Case Title: Matter of Spiller

Citation: 

Docket Number: 390, 2001

State: delaware

Court: Delaware Supreme Court

Date: 2001-12-26T00:00:00Z

Document:
IN THE SUPREME COURT OF THE STATE OF DELAWARE
IN THE MATTER OF A
MEMBER OF THE BAR OF THE
SUPREME COURT OF THE
STATE OF DELAWARE:
SAMUEL SPILLER,
Respondent.
§
§   No. 390, 2001
§
§   Board Case Nos. 71, 1998 and
§   1, 2, 3, 6, 7, 8, and 9, 1999
§
§
§
Submitted: November 20, 2001
  Decided:
December  26, 2001
Before VEASEY, Chief Justice, WALSH, and STEELE, Justices.
Upon Review of the Report of the Board on Professional
Responsibility.  Findings Affirmed.  Respondent Disbarred.
Samuel Spiller, Wilmington, Delaware, Pro Se.
Michael S. McGinniss, Esquire, Office of Disciplinary Counsel,
Wilmington, Delaware.
Per Curiam:
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The matter before the Court is a lawyer disciplinary proceeding.  A
panel of the Board on Professional Responsibility (Board) issued its Final
Report recommending that the respondent, Samuel Spiller, be disbarred from
the practice of law in Delaware due to numerous violations of the Delaware
Lawyers’ Rules of Professional Conduct (DLRPC).  Spiller filed a letter
objecting to the Board’s recommended sanction on several grounds. The
Office of Disciplinary Counsel (ODC) filed a response in opposition to
Spiller’s objections.  After careful review, we affirm the Board’s findings
and adopt its recommendation that Spiller be disbarred.
The Board’s Final Report
ODC filed a petition with the Board to discipline Spiller on eight
separate, consolidated matters.  Spiller admitted all 55 violations alleged in
the petition.  All of the allegations of the petition related to failures with
respect to residential real estate settlements.  A panel of the Board held a
hearing on January 31, 2001.  ODC presented the testimony of Robert Krapf,
Esquire, the receiver of Spiller’s law practice, and Martin Zukoff, CPA, an
auditor for the Lawyers’ Fund for Client Protection.  Spiller appeared at the
hearing without counsel.  He presented no witnesses other than himself.
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Having considered the transcript of the hearing and the record below,
we find the Board’s undisputed findings of fact to be supported by the
record.  We adopt the factual findings contained in the Board’s Final Report,
which is attached to this opinion, and we incorporate them by reference.
The following is a summary of the Board’s relevant findings of facts:
Spiller was admitted to the Delaware Bar in 1960.  At all times
relevant to ODC’s petition, Spiller was a solo practitioner who limited his
practice to real estate settlements.  In 1997, this Court publicly reprimanded
Spiller and placed him on a two-year period of disciplinary probation for
failing to maintain his books and records properly.1  Spiller was on probation
at the time of the events alleged in the ODC’s petition.
The allegations in ODC’s petition arose from several different real
estate transactions that Spiller had not properly completed.  Most of the
cases involved residential real estate settlements in which monies were
distributed at the settlement hearing and checks were dishonored.  An audit
of Spiller’s books and records revealed that the complaints against Spiller
were caused by: (1) Spiller’s failure to reconcile his bank accounts on a
regular basis; (2) Spiller’s deposit of funds in an inactive account, which
                                                
1 In re Spiller, Del. Supr., No. 176, 1997, Hartnett, J. (May 29, 1997) (ORDER).
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caused settlement checks to bounce; and (3) Spiller’s failure to determine
whether monies had been wired into the proper account, or at all, before
issuing checks dependent upon the wired monies.  The receiver testified that
Spiller’s practice was “organizational chaos.”
Although Spiller’s bank later honored many of the bounced checks
(after several attempts, in some cases), there were a number of checks that
Spiller’s bank never honored.  In all, Ticor Title Insurance Company paid
$337,049.56 for mortgage payoffs arising from settlements in which funds
were never available from Spiller’s account.  In addition to Spiller’s
financial difficulties, the receiver discovered approximately 294 documents,
including deeds, mortgages, and satisfaction pieces that Spiller had not
recorded and many that Spiller had not notarized. Ticor also paid $59,456
for unpaid real estate document recording fees, taxes, and other transaction
fees.
The total approximate shortfall in Spiller’s real estate accounts was
$603,263.2  Furthermore, there were 267 real estate transactions for which
Spiller was the Ticor agent but failed to deliver the premiums to Ticor.  The
approximate total of the unpaid premiums was $43,752.  Therefore, the total
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approximate deficiency was $645,800.  Of that amount, about $275,000 was
money that Spiller had advanced for real estate transactions involving
American Residential Mortgage Company and its affiliate, New America
Financial, Inc.,3 and which was never delivered by those companies.  The
Board found that, although there was a $300,000 shortfall in Spiller’s
accounts that could not be reconciled due to 20 missing settlement files,
there was no evidence that Spiller had stolen money or defrauded anyone.
Nor was there any suggestion that Spiller had hidden or discarded the files
for an improper purpose.
After considering all of the evidence, the Board found that Spiller had
violated numerous professional duties, including: (i) failing to maintain his
accounts in a competent manner;4 (ii) failing to act with diligence and
promptness in reconciling his accounts;5 (iii) failing to properly identify and
safeguard property belonging to a client or third party;6 (iv) failing to
                                                                                                                                                
2 The amount is approximate because Spiller’s real estate settlement account
could not be reconciled due to 20 missing settlement files.
3New America Financial, Inc. subsequently filed for bankruptcy protection.
4DELAWARE LAWYERS’ RULES OF PROFESSIONAL CONDUCT Rule 1.1.
5Id. Rule 1.3.
6Id. Rule 1.15(a).
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promptly deliver funds to a client or third party;7 (v) failing to maintain
proper books and records;8 and (vi) disbursing funds that were not good
funds.9
The Board found that Spiller knew or should have known that his
conduct was improper and that Spiller’s misconduct had caused significant
harm to his clients and the public.  The Board concluded that more serious
harm was averted only through the “extraordinary efforts” of the receiver.
The Board considered all of the aggravating circumstances, including
Spiller’s substantial experience as a lawyer, his prior disciplinary record, and
his pattern of misconduct.  The Board also considered all of the mitigating
circumstances, including Spiller’s lack of selfish motive, his efforts to cure
his practice difficulties, and the role played by American Residential
Mortgage in contributing to Spiller’s difficulties.  After balancing all of the
factors, the Board concluded that disbarment was the only appropriate
sanction.
                                                
7Id. Rule 1.15(b).
8Id. Rule 1.15(d).
9Id. Rule 1.15(h).
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Spiller’s Contentions
Spiller does not dispute any of the Board’s factual findings.  Spiller,
however, does object to the Board’s recommended sanction of disbarment
on the following grounds:  (1) the Board did not give sufficient weight to the
absence of a disciplinary record during Spiller’s many years of practice
before his public reprimand and probation in 1997; (b) the Board did not
give sufficient weight to the “severe mental stress” that he was experiencing
during the relevant time period, which was caused by “inadequate staffing,”
and instead gave greater weight to the “mismanagement [itself] rather than
the fact that stress caused the mismanagement;” (c) the Board did not give
sufficient weight to Spiller’s age, which he asserts was “a major factor in the
mismanagement” of his practice; (4) Spiller’s “inadequate staffing created
chaotic conditions and time pressures which [he] was, eventually, unable to
cope with;” and (5) there was no “hint of impropriety” on his part, although
he was “guilty of gross negligence.”  For these reasons, Spiller requests to be
placed on permanent inactive status with no chance of reinstatement.
Standard and Scope of Review
Appropriate Sanction
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Because the Board’s factual findings are undisputed, our only task is
to consider the appropriateness of the Board’s recommended sanction.10
While the Board’s recommendation may be helpful, the Court is not bound
by it and may impose any sanction it deems appropriate.11  Although the
Court has wide latitude in determining the form of discipline to be imposed,
we are guided by our prior lawyer disciplinary decisions. 12  Our precedents
reflect that, in determining an appropriate sanction for lawyer misconduct,
the Court has cited favorably to the theoretical framework found in the ABA
Standards for Imposing Lawyer Sanctions.13 That framework sets forth four
factors relevant to determining an appropriate disciplinary sanction:  (a) the
ethical duties violated; (b) the lawyer’s mental state; (c) the actual or
potential injury caused by the lawyer’s misconduct; and (d) aggravating and
mitigating circumstances.14
                                                
10In re Dorsey, Del. Supr., 683 A.2d 1046, 1048 (1996).
11In re Mekler, Del. Supr., 669 A.2d 655, 668 (1995).
12In re Maguire, Del. Supr., 725 A.2d 417, 423 (1999).
13In re Benge, Del. Supr., 754 A.2d 871, 879 (2000).
14In re Reardon, Del. Supr., 754 A.2d 568, 575 (2000) (citing ABA STANDARDS
FOR IMPOSING LAWYER SANCTIONS, Theoretical Framework (1986 and as amended
1992)).
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In this case, we find that ABA Standard 4.41(c) compels the
conclusion that disbarment is the only appropriate sanction for Spiller.
Standard 4.41(c) provides that disbarment is generally appropriate when a
lawyer has engaged “in a pattern of neglect with respect to client matters and
[has caused] serious or potentially serious injury to a client.”15  Spiller’s
pattern of neglect involved hundreds of matters in which he failed to
prepare, record, and/or notarize documents on behalf on his clients and
others.  His chronic failure to properly maintain his accounts and safeguard
property belonging to others resulted in damages in excess of $645,000.  In
one instance, a client had her property sold at a sheriff’s sale because Spiller
had failed to record the deed properly.  Moreover, numerous attorneys had to
be engaged pro bono in order to straighten out the confusion caused by
Spiller’s failure to properly record deeds or pay taxes and transfer fees.  The
receiver went to extraordinary lengths, spending nearly 1500 hours of time
and $25,000 in costs, in order to reorganize Spiller’s practice and to
minimize the damage caused by his misconduct.
Although Spiller may not have intentionally converted the property of
others, the record is clear that Spiller knew he was failing to provide the
                                                
15 ABA STANDARDS FOR IMPOSING LAWYER SANCTIONS Standard 4.41(c) (1986).
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most fundamental services to his real estate clients and that his failings
would result in harm to his clients and/or to others.  As the Board found,
Spiller “chose to continue a practice when he knew that he had inadequate
staffing, inadequate time of his own, and which he certainly must have
known would have caused damage to the public if all of the monies were not
properly disbursed and all the documents not properly recorded.”
Furthermore, contrary to Spiller’s contentions, we find that the Board
considered all of the evidence presented in aggravation and mitigation and
appropriately concluded that the mitigating factors did not warrant the
imposition of a lesser sanction.  In Spiller’s case, the aggravating factors
included Spiller’s substantial experience in the practice of law,16 Spiller’s
pattern of misconduct,17 Spiller’s commission of multiple offenses,18 and
Spiller’s prior disciplinary record,19 which included a public reprimand and
two-year probation in 1997 for similar misconduct.  It is significant and
disturbing that Spiller’s present acts of misconduct occurred while he was on
probation.
                                                
16 Id. Standard 9.22(i).
17 Id. Standard 9.22(c).
18 Id. Standard 9.22(d).
19 Id. Standard 9.22(a).
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In mitigation, the Board found that Spiller’s misconduct was not the
result of a dishonest or selfish motive.20  To the extent Spiller contends that
the Board failed to consider his age and his stress as factors in mitigation, we
find no evidence in the record to support a conclusion that Spiller’s age or
stress amounted to a “disability or impairment,”21 which appropriately could
be considered in mitigation. Spiller presented no medical evidence that he
was affected by any age-related or stress-related disorder or that his
misconduct was caused by such a disorder.   Moreover, the record supports
the Board’s finding that Spiller never sought any professional psychological
or counseling help.  We agree with the Board’s assertion that “while it is
likely that the practice failures caused mental stress it is less than clear that
the mental stress caused the practice failures.”
In sum, we agree with the Board’s implicit conclusion that the
mitigating circumstances did not outweigh the substantial aggravating
circumstances in this case.  Spiller was on probation imposed for similar
disciplinary violations when he committed the numerous violations now at
issue.  Spiller failed to comply with the conditions of his probation and
ignored his professional duties to his clients, which resulted in substantial
                                                
20 Id. Standard 9.32(b).
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harm to his clients and others.  He has proven himself unable or unwilling to
conform his conduct to the standards expected of a Delaware lawyer.  This
Court concludes that disbarment is the only appropriate remedy to protect
the public and to preserve the integrity of the legal profession.
Conclusion
The Board’s recommended sanction is accepted.  It is hereby ordered
that Samuel Spiller be disbarred from membership in the Delaware Bar.  His
name shall be stricken immediately from the roll of attorneys entitled to
practice before the courts of this State.
                                                                                                                                                
21 Id. Standard 9.32(h).