Case Title: Matter of Brodoway

Citation: 

Docket Number: 

State: delaware

Court: Delaware Supreme Court

Date: 2004-08-04T00:00:00Z

Document:
IN THE SUPREME COURT OF THE STATE OF DELAWARE

IN THE MATTER OF A MEMBER § No. 259, 2004
OF THE BAR OF THE SUPREME §

COURT OF THE STATE OF §
DELAWARE: § Board Case Nos. 36, 46, 58, 59, 2003
§

BARBARA A. BRODOWAY,

Respondent.

‘Submitted: July 23, 2004
Decided: August 4, 2004

Before STEELE, Chief Justice, BERGER, and JACOBS, Justices.
ORDER
This 4" day of August 2004, it appears to the Court that the Board on

Professional Responsi

 

ity has filed its Report in this matter pursuant to Rule 9(4)

of the Delaware Lawyers’ Rules of

 

‘iplinary Procedure. Neither the
Respondent nor the Office of Dis

 

iplinary Counsel has filed objections to the
Board's Report. The Court has reviewed the matter pursuant to Rule 9(e) and
concludes that the Board's Report should be approved.

NOW, THEREFORE, IT IS ORDERED that the Report of the Board on
Professional Responsibility filed on June 16, 2004 (copy attached) is hereby
APPROVED. The matter is hereby CLOSED.

BY THE COURT:

Pott eet —
HIGHLY CONFIDENTIAL

BOARD ON PROFESSIONAL RESPONSIBILITY OF THE
SUPREME COURT OF THE STATE OF DELAWARE.

In the Matter of

Member ofthe Bar of CONFIDENTIAL

the Supreme Court of

Delaware: Board Case Nos. 36,46,58,59, 2003

BARBARA A. BRODOWAY,
Respondent.

OPINION

‘This isthe report ofthe findings and recommendations of the Panel of the Board on.
Professional Responsibility of the Supreme Court of Delaware in the above-referenced matter. A
hearing was held on April 28, 2004, in the Supreme Court Hearing Room, 1th Floor, Carvel
‘State Office Building, 820 North French Street, Wilmington, Delaware.

Prior tothe hearing, the parties presented a Stipulation of Admitted Facts and Violations
and a set of Joint Exhibits, Copies are attached as Exhibits A and B, respectively

[At the hearing, counsel forthe parties made brief statements and arguments in support of
the Stipulation, Transcript, pages 2-7 (Hereinafter “T- ). There were several witnesses.

Joseph MeCullogh testified asthe sole ODC witness. Mr. McCullogh is an auditor for
the Delaware Lawyers Fund and was formerly a forensic examiner forthe Department of Justice
and the IRS. (T-6-7) He became involved when the ODC requested an investigative audit ofthe
real estate escrow accounts of the Respondent's practice. (T-8)

‘A previous 1997 random audit had found irregularities. Exhibit 9 found that Respondent
‘was finally in compliance in December of 1998. (T-20) Mr. McCullogh testified that apparently
there was a reversion tothe pre-December 1998 practices that resulted in the current violations.

(7-25-26) Four overdraft notices were received by the ODC pursuant to new Rule 1.115,
whereby the ODC receives overdraft notices as well asthe law firms. (7:31) The immediate
concem generated by the overdraft notices was that client funds were at risk, specifically that
some type of misappropriation of funds by a lawyer. (T-30) MeCullogh stated unequivocally
that his investigation found no evidence of any misappropriation or theft of funds or any self-
eating by the Respondent. (T-31) In fat, on the day he arrived forthe ait, one of the
‘unaccounted checks bad arrived by mail, (7-30) Moreover, the ODC raised no issues of any
ongoing violations after June of 2003.

Exhibit | was Mr. MeCullogh’s report which details the steps which were taken to bring
‘the accounting and bookkeeping practices of the Respondent into compliance. (T-11) Mr.
‘MeCullogh testified that a to the transactions prior to May 27, 2003, Respondent did not take a
‘hands-on approach to check if there were sufficient funds in the account to cover the checks that
‘were being issued. (T-57-58) She did not take sufficient hands-on approach with regard to either
pre or post-closing procedures. (T-58) In effect, the fourth overdraft notice check resulted from
certain wire transfers not being confirmed as received prior to issuing other checks. (T-9) The
net effect ofthese practices was thatthe transactions of some of Respondent's clients were being
funded by other clients. (T-13-14)

“The Respondent's witnesses were Kelly Frecberry and Nancy Chrissinger Cobb.

Kelly Freeberry was hired in 2003 to do monthly reconciliations ofthe realestate escrow
accounts for Respondent, after the intervention of the ODC. (1-63) When she first began her
‘work there were approximately 1,500 to 1,700 outstanding checks that had been unaccounted for.
(1-64) As of today there are only afew hundred. (T-64) All bave been identified and the
persons to whom they were made out have been notified and asked to identify whether or not the
checks willbe cashed in the foreseeable future. (T-67) She als testified that Ms. Brodoway had

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stopped practicing voluntarity in late December of 2003, and that she was most impressed by the
care with which Ms. Brodoway was addressing tbe concems and taking cae of the business. (T-
65) She testified that when she arrived the workload was so grat and was such a mess that it
‘would have been impossible to remedy the problems within three months. (1-66) Ms. Brodoway
‘has paid her over $5,500 for services in attempts to bring the accounts into compliance. (T-66)
‘She anticipates the compliance willbe accomplished by the end of June or July, 2004, (T-67)

‘Nancy Chrissinger Cobb, a law school classmate, a former pariner of the Respondent, and
friend, testified as to her character. (T-136) The Respondent has represented ber in several rel
estate transactions and all were done to Ms. Cobb's satisfaction. (T-139) She praised
[Respondent's substantive knowledge ofthe substantive law and her ability to represent her
lent effoctively (139-140) She also testified, as Ms. Freebery has expressed on several
‘occasions, her extreme, deep remorse for creating the situation that led to these proceedings and
‘that Respondent tok full responsibility forte situation. (T-139)

‘The other witness was the Respondent, She testified that she afirmed the admited facts
and the violations. (T-96) The primary problem was with her real estate practice. She wsed
paralegals to process the transactions (-90) However, a paralegal was doing the post-closing
procedures, and Respondent did not do “hands on job of supervising the transactions. (T-90)
‘When they got farther and farther behind, she admitted that she was not aware oft because of
‘her negligent supervision, (T-95-96) A majority of the outstanding checks that were the subject
of the problem related to recording fees and satisfaction pieces and the issuance of title
premiums (T-100; 113-114)

Since then, she has hired professionals, including Kelly Freebery, to address the problem,
(1-103) Respondent indicated that she has closed her practice as of December 22, 2003, and

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eld er lst realestate closing on December 22, 2003. She continues to take steps to bring the
accounting in compliance, including the use of a computerized system and the assistance of Ms.
Freebery in maintaining that system. (T-110)

‘Ato time through any aspect ofthe investigation was there any findings of any client
funds being misappropriated. (T-30-31)

Respondent conceded that she was responsible forthe realestate accounts within the firm
‘and that it washer mistakes that lead tothe sitution. (T-88) She had no explanation for why the
violations occured other than the rel estate boom created and continued unabated when she
anticipated it would abate. (T-71-72) Her previously normal twenty closings a month reached
sixty closings « month during the Summer of 2003 and capped st seventy-cight closing inthe
month of August, 003. (T-72) She offered no explanation why she di not follow the
suggestion ofthe ODC that she cutback on the numberof closings during the Spring and
‘Summer of 2003 to concentrate on bringing her accounts into compliance. (T-133) In retrospect,
she recognized that she should have followed that suggestion. (T-133) She gave rather poignant
testimony that acknowledged that she miscalculated her ability to carry on the practice of law
and address the deficiency. (T-105) She stated that many ofthe stale checks were premium
checks tttle insurance companies. (T-100) Apparently, the tite insurance companies and
others involved inthe real esate industry were also backed up because ofthe boom and some of
the tle insurance companies were not clearing the checks sen to them. (T-100-101) In addition,
some mortgage companies were delaying in wiring funds necessary to fund closings. (T-55; 95)
‘She stated thatthe Downs episode affected her most because it caused an epiphany that her
delays were affecting other people directly and she had to close down her practice inorder to
adress the problems, (T-105) She did not realize until after she closed down the practice the

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stress under which she bad been operating and the problems she had been creating, (T-119) She
stopped practicing in late December 2003. Since then she has worked on remediation issues. (T-
108) She dismissed her staff a the end ofthe year, which included two paralegals and a clerk,
for economic reasons

‘She testified as to the personal cost of her violations. She has not taken a salary since the
‘end of 2003, although she continues to pay the costs of practice, including lease and the expenses
for Ms, Freebery.(T-111) She has been the sole support for her student husband and since the
‘beginning of 2004, her sole source of income has been savings. (T-111)

‘The Office of Disciplinary Counsel indicated that Respondent has made
substantial efforts since January 1, 2004 to rectify the consequences of the conduct in this mater
‘by hiring a bookkeeper to address the specific issues that caused the problems and that she bas
ade a significant expenditure of funds to remedy the problems tha did exis to remove any
potential injury. (T-110)

‘The ODC was not satisfied thatthe Respondent had cooperated fully in
connection wit the investigation of this mater particularly atthe outset of the investigation
before Respondent was represented by Mr. Slanina. (T-150)

“The panel is convinced by the testimony of Respondent that she bas recognized the
‘wrongfulness of her conduct, and tha she is deeply remorseful. (T-118-120) She has, in effect,
suspended herself from the practice of law, and expressed no intention of returning toa practice
like that which generated the circumstances from which these violations arose (T-119)

“The Board finds thatthe facts and violations are as st forth inthe Stipulation.

‘The ODC recommended that Respondent be suspended for sx (6) months and one (1)
day, and be required to re-apply for reinstatement, (T-165) The ODC argued thatthe decision in

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{In Re Bailey, 821 A.2d 851 (Del.2003) (ordering a six-month plus one day suspension despite a
stipulation between the ODC and the respondent-attorey that the sanction should be a public
reprimand and three years of public probation) controlled this case.

‘The respondent argued thatthe case of Jn re Froelich, 2003 WL 22931315 (Del. Supr.
2003) was more relevant.

‘The Panel finds that this case is closer to Froelich than Bailey’. The Panel recommends
that Respondent be subject to a Public Admonition, and be placed on Probation for a period of
two (2) years, during which time she may not practice alone or be personally responsible for
‘compliance with accounting and bookkeeping standards. Further, during the period of probation,
the Panel recommends that the Respondent must have a practice monitor or mentor who shall

oversee her administrative responsibilities in the event she retums to the private practice of law.

PANEL OF THE BOARD OF
RESPONSIBILITY

 

oat bar Donald Blakey,PhD

 

“The Chair of this Panel was involved in the Panel that heard the Froelich case, and in the Panel
that heard Bailey's petition for reinstatement.
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DRAFT
HIGHLY CONFIDENTIAL

PANEL OF THE BOARD OF
PROFESSIONAL RESPONSIBILITY

By__
“Tames W. Semple, Esquire
Chair

By,

David I. Feny, Jr, Esquire

   
 
    

 

Donald A. Blakey, PhD

 

_wSsp8H6.aSs20DNIONt
CERTIFICATE OF SERVICE

‘The undersigned hereby certifies that on this 16th day of June, 2004 he
forwarded two copies of the atached Opinion of the Panel ofthe Board of Professional
Responsibility were forwarded tothe following, in the manner indicated:

Charles Slanina, Esquire First Class Mail
Finger & Slanina, P.A.

P.O. Box 1449

Hockessin, DE 19707

‘Andrea L. Rocanelli, Esquire Hand Delivery
Office of Disciplinary Counsel

200 W. Sth Street, Suite 300-A,

Wilmington, DE 19801