Circuit Court for Prince George’s County Case No. CAE 11-05720
Barbera, C.J., Harrell, Battaglia, Greene, Adkins, McDonald, Watts, JJ.
Foremost among matters, this case concerns a Maryland lawyer who promised to file a complaint on a client's behalf, learned that the court had rejected the complaint for filing, and then repeatedly deceived her client as to the status of the litigation while demanding additional retainer payments.
Michelle Hamilton Davy ("Davy"), Respondent, a member of the Bar of Maryland, represented three clients in two unrelated matters. Linda Smalls ("Smalls") retained Davy to institute an employment discrimination action against her former employer. Bobby McAdams ("McAdams"), a jeweler doing business as "Watch Tune Up, Inc." ("Watch Tune Up"), retained Davy to represent him and his business as both filed for bankruptcy. Both Smalls and McAdams filed complaints against Davy with the Attorney Grievance Commission of Maryland ("the Commission"), Petitioner.
On February 22, 2011, in this Court, the Commission filed a "Petition for Disciplinary or Remedial Action" against Davy, charging her with violating the following Maryland Lawyers' Rules of Professional Conduct ("MLRPC"): 1.1 (Competence), 1.2 (Scope of Representation and Allocation of Authority Between Client and Lawyer), 1.3 (Diligence), 1.4 (Communication), 1.5 (Fees), 1.15 (Safekeeping Property), 1.16 (Declining or Terminating Representation), and 8.4 (Misconduct). On February 28, 2011, this Court referred the case to the Honorable Beverly J. Woodard ("the hearing judge") of the Circuit Court for Prince George's County ("the circuit court"). On May 8 and 9, 2012, the hearing judge conducted a hearing. On December 21, 2012, the hearing judge filed, in this Court, an opinion including findings of fact and concluding that, in her representation of Smalls, McAdams, and Watch Tune Up, Davy had violated MLRPC 1.1, 1.2(a), 1.3, 1.4, 1.5(a), 1.5 (b), 1.15(c), 1.16(d), 8.4(c), and 8.4(d).
On September 4, 2013, we heard oral argument. On September 5, 2013, in a per curiam order, we disbarred Davy. See Attorney Grievance Comm'n v. Davy, __ Md. __, __ A.3d __, Misc. Docket AG No. 2, Sept. Term, 2011, 2013 WL 4764081, at *1 (Md. Sept. 5, 2013). We now explain the reasons for Davy's disbarment.
I. Hearing Judge's Findings of Fact
In a comprehensive forty-five page opinion, the hearing judge found the following facts, which we summarize.
On June 5, 1996, this Court admitted Davy to the Bar of Maryland. On September 8, 2003, with her consent, this Court indefinitely suspended Davy from the Bar of Maryland. See Attorney Grievance Comm'n v. Hamilton, 377 Md. 54, 832 A.2d 170 (2003). In Hamilton, id., 832 A.2d 170, this Court permitted Davy to apply for reinstatement after one year, and ordered that, before applying for reinstatement, Davy both "refund all fees paid to her by [seven] individuals" and "obtain a physical/psychological evaluation demonstrating her fitness to practice law[.]" On December 7, 2004, this Court reinstated Davy to the Bar of Maryland. See In re Petition for Reinstatement of Hamilton, 384 Md. 156, 862 A.2d 992 (2004).
In May 2008, Davy became a solo practitioner. At the time of her alleged misconduct, Davy's office was in Prince George's County, Maryland.
A. Davy's Representation of Smalls
From 2002 through 2007, Smalls worked as a civil servant in the Office of the Administration of the Executive Office of the President. In 2007, Smalls's employment with the office ended. As a result, Smalls filed multiple complaints with the Equal Employment Opportunity Commission, which issued Smalls a "right to sue" letter that imposed a deadline of November 6, 2009, for the lawsuit.
On or about October 20, 2009, Smalls contacted Davy through Davy's website. On or about October 23, 2009, Davy telephoned and spoke with Smalls, who sought legal advice about the termination of her employment. Smalls told Davy that a lawsuit would need to be filed no later than November 6, 2009. Davy told Smalls that she would represent her for a charge of $200 per hour, and that she would need a retainer of between $2, 500 and $3, 000.
On October 26, 2009, Smalls brought a check in the amount of $3, 000 to Davy's office. At that time, Davy told Smalls that she wanted an additional $2, 000. Smalls gave Davy the check for $3, 000 and agreed to allow $2, 000 to be charged to her credit card. Although Davy knew that she had not yet earned $5, 000, she never deposited any of Smalls's payments into a client trust account. Before the hearing judge, Davy stated that she did not deposit Smalls's payments into a client trust account because, at the time that she began representing Smalls, she had been corresponding with the Commission, pursuant to a conditional diversion agreement, about a prior complaint concerning the written retainer agreement format that she had been using.
After receiving Smalls's check and credit card information, Davy told Smalls that she wanted a $20, 000 retainer. Smalls requested a payment plan. Davy agreed to let Smalls use a payment plan, but did not tell Smalls when she would have to make payments. Davy did not tell Smalls: (1) how she would use the $5, 000 in payments; (2) how much she would charge in total for the representation; or (3) anything about a client trust account. Davy and Smalls agreed to meet again on November 4, 2009, by which date Davy promised to have a complaint ready.
On November 4, 2009, Davy and Smalls met. Davy did not have the complaint or the written retainer agreement. During the meeting, Davy said something to the effect of: "Mamma's got to eat, so you're  going to have to pay this kind of money." Smalls became emotional and started to leave the room, but Davy stopped her and promised that the complaint would be ready within a couple of hours.
Two days later, on November 6, 2009, at 2:53 a.m., Davy e-mailed Smalls a copy of the complaint. At 9:25 a.m., Smalls e-mailed Davy, stating that the complaint was acceptable. At 9:11 p.m., Davy left the complaint in the box for after-hours filings at the United States District Court for the District of Columbia ("the federal court").
On November 9, 2009, Davy met with Smalls and gave her a written retainer agreement, under which Davy was entitled to a $5, 000 retainer, a $250 "nonrefundable consultation fee, " and a $500 "nonrefundable engagement fee." Before then, Davy had not told Smalls about either of the nonrefundable fees. The written retainer agreement did not: (1) state that its terms were retroactive; (2) refer to the $5, 000 that Smalls had already paid; (3) include details of a payment plan; or (4) state that the retainer would be $20, 000. The hearing judge found that, in the written retainer agreement with Smalls, Davy intentionally failed to state that the retainer would be $20, 000 because the $20, 000 retainer might have discouraged Smalls from hiring Davy. Although the written retainer agreement stated that the retainer would not be deposited into a client trust account, Davy never pointed out the provision or orally informed Smalls about client trust accounts.
On November 9, 2009, Smalls paid Davy another $5, 000. Davy gave Smalls a receipt that reflected a $350 filing fee. Smalls asked Davy for the case number, which Davy promised to provide; Davy, however, made no effort to learn the case number.
On November 13, 2009, the federal court mailed Davy the check for the $350 filing fee, along with an explanation that the federal court had rejected the complaint for filing, as Davy had failed to renew her membership in the federal court's bar and to include a civil cover sheet, summons, and disc with the complaint. On November 18, 2009, the United States Postal Service forwarded the mailing to Davy's address at the time, as Davy no longer lived at the address to which the federal court had sent the mailing.
On November 23, 2009, Davy e-mailed Smalls, stating that "we have been working on billing statements[, ]" which she would provide "momentarily, " and asking when Smalls would replenish her account. Smalls e-mailed Davy, stating that she would make another payment by November 29, 2009, and asking whether a summons had been served in the case. Before the hearing judge, Davy stated that Smalls did not deserve a prompt answer to her question about the summons because Smalls had not made additional payments.
On November 24, 2009, Davy telephoned the federal court and spoke with three people about the rejection of the complaint. As of that day, if not before, Davy knew that the federal court had rejected the complaint for filing and not issued a summons. Nonetheless, on that day, Davy e-mailed Smalls, stating: "[W]e will check with the process servers and follow up on their progress and give you a report." On November 25, 2009, Davy e-mailed Smalls, stating she had followed up with the process server, but that "we have not yet been able to serve the complaint quite yet because the court still has to issue the summons[.] It normally takes several days for the summons to be issued; I also contacted the court to follow up and we will keep you apprised on the progress." In her e-mail, Davy did not mention that the federal court had rejected the complaint for filing; instead, Davy wrote that "the complaint was filed on time[.]" The hearing judge found that Davy intentionally failed to inform Smalls about the federal court's rejection of the complaint for filing because Davy wanted "to mislead Smalls as to the quality of her representation."
On November 30, 2009, after having been explicitly advised, several days earlier, of the complaint's rejection, Davy e-mailed Smalls, stating that, if Smalls wanted the representation to continue, she would need to provide a check or her credit card information.
On December 1, 2009, Davy e-mailed Smalls, stating that she had filed the complaint and Smalls had yet to pay the $350 filing fee–even though Smalls had paid the $350 filing fee according to the receipt that Davy had given Smalls on November 9, 2009. On December 2, 2009, Davy e-mailed Smalls a request to replenish the retainer and a billing statement, according to which $350 in costs "had been received." Ironically, the billing statement included a charge for Davy's telephone call to the federal court on November 24, 2009–the call during which she had been advised of the complaint's rejection. Davy also charged fees for such administrative acts as preparing billing statements, even though Davy never explained the administrative fees to Smalls, who never consented to the administrative fees.
On December 2 or 3, 2009, Smalls visited the federal court, and was told that there was no case pending in her name. On December 3, 2009, Smalls e-mailed Davy, stating that she did not believe that Davy had filed the complaint on November 6, 2009, that Davy had breached their contract, and that, if Davy did not refund the $10, 000 that she had paid by December 7, 2009, she would take "appropriate action."
On December 4, 2009, Davy e-mailed Smalls, stating that: (1) she had followed up on Smalls's claims and discovered a "technical error"; (2) she would correct the filing problem at no charge; (3) the federal court had "advised [Davy] that [Smalls's] case [would] be perfected as of the date filed"; and (4) she would refund the unearned portion of the retainer as soon as possible.
On the same day, Davy filed in the federal court a "Motion for Appropriate Relief Nunc Pro Tunc, " in which Davy requested that the federal court "relieve [Smalls] of the impact of the honest technical mistakes of [Davy], and deem the complaint . . . filed nunc pro tunc as of the original filing date, November 6, 2009." The hearing judge found that Davy filed the motion for financial reasons–i.e., so that Davy could continue to demand payments from Smalls.
On December 15, 2009, Davy e-mailed Smalls, stating: "I still want to do the case if you want me to, so let me know if you are ready to replenish your account and have us proceed, or not." On December 21, 2009, Davy e-mailed Smalls, stating that, if Smalls wanted the lawsuit to continue, she would need to "comply with the retainer agreement or hire another attorney at once." On that day, Smalls e-mailed Davy, stating that she still wanted a refund of the $10, 000 that she had paid, and that she intended to file a complaint against Davy. On December 22, 2009, Davy e-mailed Smalls, stating that, because Smalls no longer wanted the representation to continue, she would withdraw her appearance and do nothing further on Smalls's behalf.
On January 6, 2010, Smalls filed a complaint against Davy with the Commission. On or about January 30, 2010, Smalls's credit card company refunded the $2, 000 that Smalls had charged to her credit card. On March 18, 2010, the Commission's Bar Counsel's investigator interviewed Davy. On the same day, Davy moved to withdraw her appearance in Smalls's case, and on March 19, 2010, the federal court granted the motion to withdraw. On August 17, 2010, the federal court granted the "Motion for Appropriate Relief Nunc Pro Tunc." On December 29, 2010, Davy refunded the remaining $8, 000 to Smalls. The hearing judge found that, because Davy did not refund $8, 000 to Smalls until December 29, 2010–after Smalls had filed a complaint against Davy with the Commission and approximately one year after she had promised to make the refund–Davy had not been honest in her December 4, 2009, promise to give Smalls a refund.
Smalls ended up representing herself in her case. On January 14, 2012, the federal court dismissed Smalls's case because of substantive defects in the complaint drafted by Davy. Specifically, the federal court determined that it lacked subject-matter jurisdiction over all of the claims asserted by Davy on Smalls's behalf. Smalls v. Emanuel, 840 F.Supp.2d 23, 26 (D.D.C. 2012). Before the hearing judge, Davy stated that it was Smalls's fault that the federal court dismissed Smalls's case. According to Davy, Smalls should have amended the complaint.
B. Davy's Representation of McAdams and Watch Tune Up
In 2009, McAdams was a jeweler doing business as Watch Tune Up. In the District Court of Maryland, sitting in Prince George's County, Watch Tune Up was sued to recover unpaid rent. Davy met with McAdams to discuss legal matters related to McAdams's and Watch Tune Up's financial difficulties. On February 16, 2009, Davy and McAdams entered into a written "Client Retainer Agreement, " under which: (1) Davy would represent McAdams in "filing bankruptcy" (the written retainer agreement did not state whether Davy would handle McAdams's bankruptcy, Watch Tune Up's bankruptcy, or both); (2) Davy would receive $220 per hour; and (3) McAdams would pay Davy $1, 500 as a "non-refundable engagement fee[, ]" which McAdams paid Davy on or about that day. On March 9, 2009, McAdams paid Davy $3, 000.
On May 7, 2009, McAdams asked Davy for a billing statement. On or about May 11, 2009, Davy and McAdams entered into a second "Client Retainer Agreement, " under which: (1) Davy would represent McAdams in "business bankruptcy and business dissolution" (the written retainer agreement did not delineate the amount to be charged for either service); (2) Davy would receive $220 per hour; and (3) McAdams would pay Davy $7, 000 as a "non-refundable engagement fee." The second written retainer agreement did not refer to the $3, 000 that McAdams had already paid. Neither the first nor second written retainer agreement mentioned a client trust account, and Davy never orally informed McAdams about client trust accounts or non-refundable engagement fees. On May 11, 2009, McAdams paid Davy another $3, 000,
On June 10, 2009, on behalf of Watch Tune Up, Davy filed a "Voluntary Petition for Bankruptcy Protection under Chapter 7." On June 11, 2009, the bankruptcy court issued a deficiency notice because Davy had not filed certain documents. The bankruptcy court set a deadline of June 25, 2009, to provide the missing documents. On June 25, 2009, Davy filed a "Motion to Enlarge the Time" until July 10, 2009; the bankruptcy court granted the motion. Davy, however, did not provide the missing documents until July 11 and 13, 2009. The documents included a schedule stating that Watch Tune Up owned a condominium. Davy had not researched land records and thus, although she identified Watch Tune Up as the condiminium's owner, as she later acknowledged, she was unsure whether McAdams or Watch Tune Up actually owned the condominium. The schedule listed the condominium's value as $30, 000; however, there was no equity in the condominium, and Davy never had the condominium appraised.
On July 13, 2009, the bankruptcy court issued a second deficiency notice because the documents that Davy had filed were unsigned. The bankruptcy court set a deadline of July 25, 2009, to provide the signed documents. On July 28, 2009, Davy filed another "Motion to Enlarge Time." On July 29, 2009, the bankruptcy court issued yet another deficiency notice, which stated that the proposed order submitted with the "Motion to Enlarge Time" was not properly formatted.
On July 29, 2009, for the first time, Davy gave McAdams a billing statement. Davy charged fees for administrative acts such as preparing billing statements, even though she had not explained the administrative fees to McAdams, who never consented to the fees.
On August 27, 2009, Davy corrected Watch Tune Up's bankruptcy filings. On October 8, 2009–while Watch Tune Up's bankruptcy was ongoing–Davy e-mailed McAdams, stating that she was withdrawing from the representation, and that she would refund $2, 000 and return the file to McAdams.
On December 15, 2009, McAdams filed a complaint against Davy with the Commission. On March 18, 2010, the Commission's Bar Counsel's investigator interviewed Davy. On the same day, Davy refunded $2, 000 and returned the file to McAdams, and notified the bankruptcy court that she no longer represented McAdams. Davy never: (1) provided a final, accurate accounting for the $7, 500 that McAdams had paid; (2) completed Watch Tune Up's dissolution or bankruptcy (which closed on September 2, 2010); (3) completed the filing process for McAdams's new business; or (4) filed for bankruptcy on McAdams's behalf.
II. Standard of Review
In an attorney discipline proceeding, this Court reviews for clear error the hearing judge's findings of fact, and reviews de novo the hearing judge's conclusions of law. See Md. R. 16-759(b)(1) ("The Court of Appeals shall review de novo the circuit court judge's conclusions of law."); Md. R. 16-759(b)(2)(B) ("The Court shall give due regard to the opportunity of the hearing judge to assess the credibility of witnesses."); see also Attorney Grievance Comm'n v. Fader, 431 Md. 395, 426-27, 66 A.3d 18, 36-37 (2013).
The Commission filed no exceptions to the hearing judge's findings of fact and conclusions of law.
Davy filed a seventy-seven page document in this Court entitled "Exceptions, Recommendations, Renewed Motion to Dismiss and Request for Oral Argument." In the document, Davy incorporated a "Motion to Dismiss, " which is a fifty-five page document that she filed in the circuit court in June 2012–i.e., after the hearing in the circuit court, but before the hearing judge issued her opinion.
As a threshold matter, we decline to consider the "Motion to Dismiss." Because Davy filed the "Motion to Dismiss" before the hearing judge issued her opinion, the "Motion to Dismiss" does not address the hearing judge's findings of fact and conclusions of law, and thus is of no help to us in attempting to divine any issue that Davy takes to the hearing judge's findings of fact and conclusions of law. Thus, we consider only Davy's exceptions.
Unfortunately, Davy's exceptions are of little help to us in discerning the issues she raises as to the hearing judge's findings of fact and conclusions of law. Davy's exceptions include sixty pages of tables that contain one row taking issue with nearly every sentence of the hearing judge's opinion. Each row contains one or both of two apparently copied-and-pasted paragraphs in which Davy generally denies the accompanying sentence's contents as follows:
In its Petition for Disciplinary or Remedial Action, Petitioner alleged that Respondent violated Maryland Lawyers’ Rule [sic] of Professional Conduct, hereafter “MRPC, ” [sic] 1.1, 1.2, 1.3, 1.4, 1.5(a) and (b), 1.15(c), 1.16(d), 8.4(c) and (d).
This finding of fact or conclusion of law is [the Commission]’s misleading or untrue statement of evidence not plead and at issue or not proven at trial per the Rules. [Davy] incorporates by reference facts in her 6.29.12 Motion that were proven.
This conclusion of law is [the Commission]’s misstatement or reflects its omission of applicable precedent. [Davy] incorporates by reference herein legal standards in her 6.29.12 Motion which are complete and accurate.
Inexplicably, Davy even generally denies the findings of fact that are seemingly indisputable, such as the finding that in 2009, McAdams was a jeweler doing business as Watch Tune Up. Simply put, Davy fails to explain how the hearing judge’s findings of fact are clearly erroneous; in no instance does Davy demonstrate that anything in the - 15 - record contradicts any of the hearing judge’s findings of fact.  In an attorney discipline proceeding, if no exceptions are filed, this Court “treat[s] the findings of fact as established for the purpose of determining appropriate sanctions, if any.” Md. R. 16-759(b)(2)(A). Here, unable to discern any meaningful challenge to the hearing judge’s findings of fact, we overrule the exceptions and conclude that the hearing judge’s findings of fact are established by clear and convincing evidence. See Md. R. 16-759(b)(2)(B).
Davy's exceptions are even less clear concerning any issue she raises as to the hearing judge's conclusions of law. Nonetheless, below, we review the hearing judge's conclusions of law, and, to the extent that Davy takes exception to the hearing judge's conclusions of law, we overrule the exceptions.
B. Contentions that Davy Raises
Before we review the hearing judge's conclusions of law, we address–and specifically reject–seven contentions, not directly challenging the hearing judge's findings of fact and conclusions of law, that Davy raised at oral argument and/or in her exceptions.
First, we reject Davy's contention that the hearing judge erred in not mentioning in her opinion purported evidence of mitigating factors. We do recommend that, in an opinion in an attorney discipline proceeding, a hearing judge discuss–and either credit or discredit–all purported evidence of mitigating factors. Indeed, in his or her opinion, the hearing judge must mention purported evidence of mitigating factors where the hearing judge credits such evidence. See Attorney Grievance Comm'n v. Vanderlinde, 364 Md. 376, 384, 773 A.2d 463, 467 (2001) (In an attorney discipline proceeding, the hearing judge "must make findings in regards to facts that [he or she] believes mitigate in respect to the [lawyer's] conduct[.]"). However, "[a]bsent indications that" the hearing judge did not consider purported evidence of mitigating factors, where a hearing judge omits the purported evidence of mitigating factors from his or her opinion, ...