Opinion ID: 2068232
Heading Depth: 1
Heading Rank: 9

Heading: Johnson's MRPC 8.4 Exceptions

Text: Johnson takes exception to the hearing judge's finding that [t]he addendum contains the purported signatures of Mr. & Mrs. Barnes but was not signed by Ms. Thompson-Burnett. Neither Mr. nor Mrs. Barnes actually signed either the Sales Contract or the Sales Contract Addendum. The Sales Contract Addendum that was entered into evidence is blank under the purchaser section, confirming the hearing judge's finding that Thompson-Burnett did not sign the addendum. Regarding the Sales Contract Addendum, Mrs. Barnes testified as follows: [Bar Counsel]: [T]here's a document titled Sales Contract Addendum. Is that your signature on that document? [Mrs. Barnes]: No, that doesn't look like my signature either, and again, it doesn't look like my husband. Johnson's exception states: Complainant Mr. Barnes was present at the hearing and could have easily been asked by Petitioner whether or not he signed the contract. As far as Mrs. Barnes, she could not remember signing anything although we were sure that she signed various documents at closing. When asked by Petitioner, Now, before that date, had you signed any papers presented to you? She responded, Yes. Michal [Johnson, loan officer] came to my job. I was working for, I was a contractor for the U.S. Postal Service ... I signed something. Johnson's excerpt from this testimony is misleading. Mrs. Barnes's response in its entirety read as follows: Yes. Michal came to my job. I was working for, I was a contractor for the U.S. Postal Service. He said that if, it's going  he told us, told me that it would cost $18,000 to refinance. So, I asked him, I said, What if you don't  he said, We're going to refinance. If you don't refinance, then you don't have to pay the 18,000. So, he said, You and your husband have to sign this paper. I signed something. When I brought it home to my husband, he said no. He said, I'm not paying this guy $18,000 for refinance the house. So, he never signed any papers. Johnson also omits the following critical testimony elicited from Mrs. Barnes by Mr. Purcell on cross-examination regarding this document: [Purcell]: But ... before you went home to your husband, you agreed with Mr. Johnson that you would pay the 18,000? Was that your testimony? [Mrs. Barnes]: No, I didn't really agree with him. I told him I had to discuss this with my husband. [Purcell]: Was it your earlier testimony that you signed something, noting your agreement? [Mrs. Barnes]: Well, I signed, but he never got that piece of paper that I signed. The hearing judge heard this testimony from Mrs. Barnes and was in the best position to determine its veracity. We overrule this exception. Johnson takes exception to the hearing judge's finding that [t]he settlement was conducted by Respondent Will Purcell as Apple Title's designated `settlement agent,' with Respondent Renard Johnson also present at the settlement. This exception is another credibility contest between Johnson, who testified that he did not attend the settlement, and Mrs. Barnes, who testified that he did. Johnson attempts to discredit Mrs. Barnes's testimony by pointing to the fact that she could not remember the address of the subject property. Johnson also identified testimony from Mrs. Barnes in which she stated that Michal Johnson told her about the change in plans from a refinance to a sale while she apparently told the Bar Counsel's Investigator that it was Respondent Johnson who broke the news. We again defer to the hearing judge's ability to evaluate live testimony from witnesses. We overrule this exception. Johnson takes exception to the following finding regarding the Assignment of Funds document: That document ... authorized the assignment of `all proceeds or, in the alternative $18,000' of the sellers' proceeds at settlement to Michal Johnson. Such a payment was presumptively improper as an illegal kickback or finders fee in violation of the Real Estate Settlement Procedures Act (RESPA) and was not identified or itemized on Apple title's HUD-1 settlement sheet. Johnson argues: [N]either the Petitioner nor the Circuit Court presented authority or code citation under RESPA that [such a payment was presumptively improper]. Bar Counsel in its Petitions for Disciplinary or Remedial Action never alleged any violation of RESPA or any other code. The Circuit Court essentially used a brief mention of RESPA by Bar Counsel's expert witness to form a very reckless and damaging conclusion. The hearing judge concluded that the Assignment of Funds constituted a violation of RESPA based on the following testimony from Kochanski: I think there was testimony here today that Michal Johnson asked for an $18,000 finder's fee and required that of Ms. Barnes, in addition to being in the report. A finder's fee or a referral fee is something that is violative of Section 8(a) of RESPA, which provides that there shouldn't be any referral fees for the referral business.    [F]rom the report, it appeared to reference that there was an agreement that that $18,000 fee was going to be split with ... Thompson-Burnett, which, again, is a referral fee for her doing nothing; and it's also a violation, I believe, under 8(b), which prohibits splitting fees, other than ... for services actually performed[.] Kochanski, however, relied on the Investigative Report that was not entered into evidence at the hearing. Maryland Rule 5-703(a) provides, in relevant part The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence. (Emphasis added.) The hearing judge apparently relied on this Rule. [6] The Maryland Rules of Evidence permit expert witnesses to present testimony based on evidence that would be otherwise inadmissible. The problem is that the Investigative Report was not only the foundation for Kochanski's opinion that the Assignment of Funds violated RESPA, but also provided the only factual testimony regarding the existence of the fee-splitting agreement. There was nothing entered into evidence that described the fee splitting arrangement and neither Michal Johnson nor Thompson-Burnett testified. Furthermore, Kochanski testified that there were no documents indicating that Apple Title knew about a fee-splitting scenario prior to settlement or immediately following settlement. In Hartless v. State, 327 Md. 558, 580-81, 611 A.2d 581, 592 (1992), we held: The Court of Special Appeals correctly described as a circular or bootstrapping argument the defendant's attempt to create an entire scenario of what took place at the time of the murder by evidence not admissible for any reason other than to explain an [expert] opinion which was based upon that scenario. If the evidence is inadmissible for substantive purposes, it cannot be used to create the foundation of basic facts upon which the opinion necessarily turns. (Emphasis added.) We partially sustain this exception because we believe that the hearing judge committed error in mentioning a RESPA fee-splitting violation. We hold that this error was harmless, in an attorney discipline context, because the hearing judge did not say that Johnson or Purcell violated RESPA. The hearing judge made it clear that the MRPC 8.4 violation relevant to this exception occurred when the $18,000 was not identified or itemized on Apple title's HUD-1 settlement sheet. This assertion is adequately supported by the record.