Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-10-07061/USCOURTS-caDC-10-07061-0/pdf.json

Parties Involved:
Dushan Zdravkovich
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 19, 2010 Decided February 11, 2011

No. 10-7061

IN RE: DUSHAN ZDRAVKOVICH,

RESPONDENT

Christopher A. Teras argued the cause and filed the brief for

respondent.

Before: GINSBURG, TATEL, and GARLAND, Circuit Judges.

Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge: The Court of Appeals of

Maryland has disbarred attorney Dushan S. Zdravkovich for

intentional misappropriation of client trust funds. Zdravkovich

is a member of this court’s bar. Pursuant to our Rules of

Disciplinary Enforcement, we conclude that identical discipline

is warranted, and we therefore order Zdravkovich disbarred

from the practice of law before the District of Columbia Circuit.

I

The representation that led to Zdravkovich’s Maryland

disbarment stemmed from an altercation at a motorcycle

dealership. On October 28, 1999, Charles Hunter, III attempted

to take delivery of a motorcycle from a Harley Davidson

dealership in Annapolis, Maryland. After a dispute arose over

the payment of sales tax, the dealership refused to sell Hunter

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 1 of 12
2

the motorcycle. Hunter protested, refused to leave, and was

arrested for trespassing. He then hired Zdravkovich -- for whom

Hunter’s girlfriend worked as a secretary -- to represent him in

the criminal trespass matter and to obtain specific performance

on the motorcycle sale. Zdravkovich also agreed to represent

Hunter in a suit against the dealership for malicious prosecution

if Zdravkovich succeeded in defending the criminal case. See

Attorney Grievance Comm’n v. Zdravkovich, 852 A.2d 82, 85

(Md. 2004).

On November 5, 1999, Zdravkovich sent Hunter a letter

outlining anticipated fees of $1,500 for the criminal

representation, $3,500 for the specific-performance case, and

$5,000 for the malicious-prosecution case. Hunter never signed

that letter or any other fee agreement. Instead, Hunter paid

Zdravkovich $1,500 for the criminal case and gave him $15,552,

the purchase price Hunter believed he was entitled to pay for the

motorcycle. Zdravkovich deposited the $15,552 in his attorney

trust account on November 6, 1999. See id. at 85-86.

Zdravkovich proceeded to represent Hunter in a criminal

trial, which resulted in a disposition of probation before

judgment. Zdravkovich also negotiated with the Harley

Davidson dealership, offering to pay $15,552 to complete the

transaction. When those negotiations failed, he filed suit for

specific performance and petitioned, unsuccessfully, to deposit

the $15,552 with the clerk of the court in which he filed the suit. 

Frustrated that Zdravkovich had been unable to complete the

sale, Hunter terminated the representation in March 2000. On

April 12, 2000, Zdravkovich refunded the full $15,552 at

Hunter’s request. See id. at 85-87.

In late 2000, Maryland Bar Counsel subpoenaed

Zdravkovich’s trust account records as part of its investigation

into an unrelated complaint against him. In the course of that

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 2 of 12
3

investigation, Bar Counsel discovered that Zdravkovich had

allowed his trust account balance to drop substantially below

$15,552 almost immediately after he deposited Hunter’s funds. 

Specifically, Zdravkovich withdrew $1,000 of those funds on

November 12, 1999 to pay another lawyer who had no

connection to the Hunter matters. Then, between November 18,

1999 and February 25, 2000, he made a series of electronic

transfers from the escrow account to his operating account. By

February 25, Zdravkovich had withdrawn a total of $9,292.11 of

the funds. When Hunter demanded his money back,

Zdravkovich replenished the trust account with a check from his

son for $8,000 on April 1, 2000, and with an additional $1,400

from his operating account on April 13, 2000. See id. at 86;

Attorney Grievance Comm’n v. Zdravkovich, 825 A.2d 418, 424

(Md. 2003).

The Attorney Grievance Commission of Maryland filed a

petition for disciplinary action against Zdravkovich on August

8, 2002. The Maryland Court of Appeals assigned the matter to

Judge Michael E. Loney of the Circuit Court for Anne Arundel

County, who held a hearing on December 17, 2003. Judge

Loney confirmed the facts recited above. See Zdravkovich, 852

A.2d at 84-90 (quoting Judge Loney’s findings of fact and

conclusions of law). He also found that, when Zdravkovich

offered to pay $15,552 to the dealership and then to the clerk of

court, there were insufficient funds in the trust account to cover

the payment. Id. at 89. Judge Loney did not credit

Zdravkovich’s contention that Hunter had authorized him to

withdraw funds from the trust account to pay legal fees and

expenses. Instead, he credited Hunter’s testimony that

“unequivocally denie[d] . . . any such . . . authorization” and

confirmed “that the $15,552 was to be used solely for the

purchase of the motorcycle.” Id. 

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 3 of 12
4

Judge Loney concluded that Zdravkovich had “invaded the

escrowed funds of his client and used them for purposes other

than the client’s,” and he found by clear and convincing

evidence that this conduct amounted to misappropriation, misuse

of trust funds, and commingling of funds in violation of

Maryland Rules of Professional Conduct 1.15(a) and (b),

§ 10-306 of the Maryland Business Occupations and Professions

Article, and Maryland Rule 16-607. Id. at 88-91. Judge Loney

further concluded that Zdravkovich’s conduct “reflects

adversely on [his] honesty, trustworthiness or fitness as a

lawyer,” Md. R. Prof. Conduct 8.4(b), “involv[ed] dishonesty,

fraud, deceit or misrepresentation,” Md. R. Prof. Conduct 8.4(c),

and “[was] prejudicial to the administration of justice,” Md. R.

Prof. Conduct 8.4(d). Id.1

 

Zdravkovich filed exceptions to Judge Loney’s findings and

conclusions with the Maryland Court of Appeals. Deferring to

Judge Loney’s credibility determinations, the Court of Appeals

held that the evidence supported Judge Loney’s finding that the

parties intended the $15,552 to be used solely for completing the

purchase of the motorcycle, not for payment of attorney fees or

expenses. Zdravkovich, 852 A.2d at 92. It also concluded that,

with respect to all but $1,000 of the misappropriated funds, the

evidence was sufficient to find, by a clear and convincing

standard, that the misappropriation was intentional. Id. In

Maryland, intentional misappropriation is cause for disbarment

absent “compelling extenuating circumstances.” Id. at 96

(internal quotation marks omitted). Noting that Zdravkovich

had previously been reprimanded and indefinitely suspended in

an unrelated matter, the Court of Appeals ordered him disbarred

1

Judge Loney also found that Zdravkovich violated Maryland

Rule of Professional Conduct 8.1(b) by knowingly failing to respond

to Bar Counsel’s lawful demand for information regarding his trust

account. Zdravkovich, 852 A.2d at 88.

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 4 of 12
5

from the practice of law in Maryland. Id. On February 2, 2006,

the District of Columbia Court of Appeals imposed reciprocal

and identical discipline. See In re Zdravkovich, 891 A.2d 258

(D.C. 2006).

 On February 5, 2007, we issued an order directing

Zdravkovich to show cause why imposition of identical

discipline by this court would be unwarranted. After

Zdravkovich answered, we discharged that order and referred

the matter to the circuit’s Committee on Admissions and

Grievances. In January 2010, after reviewing Zdravkovich’s

brief and evidentiary submissions, the Committee recommended

that we impose reciprocal and identical discipline. Thereafter,

we ordered the case scheduled for oral argument.

II

A member of this court’s bar who “has been suspended or

disbarred from practice in any other court” is subject to

reciprocal discipline in this court. Fed. R. App. P. 46(b)(1)(A). 

In reciprocal discipline cases, we must undertake an “intrinsic

consideration of the state record,” Selling v. Radford, 243 U.S.

46, 51 (1917), recognizing that a state court’s decision to impose

a particular sanction “is not conclusively binding on the federal

courts,” In re Ruffalo, 390 U.S. 544, 547 (1968). Nevertheless,

the state court’s substantive findings are entitled to a high degree

of respect. Theard v. United States, 354 U.S. 278, 282 (1957). 

Rule IV(c) of our Rules of Disciplinary Enforcement reflects

these principles. Under Rule IV(c), “this Court shall impose the

identical discipline” imposed by the other court “unless the

attorney demonstrates that, or this Court is satisfied” that:

(1) the procedure was so lacking in notice or

opportunity to be heard as to constitute a deprivation of

due process; or

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 5 of 12
6

(2) there was such an infirmity of proof establishing

the misconduct as to give rise to the clear conviction

that this Court could not, consistent with its duty,

accept as final the conclusion on that subject; or

(3) the imposition of the same discipline by this Court

would result in grave injustice; or

(4) the misconduct warrants substantially different

discipline.

D.C. Cir. Rules, App. II, Rule IV(c) (hereinafter D.C. Cir. Rule

(IV)(c)); cf. Selling, 243 U.S. at 51 (setting forth similar criteria

for the imposition of reciprocal discipline by the Supreme

Court). This standard is narrow, for “we are not sitting as a

court of review to discover error in the [hearing judge’s] or the

[state] courts’ proceedings.” In re Sibley, 564 F.3d 1335, 1341

(D.C. Cir. 2009). And the “burden of showing why the court

should not impose reciprocal discipline rests with [the

attorney].” Id. at 1340. 

Zdravkovich seeks to stave off the imposition of identical

discipline on the basis of each of Rule IV(c)’s four exceptions. 

We consider those exceptions in order.

1. Zdravkovich contends that Maryland’s attorney

disciplinary system violates due process “because the Maryland

Court of Appeals is centrally involved in both the

investigative/charging process and the final decision on the

merits.” Br. 15. We pause at the outset to note that this claim

argues for an exception that falls outside the text of Rule

IV(c)(1). That provision is concerned with whether the

procedure was so lacking in “notice or opportunity to be heard”

as to violate due process. Zdravkovich makes no such claim,

nor could he. It is undisputed that he was given notice of the

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 6 of 12
7

charges against him, was represented by counsel, and had a

hearing at which counsel had the opportunity to call and crossexamine witnesses, make arguments, and submit evidence. 

Nonetheless, because we would hesitate to impose reciprocal

discipline if Maryland’s disciplinary system violated due

process on some ground other than that contained in the text of

Rule IV(c)(1), we proceed to examine Zdravkovich’s argument. 

That examination reveals that the argument has two fatal flaws

-- one of fact and one of law.

First, although Zdravkovich is correct that the Maryland

Court of Appeals makes the “final decision on the merits,” see

Md. Rule 16-759 (providing that the Court of Appeals reviews

exceptions to the findings of fact and conclusions of law

prepared by the hearing judge), it is simply not true that the

Court “is centrally involved in . . . the investigative/charging

process,” Br. 15. Under the Maryland Rules, the Court of

Appeals appoints Attorney Grievance Commission members,

who in turn appoint Bar Counsel, subject to the Court of

Appeals’ approval. Md. Rules 16-711, 16-712. Bar Counsel

investigates professional misconduct, files statements of

charges, and prosecutes all disciplinary and remedial actions. 

Md. Rule 16-712. Upon completion of an investigation, Bar

Counsel may file with the Grievance Commission a Statement

of Charges. Md. Rule 16-741. A Peer Review Panel reviews

statements of charges to determine whether the charges have a

substantial basis and to make a recommendation as to whether

a Petition for Disciplinary or Remedial Action should be filed. 

Md. Rules 16-742, 16-743. Finally, if the Grievance

Commission directs Bar Counsel to file a Petition, the Court of

Appeals designates a Circuit Court judge to hear the action. Md.

Rule 16-752. As this description makes clear, the Court of

Appeals has no connection to the investigative/charging process

other than its role in the appointment of Grievance Commission

members and Bar Counsel and in the designation of a hearing

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 7 of 12
8

judge -- roles that have no connection to the substance of any

particular case.

Second, it would not matter legally even if the Court of

Appeals were more involved in the investigative process than it

is. In Withrow v. Larkin, the Supreme Court expressly rejected

the claim that due process is violated where “[t]he initial charge

or determination of probable cause and the ultimate

adjudication” are made by the same agency. 421 U.S. 35, 58

(1975). “[T]he combination of investigative and adjudicative

functions,” the Court held, “does not, without more, constitute

a due process violation.” Id. In this case, there is nothing more;

there is only less. This is not a case in which “special facts and

circumstances [demonstrate] that the risk of unfairness [was]

intolerably high.” Id. To the contrary, there are no such facts or

circumstances here.2

2. We next consider Zdravkovich’s contention that, at

most, the evidence supports a charge of negligent rather than

intentional misappropriation. To support this contention,

Zdravkovich must do more than simply challenge the

factfinder’s weighing of the evidence. Under the second

exception to Rule IV(c), he must demonstrate that there was

“such an infirmity of proof” establishing the charge of

intentional misconduct “as to give rise to the clear conviction”

that accepting the Maryland Court of Appeals’ conclusion would

be “[in]consistent with [our] duty” as a court. D.C. Cir. Rule

IV(c)(2). This is a difficult showing to make, and Zdravkovich

has failed to make it.

2

Zdravkovich further maintains that “Maryland Bar Counsel’s

office engaged in several actions which can be considered

misconduct.” Br. 16. Even if this charge were true (which does not

appear to be the case), nothing Zdravkovich alleges comes close to

establishing a due process violation.

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 8 of 12
9

Maryland law “distinguishes between the intentional

misappropriation of client funds and the misappropriation of

client funds resulting from negligent or otherwise unintentional

behavior.” Attorney Grievance Comm’n v. Cafferty, 831 A.2d

1042, 1057 (Md. 2003). Intentional misappropriation includes

“conscious indifference in the use and management of the client

trust account.” Id. (internal quotation marks omitted). In this

case, there was sufficient evidence from which the Maryland

courts could conclude that Zdravkovich intentionally rather than

negligently misappropriated Hunter’s funds. Hunter hired

Zdravkovich to negotiate and complete the purchase of a

motorcycle. Shortly thereafter, Hunter gave Zdravkovich 

$15,552 -- the precise amount that Hunter told Zdravkovich he

wanted to pay for the motorcycle -- which Zdravkovich

immediately deposited into his attorney trust account. The

common sense inference is that Hunter handed over that precise

amount because he wanted it to be used to purchase the

motorcycle, not to serve as a fund from which Zdravkovich

could withdraw payments for legal fees and expenses. See Md.

Code Ann., Bus. Occ. & Prof. § 10-306 (“A lawyer may not use

trust money for any purpose other than the purpose for which

the trust money is entrusted to the lawyer.”). Hunter’s testimony

-- which Judge Loney found credible -- confirmed that this was

the agreement and that it was never modified. The only written

document discussing the terms of the representation,

Zdravkovich’s November 5, 1999 letter to Hunter, contains no

evidence to the contrary. 

Zdravkovich’s subsequent actions confirm that he knew the

money was to be used to purchase the motorcycle. Zdravkovich

contacted the dealership and offered to pay $15,552 for the

vehicle, representing that he had that amount in escrow. When

that effort failed, Zdravkovich sought to deposit the full $15,552

with the clerk of the court in which he brought the suit for

specific performance. And when Hunter lost patience with the

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 9 of 12
10

specific performance case and demanded a complete refund of

the $15,552, Zdravkovich “scrambled to add, at the eleventh

hour, enough cash to the escrow account to allow him to return

Hunter’s money to him.” Zdravkovich, 852 A.2d at 96.

Zdravkovich does not dispute these basic facts, but he does

attempt to discredit Hunter’s testimony. Zdravkovich contends

that Hunter was an unreliable witness because he failed to

remember certain facts and gave inconsistent testimony. 

Zdravkovich further maintains that Hunter’s testimony was

insufficient to establish intent by clear and convincing evidence,

because it contradicted Zdravkovich’s testimony that Hunter’s

girlfriend -- who was, at the relevant time, Zdravkovich’s

secretary -- told Zdravkovich that Hunter had approved the trust

account withdrawals. These arguments are unavailing, however,

because this court -- like the Maryland Court of Appeals --

defers to hearing judges’ determinations regarding the

credibility of witnesses. See United Servs. Auto. Ass’n v. NLRB,

387 F.3d 908, 913 (D.C. Cir. 2004). Hunter’s girlfriend did not

testify, so the only support for Zdravkovich’s report of what she

told him was Zdravkovich’s own testimony. Judge Loney

disbelieved Zdravkovich and believed Hunter instead. We have

no reason to second-guess the judge’s credibility determination. 

In sum, Hunter’s testimony, combined with the other

evidence indicating that Zdravkovich understood that the

$15,552 was intended to purchase the motorcycle, was sufficient

to support the Maryland court’s finding of intentional

misappropriation. It is therefore sufficient to warrant the

imposition of identical discipline under Rule IV(c)(2).

3. Zdravkovich further maintains that this case falls within

Rule IV(c)’s third exception, because “the imposition of the

same discipline by this Court would result in grave injustice.” 

D.C. Cir. Rule IV(c)(3). Because he sees his conduct as “at

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 10 of 12
11

worst . . . merely negligent,” Zdravkovich contends that his

disbarment would result in grave injustice. Br. 28. 

There might be something to this argument if it were true

that Zdravkovich’s conduct was merely negligent. This court

has declined to automatically impose the reciprocal discipline of

disbarment on an attorney whose misappropriation of client

funds was not intentional. See In re Pels, No. 96-7153, 1998

WL 796430 (D.C. Cir. Oct. 22, 1998). Indeed, the Maryland

Court of Appeals, itself, does not generally disbar attorneys for

misappropriation that is not intentional, reckless, or dishonest. 

See Cafferty, 831 A.2d at 1057. But as we explained above,

there was no infirmity in the finding of the Maryland Court of

Appeals that Zdravkovich committed intentional

misappropriation. Accordingly, there is no injustice in our

imposing reciprocal disbarment for that conduct, especially in

light of Zdravkovich’s previous reprimand and indefinite

suspension.

4. Finally, Zdravkovich insists that his “misconduct

warrants substantially different discipline” than that imposed by

the Maryland Court of Appeals. D.C. Cir. IV(c)(4). In support,

he offers nothing more than the arguments that we have rejected

above, plus the contention that “he is extremely unlikely to

repeat the same conduct.” Br. 34. Given that he was

“reprimanded and indefinitely suspended by” the Court of

Appeals in a previous case, Zdravkovich, 852 A.2d at 96, that

promise rings hollow. 

III 

For the foregoing reasons, we accept the recommendation

of the Committee on Admissions and Grievances to impose

upon the respondent the reciprocal and identical discipline

imposed upon him by the Court of Appeals of Maryland. We

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 11 of 12
12

therefore order that Zdravkovich be disbarred from the practice

of law before the United States Court of Appeals for the District

of Columbia Circuit. He is prohibited from holding himself out

to be an attorney at law licensed to practice before this court.

So ordered.

USCA Case #10-7061 Document #1292780 Filed: 02/11/2011 Page 12 of 12