Opinion ID: 2320656
Heading Depth: 1
Heading Rank: 6

Heading: The Court's Decisions in In re Anderson and In re Fair

Text: In Anderson, 778 A.2d at 330, the Court confirmed that Bar Counsel bears the burden of proving not only the elements of misappropriation but also the level of culpability necessary to invoke the presumption of disbarment set out in Addams, 579 A.2d at 190. [4] Relying on earlier decisions, the Court identified the characteristics of misappropriation that would be considered more than simple negligence: The hallmarks of such misconduct revealed by our cases include: the indiscriminate commingling of entrusted and personal funds; a complete failure to track settlement proceeds; total disregard of the status of accounts into which entrusted funds were placed, resulting in a repeated overdraft condition; the indiscriminate movement of monies between accounts; and the disregarded of inquiries concerning the status of funds. All of these actions reveal an intent by the attorney `to deal with and use funds escrowed for clients as his own,' or an unacceptable disregard to the security of client funds.    These and other decisions demonstrate that the central issue in determining whether a misappropriation is reckless is how the attorney handles entrusted funds, whether in a way that suggests the unauthorized use was inadvertent or the result of simple negligence, or in a way that reveals either an intent to treat the funds as the attorney's own or a conscious indifference to the consequences of his behavior for the security of the funds. Id. at 338, 339 (internal citations omitted). In Anderson, the Court also discussed its prior decision in In re Thompson, 579 A.2d 218 (D.C.1990), where it considered the impact of a respondent's explanation ofor failure to explainhis or her use of client funds. The Court in Anderson, quoting Thompson, stated: `[T]he Board may weigh, together with all of the other evidence, an attorney's explanation foror conversely inability to explain satisfactorilythe use of a client's funds in deciding whether Bar Counsel has met its burden of proving dishonest misappropriation by clear and convincing evidence.' Anderson, 778 A.2d at 336-37 (internal citation omitted). Again, quoting Thompson, the Court stated: `Bar Counsel may properly offer the inadequacy (or non-existence) of the attorney's explanation for the use of client funds as one significantand even decisivefactor in proving dishonest misappropriation', but it [the Thompson Court] limited the significance of that explanation `to circumstantial evidence which the Board may consider, along with all the other evidence, in determining whether Bar Counsel has proven dishonesty by clear and convincing evidence.' Id. at 337 (internal citations omitted). In Fair, 780 A.2d at 1106, the other recent decision to which the Court directed the Board in its remand order, the respondent was personal representative and attorney for an estate. She made partial payments to herself of fees from estate assets totaling $6,600 without prior court approval, which was required at that time. Once court approval was obtained, she overpaid herself by almost $600. The Court concluded that in this rather peculiar case, Bar Counsel had not established by clear and convincing evidence that the payments constituted intentional and/or reckless misappropriations such as to fall within the disbarment rule of Addams. As to taking the fee without prior authorization, the Court noted that, less than a year after respondent had paid herself the unauthorized fee, the legislature eliminated the need for prior court approval. Id. at 1111. Further, the Court relied on evidence in the record that at the time of respondent's actions, there was an actual probate practice of payment of fees without prior approval. Id. In these circumstances, the Court found that Bar Counsel had not established the type of intentional or reckless misconduct . . . that clearly brings respondent within the Addams disbarment rule. Id. at 1113. As to the second instance of misappropriationthe overpayment by $600the Court ruled that the Board had erred in concluding that the record showed the overpayment to have been reckless. The Court was concerned about the thinness of the record with respect to respondent's record-keeping practices and the relationship between record-keeping or lack thereof and the overpayment. Id. The Court found that the evidence did not meet the standard of recklessness as articulated in Anderson. [5]