Case Title: Attorney Grievance v. Webster

Citation: 348 Md. 662

Docket Number: 71ag/96

State: maryland

Court: Maryland Supreme Court

Date: 1998-02-17T00:00:00Z

Document:
IN THE COURT OF APPEALS OF
MARYLAND
Misc. Docket AG
No. 71
September Term, 1996
______________________________________
ATTORNEY GRIEVANCE COMMISSION
v. 
ARTHUR DIXON WEBSTER
______________________________________
Bell, C.J.
Eldridge
Rodowsky
Chasanow
Raker
Wilner
Karwacki
(retired, specially assigned)
JJ.
______________________________________
Opinion by Raker, J. 
______________________________________
Filed:  February 17, 1998 
 
  By order dated June 5, 1996, effective January 1, 1997, this Court renumbered
1
Maryland Rules governing attorney discipline proceedings and attorney trust accounts.
Formerly under subtitle BV, attorney disciplinary proceedings are now found in Chapter 700
of Title 16, Maryland Rules 16-701 through 16-718.  Formerly under subtitle BU, the rules
regarding attorney trust accounts are now found in Chapter 600 of Title 16, Maryland Rules
16-601 through 16-618.  Filed on February 28, 1997, Bar Counsel’s Petition for Disciplinary
Action charges Respondent with violations of Maryland Rules BU7 and BU9.  The hearing
judge referred to these rules in both their former and current numbering.  In this opinion, we
refer to the rules by their current numbering, 16-607 and 16-609, which were in effect at the
time these proceedings were commenced. 
 RULE 1.7. CONFLICT OF INTEREST:  GENERAL RULE.
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(b) A lawyer shall not represent a client if the representation of that client
may be materially limited by the lawyer’s responsibilities to another client or
to a third person, or by the lawyer’s own interests, unless:
(1) the lawyer reasonably believes the representation will not be
adversely affected; and 
(2) the client consents after consultation.
 RULE 1.8. CONFLICT OF INTEREST:  PROHIBITED
3
 
            TRANSACTIONS.
(a) A lawyer shall not enter into a business, financial or property
transaction with a client unless:
(1) the transaction is fair and equitable to the client; and
(2) the client is advised to seek the advice of independent counsel in the
transaction and is given a reasonable opportunity to do so.
 RULE 1.15. SAFEKEEPING PROPERTY.
4
(continued...)
Acting through Bar Counsel, the Attorney Grievance Commission filed a petition for
disciplinary action against Arthur Dixon Webster for violations of the Rules of Professional
Conduct.  Pursuant to Maryland Rule 16-709(b),  we referred the matter to Judge Thomas
1
C. Groton, III of the Circuit Court for Wicomico County to make findings of fact and
conclusions of law.  Following an evidentiary hearing, Judge Groton concluded that Webster
had violated Rule 1.7(b) (Conflict of Interest:  General Rule),  Rule 1.8(a) (Conflict of
2
Interest:  Prohibited Transactions),  Rule 1.15(a) (Safekeeping Property),   Rule 8.1(b) (Bar
3
4
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(...continued)
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(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.  Other property shall
be identified as such and appropriately safeguarded.  Complete records of such
account funds and of other property shall be kept by the lawyer and shall be
preserved for a period of five years after termination of the representation. 
 RULE 8.1. BAR ADMISSION AND DISCIPLINARY MATTERS.
5
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: 
(a) knowingly make a false statement of material fact; or
(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.
 RULE 16-607. COMMINGLING OF FUNDS.
6
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.
 RULE 16-609. PROHIBITED TRANSACTIONS.
7
An attorney or law firm may not borrow or pledge any funds required by
these Rules to be deposited in an attorney trust account, obtain any
remuneration from the financial institution for depositing any funds in the
account, or use any funds for any unauthorized purpose.  An instrument drawn
on an attorney trust account may not be drawn payable to cash or to bearer. 
Admission and Disciplinary Matters)  of the Maryland Rules of Professional Conduct, and
5
Maryland Rules 16-607(a) (Commingling of Funds)  and 16-609 (Prohibited Transactions).
6
7
We set forth those findings and conclusions as follows:
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FINDINGS OF FACT
“The Court makes the following findings of fact by clear and
convincing evidence.  Arthur D. Webster was admitted to the Maryland Bar
on November 9, 1979.  He presently practices law in a small firm, consisting
of two other attorneys, one of whom is his father.  His law office is located at
300 West Main Street, Salisbury, Maryland.  Three attorneys, John Nason,
Esquire, Steve Hearne, Esquire both of Salisbury, and Paul Bekman, Esquire,
the current President of the Maryland State Bar Association, appeared at trial
to testify as to Arthur D. Webster's honesty, good character, and practice of
law "with adherence to the highest degree of ethical conduct."
“In August 1989, David F. Brown consulted Respondent and requested
he prepare a promissory note in the amount of $47,525.98 to secure an existing
debt owed to him by Walter J. Hovatter.  Mr. Hovatter and his wife executed
the note, hereinafter referred to as the "David Brown Note" on August 18,
1989.  Shortly thereafter, Mr. Webster and Mr. Hovatter discussed Mr.
Hovatter's need for additional funds to build a facility which would better
equip Mr. Hovatter to perform a large and lucrative contract with Dresser
Industries, a company located in Salisbury, Maryland.  Mr. Hovatter, at the
time of his testimony in this matter, was being housed at the Maryland House
of Correction Annex as a result of a sentence received upon pleading guilty to
the contract killing of a race horse.
 
“Mr. Hovatter, through his testimony and demeanor on the stand, made
clear that he blames Mr. Webster for many of his financial problems, ironically
so, in that the majority of funds lent by Mr. Webster to Mr. Hovatter were
never repaid by Mr. Hovatter.  The loans made to Mr. Hovatter by Mr. Webster
are as follows :
DATE
AMOUNTS BORROWED 
MATURITY 
AMT.
           OF LOAN     
DATE
DUE ON
      
           LOAN
8/25/89
 $ 6,000.00
                      11/15/89
           $10,000.00
9/1/89
 $ 3,000.00
11/15/89
$ 5,000.00
9/15/89
 $ 7,200.00
11/15/89
$ 9,000.00
9/22/89
 $ 5,200.00
11/15/89
$ 7,000.00
10/10/89
 $12,000.00
11/25/89
$ 8,000.00
1/10/90
 
$ 8,000.00
TOTAL
 $33, 408.00
TOTAL
          $47 ,000.00
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With the exception of the $7,200.00 amount lent on September 15, 1989, all the
above loans were made by checks drawn by Respondent on an account titled
"Arthur D. Webster Escrow Account." (Hereinafter referred to as"old escrow
account.") From 1982 until 1986, Mr. Webster used the "old escrow account"
as his attorney trust account for the deposit of funds received from clients and
third persons in connection with legal representations.  In 1986 however, Mr.
Webster formed a new law firm and contemporaneously therewith opened a
new attorney trust account for the deposit of funds held in connection with his
new firm’s legal work.  (Hereinafter referred to as "the new account.")
Subsequent to the formation of the new firm, Mr. Webster did not use the "old
escrow account" to deposit funds received in connection with his legal
representations. "The old escrow account" was used for Mr. Webster's
miscellaneous business and personal purposes.  Respondent deposited his own
funds in this account and it is from this "old escrow account" that loans were
made to Mr. Hovatter as set forth above.
 
“Mr. Hovatter was presented as a talented machinist but, despite this
talent found himself in financial difficulties causing him to obtain loans from
David Brown in 1987 and 1988.  Having failed to pay those loans in a timely
manner, Mr. Brown hired Mr. Webster to prepare the previously referred to
promissory note in the amount of $47,525.98.  A discussion in late summer,
1989, by and between Mr. Hovatter and Mr. Webster regarding additional loans
resulted in Mr. Webster initially providing Mr. Hovatter with an amount of
$6,000.00 for which Mr. Hovatter offered to repay the principal amount in
addition to a $4,000.00 payment for interest, all due and payable in November
of 1989.  Mr. Webster testified that he viewed this as a commercial loan and
that the interest payment of $4,000.00 was therefore not illegal.  Prior to
making this loan, Mr. Webster did contact references of Mr. Hovatter's which
included Dick Berstein, a business person for whom Mr. Hovatter had worked
and who indicated to Mr. Webster that Hovatter was the best machinist he had
ever seen.  Webster additionally discussed the matter with Scott Campbell of
Dresser Industries who verified that, in fact, Mr. Hovatter had been awarded
substantial contracts with Dresser Industries.
 
“With the exception of the $7,200.00 amount lent on September 15,
1989, all the loans, as set forth above, were made by checks drawn on
Respondent's "old escrow account" titled "Arthur D. Webster Escrow
Account."
“Despite Mr. Hovatter's contracts with Dresser Industries, he continued
to experience financial difficulties to such an extent that he approached Mr.
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Webster and requested that Mr. Webster deposit Mr. Hovatter's checks from
Dresser in the Respondent's account and make various disbursements to or on
behalf of Mr. Hovatter.  Mr. Webster placed these funds in the "old escrow
account" and made disbursements to Mr. Hovatter's creditors as well as Mr.
Hovatter himself.
“Subsequent to that, Mr. Brown contacted Mr. Webster and requested
that he attempt to collect on the "David Brown Note" from Mr. Hovatter.  Mr.
Webster was able to get Mr. Hovatter to make a series of small payments to Mr.
Brown, but the note remained badly in default.  Sometime prior to September
1, 1990, Mr. Webster purchased the "David Brown Note" at 75% of its then
current value.
 
“The Respondent provided Mr. Hovatter with numerous legal services
which were as follows:
(a) in June, 1990, Mr. Webster appeared on Mr. Hovatter's behalf
in a district court collection action brought against Mr. Hovatter
by a trade creditor, Salisbury Special Tool Company;
(b) on an unknown date in mid-1990, Mr. Webster attended a
half-hour meeting with Roy Meyers, another creditor of Mr.
Hovatter, in an unsuccessful attempt to renegotiate the terms of
Mr. Hovatter's debt to him in connection with Mr. Hovatter's
purchase of a farm in Pennsylvania;
(c) in the fall of 1990, Mr. Webster made a number of phone
calls to Ford Motor Credit Company in connection with its
ongoing disputes with Mr. Hovatter concerning that company's
attempt to collect money from Hovatter and to repossess his Ford
truck; and
(d) in December of 1990, Mr. Webster appeared in the Maryland
District Court in connection with criminal charges against Mr.
Hovatter for the battery of Jeff Wade, who owed Mr. Hovatter
$600. 
There is no evidence that Mr. Webster was paid in connection with his
representation of Mr. Hovatter in these matters.
 
“Mr. Hovatter's financial problems continued, which resulted in Mr.
Hovatter approaching Mr. Webster in the fall of 1990, and requested that he
become a signatory on Mr. Hovatter's personal checking account and that Mr.
Webster oversee Mr. Hovatter's financial affairs through use of this account.
Mr. Webster took possession of the checkbook and wrote checks to Mr.
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Hovatter's creditors as directed by Mr. Hovatter.  This arrangement was
terminated within approximately one month when Mr. Webster learned from
the bank that the account had been overdrawn as a result of checks written by
Mr. Hovatter without the knowledge of Mr. Webster, as a series of checks had
been withheld from the checkbook by Hovatter.  In the spring of 1991, Mr.
Webster prepared a document which purported to set forth all of the loans
Respondent had made to Mr. Hovatter and the interest due to date.  The only
record or documentation that the Respondent maintained of these loans were
the canceled checks.  At least two of the loans listed, $1,700.00 on October 20,
1989, and $1,300.00 on March 9, 1990, were funds given to Mr. Hovatter in
exchange for checks which Hovatter had given to the Respondent, and that the
Respondent placed in his "old escrow account." The Respondent included these
amounts plus interest charges on the document that he provided Mr. Hovatter,
listing all of the outstanding loans.  The document reflected that Mr. Hovatter
owed to the Respondent $80,558.00 for direct loans from the Respondent.
“Mr. Hovatter requested Respondent to provide a full accounting of the
monies that had been deposited with the Respondent.  The Respondent
prepared a document which showed receipt of two checks from Dresser
Industries totaling in excess of $32,000.00 and disbursements made by the
Respondent on behalf of Mr. Hovatter.  Respondent did not account for all of
the checks received from Mr. Hovatter and deposited to the Respondent's "old
escrow account" between October, 1989 and February, 1991 or disbursements
made by the Respondent on Mr. Hovatter's behalf.  Had such a complete
accounting been made, it seems apparent that the amounts of $1,700.00 and
$1,300.00 listed as loans would have been revealed to have, in fact, been funds
that at all times belonged to Mr. Hovatter that had been deposited in the
Respondent's "old escrow account" and later paid out to Mr. Hovatter from that
account.  Mr. Hovatter disputed the amount Respondent claimed was due and
refused to sign the Note prepared by Mr. Webster evidencing that debt.
 
“In July of 1991, Mr. Webster filed a confessed judgment action on the
David Brown Note against Mr. Hovatter in the Circuit Court for Wicomico
County.  The Respondent had garnishments served on several businesses which
owed Mr. Hovatter money, including Dresser Industries.  Mr. Hovatter retained
Steven Hearne, Esquire of Salisbury, Maryland who filed a Chapter 11
bankruptcy proceeding on Mr. Hovatter's behalf.  Mr. Hearne on behalf of Mr.
Hovatter wrote to Mr. Webster that Hovatter did not dispute the principal
amounts or the dates of any of Mr. Webster's loans; however, he did take
exception to the annualized rates of interest on the loans.
  
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“Mr. Webster filed a proof of claim in Mr. Hovatter's bankruptcy case
for over $100,000.00 in unpaid principal and interest.  As a result of
negotiations between Mr. Webster and Mr. Hearne on behalf of Mr. Hovatter,
an agreement was reached.  Mr. Hearne would prepare two notes, one note in
the amount of $35,000.00 representing Mr. Hovatter's indebtedness on the
"David Brown Note" and the other note in the amount of $60,000.00
representing Mr. Hovatter's indebtedness on the direct loans from Mr. Webster.
The notes were signed in late January, 1992 by both Mr. Hovatter and his wife
after their bankruptcy had been dismissed for failure to make required
payments.  Mr. Hovatter later repudiated this agreement, subsequently had a
dispute with Mr. Hearne and discharged him as his attorney.
“In February, 1992, Mr. Hovatter filed a complaint with the Attorney
Grievance Commission concerning Mr. Webster's handling of monies that Mr.
Hovatter had provided him through checks received from Dresser Industries
and that Mr. Webster had deposited in his "old escrow account." Mr. Webster
provided a written response to Mr. Hovatter's complaint.  As a result, Robert
P. Conrad, Esquire, Assistant Bar Counsel, advised Mr. Hovatter and Mr.
Webster that no further action would be taken on the complaint.
 
“Dresser Industries, in March of 1992, was holding a substantial amount
of money due to Mr. Hovatter for work performed.  Such funds were being
withheld based upon the earlier garnishment filed by the Respondent in the
confessed judgment action.  A note reflecting an indebtedness of $95,000.00
was prepared by Mr. Webster for Mr. Hovatter and his wife's signature.
Despite Mr. Hovatter's release or discharge of Mr. Hearne as his attorney, Mrs.
Hovatter asked Mr. Hearne to review the new $95,000.00 note.  In addition to
the note, a mutual release was prepared.  Both the note and the release were
signed by the Hovatters.  Mr. Hovatter denies having signed the mutual release
despite evidence to the contrary.  The Hovatters made the first payment on the
$95,000.00 note but did not make any further payments.  As a result of the
default, Mr. Webster thereafter filed a confessed judgment action on the
$95,000.00 note.  As a result, the Hovatters sought the representation of Royal
G. Shannonhouse, Esquire and Leonard Moodispaw, Esquire who moved to
vacate the judgment by confession.
“Mr. Moodispaw filed a complaint with the Attorney Grievance
Commission on behalf of the Hovatters, which complaint gives rise to this
disciplinary proceeding against Mr. Webster.  The Attorney Grievance
Commission made requests of the Respondent to produce records for the "old
escrow account." A subpoena for production of such records was served on the
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Respondent in August, 1994.  The Commission did receive some documents as
of January 3, 1995, but not a complete record as had been requested. It was not
until sometime later in 1995 that a complete record of the"old escrow account"
was received by the Commission from Peninsula Bank. 
CONCLUSIONS OF LAW
“Rule l.l5(a).  Mr. Webster committed a violation of Rule l.l5(a) by
commingling funds of Mr. Hovatter, with personal funds of his own in a client
trust account.  Although the escrow account at Peninsula Bank of Mr. Webster
was (old escrow account) from a former practice, it was still in use and entitled
Arthur D. Webster Escrow Account, and therefore should have been treated as
a clients' trust account or it should have been closed.  Additionally, the
Respondent failed to maintain records of this account.
 
“Rule l.7(b).  Mr. Webster committed a violation of Rule l.7(b).  Mr.
Webster made numerous loans to Mr. Hovatter during the time that David
Brown had hired Mr. Webster to collect from Hovatter monies past due on Mr.
Brown's loan to Mr. Hovatter.  There is no evidence that Mr. Brown was in any
manner advised of Webster's relationship with Hovatter and that Brown
thereafter consented.
 
“Rule l.8(a).  Mr. Webster violated Rule l.8(a) in that during such time
that he represented Mr. Hovatter in numerous matters, he was engaged in
lending money to Mr. Hovatter without providing Mr. Hovatter advice that he
should seek the advice of independent counsel in reference to these loans.
“Mr. Webster's representation of Mr. Hovatter was as follows: The
Respondent entered his appearance on behalf of Mr. Hovatter in Wicomico
County District Court collection actions brought by Salisbury Special Tool and
Sears Roebuck & Co.  The Respondent represented Mr. Hovatter at trial in the
District Court of Maryland for Wicomico County in August of 1990 in
reference to the Salisbury Special Tool collection action.  The Respondent met
with a Roy Meyers in an effort to renegotiate a lease purchase agreement
between Mr. Meyers and Mr. Hovatter.  Mr. Webster made numerous calls to
the Ford Motor Credit concerning Mr. Hovatter's debt to that company and its
efforts to repossess his truck.  Finally, Mr. Webster represented Mr. Hovatter
on a criminal charge in the District Court of Maryland for Wicomico County.
“Rule 8.l(b).  Mr. Webster violated 8.l(b) in that Mr. Webster did not
respond to the request to produce his bank records.  As Mr. Webster stated,
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(T.2, p.129, L.4), "Was I dilatory?  Yes.  Did I put it off?  Obviously, I don't
want to be here today, it's very unpleasant.  It's one of those unpleasant things
sitting on your desk and you say I'll get to that tomorrow.  And, you know,
should I have responded more promptly?  Absolutely.  Did I intend to hinder
them?  No, I always figured at some point we would get it all out in the open
and I had nothing to hide.  It was just a matter of getting it done, getting it from
the bank." It should be noted that Mr. Webster did eventually provide some of
the requested information.  A complete record of the account eventually was
received from Peninsula Bank.
 
“Maryland Rule BU7(16-607) & BU9(16-609).  Although the Peninsula
Bank Trust Account titled "Arthur D.  Webster Escrow Account" ( "old escrow
account") was in fact an old account that had been Mr. Webster's attorney trust
account in a prior law practice, it remained an attorney trust account.  The
account remained titled in precisely the same fashion throughout its existence
from the time of its inception and was repeatedly referred to by Respondent as
his "escrow account." The deposit of Respondent's personal funds in this
account violated Rule BU7 (now 16-607).  The loan made by Respondent to
Mr. Hovatter written from this account likewise violated Rule BU7.  Numerous
checks drawn from this account were made payable to cash, a violation of Rule
BU9 (now 16-609).”
I.
This Court has original and complete jurisdiction over attorney disciplinary
proceedings, and, in this regard, we make an independent review of the  record.  Attorney
Griev. Comm. v. Garland, 345 Md. 383, 392, 692 A.2d 465, 469 (1997).  We accept the
hearing judge’s findings of fact unless they are clearly erroneous.  Attorney Griev. Comm. v.
Sachse, 345 Md. 578, 589, 693 A.2d 806, 811 (1997).  This Court, however, makes the
ultimate decision as to whether an attorney has engaged in professional misconduct.  Attorney
Griev. Comm. v. Breschi, 340 Md. 590, 599, 667 A.2d 659, 664 (1995). 
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Respondent filed forty-six exceptions to Judge Groton’s findings of fact and
conclusions of law.   Forty-four of these exceptions are merely restatements of Respondent’s
argument and simply state an objection that the hearing judge did not accept Respondent’s
view of the facts.  Respondent urges this Court to dismiss the charges against him “because
the record fails to show that Respondent acted with bad intent or that Respondent’s conduct
prejudiced the respective interests of Mr. Hovatter or Mr. Brown.”  In the alternative,
Respondent recommends that this Court issue a reprimand, because “Respondent did not
knowingly violate the Rules and . . . the public is not now at risk from Respondent and does
not need protection from Respondent.”  
We have often observed that the hearing judge is in the best position to assess the
credibility of the witnesses, and this determination will not be disturbed unless clearly
erroneous.  Attorney Griev. Comm. v. Glenn, 341 Md. 448, 470, 671 A.2d 463, 474 (1996).
Judge Groton’s findings of fact were not clearly erroneous.  Accordingly, the forty-four
factual exceptions have no merit, and are overruled.  The two remaining exceptions challenge
Judge Groton’s conclusions of law. 
Respondent maintains that he did not violate Rule 1.15.  That rule requires an attorney
to hold property of clients that is “in a lawyer’s possession in connection with a representation
separate from the lawyer’s own property.”  Respondent argues that he did not violate Rule
1.15 because the monies Mr. Hovatter deposited with him were not monies “in connection
with a representation,” but were all part of a series of personal loan transactions.  The hearing
judge made no findings of fact as to whether the funds in the trust account were “in
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  Rule 8-101 of the Rules of Professional Conduct of the State Bar of California was
8
superseded by Rule 4-100, Preserving Identity of Funds and Property of a Client.  The two
rules appear to be the same substantively.   
connection with a representation.”  We cannot tell from the record whether at the time
Respondent received Mr. Hovatter’s funds he received the money in connection with a
representation.  Accordingly, we find that Bar Counsel has not met its burden of proof, and
we therefore grant Respondent’s exception.
Respondent’s remaining exception is based on the same argument:  that he did not
violate  Maryland Rules 16-607 and 16-609 because the monies Mr. Hovatter deposited with
him were not monies “in connection with a representation,” and Rules 16-607 and 16-609 “do
not extend any further than the requirements of Rule 1.15.”  In addition, from 1986 onward,
notwithstanding the manner in which the account was titled, the “old account” was not an
attorney trust account.  Respondent argues that the mere fact that the account was entitled
“Arthur D. Webster Escrow Account” cannot  support a finding that he violated these rules.
A remarkably similar argument was advanced by an attorney in a California
disciplinary case.  In Doyle v. State Bar of California, 648 P.2d 942 (Cal. 1982), the Supreme
Court of California sanctioned an attorney for violating California’s disciplinary Rule 8-101,
which, in substance, is similar to Maryland Rule 16-607.  Rule 8-101 of the Rules of
Professional Conduct of the State Bar of California  provides that client funds “shall be
8
deposited in one or more identifiable bank accounts labeled ‘Trust Account,’ ‘Client’s Funds
Account’ or words of similar import . . . and no funds belonging to the member of the State
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Bar or firm of which he is a member shall be deposited therein or otherwise commingled
therewith . . . .”  Doyle, 648 P.2d at 948.  The attorney argued that the Rules of Professional
Conduct do not prevent an attorney from using for personal purposes an account formerly
used as a trust account, and still captioned as such.  In rejecting the argument, the Supreme
Court of California held:
The rule absolutely bars use of the trust account for personal purposes, even if
client funds are not on deposit.  Because petitioner used the account while it
was still denominated a trust account, even if he no longer intended to use it for
trust purposes, rule 8-101 was violated.  The rule leaves no room for inquiry
into the depositor’s intent.  
Doyle, 648 P.2d at 948.
We agree with the Supreme Court of California that when an account is designated an
attorney trust account, inquiry into the source of the funds within the account is irrelevant.
Use of the trust account for personal purposes while still designated a trust account, even if
it was no longer intended that the account be used for trust purposes, is prohibited.  It makes
no difference whether client funds are deposited in the account.   
 
 The purpose of the anti-commingling rules is to protect client funds from the claims
of creditors of the attorney.  Glenn, 341 Md. at 489, 671 A.2d at 483 (“the failure to keep
client funds separate subjects the funds to the claims of creditors of the lawyer”); In re
Timpone, 623 N.E.2d 300, 309 (Ill. 1993); Arm v. State Bar of California, 789 P.2d 922, 929
(Cal. 1990); AMERICAN BAR ASSOCIATION, ANNOTATED MODEL RULES OF PROFESSIONAL
CONDUCT Rule 1.15 (1996).  Using an account designated an attorney trust account, when it
no longer actually serves as such, constitutes a holding out to the public that the monies
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contained therein are not subject to attachment and improperly suggests that the monies are
beyond the reach of creditors of the attorney.  In this case, when Respondent put his personal
funds into an account entitled “escrow account” he improperly represented to his creditors
that those funds were being held for a third party.  See Disciplinary Counsel v. Mazer, 668
N.E.2d 478, 479 (Ohio 1996); Discipline of Tidball, 503 N.W.2d 850, 852, 854 (S.D. 1993);
Matter of Velasquez, 507 A.2d 145, 149 (D.C. 1986); Comm. on Prof’l Ethics and Conduct
of Iowa State Bar Ass’n v. Gross, 326 N.W.2d 272, 273 (Iowa 1982).  An attorney may not
avoid responsibility for misuse of a trust account, even if such misuse was inadvertent.
Attorney Griev. Comm’n v. Boehm, 293 Md. 476, 481, 446 A.2d 52, 54 (1982).
In this case, Respondent placed his personal funds, other business funds, and Mr.
Hovatter’s funds in the attorney trust account.  Based on his argument that none of this money
was received in connection with a representation, none should have been placed in the
account.  Respondent kept no accounting of Mr. Hovatter’s funds previously deposited into
the account, and, in further violation of the rules, he wrote checks payable to cash from that
account.  These actions violated Rules 16-607 and 16-609.  Respondent’s exception is
overruled.  
Bar Counsel filed no exceptions to the hearing judge’s findings of fact or conclusions
of law.  As the appropriate sanction, Bar Counsel recommends that this Court impose a
suspension of two years.  
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II.
We turn now to the issue of the appropriate sanction.  We judge each case separately
based on the particular facts and circumstances.  Attorney Griev. Comm’n v. Powell, 328 Md.
276, 300, 614 A.2d 102, 114 (1992).  The purpose of a disciplinary hearing is not to punish
the errant lawyer but rather to protect the public, to maintain the integrity of the legal
profession and to deter other lawyers from engaging in violations of the Rules of Professional
Conduct.  Attorney Griev. Com’n v. Myers, 333 Md. 440, 447, 635 A.2d 1315, 1318 (1994).
In addition to the trust account violations, Respondent also violated the rules related
to conflict of interest.  These actions merit some sanction.  See Attorney Griev. Comm’n v.
Sliffman, 330 Md. 515, 522, 625 A.2d 314, 317-18 (1993) (sanctioning attorney for
developing a differing interest than his client as a result of a loan transaction and failing to
disclose it).  Respondent also failed to respond to Bar Counsel’s requests for information.  See
Attorney Griev. Comm. v. Milliken, ___ Md. ___, ___ A.2d ___ (1998). 
Respondent’s violations do not appear to be a result of  intentional wrongdoing, but
rather the result of negligence and carelessness.  In addition, we consider as a mitigating
factor that none of Respondent’s clients were injured as a result of his actions.  Attorney
Griev. Comm’n v. Kandel, 317 Md. 274, 282, 563 A.2d 387, 391 (1989).  Indeed, Mr.
Hovatter has never repaid the loan to Respondent, and Respondent is the only party who has
been financially injured. 
Considering all the circumstances in this case, we think the appropriate sanction is a
30-day suspension.  Cf. Attorney Griev. Comm’n v. Engerman, 289 Md. 330, 348, 424 A.2d
-15-
362, 371 (1981) (finding 30-day suspension appropriate when attorney’s misconduct included
improperly acquiring an interest in litigation and failing to preserve the identity of client
funds).  The suspension of Arthur D. Webster from the practice of law in this State shall begin
thirty days from the date of this opinion.  
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 16-715(c), FOR
WHICH SUM JUDGMENT IS ENTERED
IN FAVOR OF THE ATTORNEY
GRIEVANCE COMMISSION AGAINST
ARTHUR D. WEBSTER.