Case Title: Attorney Grievance v. Spery

Citation: 371 Md. 560

Docket Number: 8ag/02

State: maryland

Court: Maryland Supreme Court

Date: 2002-11-06T00:00:00Z

Document:
IN THE COURT OF APPEALS
 OF MARYLAND
Misc. Docket AG No. 8
September Term, 2002
ATTORNEY GRIEVANCE COMMISSION
OF MARYLAND
v.
ROBERT M. SPERY
Bell, C.J.
Eldridge
Raker
Wilner
Cathell
Harrell
Battaglia,
JJ.
Opinion by Raker, J.
 
Filed: November 6, 2002                
1Rule 8.4 (Misconduct) provides, in pertinent part, as follows:
  “It is professional misconduct for a lawyer to:  
(c) engage in conduct involving dishonesty, fraud, deceit or
misrepresentation.”
The Attorney Grievance Commission, acting through Bar Counsel, filed a petition
with this Court for disciplinary action against Robert M. Spery, respondent, alleging
violations of the Maryland Rules of Professional Conduct (hereinafter “MRPC”).  The
Commission charged respondent with violating MRPC 8.4(c) (Misconduct).1  We referred
the matter to Judge Donald F. Johnson of the Circuit Court for Dorchester County to make
findings of fact and proposed conclusions of law.  Following an evidentiary hearing, Judge
Johnson concluded that respondent violated Rule 8.4(c).
I.
Judge Johnson made the following Findings of Fact and Conclusions of Law: 
Findings of Fact
“Before this Court is the Petition for Disciplinary Action, filed
by the Attorney Grievance Commission of Maryland, by Melvin
Hirshman, Bar Counsel, and James P. Botluk, Assistant Bar
Counsel, hereinafter ‘Petitioners.’  Petitioners allege that Robert
M. Spery, Esquire, hereinafter ‘Respondent,’ violated Rule
8.4(c) of the Maryland Rules of Professional Conduct in the
course of Respondent’s management of a partnership.
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Petitioners allege that the Respondent misappropriated
partnership funds by writing partnership checks payable to
himself in a total amount of approximately $47,000.00.  The
Respondent argues that he merely took the money as a loan, and
never borrowed more than his partnership interest.  An
evidentiary hearing was held on the 12th day of June, 2002.
“In December of 1982, the Respondent, together with
Eugene A. Walsh, Esquire and Arthur D. Webster, Esquire,
collectively, the ‘Partners,’ purchased the building located at
110 Baptist Street, Salisbury, Maryland, under the form of a
partnership, known as the ‘Baptist Street Associates,’ with each
Partner owning a one-third interest.  Formal partnership articles
were never drawn up.  The Partners used this building as the
office of their law firm, Webster, Walsh, & Spery.  
“Sometime in 1984, the Partners ceased practicing law
together and decided to maintain 110 Baptist Street as a rental
property.  Mr. Webster managed the partnership books until
early in 1993 at which time the Respondent became the
managing partner.  Shortly before the Respondent became the
managing partner a new tenant was acquired requiring
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renovations to the building.  The Partners elected to refinance
the building in order to obtain the money for the renovations.
The building was appraised at approximately $192,000.00 and
refinanced for approximately $155,000.00.  The renovations
were completed for approximately $25,000.00 and each partner
received approximately $29,000.00 for his share of the
accumulated equity in the partnership.  Inquiry Panel Hearing,
T. 17-20.
“As managing partner, the Respondent’s duties included
collecting rent, completing repairs, paying taxes, paying for
insurance, and making payments on the mortgage.  The
Respondent furnished copies of partnership tax returns to the
other partners.  The other partners became concerned about how
the partnership was being managed after the Vice President and
Loan Officer of Peninsula Bank notified them, in the spring of
1999, that loan payments were late.  Mr. Walsh obtained a loan
history from the bank and discovered that approximately
twenty-seven of the last thirty-six payments had been late and
that late fees had been incurred.  Mr. Walsh and Mr. Webster
were also concerned about the excessive repairs and a note that
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had been appearing on the partnership tax returns.1  They called
a partnership meeting in April of 1999 to discuss these matters
with the Respondent.
“At the meeting the Respondent did not reveal that he
was, as he now alleges, borrowing from his partnership interest.
Instead, the Respondent apologized for the late payments and
represented that he had not been attentive to the mortgage.  The
Respondent also represented that the other partners owed him
thousands of dollars for repairs that the Respondent had paid for
with his own money.  The Respondent offered to sell his
interest in the partnership for $20,000.00.  The other partners
agreed to consider this offer but first requested that the
Respondent prepare an invoice for his out-of-pocket expenses
and deliver the partnership books to the other partners to study.
____________________
1 When questioned by Mr. Walsh about the note, the
Respondent represented that it was incorrect and that the
accountant had made an error.  For the period from 1994 to
1998, approximately $18,000.00 was reported on the tax returns
for repairs, however Mr. Walsh ‘would drive by the building
periodically and couldn’t see where all the money was going.’
Inquiry Panel Hearing, T. 101.
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“The Respondent never completed an invoice and did
not deliver the books to the other partners until late in
September 1999, after Mr. Webster had made numerous phone
calls and sent letters to the Respondent.  When the books were
finally delivered, the Respondent explained that he had lost four
or five years worth of records.  Mr. Webster then obtained from
Peninsula Bank, at a cost of approximately $1,000.00, copies of
the missing bank statements, deposit slips, and returned checks
that had been preserved by the bank on microfilm.  
“Upon review of the documents, Mr. Webster discovered
that the Respondent had written numerous checks payable to
himself.  Mr. Webster calculated that the Respondent had taken
from the partnership in the course of five years, without
authorization, the amount of $47,821.16.  Mr. Webster
discovered that, at times, the partnership account lacked
sufficient funds to make the mortgage payment.  Mr. Webster
also discovered that the Respondent periodically placed money
back into the account.  After the April 1999 meeting the
Respondent deposited approximately $34,000.00 into the
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account.2
“The checkbook entries turned over by the Respondent
reflect that the Respondent reported these disbursements as
payments to ‘RMS’ for ‘various,’ ‘maintenance various,’ and
some bear no explanation at all.  On some of the check stubs the
entries have been erased or written over.  Plaintiff’s Exhibit No.
3.  
“Sometime in 2000, the Partners reached an agreement
by which the Respondent agreed to sign over his one-third
interest in the building to Mr. Walsh and Mr. Webster and pay
them a sum of $45,000.00.  This amount was to be paid in nine
equal payments of $5,000.00, payable every three months
beginning March 31, 2000.  In exchange, Mr. Webster and Mr.
Walsh agreed ‘that so long as the terms of this agreement are
fulfilled on a timely basis, that neither of us will discuss our
relationship with you regarding this building with any other
____________________
2 In 1995, during the course of the year, the Respondent took
$7,788.90 and returned $3,950.00.  In 1996, the Respondent
took $9,287.77.  In 1977, the Respondent took $14,032.53 and
returned $4,250.00.  In 1998, the Respondent took $9,201.93
and returned $5,450.00.  In 1999, the Respondent returned
$34,422.15.  Inquiry Panel Hearing, T. 35-36.
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person.’  Letter of January 23, 2000 (Inquiry Panel Hearing,
Exhibit BC 8).  The Respondent explained that he agreed to this
arrangement because he ‘didn’t want to end up on the front
page of The Daily Times.’  Inquiry Panel Hearing, T. 153.
“The Respondent made three of the scheduled payments,
however the third payment was late.3  Before the third payment
had been received, Mr. Walsh reported the Respondent to the
Attorney Grievance Commission by letter dated January 9,
2001.  Mr. Walsh decided to report the Respondent because he
could no longer endure the ‘sleepless nights’ and ‘waking in a
cold sweat.’  December 26, 2000, letter authorized by Eugene
A. Walsh to Arthur D. Webster (Inquiry Panel Hearing, Exhibit
Resp 2).  Mr. Walsh explained that his decision was also based
on the Respondent’s threat to ‘take [Mr. Walsh and Mr.
Webster] down too.’  Inquiry Panel Hearing, T. 112.
____________________
3 The first payment, made by check payable to Eugene A. Walsh
and Arthur E. Webster, was paid on March 29, 2000.  The
second check was dated June 30, 2000, and the third check was
dated January 18, 2001.  According to the agreement, the third
payment was due on September 30, 2000.
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“The Respondent admits to taking the money but argues
that he never took ‘more from the partnership capital than what
the value of his one-third interest would have been.’
Evidentiary Hearing, T. 12.  The Respondent reported the
money on his personal tax returns as income.  In light of the
Respondent’s misrepresentations at the partnership meeting in
April 1999 and his attempts to conceal his actions, considering
the misappropriations to be loans would not be an accurate
characterization.  The Respondent converted partnership money
to his own use without authorization and without disclosure to
the other partners.4  The Respondent made ambiguous entries in
the partnership books, misrepresented his conduct to the other
partners, and attempted to conceal his actions.  The Respondent
has demonstrated a lack of probity, integrity and
straightforwardness in conduct.  The Court finds by clear and
convincing evidence that the Respondent has engaged in
____________________
4  The Respondent explained that he borrowed the money in part
to pay for his daughter’s private school tuition.  However he
intended ‘to clean it up in September’ once he would be off the
private school tuition ‘hook’ and would become eligible to
withdraw from his ‘independent’ retirement account.  Inquiry
Panel Hearing, T. 180.
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dishonest conduct in violation of Rule 8.4(c) of the Maryland
Rules of Professional Conduct.  
“The Respondent argues that he only borrowed the
money and ‘replaced far more money than he ever took, not
only initially but by submitting to . . . blackmail or extortion by
Webster and Walsh.’  Evidentiary Hearing, T. 15.  Although the
subsequent conduct of the other partners may be equally
deplorable, their conduct is not a defense to the Respondent’s
own dishonesty.”
II.
Neither party has taken exceptions to the hearing judge’s findings of facts or
conclusions of law.  Consequently, the only issue in this proceeding is the appropriate
sanction to be imposed.  Bar Counsel recommends disbarment; Respondent recommends a
reprimand.  
The primary purpose in imposing discipline on an attorney for violation of the Rules
of Professional Conduct is not to punish the lawyer but rather to protect the public and the
public’s confidence in the legal profession.  Attorney Grievance Comm’n v. Powell, 369 Md.
462, 473, 800 A.2d 782, 789 (2002).  Disciplinary proceedings also are aimed at deterring
other lawyers from engaging in similar conduct.  Id.  
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Misappropriation, by an attorney, of funds entrusted to his or her care is an act
infected with deceit and dishonesty and, in the absence of compelling extenuating
circumstances justifying a lesser sanction, will result in disbarment.  Attorney Grievance
Comm’n v. Culver, 2002 Md. Lexis 786 (2002); Attorney Grievance Comm’n v. Sullivan,
369 Md. 650, 655-56, 801 A.2d 1077, 1080 (2002); Attorney Grievance Comm’n v. Vlahos,
369 Md. 183, 186, 798 A.2d 555, 557 (2002); Powell, 369 Md. at 475, 800 A.2d at 789;
Attorney Grievance Comm’n v. Vanderlinde, 364 Md. 376, 410, 773 A.2d 463, 483 (2001);
Attorney Grievance Comm’n v. Sabghir, 350 Md. 67, 84, 710 A.2d 926, 934 (1998);
Attorney Grievance Comm’n v. Ezrin, 312 Md. 603, 608-09, 541 A.2d 966, 969 (1988);
Attorney Grievance Comm’n v. Nothstein, 300 Md. 667, 687-88, 480 A.2d 807, 818 (1984);
Attorney Grievance Comm’n v. Silk, 279 Md. 345, 347, 369 A.2d 70, 71 (1977).  In cases
warranting disbarment, such as those involving intentional dishonesty, fraud,
misappropriation and the like, we will not accept as compelling extenuating circumstances
“anything less than the most serious and utterly debilitating mental or physical health
conditions, arising from any source that is the ‘root cause’ of the misconduct and that also
result in an attorney's utter inability to conform his or her conduct in accordance with the law
and with the MRPC.” Vanderlinde, 364 Md. at 413-14, 773 A.2d at 485. 
 
Bar Counsel argues that disbarment is the only appropriate sanction for respondent’s
conversion of partnership funds to his own use, concealment of his wrongdoing from his
partners, and the misrepresentations to his partners.  In mitigation, respondent argues that
2Under the ABA Standards for Imposing Lawyer Sanctions, an admonition, “also
known as a private reprimand, is a form of non-public discipline which declares the
conduct of the lawyer improper, but does not limit the lawyer’s right to practice.” 
Standard 2.6 Admonition.  We point out that although ABA Standards for Imposing
Lawyer Sanctions, 5.14, provides for an admonition under certain circumstances, an
admonition is not an available sanction under the MRPC.  Standard 5.14 reads as
follows:
“Admonition is generally appropriate when a lawyer engages
in any other conduct that reflects adversely on the lawyer’s
fitness to practice law.”
Even under the ABA Standards, respondent’s conduct would not fall within 5.14.
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the absence of any prior discipline over twenty-eight years of law practice, a timely, good
faith effort to rectify the consequences of his misconduct, cooperation with Bar Counsel and
acceptance of responsibility, and other “punishment” incurred by the actions of his injured
partners, all justify a downward departure in the sanction “from the ordinarily applicable
sanction of a reprimand to the lesser sanction of admonition.”2  
As support for his position, respondent relies on Standard 5.13 of the American Bar
Association’s Standards for Imposing Lawyer Sanctions (1991, 1992 Supp.) (ABA
Standards).  Standard 5.13 reads as follows:
“Reprimand is generally appropriate when a lawyer knowingly
engages in any other conduct that involves dishonesty, fraud,
deceit, or misrepresentation and that adversely reflects on the
lawyer’s fitness to practice law.”
Respondent’s reliance on Standard 5.13 is misplaced.  Rather, his conduct falls within
Standard 5.11, which reads as follows:
“Disbarment is generally appropriate when:
(a) a lawyer engages in serious criminal conduct
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a necessary element of which includes intentional
interference with the administration of justice,
false swearing, misrepresentation, fraud,
extortion, misappropriation, or theft; or the sale,
distribution or importation of controlled
substances; or the intentional killing of another;
or an attempt or conspiracy or solicitation of
another to commit any of these offenses; or
(b) a lawyer engages in any other intentional
conduct involving dishonesty, fraud, deceit, or
misrepresentation that seriously adversely reflects
on the lawyer’s fitness to practice.
The commentary to this standard reflects the view that a lawyer who engages in serious
illegal conduct should be disbarred.  On the other hand, Standard 5.13 applies to any other
conduct or situation in which the lawyer’s conduct, although not criminal or related to the
practice of law, nonetheless requires some form of discipline.  Respondent’s conduct falls
within 5.11, not within 5.13.
In Ezrin, the attorney stole large sums of money from his law partners.  After his
dishonest conduct was discovered, he made restitution to the law firm.  Before this Court,
Ezrin argued as mitigation, his remorse, as well as the fact that he misappropriated the
money because of “his disabling emotional state, and [that the theft] did not involve client
funds.”  Ezrin, 312 Md. at 606, 541 A.2d at 967.  We reviewed the arguments he advanced
in mitigation of his misconduct, including his fine reputation as a lawyer, his general good
character, his lack of prior disciplinary actions, restitution made to his law firm, and his
cooperation with Bar Counsel.  Id. at 609, 541 A.2d at 969. We rejected his arguments,
finding no extenuating circumstances, and imposed the sanction of disbarment.
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In Attorney Grievance Comm’n v. Lazerow, 320 Md. 507, 578 A.2d 779 (1990), the
attorney misappropriated monies he held as down payments for home purchases.  There, too,
we rejected the attorney’s argument that his general good character and reputation, the lack
of prior misconduct, his restitution of the funds, and his remorse and shame were compelling
extenuating circumstances to justify a sanction less than disbarment.  Id. at 515-16, 578 A.2d
at 783.
Respondent's case is no different.  It is of little moment that respondent stole from his
real estate partners and not from his clients.  His fraudulent, criminal conduct acting on his
own behalf for his personal gain to the detriment of his partners is no less reprehensible than
when he acts on behalf of a client.  See Vlahos, 369 Md. at 187, 798 A.2d at 557; Ezrin, 312
Md. at 604-09, 541 A.2d at 966-69; Nothstein, 300 Md. at 687, 480 A.2d at 817; Lazerow,
320 Md. at 513, 578 A.2d at 782; Silk, 279 Md. at 348, 369 A.2d at 71. That respondent
chose to steal from his real estate partners rather than from his clients makes no difference
in the disciplinary sense and does not justify a lesser sanction than disbarment.
Respondent’s dishonest and selfish motive is an aggravating factor for disciplinary purposes.
His conduct was intentional and was knowing conversion of partner funds.  Respondent
engaged in a pattern of misconduct over an extended period of time.
Respondent’s lack of previous discipline, cooperation with the investigation, and
restitution are mitigating factors, but do not justify a lesser sanction.  Respondent asks that
we consider as a mitigating circumstance the “exorbitant payments” exacted as blackmail
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or extortion by the other partners.  Respondent’s argument is that the payments of blackmail
constituted the “imposition of other penalties or sanctions,” a mitigating factor under ABA
Standard 9.32(k).  Although this Court repeatedly has cited this factor as appropriate for
consideration in fashioning a sanction in disciplinary matters, see e.g., Attorney Grievance
Comm’n v. DiCicco, 369 Md. 662, 686-87 (2002); Attorney Grievance Comm’n v. Garfield,
369 Md. 85, 102, 797 A.2d 757, 767 (2002); Attorney Grievance Comm’n v. Jaseb, 364 Md.
464, 481-82, 773 A.2d 516, 526 (2001); Attorney Grievance Comm’n v. Glenn, 341 Md.
448, 488-89, 671 A.2d 463, 483 (1996), we have not had occasion to discuss the application
of this factor.
In those jurisdictions that have found other penalties or sanctions as mitigation
justifying a lesser sanction, the courts have considered those other penalties or sanctions
only where the sanctions were disciplinary or punishment in nature.  For example, in In re
Lamberis, 443 N.E.2d 549 (Ill. 1982), the Illinois Supreme Court imposed a censure rather
than suspension on an attorney who plagiarized portions of an LL.M. thesis in view of, in
part, the disciplinary sanctions which had already been imposed by the attorney’s university.
In the Matter of Garrett, 399 N.E.2d 369 (Ind. 1980), the Indiana Supreme Court imposed
a reprimand on an attorney convicted of a second criminal violation where the attorney’s
initial suspension had been extended in light of the new case.  See also, In re Levine, 847
P.2d 1093 (Ariz. 1993) (holding that imposition of other sanctions and fees by the court, to
the extent that the attorney had paid them or will pay them in the future, justified reduced
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sanction). 
In contrast, any “punishment” incurred by respondent at the hands of his partners is
not discipline for his misconduct.  The hearing judge found that “[a]lthough the subsequent
conduct of the other partners may be equally deplorable, their conduct is not a defense to the
Respondent’s own dishonesty.”  We agree.  Neither are the financial ramifications of his
misconduct a mitigating factor in the disciplinary sense.  That his partners may have profited
improperly at his expense is not the subject of these proceedings, and any determination with
respect to the propriety of their actions must await another day and another forum.
Disbarment is the appropriate sanction.  The name of Robert M. Spery will be
stricken from the rolls of those authorized to practice law in this State.
IT IS SO ORDERED; RESPONDENT SHALL PAY ALL
COSTS AS TAXED BY THE CLERK OF THIS COURT,
INCLUDING THE COSTS OF ALL TRANSCRIPTS,
PURSUANT TO MARYLAND RULE 16-761(b), FOR
WHICH SUM JUDGMENT IS ENTERED IN FAVOR OF
THE ATTORNEY GRIEVANCE COMMISSION OF
MARYLAND AGAINST ROBERT M. SPERY.