Court Opinion

ID: 9702518
Source: CourtListenerOpinion
Date Created: 2023-08-25 23:15:12.879171+00
Date Added: 2024-06-11T18:21:38.307571
License: Public Domain

RUIZ, Associate Judge,
dissenting:
I respectfully dissent from the imposition of a thirty-day suspension in this case. Instead, I would adopt the recommendation of the Board on Professional Responsibility, to issue an informal admonition, as we are supposed to do except only in those cases where accepting the recommended disposition “would foster a tendency toward inconsistent dispositions for comparable conduct or would otherwise be unwarranted.” D.C. Bar R. XI, § 9(g)(1); In re Confidential, 670 A.2d 1343, 1346 (D.C.1996). We are to respect the Board’s sense of equity, “unless that exercise of judgment proves to be unreasonable.” In re Ryan, 670 A.2d 375, 380 (D.C.1996) (quoting In re Smith, 403 A.2d 296, 303 (D.C.1979)). The majority does not make the case that the Board’s recommended disposition is “unreasonable.” For the reasons stated below, I believe that the majority’s analysis does not support a conclusion that informal admonition would be inconsistent with sanctions for comparable conduct. Moreover, it is not the informal admonition but the thirty-day suspension that would be unwarranted, because it is unfairly harsh to respondent and is unnecessary to deter future violations and enhance public confidence in the Bar.
The majority’s recommended thirty-day suspension is a mitigated sanction which uses as its starting point the six-month suspensions that we have imposed for negligent misappropriation. According to the majority, negligent misappropriation is the correct *426theoretical framework to be applied here because the circumstances of this case present “a special form of misappropriation ease based on a lawyer’s good faith, negligent mistake of established law and on his good faith, negligent failure to address a controlling question of fact.” See ante at 421.1 According to the majority, Haar was negligent because he 1) mistakenly believed that he could withdraw from the client’s trust account fees to which he was legally entitled,2 and 2) failed to ascertain whether as a matter of fact the client disputed his entitlement to the withdrawn amount, regardless of the reasonableness of the dispute. The majority also points to Haar’s refusal to replace the $4000 he withdrew from the trust account once the client asked him to do so.
I agree with the majority’s reasoning that DR 9-103(A)(2) provides a special case within the strict rule against misappropriation of client funds contained in DR 9-103(A). Therefore, where there has been a negligent violation of DR 9-103(A)(2), cases sanctioning negligent misappropriation under DR 9-103(A) may be considered comparable for purposes of determining the appropriate sanction. I subscribe to that analysis for future cases involving violations of DR 9-103(A)(2). In the ease of Haar, however, where we for the first time established what constitutes a violation of DR 9-103(A)(2),3 it cannot be said that Haar’s actions constituted negligence. The majority treats the fact that Hour I presented a case of first impression as a “mitigating factor.” The effect of our ruling in Haar I is more fundamental than that, however, because it eliminates the basis for the majority’s conclusion that Haar acted negligently, thereby meriting suspension.
There is no dispute that Haar acted in good faith, consistently with a reasonable interpretation of DR 9-103(A)(2) held by the Board on Professional Responsibility until this court stated otherwise in Haar I. Nonetheless, the majority concludes that Haar acted pursuant to “a good faith, negligent mistake of law.” I do not see any negligence in Haar’s conduct. Not every mistake of law is necessarily negligent. For negligence to exist there must be a determination that holding the mistaken belief violates a standard of reasonable care. See Sinai v. Polinger Co., 498 A.2d 520, 529 (D.C.1985); Restatement (Seoond) of Torts, § 282 (1965) (“[Njegligence is conduct which falls below the standard established by law for the protection of others against unreasonable risk of harm.”). We know that the Board interpreted DR 9-103(A)(2) as permitting Haar’s conduct; there is no information about how other practitioners interpreted the Rule. Therefore, unless the majority believes that the Board also was negligent, not just mistaken, in arriving at an interpretation of the Rule that would have permitted Haar’s conduct, there is no basis in this record from which to conclude that Haar’s actions violated an established standard of care. Are a lawyer’s actions in the course of his or her practice to be held, as a matter of law, to the standard of what this court decides the Rules require after briefing and argument by the parties and conference among the judges? I would not think so. If it is not negligence for Haar to have believed he could withdraw the $4000 to which he correctly thought he was entitled — his asserted mistake of law — it also cannot be negligence to fail to take an action (verify his client’s consent) that Haar’s good faith belief did not require — his asserted mistake of fact. Therefore, Haar’s supposed “failure” to ascertain whether as a matter of fact his client disagreed — reasonably or not — with his withdrawal of $4000 from the trust account or to replace that amount once *427his client requested him to do so, also cannot be characterized as negligent.4
It is important to focus on what constitutes “negligent misappropriation.” The majority, citing from In re Evans, appears to define “negligent misappropriation” as a situation where the attorney has “an honest but mistaken belief’ that he or she may withdraw funds. 578 A.2d 1141, 1142 (D.C.1990) (per curiam). Under traditional concepts of negligence, an honest but mistaken belief does not constitute negligence, however, without a further showing that it was unreasonable to hold that belief. The language used by this court in negligent misappropriation cases suggests that traditional concepts of negligence apply to bar discipline cases. We have said that “[ijmproper intent is not an essential element of misappropriation,” and that, in eases where there has been commingling, “misappropriation ... is essentially a per se offense.” See, e.g., In re Pels, 653 A.2d 388, 394 (D.C.1995) (citations omitted). Those statements appear to mean that neither wrongful intent nor, indeed, intent of any kind, is required in order to establish a “negligent” violation of the Rule’s strict injunction against misappropriation. That is not to say, however, that everyone who acts with “an honest but mistaken belief’ will always be negligent.5 A per se rule of negligence is not the same as a rule of strict liability. A per se rule establishes that violation of a known standard will be conclusive proof of negligence as a matter of law. W. Page Keeton et al., Prosser and Keeton on the law of Torts, § 36, at 229-30 (5th ed.1984). Strict liability, on the other hand, means that conduct, usually involving vexy dangerous activities, is actionable regardless of the standard used to evaluate the actor’s conduct. Id. § 75 at 534-38. If conduct pursuant to “an honest but mistaken” belief is sufficient, without more, to make an attorney’s conduct actionable in the discipline system, we will have established a rule of strict liability that departs from our former negligent misappropriation cases.6
There can be no doubt that in defining misappropriation, we have strictly construed a lawyer’s duty to handle client funds only as authorized. Haar I continues to impose that strict construction in its interpretation of DR 9-103(A)(2). When it comes to sanction for misappropriation — the sole focus of this case — we have been similarly strict. We have not, however, previously gone as far as declaring a rule of strict liability regardless of the circumstances surrounding the misappropriation. Indeed, we have recognized levels of culpability leading to different sanctions. Intentional misappropriation-merits disbarment. In re Addams, 579 A.2d 190, 191 (D.C.1990) (en banc). Where misappropriation results from simple negligence, however, a six-month suspension has been the norm. See In re Ray, 675 A.2d 1381, 1388 (D.C.1996); In re Choroszej, 624 A.2d 434, 436 (D.C.1992) (per curiam). I submit that *428this ease does not meet the requirements for “simple negligence.”
The cases where the court has found “negligent” misappropriation were different from the present case in a significant respect: in those cases, respondent’s obligation was clear, yet respondent unintentionally or inadvertently failed to satisfy that duty.7 Thus, misappropriation is deemed a per se offense because an attorney is held to answer for “any unauthorized use of client’s funds entrusted to” an attorney. In re Harrison, supra note 7, 461 A.2d at 1036 (citation omitted). “Unauthorized use” in this context where there is no dispute that Haar was entitled to the funds can only mean lacking in legal authority under the Rules of Professional Responsibility. That is where this case is different; whether Haar’s withdrawal of $4000 was authorized under DR 9-103(A)(2) was a legal issue of first impression presented by this case. In Haar I we stated that, for purposes of DR 9-103(A)(2), a lawyer lacks authority so long as the client actually disputes the attorney’s entitlement to funds, without regard to the fact that the client may be wrong or acting unreasonably. This definition of what constitutes an “unauthorized” withdrawal in the context of DR 9-103(A)(2), amounting to misappropriation, however, was not known before Haar I.8 I submit that the cases where the court previously has found negligent misappropriation are different in kind from the case before us because here the respondent not only did not aet unintentionaUy or inadvertently in violation of the Rules, but acted consistently with a reasonable understanding of what the Rules permitted.
In my view, given Haar’s good faith actions consistent with a reasonable interpretation of DR 9-103(A)(2), all that can be said is that Haar acted in a way that violated the Rule, as subsequently determined in the course of Haar I. Haar’s actions, as later established in Haar I, constituted misappropriation; but he was not negligent in acting as he did, when he did because his actions did not breach an established standard. Cases involving negligent misappropriation are not comparable to this case, and there is no reason, therefore, to begin to consider the appropriate sanction from the six-month suspension benchmark established in cases involving instances of truly negligent misappropriation.
Moreover, any suspension is unwarranted in this case. Our discipline system is not punitive, but intended for the protection of clients, the profession and the public. In re Ryan, supra, 670 A.2d at 380. There is a very real difference in impact and perception between the informal admonition recommended by the Board and a suspension, even the one-month suspension imposed by the majority. The harshness of suspending Haar under these circumstances is not outweighed by any credible interest. Any interest that Haar’s client may have claimed in *429the disputed fee has been shown to have had no legal basis; in fact, the client owed much more than the disputed $4000 that Haar withdrew. Nor is there a larger public interest at stake. Once we have clarified the requirements of a Rule, as we did in Haar I, attorneys are well on notice of their obligations and must conform their conduct accordingly, on pain of sanction. Although we certainly wish to heighten lawyers’ sense of obligation to their clients in their judgments about what the Rules of Professional Conduct require, particularly when it comes to the subject of client funds, basic notions of fairness and notice should caution the court against suspending attorneys based on new, and, as in this case, perhaps unanticipated, legal interpretations. See In re Thorup, 432 A.2d 1221, 1225 (D.C.1981). As a result, I believe that the Board’s recommended informal admonition is the appropriate remedy in this ease.

.The majority's rationale differs from those of the Board and Bar Counsel. The Board considers that Haar’s actions are not analogous to misappropriation or commingling and were not dishonest. In In re Haar, 667 A.2d 1350 (D.C.1995) (Haar I), Bar Counsel originally argued, in support of a six-month suspension, that Haar’s misconduct was "akin to the intentional misappropriation of client funds.” In this second phase of the case, Bar Counsel now recommends a 90-day suspension because Haar’s actions although "not constituí[ing] a classic misappropriation of client funds,” is nonetheless "a serious ethical violation ... more egregious than ‘simple commingling.’ ”

. The majority concludes, and I agree, that Haar had a charging lien on the client’s trust account. See ante at 420.

. Haar I, supra note 1, 667 A.2d at 1353.

. Responding to this dissent, the majority states •that because Haar did not rely on a particular interpretation of DR 9-103 (A)(2), Haar’s mistake of law pertained to the law of accord and satisfaction, specifically, Haar’s understanding that because the client offered to settle for $4000, Haar was entitled to withdraw at least $4000. Ante at 421-22. Haar’s flawed understanding of the law of accord and satisfaction is not at issue here, however, as it cannot form the basis for the sanction being imposed in this discipline case for negligent misappropriation under DR 9-103(A)(2). It is against that rule that Haar’s conduct must be evaluated for negligence. The majority also states that there is "no sound reason why a mistake of law ... should generate less culpability than a mistake of fact....” Ante at 425 n. 13. I agree. However, where a Rule's requirement is uncertain, an attorney should not be culpable because he failed to ascertain facts that would have been required only if the legal standard had been clear.

. The majority apparently agrees with this view, because it argues that by failing to seek the advice of the District of Columbia Bar’s Legal Ethics Committee, Haar somehow was negligent. There is no basis in the record from which to infer, however, that the Legal Ethics Committee would have arrived at an interpretation different from that held by the Board.

. Although it does not employ the term "strict liability,” Bar Counsel’s brief quotes from the official comment to the Model Code of Professional Responsibility that "the attorney accepts the client's funds in trust and remains strictly accountable for his or her own conduct in administering that trust.” Annot. Model Code of Professional Responsibility 441-42 (1979 ed.). But cf. note 1, supra.

. Moreover, the attorneys in those cases where we have found negligent misappropriation had engaged in conduct that did not safeguard the attorney’s known obligations under the Rules of Professional Conduct. See In re Reed, 679 A.2d 506, 509 (D.C.1996) (per curiam) (respondent’s "accounting practices were practically non-existent and careless at best”); In re Pels, supra, 653 A.2d at 393-94 (commingling, failure to keep records, account for client funds and deliver client or third party funds); In re Powell, 646 A.2d 340, 343 (D.C.1994) (respondent’s conduct was determined to be "perilously close to gross negligence’’); In re Choroszej, supra, 624 A.2d at 437 (respondent was "insensitive to his fiduciary responsibilities” and engaged in "sloppy bookkeeping”); In re Cooper, 613 A.2d 938, 939 (D.C. 1992) (per curiam) (respondent’s "failure to understand the true state of his authority in [a] family dealing involved simple negligence or its equivalent”); In re Evans, supra, 578 A.2d at 1150 (respondent, who knew that he had to obtain his client’s consent, failed to effect a valid side agreement permitting him to take fee from estate funds); In re Hessler, 549 A.2d 700, 708 (D.C.1988) (commingling); In re Harrison, 461 A.2d 1034, 1036 (D.C.1983) (misappropriation not intentional, but rather "the result of [respondent's] failure to keep proper records”).

. In Haar I, the court stated that the Rule is "unambiguous,” supra note 1, 667 A.2d at 1353, but that "whether there was a dispute concerning [Haar’s] entitlement to the amount withdrawn is a close one." Id. at 1351. As mentioned above, although the court may have determined that the dictionary meaning of the word "dispute” was plain and meant a dispute in fact, even the Board did not so interpret the Rule. Therefore, for purposes of evaluating Haar's conduct in determining the appropriate sanction, it is fair to say that both the legal and factual issues were "close.”