Attorney Grievance Comm'n of Md. v. Steinhorn
Attorney Grievance Comm'n of Md. v. Steinhorn
Opinion
Barbera, C.J.
**189 *824 On June 26, 2017, the Attorney Grievance Commission of Maryland ("Petitioner"), acting through Bar Counsel, filed in this Court a Petition for Disciplinary or Remedial Action ("Petition") against Neil Warren Steinhorn ("Respondent"). The Petition alleged, among other things, 1 violations of the Maryland Lawyers' Rules of Professional Conduct ("MLRPC") 3.3 (Candor Toward the Tribunal) and 8.4 (Misconduct). 2 Those charges arise from misleading complaints **190 Respondent filed with the District Court of Maryland sitting in Baltimore County while representing the Council of Unit Owners of Kingswood Commons, Inc. ("Kingswood"), a homeowners' association, in several debt collection cases. Specifically, Respondent inflated the damages sought on the complaint form by thirty percent without separately indicating, as the form requires, that this increase constituted his attorney's fees.
Pursuant to Maryland Rules 19-722(a) and 19-727, this Court designated the Honorable Keith R. Truffer ("hearing judge") of the Circuit Court for Baltimore County to conduct an evidentiary hearing and make findings of fact and conclusions of law. The hearing was held on March 13, 2018. Respondent testified and presented evidence on his behalf. On April 27, 2018, the hearing judge issued written findings of fact and conclusions of law, concluding that Respondent did not commit any violations of the MLRPC.
Bar Counsel, on behalf of Petitioner, took no issue with the hearing judge's findings of fact but filed exceptions to each conclusion of law. Petitioner asserts that Respondent violated MLRPC 3.3(a)(1) and 8.4 because he provided the District Court with false information, misled the District Court with that information, and engaged in disreputable conduct. Petitioner also excepts to the hearing judge's finding of certain mitigating factors and asks us to consider other aggravating factors in addition to the ones the hearing judge found. Respondent counters that although he made a mistake, he did not violate any of the MLRPC.
On October 9, 2018, this Court heard oral argument in this matter. Petitioner asks us to disbar or, in the alternative, suspend Respondent. Respondent requests that we affirm the hearing judge's legal conclusions and dismiss this action. For **191 the following reasons, we agree with Petitioner that Respondent violated MLRPC 3.3 and 8.4 and, consequently, suspend Respondent from practicing law indefinitely with the right to apply for reinstatement no sooner than six months after the suspension takes effect.
I.
A. The Hearing Judge's Findings of Fact
1. Background
Respondent was admitted to the Maryland Bar in 1974. In 1979, after a five-year
*825
stint as an Assistant State's Attorney, Respondent transitioned to private practice. On June 4, 1990, Respondent was convicted of money laundering and transporting stolen goods,
United States v. Steinhorn
,
In October 2007, this Court granted Respondent's Petition for Reinstatement to the Maryland Bar.
In re Reinstatement of Steinhorn
,
2. Respondent's Court Filings
As part of his work for Kingswood, Respondent filed two form complaints-entitled DC-CV-001, Complaint/Application **192 and Affidavit in Support of Judgment-with the District Court of Maryland sitting in Baltimore County in 2014. The first complaint, filed on January 14, 2014, sought to recover $9,120 in delinquent condominium fees from Aileen Pratt, a condominium unit owner. The second complaint, filed on April 2, 2014, also sought to collect $9,120 in outstanding condominium fees from Jason Green, another condominium unit owner. Respondent submitted affidavits in support of those claims, which were signed by Marc Greenberg ("Greenberg"), an agent of Kingswood. Greenberg relied on Respondent's representations about the accuracy of those filings.
The $9,120 figure listed on both complaints represented unpaid condominium fees for a four-year period (2011-2014) plus Respondent's thirty-percent attorney's fee. 4 In other words, of the $9,120 sought in the complaints, $6,912 was for the outstanding HOA fees and $2,208 was for attorney's fees. 5 Respondent conjoined the unpaid assessments ($6,912) with the agreed-upon attorney's fees ($2,208) in each complaint filed with the court, listing one figure ($9,120) in the damages line, leaving the line designated for attorney's fees blank (see image below).
**193 *826 3. The Complaint to the Attorney Grievance Commission
In 2016, Kingswood terminated Respondent's representation and replaced him with Brian Fellner, Esq. ("Fellner"). Fellner discovered that Respondent did not timely remit several payments he collected for Kingswood. Fellner then filed a complaint with Petitioner, alleging that Respondent's delay was unwarranted. Bar Counsel investigated and determined that Respondent was also inflating the amount of damages sought in his court filings, and that he failed to rectify the issue once it was called to his attention. Petitioner concluded that such conduct violated MLRPC 3.3 and 8.4, among other charged violations. 6
4. Respondent's Testimony
During the hearing on his conduct, Respondent "candidly admitted" that he made a mistake, and he "denied any intent to deceive the court." He testified that he only sought to collect that which was rightfully owed to him based on his fee agreement with Kingswood.
The hearing judge found, as a matter of fact, that Respondent's testimony was credible and that Respondent never intended to make a false statement to the District Court. The hearing judge was persuaded by the fact that Respondent did not personally benefit from his conduct. The judge was also swayed by Respondent's sincere remorse and his implementation **194 of new office procedures to prevent those issues from reoccurring.
B. The Hearing Judge's Conclusions of Law
Based on the record and the above-summarized findings of fact, the hearing judge concluded that Petitioner failed to demonstrate, by clear and convincing evidence, that Respondent violated MLRPC 3.3(a)(1) and 8.4 (a), (c), and (d). As noted at the outset, Petitioner has filed exceptions to the hearing judge's conclusions of law.
II.
Standard of Review
"In attorney discipline proceedings, this Court has original and complete jurisdiction and conducts an independent review of the record."
Attorney Grievance Comm'n v. Good
,
*827
Attorney Grievance Comm'n v. Reno
,
III.
The Rule Violations
Based upon our independent review of the record, we disagree with the hearing judge's legal conclusions and hold that Respondent violated MLRPC 3.3(a)(1) and 8.4(a), (c), and (d).
**195 MLRPC 3.3, Candor Toward the Tribunal 7
MLRPC 3.3(a)(1) provides, in pertinent part, that a lawyer shall not "knowingly ... make a false statement of fact ... to a tribunal." This duty is premised on the idea that "[e]very court has the right to rely upon an attorney to assist it in ascertaining the truth of the case before it."
Attorney Grievance Comm'n v. Smith
,
Petitioner excepts to the hearing judge's conclusion that Respondent did not violate MLRPC 3.3(a)(1). Petitioner contends that the hearing judge applied an erroneous legal standard in concluding that Respondent's filings were not "knowingly false" because he had "no intent to deceive anyone" and no "party suffered any harm." Respondent counters that he made an honest mistake, but the factual findings of the hearing judge compel the legal conclusion that he did not violate MLRPC 3.3(a)(1). We agree with Petitioner and therefore sustain its exception.
As an initial matter, we reject Respondent's assertion that we are compelled to uphold the hearing judge's legal conclusions because we have accepted his factual findings as established. According to Respondent, the only legal conclusion that can be reached from the hearing judge's "exculpatory" factual findings is that Respondent did not violate MLRPC 3.3. Respondent is mistaken. His assertion runs counter to the **196 well-established standard of review in attorney grievance proceedings.
As part of our independent review of the record, we are free to reach different legal conclusions than those of the hearing judge, even if we accept the judge's factual findings.
See
Attorney Grievance Comm'n v. Patterson
,
We need not look any further than Respondent's testimony to reach this conclusion. Respondent testified that he reviewed each complaint to ensure its accuracy before filing it with the court. He further testified that he " knew what the attorney's fees were," that he " knew what the division was going to be subsequent to the payment of the judgment" ($6,912 for the debt and $2,208 for attorney's fees), and that those figures **197 "should have been separated." 9 (Emphasis added). Yet, despite this knowledge, Respondent did not separate those figures on the complaint forms he filed with the District Court, and he did not file corrected forms thereafter, even after this issue was called to his attention. It follows that Respondent knowingly submitted false information to the court-that the underlying debt was $9,120, when, in fact, it was only $6,912-which he failed ever to correct. Consequently, clear and convincing evidence demonstrates that Respondent violated MLRPC 3.3(a)(1).
That the hearing judge found as a fact that Respondent did not intend to deceive the court, did not harm anyone, and did not benefit from this practice-findings that Bar Counsel has not excepted to and we thus adopt-is immaterial to our analysis. What matters for purposes of finding an MLRPC 3.3(a)(1) violation is whether an attorney knows that the information he or she presents to the tribunal is incorrect.
Ward
,
**198 *829 MLRPC 8.4, Misconduct 12
1. MLRPC 8.4(c)
MLRPC 8.4(c) states that "[i]t is professional misconduct for a lawyer to ... engage in conduct involving dishonesty, fraud, deceit or misrepresentation." This rule is grounded in the idea that "[h]onesty is of paramount importance in the practice of law."
Attorney Grievance Comm'n v. Agbaje
,
Petitioner excepts to the hearing judge's conclusion that Respondent did not violate MLRPC 8.4(c). Petitioner asserts that the hearing judge erred in concluding that Respondent did not violate MLRPC 8.4(c) because his pleadings "never ... disrupt[ed] ... any court proceeding" and "no judge ... ever objected" to his filings. Respondent again counters that the hearing judge's finding that Respondent committed a genuine error but did not intend to deceive anyone necessarily means that he did not violate MLRPC 8.4(c). We again agree with Petitioner and therefore sustain its exception.
There is significant overlap between MLRPC 3.3(a)(1) and 8.4(c).
Dore
,
**199
8.4(c) as well."
We nevertheless address the significance of Respondent's misrepresentations independent of his lack of candor towards the tribunal because there are instances where an attorney may engage in misleading conduct, in violation of MLRPC 8.4(c), that is not necessarily dishonest conduct, in violation of 3.3(a)(1).
13
See
*830
Attorney Grievance Comm'n v. Nwadike
,
We have long held that concealment of material facts constitutes an MLRPC 8.4(c) violation.
See
Attorney Grievance Comm'n v. Barton
,
2. MLRPC 8.4(d)
In light of the above, we have no difficulty sustaining Petitioner's final exception, and therefore conclude that Respondent also violated MLRPC 8.4(d). MLRPC 8.4(d) provides that "[i]t is professional misconduct for a lawyer to ... engage in conduct that is prejudicial to the administration of justice." Prejudice to the administration of justice may "be measured by the practical implications the attorney's conduct has on the day-to-day operation of our court system."
Dore
,
Here, Respondent failed to inform the court that he was collecting attorney's fees.
14
Through his omissions, Respondent deprived the court of the ability to evaluate the reasonableness of his fees, an essential judicial oversight function.
See
Cohn v. Bd. of Prof'l Responsibility
,
Respondent stresses that no District Court judge ever objected to his filings. Respondent is correct that, technically speaking, no objections were ever made, but that is not because the District Court judges approved of or overlooked Respondent's conduct; on the contrary, it is because those judges were unaware of what was occurring since Respondent's complaints, on their face, concealed the material fact that he was collecting attorney's fees. Respondent's conduct thus engendered disrespect for the court, constituting further
**202
evidence of his misconduct.
See
Attorney Grievance Comm'n v. Brigerman
,
3. MLRPC 8.4(a)
MLRPC 8.4(a) provides, in relevant part, that "[i]t is professional misconduct for a lawyer to ... violate ... the Maryland Lawyers' Rules of Professional Conduct." Put simply, when an attorney violates any of the MLRPC, that attorney also violates MLRPC 8.4(a).
Framm
,
IV.
Aggravating and Mitigating Factors
Having determined that Respondent committed misconduct, we next address the presence of any mitigating or aggravating factors. A weighing of "the attorney's misconduct against any existing mitigating and aggravating factors" is essential to determining the proper sanction.
Framm
,
**203 1. Aggravating Factors
The hearing judge found several aggravating factors: Respondent's prior disciplinary record, his extensive experience practicing law, and his use of the improper
*832
filing method in more than one case.
16
Respondent takes no issue with those findings, presumably because he believes he did not violate the MLRPC. Petitioner asks us to find the presence of additional aggravating factors, including a dishonest motive, a pattern of misconduct, and a refusal by Respondent to acknowledge the wrongful nature of his conduct.
See
Attorney Grievance Comm'n v. Sperling
,
Petitioner has failed to satisfy its burden of proof regarding the existence of additional aggravating factors. We defer to the hearing judge's credibility finding that Respondent had no intent to deceive,
Attorney Grievance Comm'n v. Tanko
,
**204
Attorney Grievance Comm'n v. Sperling
,
2. Mitigating Factors
The hearing judge also found several mitigating factors: Respondent did not profit from his conduct, no client suffered any harm, no court proceeding was ever disrupted, Respondent acted timely to cure his wrongs, and Respondent implemented new office procedures to prevent future problems. Petitioner, citing
Attorney Grievance Comm'n v. Shuler
,
V.
The Sanction
Finally, we turn to the appropriate sanction for Respondent's misconduct. Because "the purpose of attorney discipline is to protect the public, not punish the attorney[,]"
Attorney Grievance Comm'n v. Mixter
,
We have imposed a range of sanctions for dishonest and deceitful conduct, from reprimand to disbarment, with a suspension (be it definite or indefinite) falling somewhere between the two.
See
Myers
, 333 Md. at 449-50,
**206
Attorney Grievance Comm'n v. Litman
,
Here, neither disbarment nor a reprimand is suitable. On the one hand, Respondent did not exhibit a specific intent to deceive. He knowingly submitted inaccurate
*834
information to the court, but he did not purposefully do so for personal gain, and no client or the court suffered any palpable harm, rendering disbarment unsuitable.
See
Tanko
,
Respondent's conduct here is akin to
Poverman
and
Robaton.
Although Respondent may not have acted with a selfish motive or harmed any client, neither negates the fact that he
**208
knowingly submitted false information to the court, which any reasonable attorney with his extensive experience handling debt collection matters would have known to avoid.
See
Attorney Grievance Comm'n v. Hodes
,
IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY THE CLERK OF THIS COURT, INCLUDING COSTS OF ALL TRANSCRIPTS, PURSUANT TO MARYLAND RULE 19-709(d), FOR WHICH SUM
**209 JUDGMENT IS ENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMMISSION AGAINST NEIL WARREN STEINHORN.
Adkins, J., now retired, participated in the hearing and conference of this case while an active member of this Court; after being recalled pursuant to the MD. Constitution, Article IV, Section 3A, she also participated in the decision and adoption of this opinion.
The Petition initially alleged that Respondent also violated MLRPC 1.5 (Fees), 1.15 (Safekeeping Property), and 1.16 (Declining or Terminating Representation), but Petitioner dropped these charges after the hearing.
On July 1, 2016, the Maryland Lawyers' Rules of Professional Conduct were renamed the Maryland Attorneys' Rules of Professional Conduct and were recodified, without substantive changes, to Title 19 of the Maryland Rules. Because we judge Respondent's conduct based on the extant rules at the time of his actions, we refer to the MLRPC throughout this decision.
Attorney Grievance Comm'n v. Butler
,
Respondent's convictions were affirmed in an unpublished decision,
see
United States v. Steinhorn
,
The math indicates that Respondent's fees were closer to thirty-two percent of the total amount recovered, not the thirty percent he indicated in his testimony.
The hearing judge's findings note that Respondent "determined the monthly amounts due from the debtor to be $144 and that his agreed attorney's fee was $46, calculated at 30% of the amount recovered. Each of the complaints filed on behalf of Kingswood failed to state these damage amounts separately, instead claiming an aggregate of $190 per month in damages." The figures discussed above illustrate the aggregate of these monthly assessments over the four-year delinquency period to demonstrate how the $9,120 figure was calculated.
See supra note 1.
MLRPC 3.3 is now codified at Maryland Rule 19-303.3.
MLRPC 1.15(b), now codified at Maryland Rule 19-301.15, provided, at the time of the
Taylor
decision, that "[a] lawyer may deposit the lawyer's own funds in a client trust account for the sole purpose of paying bank service charges on that account, but only in an amount necessary for the purpose."
Taylor
,
The instructions for the District Court complaint form specify that attorneys "need to indicate ... whether [they] are claiming 'attorney's fees.' " Eliot M. Wagonheim, District Court of Maryland, Small Claims: How to File a Small Claim in the District Court of Maryland 12 (2016), https://perma.cc/CZN2-RQD9 . Any reasonable attorney with over a decade of experience filing small claims with the District Court would know that attorney's fees must be listed separately from the principal damages sought.
The record indicates that Respondent's work force is small, consisting primarily of family members, including his two sons, his wife, and a part-time secretary. It is unclear whether any of these individuals are attorneys, but Respondent's testimony makes clear that he is responsible for approving all legal filings.
It is insignificant that Respondent has now implemented new office procedures designed to prevent this issue from arising again because, by his own admission, he never corrected either of the inaccurate complaints previously filed with the court, despite the continuing obligation to do so.
See
Joseph
,
MLRPC 8.4 is now codified at Maryland Rule 19-308.4.
The MLRPC inherently envisions a difference between dishonesty and misrepresentation, as MLRPC 8.4(c), for example, lists the two as separate ways to commit misconduct. Here, Respondent committed an affirmative dishonest act by listing $9,120 as the total debt owed, when he knew only $6,912 was due as debt, which violated MLRPC 3.3(a)(1) and 8.4(c); however, he also misled the court through silence, rather than an affirmative falsity, by not indicating his intention to collect attorney's fees, which constitutes a distinct violation of MLRPC 8.4(c). It is true that "[t]here are circumstances where failure to make a disclosure" can violate MLRPC 3.3(a)(1), cmt. 3 to MLRPC 3.3, but those tend to involve situations where an attorney makes intentional misrepresentations to the court to achieve a specific outcome.
See, e.g.
,
Framm
,
Notably, none of the filings that Respondent submitted to the court (e.g., the complaints, statements of fees due, and requests for garnishment on wages) as part of his debt collection work for Kingswood included any information about Respondent's intentions to collect attorney's fees.
Maryland Rule 3-306(c)(4)(C), for example, requires a plaintiff's attorney seeking attorney's fees to demonstrate entitlement to and the reasonableness of those fees. Similarly, Maryland Rule 3-741(d)(2) requires an attorney to provide evidence supporting the right to any fees sought in judgment on affidavit proceedings. These rules are designed to assist the court in assessing the reasonableness of attorney's fees given the risk for abuse.
We note that because the hearing judge concluded that Respondent did not commit any MLRPC violations, "it was not necessary for the hearing judge to make findings of fact relevant to aggravating factors."
Attorney Grievance Comm'n v. Dyer
,
Petitioner argues that Respondent engaged in a pattern of misconduct; yet, Petitioner only submitted two problematic filings into the record. Thus, any reference to other potential improper filings are "not a part of the record before [us]," and therefore, "we will not address such matters."
Attorney Grievance Comm'n v. Vanderlinde
,
During his testimony, Respondent expressed regret for the erroneous filings, stating, "I'm just totally ashamed that I'm here for myself and my family. ... I should not have agreed that [the fees] be presented to the court that way.... I [made] a mistake."
In
Shuler
, we provided a list of fourteen mitigating factors. 443 Md. at 507,
We have imposed indefinite suspensions upon other attorneys who knowingly misrepresented material facts.
E.g.
,
Litman
, 440 Md. at 221,
Although we have imposed a ninety-day suspension on other attorneys who submitted similar false filings with the court, none of those attorneys had a prior discipline record.
See
Dore
,
Reference
- Full Case Name
- ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Neil Warren STEINHORN
- Cited By
- 16 cases
- Status
- Published