Opinion ID: 2260682
Heading Depth: 1
Heading Rank: 6

Heading: summary of evidence establishing respondent's misconduct

Text: All of the charges in this case arise out of Respondent's representation of Betty Cox in a landlord/tenant case. Betty Cox is the name used by Hinda Exler in conducting the rental operations of a sole proprietorship under the tradename of D.C. Property Management. The dealings between Respondent and Ms. Cox did not fit the customary pattern of lawyer-client relations. As the Hearing Committee found: [Respondent] knew neither Ms. Cox's real name nor her address. All mail was sent to a post office box. Moreover, he had never met his client. Although he asked to meet with her, she refused. Hr'g Com.Rep. at 4. In the fall of 1983, Betty Cox retained Respondent by telephone to institute, for non-payment of rent, an eviction proceeding against the tenant in an apartment owed by Betty Cox. Respondent prepared and filed an appropriate complaint, and the tenant thereafter filed an answer and counterclaim based on alleged Housing Code violations. Prior to being retained in this lawsuit, Respondent had provided legal services to Ms. Cox in uncontested matters for which he charged fees at the rate of $50 per hour. When it became apparent that this case would be contested, Respondent informed Ms. Cox by letter that his fee would charged on an hourly basis at $75 per hour. RX 5. [2] After the lawsuit had been filed, Respondent promptly sought and obtained a protective order from the court which required the tenant to make rental payments to be held in the Court Registry during the pendency of the litigation. Throughout the case, Respondent communicated with Ms. Cox by telephone and letter to keep her informed of developments in the litigation, including the possibility of settlement. For example, in a letter dated March 23, 1984, Respondent reported to Ms. Cox that the case could be settled by her agreement to forego one month's rent amounting to $250. Respondent strongly recommended such a settlement because it would be absolutely futile to spend two or three days in a jury trial arguing over $250. RX 10. Ms. Cox refused to accept such a settlement and directed Respondent to continue with the litigation. Tr. II at 19. As the litigation progressed in its pre-trial stage, Respondent billed Ms. Cox from time to time for his accumulated legal fees. Thus, on March 1, 1984, Respondent sent Ms. Cox a bill for $100 to cover his court appearance on a motion that had recently been argued. RX 9. Then, on May 25, 1984, Respondent sent another statement covering additional legal services amounting to $350, and since Ms. Cox had not paid the prior statement of $100, the total amount payable to Respondent was then $450. RX 11. In July 1984, the tenant failed to make the required rental payment into the Court Registry, whereupon Respondent promptly filed a Motion for Judgment of Possession and Costs, which was thereafter set for argument on July 30, 1984. Prior to the scheduled argument, counsel for the tenant made a settlement proposal that was ultimately accepted both by Ms. Cox and the tenant. This settlement included three points pertinent to this disciplinary proceeding: (1) Ms. Cox agreed to make certain specified repairs to the apartment by August 31, 1984; (2) the rental payments held in the Court Registry would be released to Ms. Cox with the exception of $90 that would be paid to the tenant in satisfaction of the counterclaims; and (3) the entire lawsuit including all of the counterclaims against D.C. Property Management would be dismissed. Hr'g Com.Rep. at 3. On the following day, July 31, 1984, Respondent forwarded to Ms. Cox a copy of the praecipe setting forth the settlement, together with Respondent's letter that fully explained the terms of the settlement agreement. BX 7. With this letter Respondent enclosed a statement for legal fees in the amount of $500 for additional legal services, and it was called to Ms. Cox's attention that Respondent's total fee was now $950 for handling the entire case. Then, Respondent's July 31 letter specifically stated: We shall deduct our fee [$950] from the money released from the Court Registry and send the balance to you. Id. Based on the July 31 letter and corroborating testimony at the hearing, the Hearing Committee found that [t]here was an agreement between Respondent and Betty Cox that Respondent was to withhold his legal fee from the money sent from the Court Registry and then forwarded the balance to her. Hr'g Com.Rep. at 4. The Committee's findings of fact concerning the settlement and the agreed-upon disposition of the settlement funds reflected generally the evidence and testimony of Respondent on this phase of the case. See RX 14; Tr. I at 57. The Hearing Committee did not credit the contrary testimony of Ms. Cox. See (Tr. II at 6-8); 26-27. Shortly after the settlement, Respondent received on August 1, 1984, a check for $1,862 from the Court Registry, which was the settlement amount due to Ms. Cox from funds in the Court Registry. On the same date, Respondent deposited this check into his operating bank account. Thereafter, on August 17, 1984 Respondent prepared and mailed a check to Betty Cox in the amount of $912, which reflected the full amount received from the Court Registry minus the unpaid legal fees of $950 due to Respondent. Hr'g Com.Rep. at 3-4. It is undisputed that Respondent's check was prepared and mailed to Ms. Cox on or about August 17, 1984, and it is likewise undisputed that this check was never negotiated by Ms. Cox. Ms. Cox testified that she never received Respondent's letter forwarding the check for $912. Tr. II at 29. This indicates that the letter with the check was lost in the mail or possibly misplaced within the office of D.C. Property Management. [3] In any event, it is unlikely that Ms. Cox would have been satisfied even if she had received the August check for $912. As explained in her testimony, Ms. Cox insisted that she was entitled to receive the full amount of the $1,862 obtained by Respondent from the Court Registry and that her payment of Respondent's fee should be handled thereafter in a separate transaction. Tr. II at 6-7, 27-28. On or about September 21, 1984, Ms. Cox telephoned Respondent to inquire about the status of the various payments that were due her under the settlement. Respondent explained in this telephone discussion, and thereafter reconfirmed in a letter to Ms. Cox dated September 25, 1984, that the overall settlement provided for payments to her from three different sources: (1) a payment from the Court Registry with respect to all rents through June 1984 that had been deposited by the tenant with the Court Registry; (2) a payment directly from the D.C. Government with respect to the July rent; and (3) payments directly from the tenant with respect to the August and September rents. BX 8. Respondent's letter of September 25, 1984 further explained that my attorney's fees ... were deducted from the money in the Court Registry and the balance was sent to you in the letter of August 17, 1984. Id. The Hearing Committee found that after the telephone discussion on September 21, 1984, Respondent did not hear again from Ms. Cox again until about December 8, 1984, when he received a letter from her inquiring about her money.... Hr'g Com.Rep. at 4. Respondent testified that in response to Ms. Cox's December 8 letter, he wrote [to her] a day or two later that's an Exhibit. Tr. I at 65. However, the exhibits in the record do not include either the December 8 letter from Ms. Cox or the subsequent letter from Respondent. Nor does the record reveal anything concerning the substance of these written communications in mid-December 1984. However, the record does disclose that several days later, on December 28, 1984, Ms. Cox spoke by telephone with attorney William Smink to obtain his assistance in this matter. Mr. Smink testified that at the time when she called us [on December 28] there were allegations [by Ms. Cox] over the fee dispute. She wanted the full amountshe wanted the $1,862she was hot.... Tr. I at 29. After being retained by Ms. Cox, Mr. Smink thereafter contacted Respondent by telephone on January 2, 1985. According to Mr. Smink's testimony, Respondent explained he had told Ms. Cox in his letter of July 31, 1984 that he was going to take his fee out of the Court Registry funds and that his check for the balance had been placed in the mail by him on August 17, 1984. Respondent also informed Mr. Smink that, as of the time their discussion on January 2, 1985, Respondent's books and records were with his bookkeeper, and as soon as he got them back he would look into it. Tr. I at 29-30. On January 12, 1985, Mr. Smink spoke to Respondent again, explaining that Betty Cox had called [and] ... was upset that nothing had happened in that 12-day period. Tr. I at 30. According to Mr. Smink's testimony, most of that conversation dealt with the fee dispute aspect, and Respondent said the books and records were still with the bookkeeper and that he'd get on it. Id. The next telephone discussion between Mr. Smink and Respondent occurred on January 25, 1985. At that time, Respondent informed Mr. Smink that Respondent had just received the books and records back from the bookkeeper and that he would look over them over the weekend and would either submit a canceled check as proof of payment or re-issue a check. Tr. I at 30-31. Respondent then determined that his prior check had not been negotiated, and on February 2, 1985, Respondent messengered a [new] check for $912 to Mr. Smink's office. Tr. I at 31. Respondent's new check was accompanied by a letter detailing basically what had happened in the case [including] ... copies of his ledger ... showing a check had in fact, according to the ledger, been drafted to D.C. Properties in August of 1984. Id. Respondent's letter transmitting the new check for $912 offered an alternative approach designed to satisfy Ms. Cox's contention that she was entitled to receive all of the $1,862 in the Court Registry and that Respondent's fee should be handled by a separate payment. Thus, Respondent's letter to Mr. Smink, enclosing the new check for $912, stated that if Ms. Cox will place in your hand [Mr. Smink] a check for $950 to my order for fees, then I will give to you a check for $1,862. BX 9. Respondent's alternative approach to the fee dispute was not accepted by Ms. Cox. Mr. Smink then transmitted the new check for $912 to Ms. Cox with a letter stating that she could file an action in Small Claims Court or with the Fee Arbitration Board if she was still dissatisfied with Respondent's fee. This letter from Mr. Smink went on to suggest that Ms. Cox probably would fare better with the Arbitration Board. Tr. I at 31. As set forth in the Hearing Committee's findings, Ms. Cox received Respondent's new check for $912 on February 2, 1986, and this check was thereafter negotiated by Ms. Cox on February 14, 1985. Hr'g Com.Rep. at 5. The Hearing Committee also found that between the date Respondent deposited the settlement funds from the Court Registry into his own operating bank account and February 14, 1985, Respondent's bank balance on numerous occasions fell below $912, the amount owed to his client. Id. The Hearing Committee further found: Respondent was not aware that his bank balance on these occasions was below $912 (Tr. I, pp. 102, 106), because he did not keep a running balance on his operating account. He kept only a rough estimate.... He did not balance the bank statements himself, but rather sent them to his bookkeeper as they came in. Id. The Committee also found that Respondent had an informal arrangement with his bank whereby the bank would cover overdrafts. Id. Throughout the time frame pertinent to this disciplinary proceeding, Respondent was a sole practitioner and had no administrative support staff to handle financial matters other than the bookkeeper who reviewed Respondent's checkbook from time to time and balanced it. The bookkeeper was not an employee of Respondent and did not work in Respondent's office. Instead, the bookkeeper had an independent office in New Carrollton, which was several miles away from Respondent's office. Moreover, in December 1984 and January 1985, Respondent was in the process of moving his office and becoming associated with a law firm which, according to the Hearing Committee, has remedied the administrative problems of his solo practice that led to the mishandling of the client's funds in this case.