Opinion ID: 2560194
Heading Depth: 2
Heading Rank: 1

Heading: Intentional Misappropriation

Text: This is not a case where the misappropriation of funds resulted from simple negligence. Id. Even though the Hearing Committee found that the misappropriation resulted from respondent's failure to anticipate the May 31, 2001 [Medicaid] deadline, craft a game plan, and implement the plan with the necessary dispatch classic negligence languagerespondent knowingly withdrew funds from his ward's account before the court had authorized his fee petition. While it is true that respondent withdrew the fee not for [his] own use in the sense of stealing or for a temporary `loan' but rather as a satisfaction for accruing fees ... against funds which would ultimately be expected to be utilized for that purpose, In re Fair, 780 A.2d 1106, 1112 (D.C.2001), he nevertheless intentionally withdrew funds in order to pay what he thought was his fee without first obtaining court authorization that he knew was required. Respondent's actions, therefore, are distinguishable from those in cases in which we concluded that the respondents' honest, but erroneous belief that they were entitled to withdraw the misappropriated funds constituted simple negligence. In Fair, for example, the personal representative of an estate withdrew requested fees without prior court approval. 780 A.2d at 1110. We concluded that the unauthorized withdrawal constituted negligent misappropriation because the Board had found that it had become the accepted practice to withdraw fees in advance of probate court approval and, less than a year later, the legislature eliminated the need for prior approval. Id. at 1111-12. In In re Travers, withdrawal of fees prior to court approval was negligent because the lawyer `sincerely believed' ... his actions in obtaining the consents of the heirs and filing those consents with the court `supported a finding that he was not reckless and that he was [in] no way trying to mislead [the court] or conceal his conduct.' 764 A.2d 242, 249 (D.C.2000) (second and third alteration in original). See also Berryman, 764 A.2d at 770-72 (summarizing cases of negligent misappropriation). The Hearing Committee found that respondent believed that the probate court would ratify his fee because of the nature of what he was facinghis ward's potential disqualification from Medicaid benefitsand thus honestly believed he was entitled to the funds. But despite finding that respondent was not dishonest in any respect, the Hearing Committee found that respondent knew withdrawal of the fees prior to court approval was improper. We agree with that assessment. The requirement of prior court approval for conservator fees was, at the time respondent withdrew the amount he had requested (but not yet obtained approval for), and continues to be, established by statute, see D.C.Code § 21-2060, and court rule, see Super. Ct. Prob. R. 308(a). Respondent's actions, albeit in good faith, were intentional, because he knew that he was required to obtain prior court approval but withdrew the funds before obtaining the court's approval. See In re Pels, 653 A.2d 388, 397 (D.C.1995) (reject[ing] [the respondent's argument that] good faithhis reasonable but erroneous belief that he was entitled to the balance of the fundsreduced his culpability to simple negligence); In re Dulansey, 606 A.2d 189, 190 (D.C.1992) (A clear rational basis exists for [the] conclusion that attorneys who knowingly misappropriate funds stand in a different position than attorneys who commit other acts involving dishonesty.). That respondent's purpose in misappropriating funds was in the best interest of his ward may be relevant to what sanction should be imposed, but it is irrelevant to the determination that respondent intentionally misappropriated funds in the sense that he handled entrusted funds in a way that reveals ... an intent to treat the funds as the attorney's own.... Fair, 780 A.2d at 1109-10 (quoting In re Anderson, 778 A.2d 330, 339 (D.C.2001)). We, therefore, disagree with the Board's conclusion that respondent's misappropriation was negligent. See In re Bach, 966 A.2d 350, 355 & n. 16 (D.C.2009) (Ferren, J., concurring) (quoting the Board's brief in Addams for proposition that hard cases make bad law and that automatic rule of disbarment could lead to evasive action in findings of negligent misrepresentation in order to avoid rules that are felt to be Draconian when applied to a `hard' case).