Opinion ID: 1536896
Heading Depth: 2
Heading Rank: 2

Heading: The Misappropriation

Text: 4. Ms. Fisher-Hammond's case settled in or about April 1996. Pursuant to the settlement, the Maryland Automobile Insurance Fund (MAIF) issued a check (No. C25283) dated April 12, 1996 to Robin Hammond and John Anderson, Attorney in the amount of $14,338.37. Tr. 225, 313-315; BX 3, 7 at 2. 5. On or about April 19, 1996, Respondent deposited the MAIF check into an account denominated John Anderson & Associates and numbered XXXXXXXXXX at Signet Bank (now Wachovia Bank, Tr. 17, 20-21). Tr. 25, 27-28; BX 4 at l. Ms. Fisher-Hammond does not recall endorsing or even seeing the MAIF check. Tr. 53-54. But cf. Tr. 313-315 (Respondent's claim that he presented check to client for her co-endorsement). Respondent's bank account did not contain the words trust or escrow in its title. Tr. 22; BX 4-6. 6. On or about May 10, 1996, Respondent met Ms. Fisher-Hammond at her home and provided her with a check in the amount of $7,802.00 drawn on the John Anderson & Associates account at Signet Bank. Tr. 54-55, 226; BX 5 at 11, 11 A; BX 7 at 2. Respondent also presented and asked Ms. Fisher-Hammond to sign a disbursement sheet. Tr. 56, 224-225; BX 1. The disbursement sheet is undated and contains the following entries: SETTLEMENT STATEMENT Robin Hammond v. Anna Luckett Amount of Settlement ........................................................ $14,338.37 Rental Expenses Recovered (included in the above sum) ....................... $ 1,500.00 (No Atty Fee charged on this amount) Attorney Fee ................................................................ $ 4,279.00 (Atty Fee charged on $12,838.37 only) Misc. Expenses .............................................................. $ 100.00 (records fee to Hospital; phone calls to both insurance companies long dist.; pictures; postage; faxes; courier; trips to dealership) Dr. Launder ................................................................. $ 1,800.00 (reduced from $2,490.12 balance) P.G. Radiodiagnostic (reduced from $173.00) ................................. $ 133.00 P.G. Hospital ............................................................... $ 397.12 Capital Emergency Associates ................................................ $ 120.00 Total Medicals .............................................................. $ 2,450.12 PIP Benefits to A. Hammond .................................................. $ 292.75 Total to Ms. Hammond ........................................................ $ 7,802.00 Robin Hammond Ms. Robin Hammond Thank-you for using my office!! Tr. 56, 224-225; BX 1 (italicized text indicates Ms. Fisher-Hammond's signature). 7. Respondent indicated to Ms. Fisher-Hammond at the May 10 meeting that he would pay her medical providers using the $2,450.12 he had withheld from the settlement proceeds for that purpose. Tr. 58-60, 242; BX 1. The medical providers included Maryland Orthopedics, P.G. Radiodiagnostic, Capital Emergency Associates, and Laurel Regional Hospital (indicated on the disbursement sheet as P.G. Hospital). BX 1. As reflected on the disbursement sheet, Respondent represented that two of these providers, Maryland Orthopedics and P.G. Radiodiagnostic, had already agreed to reduce their bills. Tr. 57; BX 1. 8. As a consequence of her May 10, 1996 meeting with Respondent, Ms. Fisher-Hammond assumed that the medical providers would be paid with the withheld settlement proceeds and gave no further thought to their payment for some years thereafter. Tr. 59-61.
9. Respondent appears to have paid one of Ms. Fisher-Hammond's medical providers, Capital Emergency Services, albeit less than the invoiced amount. The Signet Bank account was debited on May 17, 1996 for check 1053 in the amount of $96.00. Tr. 31-32; BX 5 at 1. Although the microfiche copy of the check is largely illegible, the words CAPITAL EMERGENCY are clearly visible on the back side of the check. Tr. 31, 34-36, 228-229; BX 5 at 16a. A payment of $96.00 would reflect a 20% discount of the initial invoice amount of $120.00. Such a discount would be consistent with Respondent's practice of compromising or negotiating reductions of his clients' medical bills after settlement. We note in this regard that Respondent appears to have sought a 20% reduction of the Laurel Regional Hospital bill as well, though apparently without success. Tr. 302-303; BX 7 at 25, 83; RX 2. There is no documentation, however, establishing that Capital Emergency Associates actually agreed to the reduction as opposed to simply cashing the check and failing to pursue the balance on account of the small amount of money involved. It is also curious that the Capital Emergency Associates check was cashed on the same day as Ms. Fisher-Hammond's disbursement check, yet the 20% reduction is not reflected on the disbursement sheet Respondent provided to Ms. Fisher-Hammond with her check. 10. The May and June 1996 statements for the John Anderson & Associates account at Signet Bank do not reflect any payments to Maryland Orthopedics, Laurel Regional Hospital, or P.G. Radiodiagnostic. Tr. 31-32; BX 4-6. There is no evidence to corroborate Respondent's claim that he paid Maryland Orthopedics in 1996. Tr. 136-137. He has not remitted the amount of the reduction (presumably the $1,800.00 he withheld for this purpose minus $1,250.00, or $550.00) to Ms. Fisher-Hammond, although these funds belong to her. Tr. 77-78. Respondent was not able to produce any documentation of having paid Maryland Orthopedics prior to the February 14, 2006 settlement, of having paid the $397.00 invoice from Laurel Regional Hospital, or of having paid the $173.00 invoice from P.G. Radiodiagnostic. BX 7; see also BX 4-6.
11. Although the May and June Signet Bank account statements fail to show payments to three of the four medical providers, they clearly reflect the impermissible depletion of withheld settlement funds from the account. Checks 1061 and 1062 cleared on June 21, 1996, bringing the account balance to $670.20, well below the $2,330.12 (i.e., the $2,450.12 withheld minus the discharged $120.00 obligation to Capital Emergency Associates) Respondent was required to hold in trust to pay Ms. Fisher-Hammond's medical providers, plus the $24 he owed to Ms. Fisher-Hammond on account of the reduction of the Capital Emergency Associates payment. [4] Tr. 29-32; BX 6 at 1; But cf. Tr. 39-40 (evidence does not foreclose possibility that smaller invoices from P.G. Radiodiagnostic and Laurel Regional Hospital were paid after June 24, 1996 from remaining $670.20 of withheld settlement proceeds). 12. The disbursements leading to this shortfall were clearly for Respondent's own purposes rather than Ms. Fisher-Hammond's, with a number of checks made out to Cash or to third parties with no apparent relation to the case. BX 5, 6. By Respondent's own admission, the two checks (1061 and 1062) that immediately precipitated the shortfall pertain to another case. Tr. 239-242. Check 1061 is payable to an Antoine Thompson for Settlement in the amount of $900. BX 11-12. Check 1062 is made out to Cash in the amount of $1,600.00, with the notation Thompson-Reduced Fee in the Memo section. BX 6 at 13-14; see also Tr. 239-241 (Respondent's statement that $1,600.00 was fee relating to another case). 13. Ms. Fisher-Hammond had not authorized Respondent to use the funds for any purpose other than paying her medical providers. Tr. 59-61. [5] 14. Respondent concedes that these transactions resulted in a misappropriation of funds, Resp. Post-Hrg. Br. 7 (There is no dispute that Respondent misappropriated funds. . . .), and the Committee found and the Board affirms that Bar Counsel has established misappropriation by clear and convincing evidence. 15. In parts of his testimony, Respondent was adamant that he had actually paid Ms. Fisher-Hammond's medical providers. Tr. 238 (I remember writing these checks.), 239 (I wrote those checks. I know I wrote them.), 241 (At the time I wrote [the check that depleted the withheld funds], I had paid Ms. Hammond's providers.). In other parts of his testimony he appears to concede that that he might be mistaken in this regard or contends that clerical error may be at fault. Tr. 237-241, 281. He acknowledged that his bookkeeping practices were seriously inadequate, Tr. 242 (Well, I didn't really have a real bookkeeping system, because, one, I was really trying to do sports and entertainment.), and that he did not maintain any written record of his receipts and expenditures in respect of entrusted funds, Tr. 243 (So I was sort of more or less  I was tracking these in my head.). 16. The Committee found and the Board affirms that Respondent did not pay Maryland Orthopedics until his settlement of their invoice on February 14, 2006, two weeks prior to the evidentiary hearing in this matter, RX 4 at 2 (debt settled for $1,250.00, or roughly 50%), and has not paid Laurel Regional Hospital at all. [6] Respondent acknowledges that he failed to record any such payment, Tr. 282; could not identify the check number for any such payment, Tr. 281-283; could not produce a cancelled check reflecting such a payment, Tr. 281-283, 323-324, 338-340; and failed to maintain sufficient funds in the account to cover the payments if he had made them, Tr. 320-322. Although Respondent contends that the [Signet Bank] account was never in overdraft, Resp. Post-Hrg. Br. 13, it clearly would have been in overdraft if Respondent, having made the payments discussed above through checks 1061 and 1062, had also made the required payments to Ms. Fisher-Hammond's medical providers.
17. At the time Respondent failed to pay her medical bills, Ms. Fisher-Hammond's financial situation could only be described as precarious. A recently separated mother of two, she was working as a clerk in a warehouse packing shipments for $7 per hour to support herself and her children. Tr. 42-43, 66, 68. Respondent was well aware of Ms. Fisher-Hammond's very limited means, having been told by her that she could not afford to stay away from work for long despite her injuries (and having met with her after hours at her home for this reason), and having recently made submissions relating to lost wages on her behalf. Tr. 67-69; BX 7 at 5, 7. It was foreseeable that failing to meet these debt obligations would place Ms. Fisher-Hammond in a position of inability to pay her bills and thus damage her credit and subject her to pursuit by collections agencies. Tr. 66-68; see also Tr. 190-191 (Authorization and Assignment to Maryland Orthopedics leaves client on the hook in event of nonpayment). The Hearing Committee did not find Respondent's claim of unawareness of Ms. Fisher-Hammond's financial condition to be credible and specifically declined to credit that testimony. Tr. 311-312 (I would really not know anything about her personal finances.).