Title: Attorney Grievance v. Franz & Lipowitz

State: maryland

Issuer: Maryland Supreme Court

Document:

IN THE COURT OF APPEALS OF
MARYLAND
Misc. Docket AG
NO. 44
SEPTEMBER TERM, 1998
ATTORNEY GRIEVANCE COMMISSION
OF MARYLAND 
V.
KEITH S. FRANZ
AND
JUDSON H. LIPOWITZ
       
Bell, C. J.
     
Eldridge
    
    
Rodowsky
       
Chasanow*
Raker
  
Wilner
  
Cathell
                         JJ.
Opinion by Bell, C.J.
     
FILED: September 1, 1999
*Chasanow, J., now retired, participated in the
hearing of this case while an active member of
this Court; after being recalled pursuant to the
Constitution, Article IV, Section 3A, he also
participated in the decision and adoption of this
opinion.
     Maryland Rule 16-709, as relevant, provides:
1
“a.  Who may file.- Charges against an attorney shall be filed by the Bar
Counsel acting at the direction of the Review Board.” 
 
     Rule 7.3, regulating a lawyer’s direct contact with prospective clients, provides:
2
“(a) A lawyer may initiate in person contact with a prospective client for
the purpose of obtaining professional employment only in the following
circumstances and subject to the requirements of paragraph (b):
“(1) if the prospective client is a close friend, relative, former
client or one whom the lawyer reasonably believes to be a
client;
“(2) under the auspices of a public or charitable legal services
organization;  or
“(3) under the auspices of a bona fide political, social, civic,
fraternal, employee or trade organization whose purposes
include but are not limited to providing or recommending
legal services, if the legal services are related to the principal
purposes of the organization.
“(b) A lawyer shall not contact, or send a communication to, a prospective
client for the purpose of obtaining professional employment if:
The Attorney Grievance Commission of Maryland (the "Commission"), the petitioner,
through Bar Counsel and pursuant to Maryland Rule 16-709,  filed a Petition for Disciplinary
1
Action against Keith S. Franz and Judson H. Lipowitz, the respondents, alleging that the
respondents engaged in misconduct arising out of a two train collision which occurred near
Silver Spring, Maryland on or about February 16, 1996.  More particularly, the petitioner
charged that the respondents violated Rule 7.3  of the Maryland Rules of Professional
2
“(1) the lawyer knows or reasonably should know that the
physical, emotional or mental state of the person is such that
the person could not exercise reasonable judgment in
employing a lawyer;
“(2) the person has made known to the lawyer a desire not to
receive communications from the lawyer;  or
“(3) the communication involves coercion, duress, or
harassment.”
  
     Rule 16-609  provides:  
3
“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.”
 
     Maryland Rule 16-711(a) provides: “A written statement of the findings of facts
4
and conclusions of law shall be filed in the record of the proceedings and copies sent to
all parties.”
2
Conduct, Maryland Rule 16-812, Appendix: Rules of Professional Conduct of the Maryland
Rules, and Rule 16-609,  proscribing certain transactions involving attorney trust accounts.
3
We referred the matter to the Honorable John F. Fader II, of the Circuit Court for
Baltimore County, to make findings of fact and draw conclusions of law pursuant to
Maryland Rule 16-711(a).     Following a hearing,  Judge Fader filed Findings of Fact and
4
Conclusions of Law as follows:
“The Respondent, Keith S. Franz, was admitted to the Bar of the Court of Appeals of
3
Maryland on November 8, 1979.   The Respondent, Judson H. Lipowitz, was admitted to the
Bar of the Court of Appeals of Maryland on January 18, 1985.   The Respondents are
partners in a law firm which maintains its principal office for the practice of law at 101 East
Chesapeake Avenue, Towson, Maryland.
“On Friday, February 16, 1996, the Respondents learned that two trains had collided
near Silver Spring, Maryland.   They spoke by telephone shortly after 10:00 p.m. and decided
to go to the scene and investigate the accident.   While traveling to the site, they learned that
the railroad companies had established headquarters at the Hyatt Hotel in Washington, D.C.
(hereafter referred to as “the hotel”).   The Respondents changed their plans and traveled to
the hotel instead, where they expected there would be a communications center for the media
and the National Transportation Safety Board.   They thought that would be the best place
to start investigating the facts.
“They arrived at approximately 12:15 a.m. on Saturday, February 17, 1996.   They
found the lobby of the hotel virtually empty and proceeded to the bar area of the hotel where
people were watching a televised news report of the accident.   The Respondents then
encountered several passengers/victims of the train accident who were staying at the hotel.
The Respondents initiated in person contacts with some of these individuals.   The
Respondents identified themselves as attorneys, handed out business cards, and told some
of the victims that they would like to represent them.   The Respondents obtained names,
addresses and telephone numbers for these individuals.   The Respondents did not bring
retainer agreements or attempt to have any retainer agreement signed at that time.   They
4
advised the victims to consult with their families before making a decision as to
representation.
“The Respondent subsequently made telephone contact and visited with these
prospective clients and their families.   The Respondents were engaged by some of the
victims and/or their parents as a result of these in person contacts.   The individuals contacted
were neither close friends, relatives, former clients nor believed to be clients by the
Respondents.   The contacts were not made under the auspices of a bonafide political, social,
civil, fraternal, employee or trade organization.
“Shortly after they were engaged, the Respondents arranged for loans for these clients
from another client of the firm.   The loans, for the purchase of clothing destroyed in the
accident and other emergency needs, were to be made from funds maintained in the firm’s
client funds account by way of checks written on this account.   In order to facilitate one
such loan to a client, Marlene Boyer, whose minor son was hospitalized following the
accident, the Respondent, Keith S. Franz, issued a check in the amount of $250 payable to
“cash,” had a firm employee cash the check and deliver the loan proceeds in cash to Ms.
Boyer.   Although Mr. Franz issued the check, Mr. Lipowitz was aware of the transaction.
“The Respondents later determined that they had acted improperly by making direct
contact with the prospective clients and withdrew as counsel from the representation of all
the clients obtained in this manner.   They sent to each of the clients who was had engaged
them a letter with the identical text as appears in the letter dated March 8, 1996 to Rodney
Crawford, attached as “Exhibit A..”   They made no charge for any of the time they spent or
5
expenses they incurred; and they turned over the results of their investigation and cooperated
with new counsel of the clients’ choice to accomplish a smooth transition.
“On March 12, 1996, the Respondents self-reported their conduct to Bar Counsel. The
Respondents met with Bar Counsel prior to the publication of a newspaper article in which
their conduct was described.   The actions of the Respondents and the other attorneys
following the train accident were the subject of articles in the news media which were critical
of the legal profession.
“The Respondents acknowledge that their conduct violated Maryland Rule of
Professional Conduct 7.3 and Rule 16-609, pertaining to attorney trust accounts.”
The hearing court concluded, “by clear and convincing evidence that the respondents
...  violated Maryland Rule of Professional Conduct 7.3, by initiating in person contacts with
prospective clients for the purpose of obtaining professional employment, and Rule 16-609,
by drawing or causing to be drawn on an attorney trust account a check payable to ‘cash.”’
Neither party took exceptions to the findings of fact or conclusions of law.   Indeed,
both the petitioner and the respondents stipulated that “the Respondents, Keith S. Franz and
Judson H. Lipowitz, violated Maryland Rule of Professional Conduct 7.3, by initiating in-
person contacts with prospective clients for the purpose of obtaining professional
employment, and Rule 16-609, by ‘drawing or causing to be drawn on an attorney trust
account a check payable to ‘cash.’”   Consequently, the only issue that this Court is required
to decide is the appropriate sanction to be imposed for  these violations.
The petitioner seeks for the in person solicitation, as to each respondent, a two-year
     As the respondents point out, the petitioner does not mention the 16-609 violation
5
when recommending a sanction, thus suggesting that a reprimand is appropriate for that
violation whatever the sanction for the solicitation.  That approach seems appropriate
since the only violation found was that the respondents caused the check drawn on their
trust account to be made payable to “cash.”   The petitioner has acknowledged:
“The funds were deposited into the escrow account.   However, you are not
allowed to write a check to cash.   That is the aspect of that rule that was
violated, that an instrument to cash was written.   It was not in the form of a
loan but the aspect of a loan, that in and of itself does not violate any of the
rules.” 
We too will address only the in person solicitation in determining the appropriate
sanction.
     The Court said:
6
“Respondent, on the other hand, accosted persons known by him to have
been charged with an incarcerable criminal offense, who were without
counsel, and who had just been advised by a judge concerning the
maximum possible penalties upon conviction and the important assistance
an attorney could provide.   The vulnerability of persons in that situation
should have been, and indeed was, obvious to the Respondent.   It is just
that type of situation, fraught as it is with the potential for overreaching or
other improper conduct, which is appropriate for a prophylactic rule
prohibiting in-person solicitation of any kind.” 
6
suspension from the practice of law.    It relies on Attorney Grievance Commission v.
5
Gregory, 311 Md. 522, 536 A.2d 646 (1988) and Attorney Grievance Commission v. Weiss,
300 Md. 306, 477 A.2d 1190 (1984), in both of which this Court addressed the issue of in-
person solicitation of cases.  The petitioner points out, in particular, that the solicitation in
those cases occurred in the courthouse and, in Gregory, the Court characterized the persons
whom the attorney contacted as “vulnerable,” and the situation or circumstances in which
the solicitation was made as having the potential for overreaching or improper conduct.6
Attorney Grievance Commission v. Gregory, 311 Md. 522, 532, 536 A.2d 646, 651
(1988).   
     The petitioner cites the comment to Rule 7.3, the adoption by several Bar
7
Associations, including the Maryland State Bar Association, of plans to assist victims of
disasters and prevent their being taken advantage of during that stressful period and
legislation, both federal and State, including some enacted by the Maryland General
Assembly, Maryland Code (1989, 1996 Replacement Volume) §§ 10-605.1 and 10-606 of
the Business Occupations & Professions Article,  to address the problem.   As to the
former, it points out:
“The harms cited in the rule include harassment of individuals who have
already been traumatized by an accident involving themselves or a loved
one.   This type of conduct also contributes to the public perception of
members of the legal profession as mercenaries who take advantage of the
victims of tragic accidents for their own profit.”
     We agree with the respondents, these out of state cases are not comparable to the
8
facts of the case sub judice and thus are not helpful or useful in our analysis.
7
Acknowledging that the sanction in Weiss was a reprimand and, in Gregory, who had
previously been reprimanded for in-person solicitation, a ninety day suspension, the
petitioner justifies its request for a more severe sanction in this case on the basis that Gregory
and Weiss served notice on the bar that such conduct would not be tolerated, that the conduct
in this case was more reprehensible, and that the vulnerability of the persons solicited here
is greater than in either of those cases.  Furthermore,  comparable sanctions have been
7
imposed for similar conduct by courts in other states.  See In the Matter of the Application
for Discipline of Perl, 407 N.W.2d 678 (Minn. 1987); Norris v. Alabama State Bar , 582
S.2d 1034 (Ala. 1991); In Re Teichner, 387 N.E.2d 265 (Ill. 1979).8
The respondents believe that the appropriate sanction is a public reprimand.   From
their perspective, the petitioner’s “Draconian recommendation takes no account of guidelines
     The respondents think it important, not simply that they have no prior disciplinary
9
history, but also that they have been involved in civic activities of recognized social value
and given freely of their time and professional expertise in doing so.   We do not need to
quantify this factor as a mitigator in this case. 
8
and relevant factors set out in the precedents of this Court and relies on out-of-state case
authority that does not support [its] recommendation.”   The guidelines and relevant factors
to which the respondents refer include the purpose of attorney discipline, the absence of any
history of being disciplined or charged with violations of the Rules of Professional Conduct,
the attorneys’ prior professional history,  whether the behavior was intentional, premeditated
9
or likely to be repeated, the actual effect or result of the offending behavior, whether the
attorneys recognized that they had engaged in misconduct and what they did to rectify it,
whether the attorneys cooperated with Bar Counsel, and whether the misconduct involved
misrepresentation, dishonesty or moral turpitude.  Each of these factors militate in favor of
a reprimand, the respondents maintain.   Moreover, the respondents assert that they have
already suffered for their misconduct. 
It is well-settled that the purpose of disciplinary proceedings is to protect the public
rather than to punish the erring attorney.  Attorney Grievance Comm'n of Maryland v. Myers,
333 Md. 440, 446-47, 635 A.2d 1315, 1318 (1994); Attorney Griev. Comm'n v.
Goldsborough, 330 Md. 342, 364, 624 A.2d 503, 513;  Attorney Griev.  Comm'n v.
Protokowicz, 329 Md. 252,  262-63, 619 A.2d 100, 105 (1993);   Attorney Griev. Comm'n
v. Myers, 302 Md. 571, 580, 490 A.2d 231, 236 (1985);  Attorney Griev.  Comm'n v.
Velasquez, 301 Md. 450, 459, 483 A.2d 354, 359 (1984);  Attorney Griev.  Comm'n v.
9
Montgomery, 296 Md. 113, 119, 460 A.2d 597, 600 (1983).   The public interest is served
when this Court imposes a sanction which demonstrates to members of the legal profession
the type of conduct that will not be tolerated.   Attorney Griev.  Comm'n v. Kerpelman, 288
Md. 341, 382, 420 A.2d 940, 959 (1980), cert. denied,  450 U.S. 970, 101 S.Ct. 1492, 67
L.Ed.2d 621 (1981).  By imposing such a sanction,  this Court fulfills  its responsibility "to
insist upon the maintenance of the integrity of the Bar and to prevent the transgression of an
individual lawyer from bringing its image into disrepute."   Maryland St. Bar Ass'n v.
Agnew, 271 Md. 543, 549, 318 A.2d 811, 814 (1974).  Therefore, the public interest is
served when sanctions designed to effect general and specific deterrence are imposed on an
attorney who violates the disciplinary rules.  See Protokowicz, 329 Md. at 262-63, 619 A.2d
at 105;  Attorney Griev.  Comm'n v. Owrutsky, 322 Md. 334, 355, 587 A.2d 511, 521
(1991);  Attorney Griev.  Comm'n v. Alison, 317 Md. 523, 540-41, 565 A.2d 660, 668
(1989).  Of course, what the appropriate sanction for the particular misconduct is, in the
public interest, generally depends upon the facts and circumstances of the case.  Attorney
Griev.  Comm'n v. Babbitt, 300 Md. 637, 642, 479 A.2d 1372, 1375 (1984) (the facts and
circumstances of a case will determine how severe the sanction should be); Montgomery,
296 Md. at 120, 460 A.2d at 600;   Attorney Griev.  Comm'n v. Pollack, 289 Md. 603, 609,
425 A.2d 1352, 1355 (1981).  The attorney's prior grievance history, as well as facts in
mitigation, constitutes part of those facts and circumstances.   Maryland State Bar Ass'n v.
Phoebus, 276 Md. 353, 362, 347 A.2d 556, 561 (1975).  
To be sure, as the petitioner points out, this Court stated, in Weiss,  that “a persistent
10
or more egregious course of conduct in violation of our disciplinary rules may lead to much
more severe sanctions,” than the reprimand imposed in that case, citing for that proposition,
Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978), in
which the United States Supreme Court upheld an indefinite suspension of a lawyer who
both went to the hospital to seek to represent an accident victim and to the home of her
passenger the day after she was released from the hospital; In Re Campbell, 502 P.2d 1100
(Idaho 1972), in which an attorney was suspended for six months for  repeatedly calling on
private homes without invitation in an effort to sell estate planning services); and  Kentucky
State Bar Association v. Stivers, 475 S.W.2d 900 (Ky.1971), cert. denied, 406 U.S. 968, 92
S.Ct. 2412, 32 L.Ed.2d 666 (1972), in which an attorney was suspended for one year for
knowingly causing a letter to be written to an accident victim for the purpose of solicitation.
300 Md. 314, 477 A.2d at 1194.    
We have also recognized that an attorney’s voluntary termination of the misconduct,
accompanied by an appreciation of the serious impropriety of that past conduct and remorse
for it, is evidence that the attorney will not hereafter engage in such unethical conduct if
permitted to continue practice. Attorney Grievance Comm’n v. Freedman, 285 Md. 298, 300,
402 A.2d 75, 76 (1979).    The likelihood of repetition is a factor to be considered in
determining the appropriate sanction.   In Freedman, taking that factor into account resulted
in a reprimand, rather than a suspension, as the Attorney Grievance Commission had urged.
Of course, conduct that is an aberration can be so egregious as to warrant the imposition of
a significant sanction.  Attorney Grievance Comm'n of Maryland v. Protokowicz, 329 Md.
11
252, 263, 619 A.2d 100, 105 (1993). 
The hearing court concluded, without specifying the aspect of the rule or the
particulars, that the respondents violated Rule 7.3 by “initiating in person contacts with
prospective clients for the purpose of obtaining professional employment.”   Rule 7.3 has two
aspects: paragraph (a) permits in person contacts under limited conditions and of a specified
category of persons, while paragraph (b) sets out the circumstances in which in person
solicitation is proscribed.   Violation of the proscriptions contained in paragraph (b) is more
serious, and more egregious, than violation of paragraph (a).
The respondents certainly violated paragraph (a), the in person solicitation in which
they engaged being of persons other than those permitted to be solicited and under conditions
other than those allowed.   They also violated, the findings of fact show, paragraph (b) (1).
Surely, the respondents reasonably should have known that the victims of a train accident,
within hours of the accident, could not exercise reasonable judgment in employing a lawyer.
On the other hand, it is clear from the findings of fact that the respondents did not aggravate
this violation by forcing themselves or their communications on those who made known that
such contact or communication was not welcome or doing so in a manner that involved
coercion, duress and harassment.   Indeed, the hearing court found that, although they
obtained the names, telephone numbers and addresses of the persons contacted and later
called and visited them, resulting in some of them retaining the respondents, the respondents
did not, at that time, pressure these prospective clients to engage them as their lawyers. 
Moreover, the court determined that they did not bring retainer agreements with them.
12
Thus, while serious, the conduct of the respondents does not rise to the level of
egregiousness referred to in Weiss.   In any event, a public reprimand is a substantial
sanction.  Subsequent to its decision in Weiss, this Court noted, in reprimanding attorneys
who had been found to have violated multiple disciplinary rules, including commingling and
entering into an impermissible fee arrangement, that a reprimand “will forever be recorded
among the reported opinions of this Court” and that “should respondents be involved  in any
future disciplinary actions [it] will be taken into consideration.”  Attorney Grievance
Comm'n v. Kemp, 303 Md. 664, 681, 496 A.2d 672, 681 (1985) See also Attorney Grievance
Comm'n v. Heinze, 293 Md. 193, 197, 442 A.2d 570, 572 (1982).   But there are other
mitigating circumstances present in this case.
The respondents, within a short time of its occurrence, recognized the impropriety of
their having made direct contact with the victims of the train accident and immediately
withdrew as counsel for those clients.   They subsequently cooperated with those former
clients and new counsel of their choice, turning over the results of their investigation in the
process.   The respondents neither charged, nor accepted, a fee for the time spent
investigating the accident or facilitating, with new counsel, a smooth transition.   Nor did
they seek, or accept, reimbursement for the expenses incurred.   Moreover, the respondents
self reported their misconduct to the petitioner, prior to the publication of a newspaper article
that detailed their and other attorney’s conduct in connection with the train accident.   In
addition, the respondents cooperated fully with the petitioner in its investigation leading to
these charges being filed.   As we have seen, the respondents have never denied their
13
misconduct or sought to minimize it; rather, they have taken full responsibility and stated
repeatedly their regret for having engaged in it.   Although the hearing court did not make
an explicit finding to this effect, it can be inferred from the circumstances that the conduct
of the respondents in this case was an aberration and will not be repeated.   Finally, there is
neither a hint nor suggestion that the respondents’ conduct was characterized by
misrepresentation, fraud, dishonesty or moral turpitude.
Neither of these respondents has any prior grievance history or been the subject of any
disciplinary proceedings.   Under the circumstances, therefore, we believe the appropriate
sanction is a reprimand.   
 
 
IT IS SO ORDERED; RESPONDENTS 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 KEITH S. FRANZ
AND JUDSON H. LIPOWITZ.