Circuit Court for Montgomery County Case No. 26733-M
The opinion of the court was delivered by: Adkins, J.
Attorney Grievance Commission v. Donya Tarraine Zimmerman, Misc.
Docket AG No. 32, September Term, 2011
ATTORNEY DISCIPLINE--SANCTIONS--DISBARRMENT: Respondent Donya Tarraine Zimmerman misappropriated funds from her client trust account; failed to return a retainer to a client in timely fashion; and lied to her clients about the status of retainer funds that needed to be returned. In light of her misappropriation of client funds and dishonest words in an effort to conceal such misappropriation, the appropriate sanction in this case is disbarrment.
Bell, C.J., Harrell Battaglia Greene Adkins Barbera McDonald, JJ.
The Attorney Grievance Commission of Maryland ("AGC"), acting through Bar Counsel, filed a Petition for Disciplinary or Remedial Action ("Petition") against Respondent Donya Tarraine Zimmerman. Bar Counsel charged Zimmerman with violating several rules and statutes in her capacity as representative of Monique V. Shilling and Deedra L. Danner. Specifically, Bar Counsel alleged that Zimmerman violated Maryland Rules 16-604 (Trust Account -- Required Deposits)*fn1 and 16-609(a) (Prohibited Transactions);*fn2 Maryland Code (1989, 2010 Repl. Vol.), Section 10-306 of the Business Occupations and Professions Article (Misuse of Trust Money);*fn3 and the following Maryland Lawyers' Rules of Professional Conduct ("MLRPC"):*fn4 Rule 1.3 (Diligence);*fn5 Rule 1.4 (Communication);*fn6 Rule 1.15(a) and (c) (Safekeeping Property);*fn7 Rule 1.16(d) (Declining or Terminating Representation);*fn8 and Rule 8.4(b)-(d) (Misconduct).*fn9
Following a hearing in the Circuit Court for Montgomery County, Judge Louise G. Scrivener issued findings of fact and conclusions of law. With regard to Shilling's complaint, the hearing judge found that Zimmerman violated MLRPC Rules 1.15(a) and (c), 1.16(d), and 8.4(b)-(d), as well as Maryland Rule 16-609(a)-(c). With regard to Danner's complaint, the hearing judge found that Zimmerman violated MLRPC Rules 1.3, 1.4, 1.15 (a) and (c), 1.16(d), and 8.4 (b)-(d), as well as Maryland Rule 16-609 and Section 10-306 of the Business Occupations and Professions Article. Zimmerman appeared before this court on June 11, 2012, and we disbarred her in a per curiam order the next day. We now explain why.
The hearing judge outlined some background matters:
The Respondent, Donya Tarraine Zimmerman, was admitted to the Bar of the Court of Appeals of Maryland in December 2001. She is not admitted in any other jurisdiction. Since then, she has had a solo practice, primarily handling bankruptcy and family law matters. Her current office is located in Baltimore, but at the time of the matters involved in this Petition, Respondent's office was in Gaithersburg, Maryland.
The hearing judge made the following findings of fact respecting Shilling's complaint:
Respondent began representing Monique Shilling in 2007 or 2008, regarding a modification of child custody and child support. Ms. Shilling made a number of payments on her bill, the last one being in the amount of $3,000.00, paid on or about May 28, 2010. A portion of that payment was an advance payment of costs and expenses. In July 2010, Ms. Shilling terminated Respondent's services and requested a refund of the unearned portion of the retainer. Respondent determined that the unearned amount was $805.00. Respondent returned those funds to Ms. Shilling by a money order on November 15, 2010.
During the period of time Respondent represented Ms.
Shilling, Respondent only had one escrow account, which was at M&T Bank. Accordingly, Respondent should have been holding at least $805.00 in her escrow account after she received the payment at the end of May 2010 until she refunded that amount in November. Yet, the balance held in her escrow account as of June 1, 2010 was $17.17. Respondent's client ledger for Ms. Shilling shows that check no. 1162, dated June 5, 2010, in the amount of $500.00, was credited against Ms. Shilling's retainer. The payment is described as "IRS payment" on the client ledger. Respondent testified that this check to the United States Treasury was a payment of Respondent's own business tax obligation.
Respondent testified in her deposition that the portion of the payment received from Ms. Shilling on May 28 that reflected advance payment of fees was $1,500.00. She deposited that amount in her escrow account on June 8, 2010. Assuming that those funds were the Shilling retainer, the balance in the escrow account dropped to $427.07 on June 14. By the end of June, the balance was $2.07. Respondent failed to maintain the unearned portion of Ms. Shilling's retainer in her escrow account.
Respondent made a number of promises and representations to Ms. Shilling regarding the return of her retainer in e-mail correspondence in the summer and autumn of 2010. On August 5, she promised to mail the balance of the retainer by the end of the following week. On August 23, she promised, "I will put the check in the mail tomorrow with your last billing." On September 3, 2010, Respondent claimed, "I sent it in the mail by certified mail." In her deposition, Respondent acknowledged that the mailing of the money order in November was her first attempt to refund the retainer to Ms. Shilling.
With respect to Danner's complaint, the hearing judge found:
Respondent began representing Deedra Danner in July 2010. On July 22, 2010, Ms. Danner signed a retainer agreement and gave Respondent a check in the amount of $2,000.00 as a retainer. Approximately a week later Ms. Danner reconciled with her husband. On July 29, she left Respondent a voice mail message, notifying her that her services would no longer be needed. Respondent returned her call the following day and suggested that she hold the retainer for a month in case Ms. Danner changed her mind. After a month, Ms. Danner received an invoice indicating that $1,610.00 would be returned, but no check was enclosed. In late October, Ms. Danner contacted Respondent's office and made an appointment for November 11, 2010 to pick up the check and her client file. That appointment was ultimately canceled due to Respondent's representation that she had hurt her back. Respondent did not forward the check or the file to Ms. Danner. Ms. Danner attempted to recover her retainer by enlisting the efforts of the Fee Dispute Resolution Committee of the Bar Association for Montgomery County. On December 9, 2010, Respondent sent an e-mail to Karen Robbins of the Fee Dispute Resolution Committee, stating that she had sent the payment by money order and would have to have the money order replaced. She claimed that she had sent the money order about two weeks earlier. In her deposition, Respondent could not provide any details regarding the alleged Western Union money order or her attempts to have the money order reissued. As of the hearing on February 13, 2012, Ms. Danner had never received the $1,610.00 balance of her retainer.
The hearing judge made these findings with respect to Respondent's use of her escrow account:
Ms. Danner testified that the Respondent cashed the retainer check at Ms. Danner's bank, Chevy Chase Bank. The reverse side of the retainer check corroborates that Respondent endorsed the check and presented her driver's license as identification to cash the check at the drawer's bank, rather than to deposit the check in her escrow account. The check was cashed on June 22, 2010. Respondent deposited $2,600.00 in her escrow account on July 25, 2010. There is no notation of the source of funds for that deposit to indicate whether those funds pertain to Ms. Danner. Assuming those funds represent, in part, Ms. Danner's retainer, the remaining $600.00 from that deposit was disbursed from the account on July 23, 2010, by check no. 1168 for $600.00, which was paid to Respondent's secretary, Althea Burnett for "pay for week of 7/23/10". The balance in the escrow account before the June 26 deposit was $47.07. Accordingly, any additional disbursements from the escrow account in excess of $47.07 were from Ms. Danner's retainer. Check no. 1169, dated July 27, 2010, in the amount of $150.00, was for "svcs rendered in Danner case". Check no. 1171, dated July 30, 2010, in the amount of $300.00, was also for services in the Danner case. Respondent took a total of $450.00 in fees from Ms. Danner although her invoice indicates the total fee to which she was entitled was only $390.00. By August 6, the balance in Respondent's escrow account was $87.17. Disbursements using Ms. Shilling's funds included payment of Respondent's malpractice insurance premium (check no. 1172 to AFCO, dated August 2, 2010, for $85.10), $250.00 for dues to the Bar Association of Montgomery County (check no. 1173, dated August 2, 2010, and check no. 1174 dated August 2, 2010), and checks to herself (check no. 1175, dated August 2, 2010 and check no. 1176, dated August 4, 2010).
Respondent acknowledges having four overdrafts on her escrow account during September and October 2010. It should be noted that Respondent should have been holding $805.00 for Ms. Shilling and $1,610.00 for Ms. Danner in her escrow account at that time. Respondent's escrow account had a negative balance on four occasions in September and October 2010. Her escrow account balance was below the total of $2,215.00 that belonged to Ms. Shilling and Ms. Danner at all times after July 26, 2010 through October 8, 2010, except for August 9. In her response to Bar Counsel regarding the overdrafts, Respondent explained that she failed to wait for deposited items to clear before she drew on those funds. No evidence on this point was presented.
A review of the checks drawn on Respondent's escrow account shows that she regularly paid her business expenses out of this account. As noted above, Respondent paid her federal taxes with an escrow account check, using funds that belonged to Ms. Shilling. She drew 14 checks on her escrow account to pay her secretary, Althea Burnett from June through September 2010. She also paid bar association dues and malpractice insurance premiums from the escrow account.
On November 5, 2010, Respondent drew a check for "cash" in the amount of $1,100.00 from her escrow account.
Based on the findings of fact, the hearing judge made the following conclusions of law with respect to Shilling's complaint:
Rule 1.15(a) requires that a lawyer hold property of clients separate from the lawyer's own property and those funds be kept in an attorney escrow account. The records of Respondent's bank account show that Respondent did not deposit the check she received from Ms. Shilling on May 28, 2010 in her escrow account. It appears that the unearned portion of that payment, in the amount of $1,500.00, was deposited in Respondent's escrow account June 8, 2010. From May 28 until June 8, 2010, Respondent failed to hold Ms. Shilling's funds in her escrow account. Respondent violated Rule 1.15(a) by her failure to hold Ms. Shilling's funds in her escrow account during that period of time.
Rule 1.15(c) requires that a lawyer deposit advance payments of legal fees and expenses in an escrow account and prohibits the lawyer from withdrawing the funds for her own benefit until earned, absent the client's informed consent confirmed in writing. At all times after June 8, Respondent should have held at least $805.00 in her escrow account on behalf of Ms. Shilling until she returned those funds to the client in November 2010. In fact, Respondent's balance in her escrow account was $2.07 as of the end of June 2010. Respondent drew check no. 1162 on her escrow account to pay her federal tax obligation pertaining to her business. That check was identified on the client ledger for Ms. Shilling as coming from Ms. Shilling's funds. When the check to the IRS was posted to Respondent's escrow account on June 14, 2010, the balance remaining in the account was $427.07, substantially less than the amount still belonging to Ms. Shilling. By withdrawing funds belonging to Ms. Shilling for Respondent's own benefit when those funds had not been earned, Respondent violated Rule 1.15(c) of the [MLRPC].
Rule 1.16(d) of the [MLRPC] requires a lawyer, upon termination of representation, to [take] steps to the extent reasonably practicable to protect a client's interest, including refunding any advance payment of fee or expense that has not been earned or incurred. Ms. Shilling terminated Respondent's services in July 2010. Despite several promises around
September to return the unearned balance, Respondent did not do so until November. Respondent's delay of four months in refunding the balance was unreasonable, particularly in light of the fact that she failed to maintain those funds in her escrow account. The delay in refunding the unearned portion of the payment to Ms. Shilling was a violation of Rule 1.16(d) of the [MLRPC].
Respondent's use of the unearned portion of Ms. Shilling's retainer for her own use, including the payment of taxes to the IRS, was a willful misuse of client funds. The willful misuse of client funds is a violation of section 10-306 of the Business Occupations and Professions Article, Annotated Code of Maryland. Respondent's blatant misappropriation of Ms. Shilling's money was a criminal act adversely reflecting on her honesty and trustworthiness in violation of Rule 8.4(b) of the [MLRPC, p]articularly in light of Respondent's false promises to mail the check to Ms. Shilling in August 2010 and her later false claim that she had mailed the check. Respondent's conduct of misappropriation and misrepresentation to the client violated Rule 8.4(c), conduct involving dishonesty, fraud, deceit or misrepresentation; as well as Rule 8.4(d), conduct prejudicial to the administration of justice.
Based on the findings of fact, the hearing judge made the following conclusions of law about Respondent's use of her escrow account:
Respondent received funds from Monique Shilling and Deedra Danner which were advance payment of fees. Respondent did not deposit the checks in her escrow account. She deposited funds in her escrow account after cashing the checks. At times when the escrow account should have been holding at least $2,215.00 for these two clients, Respondent transferred funds to her checking account, drew checks to herself, paid her secretary her salary on numerous occasions, and paid business expenses related to her law practice, including bar association dues, malpractice insurance premiums, and taxes.
Respondent violated Rule 1.15(a) of the [MLRPC] by not depositing her clients' checks directly in the escrow account. She violated Rule 1.15(c) by disbursing funds from her escrow account to pay her business expenses, thereby invading the funds she should have been holding for these clients. Her willful and deliberate use of client funds to pay her own expenses was a misappropriation and misuse of trust funds in violation of section 10-306 of the Business Occupations and Professions Article, as well as criminal conduct in violation of Rule 8.4(b) of the [MLRPC]. Respondent's misuse of client money was dishonest conduct and was prejudicial to the administration of justice in violation of Rules 8.4(c) ...