Opinion ID: 1912622
Heading Depth: 1
Heading Rank: 8

Heading: Ruddy's Exceptions

Text: 1. Undue Influence/Conflict of Interest Ruddy excepts to the hearing judge's denial of his motion to dismiss the disciplinary action on the grounds that Meng's status as a member of the Attorney Grievance Commission created a conflict of interest for Bar Counsel and unduly influenced his objectivity. Ruddy argues that because of Mr. Meng's extremely high profile resulting from his service to and on the Attorney Grievance Commission ... Assistant Bar Counsel began to defer to Mr. Meng in the evaluation of the validity of Mr. Meng's two (2) Complaints. In short, Ruddy argues that there is an incurable Conflict of Interest when, in a highly contentious case, a member of the Attorney Grievance Commission reports opposing counsel to Bar Counsel for ethical violations. According to Ruddy, [i]nstead of a neutral third party, this matter was investigated by Bar Counsel, who was an at-will employee of the Attorney Grievance Commission. The Attorney Grievance Commission recommends Bar Counsel's budget, salaries, promotions, and other personnel and funding decisions. There is a substantial interplay between Bar Counsel and the individual commissioners. We disagree with these generalizations. The effect of presuming a conflict of interest whenever a lawyer member of the Attorney Grievance Commission reports misconduct would be to preclude such Commission members from so reporting. We would be unwise to adopt such a rule. A lawyer who knows that another lawyer has committed a violation of the Maryland Lawyers' Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority. MRPC 8.3 (emphasis added). MPRC 8.3 applies to all lawyers, whether or not they are members of the Attorney Grievance Commission. Holding that any such report automatically engenders undue influence and a resulting conflict of interest would effectively shield the misconduct in question from scrutiny, since a decision to not report the misconduct raises the specter of a MPRC 8.3 violation, while a decision to report the conduct guarantees that the disciplinary proceedings are fatally defective. To be sure, Bar Counsel are not immune to the effect of competing interests, and they are subject to conflicts of interest like any lawyer. See Md. Rule 16-742(d) (A member of a Peer Review Panel shall not participate in any proceeding in which the member's impartiality might reasonably be questioned.); Bowen v. State Bar, 177 P.3d 611, 614 (Utah 2008) (While there is no formal mechanism for recusal of screening panel members, participating members should be conscientious in identifying and disclosing conflicts of interest, and should recuse themselves when such conflicts exist.). Whether a conflict of interest existed is simply a question of fact. The Supreme Court of Minnesota confronted a similar situation in Kennedy v. L.D., 430 N.W.2d 833 (Minn.1988). In Kennedy, the petitioner had filed three separate complaints against lawyers employed by the Office of Lawyers Professional Responsibility (Director's Office), which were heard by panels from the Lawyers Professional Responsibility Board (Board) and dismissed. He alleged that the Board and the Director's Office are not separate entities and therefore, allowing Board members to initially review complaints against attorneys in the Director's Office creates an impermissible conflict of interest. Kennedy, 430 N.W.2d at 835. After determining that there was no structurally inherent conflict of interest, the court stated, [The petitioner] has presented no basis for disqualification. He simply alleges that there may be a conflict. Absent a showing of actual bias on the part of a panel member, we must presume that the panel members acted honestly and with integrity in their roles as decisionmakers. Id. at 837. Unlike the petitioner in Kennedy, Ruddy points to specific instances that he alleges illustrate Assistant Bar Counsel's deference to Meng's opinion. We shall review these instances in turn. Ruddy alleges that [o]nce Mr. Meng's Complaint was consolidated with Respondent's brother's Complaint both Assistant Bar Counsel and the Peer Review Panel gave an implied credibility to Respondent's brother's Complaint that would not have been granted if Respondent's brother's Complaint was required to stand alone. Ruddy argues that his brother's previous multiple unsuccessful Complaints against Ruddy in the past would have undermined the validity of his brother's current Complaint. Bar Counsel may well view a serial complainant with some skepticism, but this would not be determinative. Bar Counsel has a duty to investigate all complaints filed with the Commission that are not facially frivolous or unfounded[.] Attorney Grievance Comm'n v. Lee, 393 Md. 546, 561, 903 A.2d 895, 904 (2006). Moreover, the mere submission of a second complaint by a different party would buttress the less credible complaint as a second, independent source. We keep in mind that a complaint is simply the mechanism by which Bar Counsel becomes aware of possibly questionable attorney conduct. After learning of such conduct, whether by complaint or otherwise, Bar Counsel makes an appropriate investigation, Md. Rule 16-731, and it is that investigation that dictates the procedure that Bar Counsel follows. See Md. Rule 16-734. That Bar Counsel is not obliged to dismiss a complaint solely at the complainant's request, Lee, 393 Md. at 561, 903 A.2d at 904, highlights the limited role of the complaint. [25] Ruddy perceives inappropriate deference by Assistant Bar Counsel to Meng because of Bar Counsel's lack of concern about the fact that Meng took almost six (6) months to initiate his First Complaint as regards conduct that supposedly raised substantial question as to Respondent's honesty, trustworthiness and fitness to be a lawyer. Similarly, he points out, when Meng admitted that Ruddy corrected his March 24, 2006, testimony outside the courtroom, Assistant Bar Counsel chose to emphasize his appreciation for Mr. Meng's clarification rather than recognizing that Mr. Meng's so called clarification undermined the integrity of the key ethical issue of his First Complaint. Meng's first complaint dealt with Ruddy's testimony regarding his son's rent. Meng testified he only became aware of the inconsistency in August 2006, as he had not been able to review the tapes of the testimony until then. Until that point, although he suspected that Ruddy's testimony was inaccurate, he was not certain enough to act on it, which is why he called upon [Ruddy] to review his testimony and correct it with the Court[.] MRPC 8.3 only requires a lawyer to report another lawyer's misconduct when the reporting lawyer has actual knowledge of misconduct that raises a substantial question as to that lawyer's honesty, trustworthiness, or fitness as a lawyer[.] The record indicates that Meng did not have actual knowledge of the discrepancy until significantly after the testimony. That Bar Counsel later did not recogniz[e] that Mr. Meng's... clarification undermined the integrity of the key ethical issue is explainable by the simple fact that Assistant Bar Counsel agreed with Meng's understanding of what constitutes reasonable remedial measures. Although we have rejected that view, it is not so unsound as to reflect bias. Ruddy also points to Assistant Bar Counsel's undertaking of the unusual procedure of traveling to Mr. Meng's office in order to entertain his Response to Respondent's Reply to the First Complaint[,] a practice that contradicted the normal procedure and denied Respondent the opportunity to be made aware of Mr. Meng's Response. During oral argument, Assistant Bar Counsel explained that he only met with Meng once during the investigative stage and that it is not uncommon for Bar Counsel to meet with the complainant to obtain further information. After the investigative stage, he notified Meng in his capacity as complainant that the matter was being referred to the peer review panel, which Meng could attend. These interactions are perfectly consistent with the procedure defined in the Maryland Rules. Maryland Rule 16-731 describes the procedure that governs the investigative process that occurs after Bar Counsel receives a complaint that is neither frivolous nor unfounded: Bar Counsel shall make an appropriate investigation.... Bar Counsel shall ... acknowledge receipt of the complaint and explain in writing to the complainant the procedures for investigating and processing the complaint ... and (D) conduct an investigation to determine whether reasonable grounds exist to believe the allegations of the complaint. Maryland Rule 16-743 governs the Peer Review Panel procedure: The Chair shall notify... each complainant of the time, place, and purpose of the meeting and invite their attendance. Finally, Maryland Rule 16-723 governs confidentiality: Upon request of a complainant, Bar Counsel may disclose to the complainant the status of an investigation and of any disciplinary or remedial proceedings resulting from information from the complainant. Assistant Bar Counsel also indicated that he spoke with Meng on the phone at some point about the Peer Review Panel meeting and perhaps about some of the allegations of the complaint that were before the panel. This is insufficient evidence to conclude that Assistant Bar Counsel acted improperly. Ruddy also alleges that Assistant Bar Counsel treated Meng's contention that Ruddy's testimony under oath was not accurate and was not subsequently corrected by Respondent as presumptively binding, rather than making its own independent determination. Assistant Bar Counsel's concurrence with Meng's interpretation of the events does not mean that Bar Counsel did not act independently. Moreover, at the heart of the attorney discipline process is the separation of the prosecutorial and adjudicative functions. See Md. Rule 16-751 (Upon approval or direction of the Commission, Bar Counsel shall file a Petition for Disciplinary or Remedial Action in the Court of Appeals.) (emphasis added). After Bar Counsel files a Petition, a hearing judge makes factual findings and recommended conclusions of law. [26] See Md. Rule 16-757. The involvement of the hearing judge and this Court as the neutral arbiters of facts and law negates a claim that any bias by Bar Counsel will undermine the result. Ruddy's contention that a pattern of undue influence explains why Bar Counsel chose to ignore Respondent's Complaint that [Meng] was utilizing the threat of filing grievances as leverage is similarly unpersuasive. [O]nce Bar Counsel initiate[s] an investigation after the complaint [is] received ... he [is] duty-bound to complete the investigation[,] Lee, 393 Md. at 562, 903 A.2d at 904-05, because once the investigation begins, a complaint should be dismissed only if Bar Counsel concludes that the evidence fails to show sanctionable professional misconduct or incapacity[,] id. at 561-62, 903 A.2d at 904. In a disciplinary proceeding for Ruddy, Meng's conduct would only be relevant, if at all, to the question of whether the complaint was frivolous or unfounded, a question that we answer in the negative. Ruddy points to a denial of fundamental due process [that] further evidences a deference on the part of Assistant Bar Counsel to the opinions of Mr. Meng. In a July 26, 2007, letter, Assistant Bar Counsel gave Ruddy until August 31, 2007 to respond to Meng's complaint about the affidavits, yet on August 10, 2007 ... [Bar Counsel] alleged without benefit of Respondent's Response that Respondent's Affidavits were false. A Committee Note to Maryland Rule 16-731 provides: Before determining whether a complaint is frivolous or unfounded, Bar Counsel may contact the attorney and obtain an informal response to the allegations. Rule 16-731(c) governs notice to the attorney after Bar Counsel has determined that the complaint is not frivolous or unfounded: As part of the notice, Bar Counsel may demand that the attorney provide information and records that Bar Counsel deems appropriate and relevant to the investigation. The notice shall state the time within which the attorney shall provide the information and any other information that the attorney may wish to present. The Rules do not require that attorneys under investigation have an opportunity to respond before the investigation begins. [27] Our independent review of the record persuades us that Ruddy's claims about Meng's inappropriate influence over Bar Counsel are unfounded. In short, our review of the record reveals that Meng recused himself from the disciplinary process, participating only in his capacity as an attorney complainant. He did not make any recommendations as to the course of the proceeding or try to influence the charges brought against Ruddy, except through his official complaints. Ruddy's exception is overruled. 2. MRPC 1.7 (Conflict of Interest) Ruddy excepts to the hearing judge's conclusion that he violated MRPC 1.7, which provides, in relevant part, that a lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests. The hearing judge grounded Ruddy's MRPC 1.7 violation on the following finding: (7) That even had the respondent believed that the repayment arrangement resolved the conflict, he should have known that it could not possibly have resolved the issue of interest on the loan. That upon his opening the estate, the note was in default status and that another non-conflicted personal representative would have been duty bound to file suit against the respondent and obtain a judgment ... or otherwise obtain interest[.] We disagree with the hearing judge's apparent conclusion that the mere fact of Ruddy's indebtedness to the estate created a conflict of interest. See Talbert v. Reeves, 211 Md. 275, 279, 127 A.2d 533, 536 (1956). In Gianakos v. Magiros, 238 Md. 178, 186, 208 A.2d 718, 723 (1965), we explained: If an administrator is properly appointed by the court having jurisdiction, he is not disqualified by the filing of a personal claim against the estate; nor, as administrator, is he required to avail himself of a defense of limitations against such a claim. By reason of his court appointment, in the absence of proof of wrongdoing, he is authorized to take action which might, under other circumstances, constitute a conflict between his personal position and his fiduciary capacity. (Emphasis added.) Nor do we think that Ruddy was duty bound to file suit and obtain a judgment against himself. But as the hearing judge recognized, there still remains the question of interest on the loan. Respondent should have made other arrangements for the collection of interest, such as signing a promissory note to pay interest, if only at the general legal interest rate (6% per annum). See MD. CONST. art. III § 57. Ruddy allowed his sister to pay back her loan the same way, but there were over thirty other interested parties who would have benefited from the payment of interest. Accordingly, we partially sustain Ruddy's exception regarding the hearing judge's findings that the debt itself caused a conflict of interest, and that a non-conflicted personal representative would have been duty bound to file suit against the respondent. We overrule his exception in part because he should have made some arrangement for the payment of interest. Ruddy also excepts to the hearing judge's finding that he had no right to rely on Bar Counsel's consent to the repayment proposal, arguing that Bar Counsel is estopped because it failed to object to or later revoke the conditional diversion agreement and later terminated the agreement as complete. Similarly, Ruddy excepts to the finding that, as a seasoned attorney, he should have recognized the conflict, explaining that Bar Counsel also failed to recognize the conflict, even after a lengthy conversation about the matter. We shall overrule these exceptions. We have consistently defined the doctrine of equitable estoppel as the effect of the voluntary conduct of a party whereby he is absolutely precluded both at law and in equity, from asserting rights which might perhaps have otherwise existed, either of property, of contract, or of remedy, as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse and who on his part acquires some corresponding right, either of property, of contract, or of remedy. Cunninghame v. Cunninghame, 364 Md. 266, 289, 772 A.2d 1188, 1201 (2001) (citation omitted). This doctrine is inapplicable to the present case. Lawyers admitted to practice in this State are deemed to know the Rules of Professional Conduct and have the obligation to act in conformity with those standards as a requirement to practice law. Attorney Grievance Comm'n v. Stein, 373 Md. 531, 542, 819 A.2d 372, 379 (2003). We have also held that an opinion of the Ethics Committee of the Bar Association is advisory, and is not binding on this Court, although [a]s a practical matter ... where an attorney can demonstrate reasonable reliance upon an ethics opinion on point, that fact is likely to have a significant effect on ... the determination or disposition of those charges that may be filed. Attorney Grievance Comm'n v. Gregory, 311 Md. 522, 531-32, 536 A.2d 646, 651 (1988). Bar Counsel's actions or statements not directly addressing the same matter are no more binding than Ethics Committee opinions. The October 2003 conversation in question occurred in the context of a Conditional Diversion Agreement that was signed in December 2001, [28] two years before Mary Fitzsimmons's death and Ruddy's subsequent appointment as personal representative, and resulted from complaints lodged in connection with the administration of the Hayes estate. The effect of a Conditional Diversion Agreement is to stay a disciplinary or remedial proceeding until satisfaction of the Agreement, at which point Bar Counsel terminates the disciplinary or remedial proceeding. See Md. Rule 16-736. Termination of the disciplinary or remedial proceeding, however, does not preclude further proceedings if the attorney later violates the Rules of Professional Conduct again. See Md. Rule 16-736. Bar Counsel's only duties regarding the Conditional Diversion Agreement were in the context of the Hayes estate, not the Fitzsimmons estate. As a result, Bar Counsel's alleged failure to raise the conflict issue when Ruddy appraised him of the proposed loan repayment procedure was not an endorsement of Ruddy's undertaking a separate representation containing the same conflict. Accordingly Bar Counsel is not estopped from subsequently raising the question of misconduct, given the purpose of attorney discipline proceedings. Ruddy's MRPC 1.7 exception is overruled in part and sustained in part.