Attorney Grievance v. Mahone , 451 Md. 25 ( 2016 )

Attorney Grievance Commission of Maryland v. Willie James Mahone, Miscellaneous
Docket AG No. 82, September Term, 2015
ATTORNEY DISCIPLINE — SANCTIONS — INDEFINITE SUSPENSION —
Respondent Willie James Mahone violated the Maryland Lawyers’ Rules of Professional
Conduct (“MLRPC”), Maryland Rules regarding attorney trust accounts, and Maryland
Code (1957, 2010 Repl. Vol.), § 10-306 of the Business Occupations and Professions
Article (“BP”) when he failed to maintain records accurately reflecting the status of his
attorney trust account. Furthermore, Respondent commingled personal funds and client
funds within the account, withdrew cash from his trust account, and created negative
balances in multiple client accounts.
On February 12, 2014, Sandy Spring Bank notified the Attorney Grievance Commission
of Maryland (“AGC”) that Respondent’s attorney trust account was overdrawn by
$86.48. When the AGC investigated the matter, it found that Respondent could not
produce records of his trust account activity. In addition, Respondent failed to timely and
completely respond to Bar Counsel’s requests for information. Respondent violated (1)
MLRPC 1.1 (Competence); (2) MLRPC 8.1(b) (Bar Admission and Disciplinary
Matters); (3) MLRPC 8.4(a) and (d) (Misconduct); (4) Maryland Rule 16.606.1 (Attorney
Trust Account Record-Keeping); (5) Maryland Rule 16-607 (Commingling of Funds); (6)
Maryland Rule 16-609 (Prohibited Transactions); and (7) BP § 10-306 (Misuse of Trust
Money) when he mismanaged his attorney trust account and failed to fully comply with
the AGC’s disciplinary investigation. Taken together, these violations warrant indefinite
suspension.
Circuit Court for Montgomery County
Case No.: 32111
Argued: November 3, 2016
IN THE COURT OF APPEALS
OF MARYLAND
Misc. Docket AG No. 82
September Term, 2015
ATTORNEY GRIEVANCE COMMISSION
OF MARYLAND
v.
WILLIE JAMES MAHONE
Barbera, C.J.
Greene
Adkins
McDonald
Watts
Hotten
Getty,
JJ.
Opinion by Adkins, J.
McDonald and Watts, JJ., concur and dissent.
Filed: December 19, 2016
On February 29, 2016, the Attorney Grievance Commission of Maryland
(“AGC”), acting through Bar Counsel, filed a Petition for Disciplinary or Remedial
Action against Respondent Willie James Mahone. Bar Counsel charged Mahone with
violating the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”), Maryland
Rules governing attorney trust accounts, and a statutory provision regarding misuse of
trust money.1 Specifically, Bar Counsel alleged that Mahone violated the following
provisions: (1) MLRPC 1.1 (Competence);2 (2) MLRPC 1.4 (Communication); 3 (3)
1
Effective July 1, 2016, the Maryland Rules were revised. The MLRPC were
renamed the Maryland Attorneys’ Rules of Professional Conduct (“MARPC”) and
renumbered. Rules Order (June 6, 2016). The revised rules are now numbered as
follows: MARPC 19-301.1 (Competence); MARPC 19-301.4 (Communication);
MARPC 19-301.15 (Safekeeping Property); MARPC 19-308.1 (Bar Admission and
Disciplinary Matters); and MARPC 19-308.4 (Misconduct). The Maryland Rules
regarding attorney trust accounts were also renumbered. The revised rules are now
numbered as follows: Rule 19-407 (Attorney Trust Account Record-Keeping); Rule 19-
408 (Commingling of Funds); and Rule 19-410 (Prohibited Transactions). We will refer
to the MLRPC and the previous numbering of the Maryland Rules regarding attorney
trust accounts because the misconduct at issue occurred before these changes.
2
Rule 1.1. Competence.
A lawyer shall provide competent representation to a client.
Competent representation requires the legal knowledge, skill,
thoroughness and preparation reasonably necessary for the
representation.
3
Rule 1.4. Communication.
(a) A lawyer shall:
(1) promptly inform the client of any decision or
circumstance with respect to which the client’s
informed consent, as defined in Rule 1.0(f), is
required by these Rules;
(2) keep the client reasonably informed about the
status of the matter;
(continued . . .)
MLRPC 1.15(a), (c), and (d) (Safekeeping Property);4 (4) MLRPC 8.1(b) (Bar
Admission and Disciplinary Matters);5 (3) MLRPC 8.4(a), (c), and (d) (Misconduct);6 (4)
(3) promptly comply with reasonable requests for
information; and
(4) consult with the client about any relevant
limitation on the attorney’s conduct when the
attorney knows that the client expects assistance
not permitted by the Maryland Lawyers’ Rules of
Professional Conduct or other law.
(b) A lawyer shall explain a matter to the extent reasonably
necessary to permit the client to make informed decisions
regarding the representation.
4
Rule 1.15. Safekeeping Property.
(a) A lawyer shall hold property of clients or third persons that is
in a lawyer’s possession in connection with a representation
separate from the lawyer’s own property. Funds shall be kept
in a separate account maintained pursuant to Title 16, Chapter
600 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
lawyer and shall be preserved for a period of at least five years
after the date the record was created.
***
(c) Unless the client gives informed consent, confirmed in writing,
to a different arrangement, a lawyer shall deposit legal fees and
expenses that have been paid in advance into a client trust
account and may withdraw those funds for the lawyer’s own
benefit only as fees are earned or expenses incurred.
(d) Upon receiving funds or other property in which a client or
third person has an interest, a lawyer shall promptly notify the
client or third person. Except as stated in this Rule or
otherwise permitted by law or by agreement with the client, a
lawyer shall deliver promptly to the client or third person any
funds or other property that the client or third person is entitled
(continued . . .)
2
Maryland Rule 16.606.1 (Attorney Trust Account Record-Keeping);7 (5) Maryland Rule
16-607 (Commingling of Funds);8 (6) Maryland Rule 16-609 (Prohibited Transactions);9
to receive and, upon request by the client or third person, shall
render promptly a full accounting regarding such property.
5
Rule 8.1. Bar Admission and Disciplinary Matters.
An applicant for admission or reinstatement to the bar, or a
lawyer 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 1.6.
6
Rule 8.4. Misconduct.
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Maryland Lawyers’ 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 dishonesty, fraud, deceit or
misrepresentation;
(d) engage in conduct that is prejudicial to the administration of
justice[.]
7
Rule 16-606.1. Attorney trust account record-keeping.
(a) Creation of records. The following records shall be created
and maintained for the receipt and disbursement of funds of
clients or of third persons:
(1) Attorney trust account identification. An
identification of all attorney trust accounts
maintained, including the name of the financial
institution, account number, account name, date
the account was opened, date the account was
closed, and an agreement with the financial
(continued . . .)
3
institution establishing each account and its
interest-bearing nature.
(2) Deposits and disbursements. A record for each
account that chronologically shows all deposits
and disbursements, as follows:
(A) for each deposit, a record made at or near
the time of the deposit that shows (i) the
date of the deposit, (ii) the amount, (iii) the
identity of the client or third person for
whom the funds were deposited, and (iv)
the purpose of the deposit;
(B) for each disbursement, including a
disbursement made by electronic transfer, a
record made at or near the time of
disbursement that shows (i) the date of the
disbursement, (ii) the amount, (iii) the
payee, (iv) the identity of the client or third
person for whom the disbursement was
made (if not the payee), and (v) the purpose
of the disbursement;
(C) for each disbursement made by electronic
transfer, a written memorandum authorizing
the transaction and identifying the attorney
responsible for the transaction.
(3) Client matter records. A record for each client
matter in which the attorney receives funds in
trust, as follows:
(A) for each attorney trust account transaction,
a record that shows (i) the date of the
deposit or disbursement; (ii) the amount of
the deposit or disbursement; (iii) the
purpose for which the funds are intended;
(iv) for a disbursement, the payee and the
check number or other payment
identification; and (v) the balance of funds
remaining in the account in connection with
the matter; and
(B) an identification of the person to whom the
unused portion of a fee or expense deposit
is to be returned whenever it is to be
returned to a person other than the client.
(continued . . .)
4
(4) Record of funds of the attorney. A record that
identifies the funds of the attorney held in each
attorney trust account as permitted by Rule 16-
607 b.
(b) Monthly reconciliation. An attorney shall cause to be
created a monthly reconciliation of all attorney trust account
records, client matter records, records of funds of the attorney
held in an attorney trust account as permitted by Rule 16-
607 b, and the adjusted month-end financial institution
statement balance. The adjusted month-end financial
institution statement balance is computed by adding
subsequent deposits to and subtracting subsequent
disbursements from the financial institution’s month-end
statement balance.
(c) Electronic records. Whenever the records required by this
Rule are created or maintained using electronic means, there
must be an ability to print a paper copy of the records upon a
reasonable request to do so.
(d) Records to be maintained. Financial institution month-end
statements, any canceled checks or copies of canceled checks
provided with a financial institution month-end statement,
duplicate deposit slips or deposit receipts generated by the
financial institution, and records created in accordance with
section (a) of this Rule shall be maintained for a period of at
least five years after the date the record was created.
8
Rule 16-607. Commingling of funds.
a. General prohibition. An attorney or law firm may deposit in
an attorney trust account only those funds required to be
deposited in that account by Rule 16-604 or permitted to be so
deposited by section b. of this Rule.
b. Exceptions. 1. An attorney or law firm shall either (A) deposit
into an attorney trust account funds to pay any fees, service
charges, or minimum balance required by the financial
institution to open or maintain the account, including those fees
that cannot be charged against interest due to the Maryland
Legal Services Corporation Fund pursuant to Rule 16-610 b 1
(D), or (B) enter into an agreement with the financial institution
to have any fees or charges deducted from an operating account
maintained by the attorney or law firm. The attorney or law
firm may deposit into an attorney trust account any funds
(continued . . .)
5
and (7) Maryland Code (1957, 2010 Repl. Vol.), § 10-306 of the Business Occupations
and Professions Article (“BP”) (Misuse of Trust Money).10
expected to be advanced on behalf of a client and expected to
be reimbursed to the attorney by the client.
2. An attorney or law firm may deposit into an attorney
trust account funds belonging in part to a client and in part
presently or potentially to the attorney or law firm. The portion
belonging to the attorney or law firm shall be withdrawn
promptly when the attorney or law firm becomes entitled to the
funds, but any portion disputed by the client shall remain in the
account until the dispute is resolved.
3. Funds of a client or beneficial owner may be pooled and
commingled in an attorney trust account with the funds held for
other clients or beneficial owners.
9
Rule 16-609. Prohibited transactions.
a. Generally. An attorney or law firm may not borrow or pledge
any funds required by the Rules in this Chapter to be deposited
in an attorney trust account, obtain any remuneration from the
financial institution for depositing any funds in the account, or
use any funds for any unauthorized purpose.
b. No cash disbursements. An instrument drawn on an attorney
trust account may not be drawn payable to cash or to bearer,
and no cash withdrawal may be made from an automated teller
machine or by any other method. All disbursements from an
attorney trust account shall be made by check or electronic
transfer.
c. Negative balance prohibited. No funds from an attorney trust
account shall be disbursed if the disbursement would create a
negative balance with regard to an individual client matter or
all client matters in the aggregate.
10
Business Occupations and Professions Article § 10-306. Misuse of trust
money.
A lawyer may not use trust money for any purpose other
than the purpose for which the trust money is entrusted to the
lawyer.
6
We transmitted the matter to the Circuit Court for Montgomery County and
designated the Honorable Cynthia Callahan (“the hearing judge”) to conduct an
evidentiary hearing. Following a one-day hearing, the hearing judge issued Findings of
Fact and Conclusions of Law, in which she found by clear and convincing evidence that
Mahone violated MLRPC 1.1, MLRPC 8.1(b), MLRPC 8.4(a), (c), and (d); Maryland
Rules 16.606.1, 16-607, 16-609; and BP § 10-306.
THE HEARING JUDGE’S FINDINGS OF FACT
Mahone was admitted to the Maryland Bar in May 1980. The AGC’s
investigation of Mahone was triggered when Sandy Spring Bank notified the AGC that
an overdraft of his attorney trust account had occurred. The hearing judge made the
following findings of fact by clear and convincing evidence:
In February 2014, an overdraft in the amount of $86.48 occurred in Mahone’s
attorney trust account. On March 10, 2014, Bar Counsel sent Mahone a letter
requesting an explanation of the overdraft and client ledgers, monthly bank statements,
deposit slips, and canceled checks from November 2013 to March 2014. The letter
requested a response within 10 days. Mahone responded on March 31, 2014, but did
not provide the requested client ledgers or deposit slips. His response was also 10 days
late.
Bar Counsel sent Mahone follow-up letters requesting the client ledgers and
deposit slips on April 10, 2014, November 18, 2014, and December 10, 2014. Despite
these repeated requests, Mahone never responded.
7
Due to Mahone’s failure to provide the requested information, Bar Counsel
subpoenaed Sandy Spring Bank for Mahone’s attorney trust account records for
November 2013 to December 2014. A forensic investigator for the AGC, Charles E.
Miller, IV, analyzed Mahone’s attorney trust account records. Miller created a
transaction summary and client ledger summary from these records, which indicated:
(1) negative balances in nine client trust accounts; (2) earned attorney’s fees deposited
into nine client trust accounts; (3) remaining balances in five client trust accounts; (4)
11 electronic transfers, including several checks Mahone made out to himself; and (5) a
$1,500 cash withdrawal.
On April 9, 2015, Bar Counsel provided Mahone with Miller’s summaries and
requested additional information related to the transactions in the summaries by April
24, 2015. Although Mahone was granted a 14-day extension, Bar Counsel did not
receive a response. Bar Counsel then requested a response by May 18, 2015. Mahone
responded by letter on May 20, 2015, stating that he would provide the requested
information by June 1, 2015. Mahone finally responded to Bar Counsel’s request on
August 16, 2015, but failed to provide a satisfactory explanation or any of the requested
supporting documentation. Mahone later sent Bar Counsel a supplemental response,
but none of the information he provided addressed Bar Counsel’s requests.
On June 23, 2016, Bar Counsel deposed Mahone. During his deposition,
Mahone admitted that he failed to create and maintain proper records, failed to create
records associated with electronic transactions, and commingled funds. Mahone also
answered questions related to four transactions in Miller’s summaries. Miller updated
8
his summaries to reflect this new information, and the summaries were received into
evidence. The summaries demonstrated the following by clear and convincing
evidence:
1. Mahone caused negative balances in the following client matters:
06/25/2014 Acoota -$800.00
12/01/2014 Harrison -$525.00
10/08/2014 Juarez -$1,472.00
10/16/2014 Leppo -$1,365.00
06/16/2014 Mahmood -$516.00
08/29/2014 Mahmood -$2,035.20
12/17/2014 Patty -$2,000.00
09/25/2014 Rice -$1,575.11
02/12/2014 Unknown -$86.48
2. Mahone deposited earned attorney’s fees into his attorney trust account in
the following matters:
11/16/2014 Anzures $238.75
11/04/2014 Branson $125.00
11/04/2014 Fletcher $125.00
11/16/2013 Goldberg $300.00
09/10/2014 Knill $125.00
09/10/2014 Lopez $350.00
11/04/2014 Marks $125.00
12/04/2014 Marks $625.00
11/08/2013 Smith-Jasper $260.00
3. Mahone improperly maintained funds in his attorney trust account
belonging to clients, third parties, and sometimes himself in the following matters:
04/02/2014 Duckett $27.31
08/06/2014 Hickman $600.00
01/27/2014 Hopkins $200.00
08/11/2014 Salahudding $537.00
08/19/2014 Yamada $1,628.00
9
4. Mahone failed to maintain records associated with the following electronic
funds transfers from his attorney trust account:
01/29/2014 Unknown -$1,000.00
10/02/2014 Unknown -$2,000.00
5. Mahone failed to maintain any records associated with the following
transactions and cannot identify whose money was withdrawn from the attorney trust
account:
09/09/2014 Hopehill United -$100.00
Methodist
Church
10/02/2014 Check to -$2,000.00
Mahone
11/29/2013 Check to -$800.00
Mahone
12/30/2013 Check to -$900.00
Mahone
02/12/2014 Cash Deposit $125.00
02/18/2014 Cash Deposit $100.00
04/25/2014 Cash Deposit $1,500.00
11/19/2014 Check to -$500.00
Mahone
11/25/2014 Check to -$865.00
Mahone
6. On September 9, 2014, Mahone made a $100 personal donation to his
church from his attorney trust account.
10
THE HEARING JUDGE’S CONCLUSIONS OF LAW
From these facts, the hearing judge concluded that Mahone violated MLRPC 1.1,
8.1(b), and 8.4(a), (c), and (d). The hearing judge also found that Mahone violated
Maryland Rules 16-606.1, 16-607, and 16-609, and BP § 10-306.11
MLRPC 1.1: Competence
MLRPC 1.1 requires attorneys to represent their clients with the necessary legal
knowledge, skill, thoroughness, and preparation. The hearing judge found that Mahone
violated MLRPC 1.1 when “he failed to competently handle client and third party funds
deposited into his trust account.” In addition, the hearing judge found that Mahone
violated MLRPC 1.1 when “he failed to create and maintain records of the deposits and
withdrawals of client and third party funds.”
MLRPC 8.1: Bar Admission and Disciplinary Matters
MLRPC 8.1 imposes an obligation on Maryland attorneys to fully cooperate with
disciplinary investigations. The hearing judge found that Mahone violated MLRPC
8.1(b) by failing to timely and completely respond to Bar Counsel’s letters requesting
additional information on March 10, 2014, April 10, 2014, and November 18, 2014.
MLRPC 8.4: Misconduct
MLRPC 8.4 defines professional misconduct for attorneys. The hearing judge
found that Mahone violated MLRPC 8.4(a), (c), and (d). He violated MLRPC 8.4(a) by
breaching other rules of professional conduct. Mahone violated 8.4(c) “when he created
11
The hearing judge did not find a violation of MLRPC 1.4 or 1.15. The Findings
of Fact and Conclusions of Law do not contain any mention of these charges.
11
negative balances in his trust account for individual client matters and when he over-
drafted his account.” Lastly, the hearing judge concluded that Mahone’s conduct, taken
as a whole, harms the reputation of the legal profession in violation of MLRPC 8.4(d).
Rule 16-606.1: Attorney Trust Account Record-Keeping
Maryland Rule 16-606.1 requires attorneys to create and maintain records
reflecting the status and activity of attorney trust accounts. The hearing judge found that
although Mahone did not act with “malice or for personal gain,” he violated this Rule:
[Mahone] did not create and maintain records for the receipt
[or] disbursement of funds [for] clients or [ ] third persons.
He was unable to identify which client matters were
associated with numerous transactions. [Mahone] admits that
he failed to perform monthly reconciliations of his trust
account. He was unable to reconcile many of the individual
client ledgers or account for the balance of the funds
maintained in his account at any given time. [Mahone] failed
to create or maintain any records associated with the
electronic transfers from his account.
Rule 16-607: Commingling of Funds
Maryland Rule 16-607 prohibits attorneys from depositing personal funds into an
attorney trust account. The hearing judge found that Mahone violated Rule 16-607 by
“routinely [leaving] his own funds in his trust account as a ‘buffer’” and depositing
earned attorney’s fees into the trust account. Additionally, the hearing judge found that
none of the exceptions in Rule 16-607 b—which provides situations in which an attorney
may commingle personal funds with the clients’—applied.
12
Rule 16-609: Prohibited Transactions
Under Maryland Rule 16-609, attorneys are prohibited from using funds within a
trust account for any unauthorized purpose, withdrawing cash from a trust account, and
creating a negative balance within a trust account. The hearing judge found that Mahone
violated Rule 16-609 by using trust funds for unauthorized purposes, withdrawing $1,500
in cash from his trust account, and creating negative balances in accounts belonging to
Juarez, Leppo, Mahmood, Rice, and “Unknown.”
BP § 10-306: Misuse of Trust Money
BP § 10-306 prohibits attorneys from using trust money for any unauthorized
purpose. The hearing judge found that Mahone violated BP § 10-306 for the same
reasons he violated MLRPC 8.4(c) and Rule 16-609.
DISCUSSION
“In attorney discipline proceedings, this Court has original and complete
jurisdiction and conducts an independent review of the record.” Att’y Grievance Comm’n
v. Page, 430 Md. 602, 626 (2013) (citation omitted). Within this independent review,
however, we accept the hearing judge’s findings of fact unless they are determined to be
clearly erroneous. Id. (citation omitted). If the hearing judge’s factual findings are
founded on clear and convincing evidence, this Court will not disturb them. Att’y
Grievance Comm’n v. Ugwuonye, 405 Md. 351, 368 (2008) (citation omitted). By
contrast, this Court reviews the hearing judge’s conclusions of law without deference. Id.(citation omitted).
13
Exceptions
Both parties are permitted to file “(1) exceptions to the findings and conclusions of
the hearing judge [and] (2) recommendations concerning the appropriate
disposition . . . .” Md. Rule 16-758(b). If neither party files any exceptions, “the Court
may treat the findings of fact as established for the purpose of determining appropriate
sanctions, if any.” Md. Rule 16-759(b)(2)(A). Mahone takes exception to multiple
conclusions in the hearing judge’s Findings of Fact and Conclusions of Law. 12 Bar
Counsel has filed no exceptions.
First, Mahone excepts to the hearing judge’s finding that he “failed to respond” to
Bar Counsel’s letters sent on April 10, 2014, November 18, 2014, and December 10,
2014. Mahone argues that because he did not willfully fail to respond to these inquires,
the hearing judge’s finding is incorrect. He asserts that he did not receive these letters
because he had changed office locations. Similarly, Mahone excepts to the hearing
judge’s finding that he “failed to provide information, documentation, or explanation
sufficient to account for the negative account balances, earned fee deposits, remaining
balances, electronic transfers, unidentified transfers, and cash withdrawals for any of the
12
Mahone, acting pro se, filed exceptions on October 4, 2016, in which he
excepted to several of the hearing judge’s findings of fact and any conclusions of law
premised on the factual findings. Approximately three weeks later, Mahone requested
leave to file a supplement in support of his exceptions. During oral argument, this Court
granted Mahone’s request and accepted his supplemental arguments. Therefore, we
considered Mahone’s supplemental arguments when ruling on his exceptions.
14
accounts in question.” Mahone contends that he provided “information covering the
substance of the requests.” Therefore, he argues, this finding is inaccurate.
Mahone also takes exception to the hearing judge’s findings that he created
negative account balances, deposited earned attorney’s fees into his attorney trust
account, improperly maintained client and third party funds in his trust account, and
failed to maintain records identifying whose money was withdrawn from the trust
account. Mahone argues that these findings are erroneous, in part or in full, and
unsupported by the record evidence. Specifically, he asserts that Bar Counsel has not
presented evidence definitively establishing negative account balances and the
commingling of funds within the trust account. Furthermore, Mahone argues that Bar
Counsel did not prove that he failed to maintain proper bank records. He contends that
the fact that he did not provide sufficient records to Bar Counsel does not mean that he
did not maintain them. Mahone also excepts to any conclusions of law based on these
factual findings.13
Lastly, Mahone takes exception to the hearing judge’s conclusion that he violated
MLRPC 8.4(c). He argues that Bar Counsel has not presented any evidence that he acted
with dishonesty, fraud, deceit, or misrepresentation. Rather, Mahone contends, this case
only involves negligence. He points out that the hearing judge did not find that he acted
with any intent to deceive or that he made any misrepresentations. Moreover, Bar
13
In his Exceptions to Findings of Fact and Conclusions of Law, Mahone also
took exception to the hearing judge’s finding that he admitted to commingling funds. At
oral argument, however, Mahone, through counsel, stated that he was no longer
maintaining that exception.
15
Counsel presented no evidence that any client was deprived of any funds. Mahone
asserts that his commingling of client and personal funds was due to his failure to move
earned fees into his own account, and not any fraud or dishonesty on his part.
We overrule Mahone’s exceptions to the hearing judge’s findings of fact. Bar
Counsel submitted sufficient evidence that Mahone failed to respond to letters requesting
information related to the disciplinary investigation. Although Mahone’s failure to
respond may not have been willful, the hearing judge only found that he did not
respond—she made no factual determination as to willfulness. In the Conclusions of
Law, on the other hand, the hearing judge found a violation of MLRPC 8.1(b) based in
part on Mahone’s failure to respond to Bar Counsel’s November 18, 2014 letter. We
agree that Bar Counsel did not present sufficient evidence that Mahone knowingly failed
to respond to the November 18, 2014 letter, as required by the 8.1(b). But the hearing
judge’s conclusion that Mahone violated MLRPC 8.1(b) was also based on letters Bar
Counsel sent on March 10, 2014 and April 10, 2014. Mahone provided an incomplete
response to Bar Counsel’s March 10, 2014 letter and completely failed to respond to the
April 10, 2014 letter. Bar Counsel’s November 18, 2014 letter reminded Mahone that he
had not responded to the April letter and once again requested additional information.
“Bar Counsel’s persistence will not absolve an attorney of the responsibility to make a
reasonably prompt reply.” Att’y Grievance Comm’n v. Taylor, 405 Md. 697, 719 (2008).
Therefore, we overrule Mahone’s exception on this issue.
We also overrule Mahone’s exception to the hearing judge’s finding that he failed
to maintain records reflecting the activity of his attorney trust account. At oral argument
16
and through his supplemental briefings, Mahone admitted that he failed to maintain the
required records concerning these accounts. As to Bar Counsel’s requests for additional
documentation, Mahone explained that “he could not produce what he admittedly failed
to maintain.” There is also sufficient evidence that Mahone created negative account
balances, deposited earned attorney’s fees into his attorney trust account, and
commingled attorney, client, and third party funds. Therefore, we overrule Mahone’s
exceptions to these findings.
Lastly, we sustain Mahone’s exception to the hearing judge’s conclusion that he
violated MLRPC 8.4(c). As discussed below, we find that Bar Counsel has not presented
clear and convincing evidence that Mahone intended to deceive a client or third party.
Additionally, we find that he has not made any false statement or misrepresentation in
violation of MLRPC 8.4(c).
Conclusions of Law
We agree with the hearing judge’s conclusion that Mahone violated MLRPC 1.1,
MLRPC 8.1(b), MLRPC 8.4(a) and (d); Maryland Rules 16.606.1, 16-607, 16-609; and
BP § 10-306. We do not find, however, that Mahone violated MLRPC 8.4(c).
Mahone violated MLRPC 1.1 and Rule 16-606.1 when he failed to maintain
records for his attorney trust account. He violated Rule 16-607 when he commingled his
personal funds with client funds. When Mahone used trust account funds for an
unauthorized purpose, withdrew cash from the account, and created negative balances
within multiple client accounts, Mahone violated Rule 16-609 and BP § 10-306.
Additionally, Mahone’s failure to respond to Bar Counsel’s requests for information
17
completely and in a timely manner constitute a violation of MLRPC 8.1(b). Taken
together, these violations result in a breach of MLRPC 8.4(a). Lastly, Mahone’s overall
mismanagement of client funds constitutes conduct prejudicial to the administration of
justice in violation of MLRPC 8.4(d).
Although Mahone’s conduct clearly violated the provisions described above, he
did not violate MLRPC 8.4(c), which prohibits attorneys from engaging in “conduct
involving dishonesty, fraud, deceit or misrepresentation.” Fraud is statutorily defined as
“conduct that is fraudulent under the substantive or procedural law of [Maryland] and has
a purpose to deceive.” MLRPC 1.0(e) (emphasis added). “This does not include merely
negligent misrepresentation or negligent failure to apprise another of relevant
information.” Id. cmt. 5. The MLRPC do not define dishonesty, deceit, or
misrepresentation. Therefore, we use the ordinary meanings of these words. See Bd. of
Educ. v. Marks–Sloan, 428 Md. 1, 28 (2012). In doing so, “it is helpful to consult their
dictionary definitions.” Id. Black’s Law Dictionary (“Black’s”) defines “deceit” as
“[t]he act of intentionally leading someone to believe something that is not true” or “an
act designed to deceive or trick.” Deceit, Black’s Law Dictionary (10th ed. 2014).
Applying these definitions to this case, we conclude that Mahone did not engage
in conduct involving fraud or deceit. There is no evidence that Mahone acted with a
purpose to deceive in failing to maintain his trust account records or in failing to timely
and completely respond to Bar Counsel. Furthermore, Bar Counsel has not presented any
evidence suggesting that Mahone intentionally led Bar Counsel or any third party to
18
believe something that was not true. In fact, the hearing judge found that Mahone acted
“without malice or personal gain.”
As to the other two terms, Black’s defines “dishonesty” as “behavior that deceives
or cheats people” or “untruthfulness.” Dishonesty, Black’s Law Dictionary. And
“misrepresentation” is defined as “[t]he act or an instance of making a false or misleading
assertion about something, [usually] with the intent to deceive.” Misrepresentation,
Black’s Law Dictionary. As used in MLRPC 8.4(c), a “misrepresentation is made when
the attorney ‘knows the statement is false,’ and cannot be ‘the product of mistake,
misunderstanding, or inadvertence.’” Att’y Grievance Comm’n v. Zeiger, 428 Md. 546,
556 (2012) (quoting Att’y Grievance Comm’n v. Siskind, 401 Md. 41, 68–69 (2007)). An
attorney can violate MLRPC 8.4(c) through dishonesty or misrepresentation absent any
intent to deceive. Att’y Grievance Comm’n v. Dore, 433 Md. 685, 707–08 (2013). In this
case, however, Mahone has not done so. Although Mahone was certainly negligent in his
handling of his attorney trust account, Bar Counsel has not presented clear and
convincing evidence that Mahone made a dishonest or false assertion in violation of
MLRPC 8.4(c). See Att’y Grievance Comm’n v. DiCicco, 369 Md. 662, 684 (2002) (“It
is well settled that this Court will not find a violation of [MLRPC] 8.4(c) when the
attorney’s misconduct is the product of ‘negligent rather than intentional misconduct.’”
(citations omitted)).
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Sanction for Violations of MLRPC 1.1, 8.1(b), 8.4(a) and (d); Maryland Rules
16-606.1, 16-607, and 16-609; and BP § 10-306
This Court imposes sanctions on errant attorneys “to protect the public and the
public’s confidence in the legal profession” and “to deter other lawyers from violating the
Rules of Professional Conduct.” Taylor, 405 Md. at 720. To accomplish this, the
sanction should be “commensurate with the nature and the gravity of the misconduct and
the intent with which it was committed.” Id. (citation omitted). Thus, the style and
severity of the sanction “depends upon the facts and circumstances of the case.” Id. This
Court does not impose sanctions with the goal of punishing the attorney. Id.When assessing the appropriate result, we often refer to the American Bar
Association’s Standards for Imposing Lawyer Sanctions, which advises that we consider
four questions: “(1) What is the nature of the ethical duty violated?; (2) What was the
lawyer’s mental state?; (3) What was the extent of the actual or potential injury caused by
the lawyer’s misconduct?; and (4) Are there any aggravating or mitigating
circumstances?” Id.; see also Standards for Imposing Lawyer Sanctions (Am. Bar Ass’n
1992), http://www.americanbar.org/content/dam/aba/administrative/professional_respons
ibility/sanction_standards.authcheckdam.pdf [https://perma.cc/RAJ8-G6UH]. Possible
mitigating factors include:
[A]bsence of a prior disciplinary record; absence of a
dishonest or selfish motive; personal or emotional problems;
timely good faith efforts to make restitution or to rectify
consequences of misconduct; full and free disclosure to
disciplinary board or cooperative attitude toward proceedings;
inexperience in the practice of law; character or reputation;
physical or mental disability or impairment; delay in
disciplinary proceedings; interim rehabilitation; imposition of
20
other penalties or sanctions; remorse; and finally, remoteness
of prior offenses.
Att’y Grievance Comm’n v. Sweitzer, 395 Md. 586, 599 (2006) (quoting Att’y Grievance
Comm’n v. Glenn, 341 Md. 448, 488–89 (1996)).
Bar Counsel recommends that Mahone be disbarred. This case does not warrant
such a severe sanction. This Court has held that “[d]isbarment is warranted in cases
involving flagrant neglect of client affairs, including the failure to communicate with
clients or respond to inquiries from Bar Counsel.” Att’y Grievance Comm’n v. Thomas,
440 Md. 523, 558 (2014) (citations omitted). Additionally, absent “compelling
extenuating circumstances,” disbarment is ordinarily the sanction for intentional
dishonest conduct, including theft. Att’y Grievance Comm’n v. Gracey, 448 Md. 1, 27
(2016) (citation omitted). “Although ignorance does not excuse a violation of
disciplinary rules, a finding with respect to the intent with which a violation was
committed is relevant on the issue of the appropriate sanction.” Att’y Grievance Comm’n
v. Bell, 432 Md. 542, 559 (2013) (quoting Att’y Grievance Comm’n v. Obi, 393 Md. 643,
658 (2006)). For the careless mishandling of funds that did not result in financial loss to
the client, typically the appropriate sanction is indefinite suspension. Id. (collecting
cases).
Here, it is clear that Mahone did not act with a dishonest or selfish intent and there
is no evidence that any of Mahone’s clients lost money due to his mismanagement.
Furthermore, there is no evidence that Mahone’s mismanagement of his attorney trust
account impacted the quality of his legal representation, and Mahone has taken steps to
21
remedy his admittedly “sloppy recordkeeping.” He has resolved to more closely examine
his monthly statements and has contacted an accountant who agreed to monitor his
attorney trust account.
In addition, even though Mahone failed to comply with Bar Counsel’s requests in
a timely manner, and when he did, he did not provide all the requested information, there
is no evidence that he intentionally failed to comply with the investigation. Indeed,
Mahone was deposed and attempted to clarify several of the questionable transactions
highlighted in Miller’s reports. Mahone could not satisfactorily explain every transaction
for the very reason Bar Counsel pursued disciplinary action against him—
mismanagement of his accounts and poor record-keeping. As Mahone himself pointed
out, he cannot produce documentation that he failed to keep in the first place. Finally,
Mahone has expressed remorse and there is no evidence of a dishonest or selfish motive.
Attorney Grievance Commission v. Bell and Attorney Grievance Commission v.
DiCicco provide us with guidance on the appropriate sanction. In Bell, the attorney only
maintained an attorney trust account, not an operating account, and paid his personal
expenses from the trust account. Bell, 432 Md. at 556. His trust account records revealed
multiple transactions that could not be attributed to a specific client, negative balances,
and 45 cash disbursements totaling nearly $62,000 that Bell paid to himself. Id. at 548–
49. In addition, Bell had received a prior reprimand for attempting to obtain an
unreasonable fee from a client in violation of MLRPC 8.4(a). Id. at 560. Despite Bell’s
disciplinary history and “continuous mishandling” of his trust account, we rejected Bar
Counsel’s request for an indefinite suspension with right to re-apply after 90 days. Id. at
22
563. Instead, we imposed the sanction of indefinite suspension with the right to re-apply
after 30 days. Id. As mitigating factors, we considered that Bell did not have the intent
to defraud his clients, had attended a training on proper record-keeping, and had
corrected his trust account overdrafts. Id. at 562. Thus, Bell illustrates that lack of intent
to defraud and corrective action can mitigate trust account mismanagement.
Similarly, in DiCicco, we imposed an indefinite suspension with a right to re-
apply after 90 days on an attorney who failed to maintain client funds in a separate trust
account, frequently caused his trust account to have a negative balance, and used his trust
account as his personal bank account. In rejecting Bar Counsel’s recommendation for
disbarment, we “consider[ed] the absence of fraudulent intent and the lack of evidence
that any client suffered financial loss resulting from Respondent’s misconduct.”
DiCicco, 369 Md. at 688. Therefore, it is appropriate for us to consider Mahone’s intent,
whether his clients suffered financial loss, and any corrective action he has taken in
determining his sanction. Here, there is no evidence that any of Mahone’s clients
suffered financial loss or that Mahone intended to defraud them, and he has hired an
accountant to help him manage his financial affairs—all mitigating factors.
Arguing in favor of disbarment, Bar Counsel emphasizes that Mahone has violated
the MLRPC on three previous occasions. Although this history does constitute an
aggravating factor, we do not agree that these prior violations were severe enough to
warrant Mahone’s disbarment in this case. In 1997, Mahone was sanctioned with an
indefinite suspension for MLRPC violations related to withholding taxes. In 2007,
Mahone was reprimanded for failing to respond to Bar Counsel’s lawful requests for
23
information. In 2012, Mahone was reprimanded for failing to safe-keep third party funds.
Mahone’s last indefinite suspension was almost 20 years ago. Additionally, his last two
reprimands were both entered by consent order, which shows he cooperated with Bar
Counsel and took responsibility for his conduct in these matters. We find that these prior
violations are outweighed by the lack of any intent to deceive or dishonesty in this case.
That said, Mahone’s prior sanction and reprimands are still factors we must
consider when fashioning a sanction. Mahone requests that we impose indefinite
suspension with the right to re-apply after a term this Court deems appropriate. But given
his disciplinary history—three different disciplinary actions, two of which involved the
mishandling of money—we find that a more severe sanction is warranted. See Att’y
Grievance Comm’n v. Mba-Jonas, 397 Md. 690, 702 (2007) (characterizing definite
suspensions and indefinite suspensions with right to re-apply as “more lenient” than
permanent indefinite suspension). Therefore, we decline to adopt Mahone’s requested
sanction.
Accordingly, we conclude that indefinite suspension is the appropriate sanction.
IT IS SO ORDERED; RESPONDENT
SHALL PAY ALL COSTS AS
TAXED BY THE CLERK OF THIS
COURT, INCLUDING COSTS OF
ALL TRANSCRIPTS, PURSUANT
TO MARYLAND RULE 19-709(d).
JUDGMENT IS ENTERED IN
FAVOR OF THE ATTORNEY
GRIEVANCE COMMISSION
AGAINST WILLIE J. MAHONE IN
THE SUM OF THESE COSTS.
24
Circuit Court for Montgomery County
Case No. 32111-M
Argued: November 3, 2016
IN THE COURT OF APPEALS
OF MARYLAND
No. 82
September Term, 2015
______________________________________
ATTORNEY GRIEVANCE COMMISSION
OF MARYLAND
v.
WILLIE JAMES MAHONE
______________________________________
Barbera, C.J.
Greene
Adkins
McDonald
Watts
Hotten
Getty,
JJ.
______________________________________
Concurring and Dissenting Opinion by Watts,
J., which McDonald, J., joins
______________________________________
Filed: December 19, 2016
Respectfully, I concur in part and dissent in part. I concur with respect to the
violation of the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”), and I
dissent solely as to the appropriate sanction. Even with the exception to the MLRPC
8.4(c) violation having been sustained, given the seriousness of Willie James Mahone
(“Mahone”)’s misconduct and his prior disciplinary record, from my perspective,
disbarment is the appropriate sanction in this case.
The hearing judge concluded that Mahone had violated MLRPC 1.1
(Competence), 8.1(b) (Disciplinary Matters), 8.4(c) (Dishonesty, Fraud, Deceit, or
Misrepresentation), and 8.4(d) (Conduct That Is Prejudicial to the Administration of
Justice); Maryland Rules 16-606.1 (Attorney Trust Account Record-Keeping), 16-607
(Commingling of Funds), and 16-609 (Prohibited Transactions); and Md. Code Ann.,
Bus. Occ. & Prof. (“BOP”) § 10-306 (Trust Money Restrictions). The hearing judge
determined that Mahone’s violation of Maryland Rule 16-606.1 was “without malice or
personal gain[.]” The Majority upholds the hearing judge’s conclusions as to MLRPC
1.1, 8.1(b), and 8.4(d); Maryland Rules 16-606.1, 16-607, and 16-609; and BOP § 10-
306. See Maj. Slip Op. at 17. The Majority, however, sustains Mahone’s exception to
the hearing judge’s conclusion as to MLRPC 8.4(c). See id.
Taking into account the Majority’s sustaining of the exception as to the MLRPC
8.4(c) violation and the hearing judge’s determination that Mahone violated Maryland
Rule 16-606.1 without malice or personal gain does not obfuscate the conclusion that
disbarment is warranted. In 1997, this Court indefinitely suspended Mahone from the
practice of law in Maryland for MLRPC violations that occurred when Mahone failed to
comply with his obligations with regard to withholding taxes, see id. at 23; in 2007, this
Court granted a Joint Petition for Reprimand by Consent for Mahone’s violation of
MLRPC 8.1(b) (Disciplinary Matters), see Attorney Grievance Comm’n v. Mahone, 400
Md. 95, 927 A.2d 418 (2007); and, most recently, in 2012, this Court granted a joint
petition for reprimand for Mahone’s violations of MLRPC 1.1 (Competence), 1.15(a),
1.15(e) (Safekeeping Property), and 8.4(d) (Conduct That Is Prejudicial to the
Administration of Justice), see Attorney Grievance Comm’n v. Mahone, 425 Md. 343, 40
A.3d 1038 (2012)—i.e., this Court reprimanded Mahone for mishandling his attorney
trust account, which is essentially the same as the misconduct in this case. This Court’s
action in indefinitely suspending Mahone represents the fourth occasion on which he has
been sanctioned for misconduct. Although Mahone’s indefinite suspension occurred in
1997, and may arguably be considered remote, the repetitive nature of Mahone’s
misconduct clearly raises the issue of the need to protect the public and deter Mahone and
other lawyers from similar misconduct.
In discussing Mahone’s prior disciplinary record, the Majority theorizes that, at
least with regard to his two reprimands, Mahone took responsibility for his actions and
cooperated with Bar Counsel by entering a joint petition for reprimand in each case. See
Maj. Slip Op. at 24. This is one interpretation. Another explanation for the joint
petitions and agreed-upon reprimands is that Mahone, recognizing that he had been the
subject of an indefinite suspension in 1997, simply sought to make the best arrangement
possible to minimize the sanction imposed in his last two attorney grievance cases.
Certainly, that he engaged in further misconduct after his 2007 reprimand, and was again
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reprimanded in 2012, undermines any conclusion that Mahone has benefited from his
earlier indefinite suspension. Overall, the continuum of attorney grievance cases
demonstrates that Mahone was not deterred by his prior encounters with Bar Counsel.
And, the frequency of his misconduct indicates that he would pose a threat to future
clients. Given his track record, and the nature of the misconduct in this case—namely,
his mismanagement of his attorney trust account and his failure to comply with Bar
Counsel’s investigation, which is essentially the same misconduct that Mahone has
previously engaged in—disbarment is the appropriate sanction.
For the above reasons, respectfully, I concur in part and dissent in part.
Judge McDonald has authorized me to state that he joins in this opinion.
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