Title: IMO James J. Woods, Jr., Esquire

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE

IN THE MATTER OF A MEMBER §
OF THE BAR OF THE SUPREME § —_ No. 253, 2016
COURT OF THE STATE OF
DELAWARE: Board on Prof. Responsibility
Case No. 112456-B

JAMES J. WOODS, JR.,

Respondent.

Submitted: July 13, 2016
Decided: July 13, 2016

Before STRINE, Chief Justice; HOLLAND, and VALIAURA, Justices.

‘Upon Review of the Report of the Board on Professional Responsibility, PUBLIC
REPRIMAND AND PROBATION.

Matthew F. Boyer, Esquire, Connolly Gallagher LLP, Wilmington, Delaware,
‘Attomey for Respondent.

Jennifer-Kate Aaronson, Esquire, Patricia Bartley Schwartz, Esquire, Wilmington,
Delaware, Attorneys for the Office of Disciplinary Counsel.

 

PER CURIAM:
On October 7, 2015, this Court suspended the Respondent, James J. Woods,
Jr. (“Respondent”), from the practice of law, pending the disposition of disciplinary
proceedings before the Board on Professional Responsibility (“Board”). The Board
has filed a Report on this matter pursuant to Rule 9(d) of the Delaware Lawyers’
Rules of Disciplinary Procedure. The Board recommends that Respondent be
publicly reprimanded, reinstated to practice law, and placed on probation for three
years with conditions. The Office of Disciplinary Counsel (“ODC”) filed one
objection to the Report. ODC does not object to the reinstatement and sanctions
recommended by the Board, but does challenge the Board's determination that ODC
did not prove one of the alleged ethical violations asserted in the Petition for
Discipline. Respondent, through counsel, filed no objections.

We have concluded that ODC’s objection is meritorious. We have also
determined that, even with that additional violation, reinstatement and the same
sanctions recommended by the Board are appropriate.

Petition for Discipline

The Petition alleged five counts of professional misconduct.
Count I: Delaware Lawyers’ Rules of Disciplinary Procedure 7(c)

ODC alleged that Respondent committed professional misconduct by
violating Delaware Lawyers’ Rules of Disciplinary Procedure Rule 7(c), which

states that it shall be grounds for discipline for a lawyer to “[vliolate the terms of
any private or public disciplinary or disability disposition.” The terms of
Respondent's private probation (to which he consented) unambiguously required
Respondent to provide a pre-certification by a licensed certified public accountant,
for his 2014 and 2015 Certificates of Compliance. Respondent admitted that he
failed to comply with this condition of his private probation and stated that he
“stipulate{s] to the violation of [Procedural Rule] 7(c) as alleged in Count I of the
Petition.” Accordingly, the Board found that Respondent violated Procedural Rule
1c).

Count It: Delaware Lawyers’ Rules of Professional Conduct 1.15(@)

ODC alleged that Respondent committed professional misconduct in violation.
of Conduct Rule 1.15(d) by failing to properly maintain his firm’s books and records
in 2013. Respondent admitted that he did not fully comply with the relevant books
and records requirements as alleged in Count II. Accordingly, the Board found that
Respondent violated Conduct Rule 1.15(d).

Count III: Delaware Lawyers’ Rules of Professional Conduct 8.4(c).

ODC alleged that Respondent committed professional misconduct in violation
of Conduct Rule 8.4(¢) by filing with the Supreme Court Certificates of Compliance
in 2014 and 2015, each of which contained misrepresentations to the Court relating
to Respondent's maintenance of his law office books and records. Respondent

testified that he believed at the time that his representations were accurate, but
admitted that his Certificates of Compliance contained statements that he later
earned, after discussions with accountants, were not accurate and admitted that this
violates Conduct Rule 8.4(c). Accordingly, the Board found that Respondent
violated Conduct Rule 8.4(c).

Count IV: Delaware Lawyers’ Rules of Professional Conduct 8.4(d), With Respect
10 Certificates of Compliance

DC alleged that the same conduct underlying Count II (making
misrepresentations in Certificates of Compliance) also establishes a violation of
‘Conduct Rule 8.4(d), which provides that it is professional misconduct for a lawyer
to “engage in conduct that is prejudicial to the administration of justice.”
Respondent admitted that he filed Certificates of Compliance that contained
misrepresentations, but contended that those misrepresentations were merely
negligent, and argued that his conduct violating Conduct Rule 8.4(c) does not
warrant a “duplicative” finding of a violation of Conduct Rule 8.4(4). The Board,
quoting Jn re Wilson,! noted that “the [Court] relies upon representations made by
attomeys in the Certificates filed with their annual statements each year in the

admit

 

stration of justice governing the practice of law in Delaware.”? As such, the

Board found that an attorney violates Conduct Rule 8.4(d) by filing inaccurate

12005 WL 3485738 (Del. Nov. 9, 2005).
21d a9,
Certificates purporting to comply with other Rules of the Court? Accordingly, the
Board found that Respondent violated Conduct Rule 8.4(d) by filing Certificates of
Compliance with the Supreme Court in 2014 and 2015 that contained
misrepresentations,

Count V: Delaware Lawyers’ Rules of Professional Conduct 8.4(d), With Respect
to Violating Terms of Private Probation

‘ODC alleged that the same conduct underlying Count I (violation of the terms
of a disciplinary disposition) also establishes a violation of Conduct Rule 8.4(d),
‘which provides that it is professional misconduct for a lawyer to “engage in conduct
that is prejudicial to the administration of justice.” Respondent admitted that he did

not comply with the condi

 

ions of his private probation, but argued that this conduct,
did not warrant a “duplicative” finding of a violation of Conduct Rule 8.4(4) as
“conduct prejudicial to the administration of justice.” The Board's Report states: “It
is clear and admitted that Respondent violated the terms of his private probation,
However, the Board finds that ODC has not proven by clear and convincing evidence

that Respondent's violation of the terms of his private probation was prejudicial to

3 Id (approving the Board’s findings of violations of Conduct Rule 115A and Conduct Rule 8.4(@)
for alleging compliance with Conduct Rule 1.15A).

5
the administration of justice, and therefore finds no violation of [Conduct] Rule
8.4(4) on this count.”
ODC's Objection

ODC contends that the Board erroneously concluded ODC failed to prove a
violation of Conduct Rule 8.4(4) because there was not “any precedent in which a
violation of the terms of a private probation was held also to violate [Conduct] Rule
8.4(@).” We agree. This Court has held that a lawyer engages in conduct prejudicial
to the administration of justice in violation of Conduct Rule 8.4(d) when that lawyer
fails to satisfy a condition of a disciplinary sanction.* Respondent's misconduct is
identical to the misconduct in Jn re Holfeld, in that Respondent failed to comply with
the pre-certification condition in his private probation.’

AA private disciplinary sanction has the same force and effect as a formal order
from this Court’ Failure to comply with the terms of a private disciplinary sanction
violates Procedural Rule 7(c); failure to comply with the terms of a court order

violates Conduct Rule 3.4(c). Holfeld is consistent with this Court’s precedent of

‘in re Holfeld, 74 A.34 60S, 607-08 (Del. 2013) (affirming the Board's finding that lawyer's
failure to comply with a pre-certfication condition in a private disciplinary sanction was
prejudicial to the administration of justice in violation of Conduct Rule 8.4(4))

1d at 607-08,

‘See Del. Sup. Ct. R. 33(a)(0); n re Poliguin, 49 A3d 1115, 1139 (Del. 2012) (noting that the
Court “has exclusive authority and wide latitude in determining disciplinary sanctions over
lawyers.) (intemal quotation marks omitted).

   

6
finding a lawyer engages in conduct prejudicial to the administration of justice when
that lawyer violates a prior disciplinary order.”
Conclusion

We hold that Respondent violated Conduct Rule 8.4(d) as alleged in Count V
in the Petition for Discipline by clear and convincing evidence. We approve the
Board's findings of Respondent's violation of Procedural Rule 7(c), and Conduct
Rules 1.15(d), 8.4(c), and 8.4(d) as alleged in Counts I-IV in the Petition for
Discipline.

We approve the Board’s recommendation that Respondent be publicly

reprimanded for viol

 

ion of Delaware Lawyers’ Rules of Disciplinary Procedure
7() and Rules of Professional Conduct 1.15, 8.4(c) and 8.4(4). We approve the
Board's recommendation that Respondent's interim suspension be lifted
immediately and that Respondent be reinstated to practice law with a three-year
period of public probation, subject to the conditions set forth in the Board’s Report

attached to this Opinion.

7 See In re Feuerhake, 89 A.34 1058 (Del. 2014) (knowingly violating suspension order is
prejudicial to the administration of justice); see also In re Davis, 43 A.3d 856 (Del. 2012) (same).

7
BOARD ON PROFESSIONAL RESPONSIBILITY.
(OF THE SUPREME COURT OF THE STATE OF DELAWARE

INTHE MATTER OF A MEMBER OF THE)
BAR OF THE SUPREME COURT OF

DELAWARE: } connpenmist
3 naar Case No 124868

JAMES J. WOODS, JR., }
Respondent }

‘REPORT OF THE BOARD AND RECOMMENDATION OF SANCTION

This isthe Report and Recommendation ofthe Board on Professcoal
Responsibility ofthe Supreme Court ofthe State of Delaware (the “Boar inthe above-
captioned matter. A hearing was held on February 23,2016, inthe New Caste County
‘Courthouse, Courtroom 12D, $00 North King Sect, Wilmington, Delaware. The Pane!
ofthe Board consisted of Gerald J. Hager, Esq, Babara Beck and Rober S, Saunders,
sq, (Chait (collectively, the “Pane!"). The Office of Disciplinary Counsel (“ODC*)
was represeted by Jennifer-Kate Aaronson, Esq, Respondent was represented by
Matthew L. Boyer, Esq

PROCEDURAL HISTORY
(ODC filed a Petition for Discipline withthe Board on October 7, 2015,
Also on October 7, 2015, the Court entered an Order immediately suspending
Respondent from the practice of law pending the disposition of these proceedings.
Respondent filed his Answer on October 27, 2015. A hearing was originally scheduled
for December 10, 2015. However, Respondent requested, and ODC did not oppose, &
continuance to February 23, 2016, which the Panel Chair granted, At te hearing, ODC
presented testimony from Respondent, in adtion to Joint Exhibits 1-17, which were
suimited without objection. Respondent submited his own affidavit, which was admited
without objection as Joint Exhibit 18, and presented his ovm testimony. Respondent also
submited affidavits from Francis J. Jones, 3, Esquite, Christopher Logulo, Esquire and
Bruce G.Fay, DMD, which were admited without objection as Joint Exhibits 19-21.
[At he request ofthe Panel Chair, on April 29,2016, ODC supplemented the record with
‘wo additional pieces of correspondence between the pastes, which were admited

‘without objection as Joint Exhibits 22 and 23.

I, STATEMENT OF FACTS

‘Respondent was admitted to the bar of the Supreme Court of the State of
Delaware in December 1981.1 Respondent practiced with a major Delaware firm until
the end of 2004, at which point he started him own firm? At all times relevant to the
Petition, Respondent practiced asa sole practitioner.” Respondent's practice consisted
principally of real estate transactions and personal injury litigation.

In June 2012, the Lawyers’ Fund for Client Protection (*LFCP”)
‘conducted a compliance audit of Respondent's firm's books and records forthe six
‘month period ending May 2012 (the “2012 Ault Report”), The 2012 Audit Report
identified several deficiencies in Respondent's firm's books and records." LECP asked

"Petion 11; Answer #1 rsp 38,
> Transcript 4.

> Petition 1 Answer

* Petition (2; Answer $2.
Respondent to have an independent audit conducted of Respondent's firm's books and
records for the six months ended November 30, 2012, with a report to LFCP by January
15, 2013. On January 16, 2013, Respondent requested an extension, which was granted.
‘After the extended deadline, Respondent provided LFCP with a document that was not an
independent audit report, LFCP referred the matter o DC’

‘At ODC's request, Master Sidlow Associates, P.A. (“Master Sidlow”)
audited Respondent's firm’s books and records for the seven months ended January 31,
2013. The audit report identified deficiencies including 44 checks outstanding (in other
‘words, checks that had been written on one of Respondent's accounts but had not been
deposited by the payees) and one negative balance in alist of client funds At the
hearing, Respondent explained that sometimes checks he issued to various parties at real
estate closings were not deposited, and that sellers in real estate transactions often le the
state and were difficult to contact, leading to outstanding checks.” Respondent further
explained that checks issued were treated in the firm's accounting records as deducted on
the date of issuance, whereas checks deposited were credited on the date of deposit. Asa
result, when real estate closings happened on the last Friday of the month and the checks
received and issued at the closing were not deposited until the next business day, the

client account would appear to have a negative balance at the end of the month *

5 Petton $8 Answer 8
“Peition $9; Answer.

 Teanscipt 5557; see alo Transcript 108-
* Transcript $082; ee alo Transit 100-108.

 
‘After a presentation ofan investigative report by ODC, on July 11,2013,
the Preliminary Review Committee determined that probable cause supported a Petition
{for Discipline against Respondent for violations of Rules 1.15(d), 84(c) and 8.4(4) and
offered Respondent the sanction of a two-year private probation with conditions.? One of
the conditions was that Respondent “shal ile with your 2013 and 2014 Certificates of
‘Compliance a pre-certfication of your books and records by a licensed certified public
accountant reporting the status ofthe firm's compliance, or lack thereof, withthe
recordkeeping requirements of Rule 1.15 and Rule 1.15A.” Respondent signed a
certificate of consent that stated in part “I hereby consent to the imposition of a two-year
private probation ... and accept the conditions attached to the private probation as
described above."?

In connection with his Cerificate of Compliance due February 28, 2014,

‘Respondent asked a ttle insurance company with which he did business ifit had an

 

‘accountant who could provide the pre-certification, and understood that it did!" Shortly
before the pre-certfiction was du, however, Respondent leamed that the ttle insurance
company’s accountants would not be able to examine his firm's books and records.*
‘ODC granted Respondent an extension to March 10, 2014 to file apre-certification by &
certified public accountant.” After further correspondence with ODC, on April 4,
Respondent submitted a letter from a Quality Control Representative ofthe ttle insurance

* on Exhibi
"Jone hii

"Join Exhibit 18 Affidavit 3)
oy

Jone Ebb 8
‘company. The letter did not certify that Respondent's firm's books had been maintained
{in compliance with Rule 1.15 and was not from a licensed certified public accountant."*
(On the same day, ODC advised Respondent thatthe letter did not comply with the
‘conditions of the private probation and directed an audit by Master Sidlow."* Respondent
‘id not engage a CPA to conduct an audit of his books and records because he believed
Master Sidlow would conduct the audit!”

(On December 15,2014, Master Sidlow notified Respondent that it would
audit Respondent's books and records for 2013.!" (The record does not explain why the
Master Sidlow audit that ODC requested in April did not begin until December.) On.
‘April 8, 2015, Master Sidlow submitted a report dated March 17, 2015, of an audit of
Respondent's firm’s books and records for the year 2013. The audit report identified
several deficiencies including 41 checks outstanding for longer than six months.'°

Respondent filed his 2015 Certificate of Compliance withthe Delaware
Supreme Court on March 1, 2015, It did not include a pre-cerification by a licensed
certified public accountant Respondent testified that when he was contacted by Master
Sidlow around Thanksgiving, 2014, to schedule an audit for January 2015, he

erroneously concluded that Master Sidlow would audit his firm's books and records for

int Ex

  

*
" eion $12; Answer § 12.
"Jone Bebe 8

© Transp 63-64

© etn 14; Answer $14

© ein $16; Jit xb 3.
» Peon {19; Answer 19
2014, and believed that that would permit him to satisfy the condition of his private
probation." Respondent further testified that he asked Master Sidlow to audit his firm's
2014 books and records and learned in February 2015 that it could not, by which point it
‘was too late to have a licensed CPA provide the pre-ertfication before its due date?
(On April 15, 2015, ODC advised Respondent that LFCP had reported that
Respondent's firm did not maintain its financial books and records in compliance with
Rule 1.15 for the year 2013, and advised Respondent that ODC had opened a new file
and that it was ODC’s position that Respondent had failed to comply with the conditions
of his private probation and had again violated Rule 1.15. On May 29, 2015, ODC
‘wrote to Respondent advising that a formal investigation would proceed, and requesting
that Respondent bring his firm’s books and records into compliance with Rule 1.15 and
submit a report from a certified public accountant approved by LCFP on or before
September 1, 2015. In July 2015, Respondent engaged an independent accounting firm,
‘Belfint Lyons & Shuman (“Belfint Lyons”). On September 1, 2015, Respondent
advised ODC that a team from Belfint Lyons was working on the matter, but had not
‘completed their report. Respondent stated “I will send you the pre-ertfication as soon
5 I can, hopefully by the 21" ofthis month."* On September 3, 2015, ODC advised
Respondent that it intended to presenta Petition for Discipline toa Panel ofthis Board's
Transcript 666,
> Trancip 6566
2 Joint Exhibit 22.
Joint Exit 9.

Joint Exhibie 18 (Afidavie $6).
Joint Exhibit 10
Preliminary Review Committee on October 7, 201527 On September 23, 2015,
Respondent wrote to ODC stating that he believed his accounts were in order since April
2014, and explaining that he had asked Belfint Lyons to complete its work as soon as
possible On September 24, 2015, ODC wrote to Respondent requesting thatthe pre=
certification by a licensed certified public accountant be submitted by September 29,
2015, and stating that if the pre-certfication was not received, ODC woul file a Petition
for Interim Suspension in the Delaware Supreme Court

On October 7, 2015, the Court held a hearing and entered an Order
immediately suspending Respondent from the practice of law pending the disposition of
isciplinary proceedings before the Board.®® The Order recites that it was entered “upon
receipt of sufficient evidence reflecting that [Respondent] has engaged in professional
‘misconduct demonstrating that he poses a significant threat of substantial harm to the
Public and to the orderly administration of justice...” (Jd) A transcript or other record
of this hearing was not available to the Panel"

(On December 15, 2015, Belfint Lyons submitted audit reports to the LCFP
for the seven months ended December 31, 2012,” the year ended December 31, 2013,

and the year ended December 31, 2014.2

 

ain Beh 23,
2 Join Exhibit 1.
> dont Exhibit 12.
> in Exit
Transcript 162

2 oit Exhibi
> oi Beit 1s
‘At the hearing, Respondent presented affidavits from character witnesses,
Dr. Bruce G. Fay has known Respondent for ten years and been his client in several
‘matters, and states that Respondent has always handled and allocated funds property.”*
Francis 5 Jones, Jt, Esq, the Receiver for Respondent's practice, testified that he has

ion to his

 

known Respondent since 1973 and Respondent has demonstrated dedi
clients, a thorough understanding of the law, and a complete lack of dishonesty, Me.
Jones also favorably described Respondent's public service.* Christopher Logullo, Esq.
testified that he has known Respondent for at least ten years and has a high regard for
‘Respondent's intellect, sensitivity to client needs, and dedication tothe ideals ofthe

Delaware Bar.

II. STANDARD OF PROOF
ODC must prove its allegations of professional misconduct by clear and

‘convincing evidence. Delaware Lawyers’ Rules of Disciplinary Procedure 15(c) & (€),

IV. ANALYSIS
(@) Professional Misconduct
‘The Petition alleges five counts of professional misconduct.

Count I: Delaware Lawyers’ Rule of Disciplinary Procedure 7(c)
‘ODC alleges that Respondent committed professional misconduct by

violating Delaware Lawyers’ Rule of Disciplinary Procedure Rule 7(c), which states that
(Gon from previous page)

> Joint Exit 16

Joint Extbie 21.

% Joint Exhibit 19,
it shal be grounds for discipline for a lawyer to “[vJiolate the terms of any private or
public disciplinary or disability disposition.” The terms of Respondent's private
probation (to which he consented) unambiguously required Respondent to provide a pre-
certification by a licensed certified public accountant for his 2014 and 2015 Certificates
‘of Compliance. Respondent admits that he failed to comply with this condition of his
private probation and states that he “stipulte(s] to the violation of Rule] 7(c) as alleged
{in Count I ofthe Petition.”*” Accordingly, the Panel finds that Respondent violated
Procedural Rule 1c).

Count I: Delaware Lawyers’ Rule of Professional Conduct 1.15(d)

ODC alleges that Respondent committed professional misconduct by
Violating Rule 1.15(4) by failing to maintain hs firm's books and records properly in
2013. Respondent admits that he didnot fully comply with the relevant books and
records requirements as alleged in Count I” Accordingly, the Pane! finds that
Respondent violated Rule 1.15(4).

Count Il: Delaware Lawyers’ Rule of Professional Conduet 8.4(0)

ODC alleges that Respondent committed professional misconduct by
‘violating Rule 8.4(c) by filing with the Supreme Court Certificates of Compliance in
2014 and 2015 each of which contained misrepresentations to the Court relating to
‘Respondent's maintenance of his law office books and records. Respondent testified that

> Soint Exhibit 18 (Affidavit 8)
>» Petition 917,27
> Joint Exhibit 18 (Affidavit 12).
‘he believed atthe time that is representations were accurate," but admits that his
Certificates of Compliance contained statements that he later learned after discussions
‘with accountants were not accurate and admits that this violates Rule 8.4(¢).
‘Accordingly the Panel finds that Respondent violated Rule 8.4(¢).

Count IV: Delaware Lawyers’ Rule of Professional Conduct 84(@), With Respect 0
Certificates of Compliance

ODC alleges that the same conduct underlying Count It (making
misrepresentations in Certificates of Compliance) also establishes a violation of Rule
8.4(4), which provides that itis professional misconduct for a lawyer to “engage in
conduct that s prejudicial tothe administration of justice.”

Respondent admits the that he fled Certificates of Compliance that
contained misrepresentations, but contends that those misrepresentations were merely
negligent, and argues that his conduct violating Rule 8.4(c) does not warrant a
“duplicative” finding of a violation of Rule 8.4(4).

“The [Court relies upon representations made by attorneys in the
Certificates filed with their annual statements each year inthe administration of justice
‘governing the practice of law in Delaware.” Jn re Wilson, 886 A.2d 1279, 2005 WL
3485738 at #9 (Del. 2005) (TABLE). An attomey violates Rule 8.4(é) by fling an

inaccurate certification with the Court with respect compliance with Rule 1.15. Jd.

Transcript 42 er sg,
“© Transcript 49-50, 52-53, 57.
© Joint Exhibit 18 (AMfidvit 14)

10
Accordingly, the Panel finds that Respondent violated Rule 8.4(4) by
filing Certificates of Complaint with the Supreme Court in 2014 and 2015 that contained
misrepresentations,

Count ¥: Delaware Lawyers’ Rule of Professional Conduct 8.4(@), With Respect to
Violating Terms of Private Probation

Finally, ODC alleges thatthe same conduct underlying Count I (violation
of the terms of a disciplinary disposition) also establishes a violation of Rule 8.4(4),
which provides that itis professional misconduct for a lawyer to “engage in conduct that
is prejudicial to the administration of justice.” Respondent admits that be did not comply
‘with the conditions of his private probation, but argues that this conduet does not warrant

“duplicative” finding of a violation of Rule 8.4(d) as “conduct prejudicial to the

 

sdministation of justice.

(ODC contends that Respondents failure to comply withthe condition of|
his private probation led to substantial efforts by ODC to obisin compliance and
ultimately to Respondent's interim suspension, which led in tum othe appointment of a
receiver for Respondent's practice, Francis J. Jones, Jr., Esquire." The record

demonstrates that. However,

 

{snot apparent whether or how these things prejudiced
the administration of justice. ODC did not present any evidence that its efforts with
respect to Respondent impaired its ability to perform its function as an arm of the Court,
‘or otherwise prejudiced the administration of justice. Moreover, Mr. Jones states in his
affidavit that Respondent has assisted in every way requested and cooperated fully,

© Transcript 14-15, 106.07, 13031.
involving a significant amount of time from Respondent, and that he found Respondent's
‘case files tobe in good order.** ODC did not offer, andthe Pane! has not identified, any
‘precedent in which a violation of the terms of « private probation was held also to violate
Rule &4(4). The Panel notes that Jn re Martin, 35 A.3d 419 (Del. 2011) (TABLE) also
involved a violation ofthe terms of a private admonition by failing to provide a pre-
certification in connection with a certificate of compliance, and it appears that ODC did
‘not allege in In re Martin that that conduct also violated Rule 8.4(d)..

Itis clear and admitted that Respondent violated the terms of hs private
probation, However, the Pane! finds that ODC has not proven by clear and convincing
evidence that Respondent's violation of the terms of his private probation was prejudicial
to the administration of justice, and therefore finds no violation of Rule 8.4(4) on this

count.

@) Sanction
(OC contends thatthe appropriate sanction isa public reprimand and a
three-year probation with conditions upon Respondents retum to practice, ODC
concedes that continued suspension is not warranted so long as appropriate conditions are
{imposed during a period of probation.
Respondent concedes that a public reprimand and probation with
conditions are appropriate and consistent with this Counts precedent in similar cases

Joint Exhibit 19 at 94
“© Transit 157-58,
 Transerip 148

12
“The objectives of the lawyer disciplinary system are to protect the public,
to protect the administration of justice, to preserve confidence in te legal profession, and
to deter other lawyers from similar misconduct.” In re Bailey, 821 A.2d 851, 866 (Del.
2003), “T]he Court looks to the ABA Standards for Imposing Lawyer Sanctions as a
‘model for determining the appropriate discipline warranted under the circumstances of
each case.” Id.

“The ABA framework consists of four key factors to be considered by the
Court: (a) the ethical duty violated; (b) the lawyer's mental state; (c) the extent of the
‘actual or potential injury caused by the lawyer's misconduct; and (8) aggravating and
mitigating factors.” Id

@ Ethical Duty Violated
‘As discussed above, the Panel finds by clear and convincing evidence that
Respondent violated Delaware Lawyers’ Rule of Disciplinary Procedure 7(c) and Rules

of Professional Conduct 1.15(4), 8.4(¢) and 8.4(4)..

(Respondent's Mental State
ODC contends that Respondent's mental states “knowledge."*” Under
the ABA Standards, “inowiedge”is the conscious awareness ofthe nature or attendant
circumstances ofthe conduct but without the conscious objective or purpose to
sccomplish particular result. The Panel concludes that with respect to Counts Il, II and
TV (that is, those counts based onthe sufficiency or insufficiency of Respondent's firm's

financial books and records and his statements concerning their sufficiency), ODC has

© Transript 133-135.

B
not proven by clear and convincing evidence that Respondent had any state of mind more
culpable than negligence, At the hearing, Respondent credibly explained that he believed
at the time that his fir’s books and records were compliant. However, ODC has proven
by clear and convincing evidence that Respondent failed to exercise the care that a
reasonable lawyer would exercise in the circumstances and was therefore negligent inthe
handling of his firm’s financial books and records

With respect to Count I (violating the terms of his private probation),
‘ODC has proven by clear and convincing evidence that Respondents state of mind was
“knowledge.” Although it may be thatthe state of mind associated withthe behavior by
‘Respondent that led to his inability to comply with the conditions of his private probation
‘was merely negligence, cerainly Respondent knew when he filed the Certificates of
Compliance thatthe certificates did not comply with the conditions of his private

‘probation because they did not include a pre-certification by a licensed CPA.

(Gi)_Extent of Actual or Potential Injury

ODC does not allege and has not proven any actual injury to any client or
‘member of the public; however, failure to maintain adequate firm books and records can
create the potential for injury. “[A\] lawyer’s duty to maintain proper books and records

 

exists for the purpose of protecting not only the lawyer but the lawyer's clients, and the
failure to fulfil that duty presents serious risks to the lawyer's clients, even if no actual
hharm results.” Jn re Benson, 774 A.2d 258, 262-63 (Del. 2001); see also In re Bailey,

821 A.2d 851, 866 (Del. 2003),

iv) Aggravating and Mitigating Factors

4
ABA Standards Section 9.1 provides that ageravating (Section 9.22) and
mitigating (Section 9.32) circumstances should be considered to increase or decrease the
degree of discipline imposed. In re Bailey, 821 A.24 851, 866 (Del. 2003)

Respondent's substantial experience in the practice of law is an
aggravating factor. In addition, his failure to comply wit the terms of his private
probation, to which he consented, and failure to address the bookkeeping and accounting
issues that led tothe private probation inthe first place, evidence a pattem of misconduct
that is also an aggravating factor. The Panel finds that ODC has not demonstrated that
‘ny other aggravating factor is present.

In mitigation, there is no evidence that Respondent acted with a dishonest
or selfish motive. Respondent has also made full and free disclosure tothe Panel and
demonstrated a cooperative attitude toward the proceedings. Respondent has submitted
favorable and undisputed evidence of character and reputation, which the ODC
concedes * Respondent has also demonstrated remorse. The Pane! finds that each of
these mitigating factors is present, and counterbalance the aggravating factors.

‘Under ABA Standard 7.3, a reprimand is generally appropriate when a

lawyer negligently engages in conduct that

 

violation of a duty owed as a professional
and causes injury or potential injury toa client, the public, or the legal system.
‘Moreover, in In re Witherell, 998 A.2d 852 (Del, 2010), the Court imposed a public
reprimand and period of probation even though the respondent was found to have acted
‘with “knowledge” of failure to maintain financial books and records. A public sanction

serves the purpose of providing notice to the legal community and the public that

Transrpt 138

1s
violations with respect to the maintenance of proper financial books and records will be
<ealt with appropriately, As both ODC and Respondent agree, a public sanction in this
‘case is consistent with the Cours precedent in similar matters. See In re Witherell, 998

‘A.24 852 (Del. 2010) (listing cases).

CONCLUSION

 

‘Upon consideration ofthe foregoing the Panel recommends that
Respondent be publicly reprimanded for violation of Delaware Lawyers’ Rule of,
Disciplinary Procedure 7(c) and Rules of Professional Conduct 1.15, 84(¢) and 8.4(@.
‘The Pane! further recommends that Respondent's interim suspension be lifted
immediately and that Respondent be reinstated to practice with a three-year period of
public probation subject to the following conditions:

(@) Within 60 days after the ast day of each ofthe following periods (the
“Reporting Periods"): (i) the calendar quarter (e.g, January through March) in which
Respondeat’s interim suspension is lifted; (ji) each subsequent calendar quarter in the
year in which Respondent's interim suspension is lifted; (i) the first six months ofthe
‘year following the year in which Respondent's interim suspension is lifted; (iv) the last
six months of that year; and (iv) the year thereafter,

Respondent shall cause to be filed with ODC either (x) a certificate that he
was not the managing partner of any law firm during the Reporting Period just
‘concluded; or (y) an affidavit by a licensed certified public accountant ina form
reasonably satisfactory to ODC that his firm's practice books, records and bank accounts
have been maintained in compliance with Rule 1.15 during the Reporting Period just

concluded.

16
(©) Respondent willfully cooperate with the performance of any audit of
his law firm's practice books and records by an auditor for Lawyers’ Fund for Client
Protection;

(© Pursuant to Procedural Rule 27, Respondent shall pay ODC's cost in.
this disciplinary matter promptly upon the presentation of a statement of costs by ODC.

Respondent shall also pay the costs of the audits performed by Master Sidlow.

‘ea WSROLA- MSW