 
    119 A.3d 765
    , 788 (2015) (citing Attorney Grievance Comm’n
    v. Paul, 
    423 Md. 268
    , 284, 
    31 A.3d 512
    , 522 (2011). Considering the facts presented
    before us, and absent mitigating circumstances, we conclude that disbarment is the
    appropriate sanction.
    We have consistently held that repeated failures to respond to Bar Counsel’s
    investigative requests can be a violation of MARPC §19-308.1(b). See Attorney Grievance
    Comm’n v. Gray, 
    436 Md. 513
    , 521-22, 
    83 A.3d 786
    , 791 (2014) (holding attorney violated
    Rule 8.1(b) by failing to respond to two letters from the Commission regarding grievance
    complaint); Attorney Grievance Comm’n v. Harmon, 
    435 Md. 306
    , 315-16, 
    77 A.3d 1107
    ,
    1112-13 (2013) (concluding that attorney violated Rule 8.1(b) by failing to respond to Bar
    Counsel’s letters regarding multiple grievance complaints); Attorney Grievance Comm’n
    9
    v. Bleecker, 
    414 Md. 147
    , 174, 
    994 A.2d 928
    , 944 (2010) (determining that attorney
    violated Rule 8.1(b) by failing to respond to repeated written requests for information from
    Bar counsel regarding grievance complaint). Here, the record reflects that Respondent
    repeatedly failed to respond to Bar Counsel’s request for information regarding
    Respondent’s trust account and the tax liens entered against him in violation of MARPC
    §19-308.1(b).
    In Siskind, we noted that “acts of dishonesty, fraud, or misleading behavior may warrant
    a sanction of disbarment.” 
    401 Md. at 75
    , 
    930 A.2d at 348
    ; see also Attorney Grievance
    Comm’n v. White, 
    354 Md. 346
    , 366, 
    731 A.2d 447
    , 458 (1999) (“[t]actics involving
    dishonesty, fraud, or deceit, carry the risk of the ultimate sanction by this Court.”). We
    concluded that this is so, because
    [u]nlike matters relating to competency, diligence and the like, intentional
    dishonest conduct is closely entwined with the most important matters of
    basic character to such a degree as to make intentional dishonest conduct by
    a lawyer almost beyond excuse. Honesty and dishonesty are, or are not,
    present in any attorney’s character.
    Siskind, 
    401 Md. at 75
    , 
    930 A.2d at 348
     (quoting Attorney Grievance Comm’n v.
    Vanderlinde, 
    364 Md. 376
    , 418, 
    773 A.2d 463
    , 488 (2001)). We have also held that “[o]nly
    in the case of compelling extenuating circumstances ‘will we even consider imposing less
    than the most severe sanction of disbarment’ in cases involving dishonesty and fraudulent
    conduct.” Attorney Grievance Comm’n v. McClain, 
    406 Md. 1
    , 19, 
    956 A.2d 135
    , 145-46
    (2008) (quoting Attorney Grievance Comm’n v. Goodman, 
    381 Md. 480
    , 499, 
    850 A.2d 1157
    , 1168 (2004)). Elaborating on the “compelling extenuating circumstances”
    requirement, we concluded that
    10
    we will not accept, as “compelling extenuating circumstances,” anything less
    than the most serious and utterly debilitating mental or physical health
    conditions, arising from any source that is the “root cause” of the misconduct
    and that also results in an attorney’s utter inability to conform his or her
    conduct in accordance with the law and with the [MARPC].
    Attorney Grievance Comm’n v. Vanderlinde, 
    364 Md. 376
    , 413-14, 
    773 A.2d 463
    , 485
    (2001). We conclude that no such “compelling extenuating circumstances” exist in the
    case at bar.
    This case is analogous to our decisions in Attorney Grievance Comm’n v. Byrd, 
    408 Md. 449
    , 
    970 A.2d 870
     (2009) and Attorney Grievance Comm’n v. Zodrow, 
    419 Md. 286
    ,
    
    19 A.3d 381
     (2011). In Byrd, we disbarred an attorney for, inter alia, perjuring himself by
    filing false business reports under oath in the attorney’s bankruptcy proceeding in violation
    of Rule 8.4(b), (c), and (d). 
    408 Md. at 483
    , 
    970 A.2d at 889
    . In Zodrow, a reciprocal
    discipline proceedings case, we disbarred an attorney for, inter alia, failing to make
    pertinent asset disclosures during his personal bankruptcy case in violation of Rule 8.4.
    
    419 Md. at 303-04
    , 
    19 A.3d at 391-92
    . In the present case, Respondent knowingly failed
    to disclose a potential claim his law firm’s pension plan may have received in his petition
    for bankruptcy, thereby violating MARPC §19-308.4(c) and (d).
    In concluding that Respondent has violated multiple Rules of Professional Conduct,
    we further hold that Respondent thereby violated MARPC §19-308.4(a). See Gallagher,
    
    371 Md. at 710-11
    , 
    810 A.2d at 1018
     (holding that because attorney violated several Rules
    of Professional Conduct, the attorney also violated Rule 8.4(a)); Foltz, 
    411 Md. at 411
    , 
    983 A.2d at 465
     (concluding that attorney’s violation of multiple other Rules constituted a
    violation of Rule 8.4(a)). Accordingly, and guided by our holdings in Byrd and Zodrow,
    11
    we entered the April 4, 2017 per curiam order, disbarring Respondent and awarding costs
    against him.
    12