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Attorney Grievance Com'n of Maryland v. Worthy

Court of Appeals of Maryland

January 30, 2014

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
Michael Ron WORTHY.

Page 114

James P. Botluk, Assistant Bar Counsel (Glenn M. Grossman, Bar Counsel, Attorney Grievance Commission of Maryland), for Petitioner.

William C. Brennan, Esquire (Greenbelt, MD), for Respondent.

Argued before BARBERA, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, McDONALD and WATTS, JJ.

BATTAGLIA, J.

[436 Md. 635] Michael Ron Worthy, Respondent, was admitted to the Bar of this Court on December 19, 1996. On March 14, 2012, the Attorney Grievance Commission, acting through Bar Counsel (" Bar Counsel" ), pursuant to Maryland Rule 16-751(a),[1] filed a " Petition For Disciplinary or Remedial Action" (" Petition" ) against Worthy, charging various violations of the Maryland Lawyers' Rules of Professional Conduct, to include Rule 8.4(b), (c) and (d) (Misconduct).[2]

The factual bases of these charges arose out of Worthy's failure to file federal personal income tax returns for 2006 and 2007. Bar Counsel alleged that Worthy " willfully failed to file federal income tax returns for the years 2006 and 2007, resulting in a tax loss of at least $70,000." The Petition also alleged that Worthy " pleaded guilty to two counts of failure to file tax returns in the [U.S.] District Court of Maryland" [3] and [436 Md. 636] at the time of the Petition filing, Worthy was " scheduled to

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be sentenced on those charges on March 22, 2012." In an Order dated March 13, 2012, we referred the matter to Judge Graydon S. McKee, III, of the Circuit Court for Prince George's County for a hearing, pursuant to Rule 16-757.[4]

[436 Md. 637] On March 22, 2012, Judge Roger W. Titus of the United States District Court for the District of Maryland sentenced Worthy to six months' incarceration followed by one year of supervised release. Worthy reported to serve his sentence in May of 2012.

After his release in October of 2012, Worthy was served with process in this case in January of 2013. He then filed a Response to the Petition for Disciplinary or Remedial Action, admitting that he had been convicted of two counts of willful failure to file but denying that he had violated any Rule of Professional Conduct. At the subsequent hearing, Bar Counsel and Worthy submitted a Joint Statement of Stipulated Facts and four Joint Exhibits. [5] Worthy requested and garnered [436 Md. 638] the opportunity to provide mitigation through

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his own testimony, as well as in letters from four judges in which they favorably addressed Worthy's character, after they had been duly served with subpoenas.[6]

Judge McKee issued written Findings of Fact and Conclusions of Law in which he determined that Worthy violated Rules 8.4(b) and (d), but did not violate Rule 8.4(c):

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The Attorney Grievance Commission of Maryland filed a Petition for Disciplinary or Remedial Action against the Respondent, Michael Ron Worthy, Esquire, in the Court of Appeals of Maryland on March 5, 2012, alleging that he committed professional misconduct by willfully failing to file his federal income tax returns for two years (2006 and 2007). The Court of Appeals assigned this matter to this Court on March 13, 2012, to conduct a trial of this matter. Respondent was served with process in January 2013, and filed an Answer on or about February 6, 2013.
The Court conducted the trial on March 11 and April 12, 2013. At the March 11 hearing, the parties submitted an [436 Md. 639] agreed statement of facts and several exhibits. Respondent testified at the April 12 hearing and submitted several letters from judges regarding his character.

FINDINGS OF FACT

The Court finds that the following facts have been proven by clear and convincing evidence:
Michael Ron Worthy was admitted to the Bar of the Court of Appeals of Maryland on December 19, 1996. After his admission to the Bar, he worked as an Assistant State's Attorney in Prince George's County before establishing a law firm (Williams Worthy, LLP) in 2000. By 2006, Mr. Worthy also operated a real estate office (Esquire One) and managed several rental properties. During this time period, the law firm of Williams Worthy had approximately 14 employees while the real estate firm of Esquire One had a similar number of real estate agents. The law firm, the real estate company and the rental properties all had numerous and separate business records and bank accounts. Mr. Worthy was not very familiar with all of the accounting procedures that

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were necessary to run a real estate brokerage business and a law firm. His law partner, in fact, managed the books and records of the law firm.
Mr. Worthy did not timely file federal tax returns for the years of 2006 and 2007. During the period of time when those returns were due, Mr. Worthy had lost some of his financial records and had to order additional bank records. Those records were insufficient to adequately prepare the returns. Mr. Worthy worked with his personal CPA to accurately prepare his tax returns. However, the tax returns were not timely filed. Mr. Worthy understood his legal obligation to file returns or obtain an extension of time. He did not file an extension request for either year. Mr. Worthy did not attempt to evade responsibility for his conduct. Mr. Worthy testified that, " It was totally my responsibility to understand what the tax laws are. I am a lawyer."
[436 Md. 640] The United States Attorney brought criminal charges against Mr. Worthy. On July 7, 2010, Mr. Worthy pleaded guilty in the United States District Court for the District of Maryland in Criminal No. RWT-10-253 to two counts of willful failure to file federal tax returns in violation of 26 U.S.C. ยง 7203. On March 22, 2012, Mr. Worthy was sentenced to six months incarceration and served his sentence from May through October of 2012. During his period of incarceration, Mr. Worthy did not engage in the practice of law.
In his plea agreement, Mr. Worthy acknowledged that he owed at least $70,000 in federal taxes for those two years. Mr. Worthy was not charged with tax fraud or tax evasion, and there is no allegation that he committed those offenses. Mr. Worthy is working with the Internal Revenue Service to arrange a payment plan.
In addition, Mr. Worthy has taken steps to ensure that his books and records are properly maintained and that his taxes are timely filed. He has taken courses involving taxation, hired a full-time accounting person for his office and meets once a month with his outside accountant. He no longer runs a real estate brokerage firm and has lost all of his investment properties. Mr. Worthy now just practices law in a sole practice firm.
Four Judges of the Seventh Judicial Circuit of Maryland submitted letters regarding Mr. Worthy's character. The Honorable Hassan A. El-Amin described Mr. Worthy as having been " an up-front, no nonsense prosecutor" who always kept his word. When Mr. Worthy later appeared before Judge El-Amin when in private practice, his clients were always well-represented. Mr. Worthy was particularly knowledgeable about Fourth Amendment issues. Judge El-Amin also noted that Mr. Worthy had excelled at training young attorneys and that he was very supportive of the J. Franklyn Bourne Bar Association. He opined that Mr. Worthy " is a man of good— and in some respects— outstanding, character." The Honorable Melanie Shaw Geter has known Mr. Worthy approximately twenty years. She [436 Md. 641] notes that Mr. Worthy was always honest with the court in his interactions and that she did not believe he is a deceitful person. The Honorable C. Philip Nichols, Jr. expressed a high regard for Mr. Worthy and noted that he never had an occasion to question his professional judgment in court. The Honorable Michele D. Hotten has known Mr. Worthy for fifteen years. She wrote that Mr. Worthy " never displayed any traits of dishonesty or deceit" when appearing before her. She described

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Mr. Worthy as " an intelligent, zealous, resourceful, hard-working attorney" .

CONCLUSIONS OF LAW

The Petition for Disciplinary or Remedial Action alleges that Mr. Worthy violated Rules 8.4(b), (c) and (d) of the Maryland Rules of Professional Conduct.
Rule 8.4(b) states that it is professional misconduct for a lawyer to " commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness or fitness as a lawyer in other respects" . Mr. Worthy's conviction for two counts of failing to file tax returns establishes that he committed criminal acts. The Maryland Court of Appeals has held on many occasions that the willful failure to file tax returns is conduct which violates Rule 8.4(b).
Rule 8.4(c) states that it is professional misconduct for a lawyer to " engage in conduct involving dishonesty, fraud, deceit or misrepresentation" . Although the Respondent willfully failed to file his tax returns for two years, there is not clear and convincing evidence showing that he did so dishonestly or in a deceitful manner. He was not charged with tax evasion or concealing income. Mr. Worthy testified that he was hampered in preparing the returns because his partner had control of some of the business records and that he lost some of the records. He attempted to recover the records from the bank, but the bank records were not sufficient to establish all of the information needed to prepare the returns. While Mr. Worthy's actions were inexcusable, there is no evidence that he intended to deceive the government or avoid his financial obligations. Particularly [436 Md. 642] in light of the opinions of the Judges regarding Mr. Worthy's integrity and honesty, the Court finds that Respondent did not violate Rule 8.4(c).
Pursuant to Rule 8.4(d) of the Maryland Rules of Professional Conduct, it is professional misconduct for a lawyer to " engage in conduct that is prejudicial to the administration of justice" . Mr. Worthy's willful failure to file tax returns showed a disregard for his legal obligations and a lack of respect to governmental authority. His conduct placed the legal profession in a bad light and erodes public confidence in the integrity of the legal profession. The Court finds that Respondent engaged in conduct prejudicial to the administration of justice in violation of Rule 8.4(d).
In summary, the Court finds by clear and convincing evidence that Mr. Worthy violated Rules 8.4(b) and (d) of the Maryland Rules of Professional Conduct by his willful failure to file federal tax returns but that his conduct did not violate Rule 8.4(c).

" This Court has original and complete jurisdiction over attorney discipline proceedings in Maryland." Attorney Grievance v. O'Leary, 433 Md. 2, 28, 69 A.3d 1121, 1136 (2013), quoting Attorney Grievance v. Chapman, 430 Md. 238, 273, 60 A.3d 25, 46 (2013). " [W]e accept the hearing judge's findings of fact as prima facie correct unless shown to be clearly erroneous." Attorney Grievance v. Fader, 431 Md. 395, 426, 66 A.3d 18, 36 (2013), quoting Attorney Grievance v. Rand, 429 Md. 674, 712, 57 A.3d 976, 998 (2012). We conduct an independent, de novo review of the hearing judge's conclusions of law, pursuant to Rule 16-759(b)(1).[7]

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Neither party took exception to Judge McKee's Findings of Fact and Conclusions of Law. We accept " the findings of fact as established for the purpose of determining appropriate [436 Md. 643] sanctions, if any." Maryland Rule 16-759(b)(2)(A); [8] see Fader, 431 Md. at 427, 66 A.3d at 37; Attorney Grievance v. Nelson, 425 Md. 344, 358, 40 A.3d 1039, 1047 (2012). " We also accept the conclusions of law if they are supported by the factual findings." Attorney Grievance v. Snyder, 406 Md. 21, 28, 956 A.2d 147, 151 (2008), citing Attorney Grievance v. Mba-Jonas, 402 Md. 334, 344, 936 A.2d 839, 845 (2007). We find that Judge McKee's conclusions of law are supported by the findings of fact.

With respect to sanction, Bar Counsel recommends indefinite suspension from the practice of law with the right to apply for reinstatement after six months. Worthy requests a finite six month suspension from the practice of law nunc pro tunc to May 2012, to coincide with his six months' incarceration. We will adopt Bar Counsel's recommendation and explain.

We have often stated in attorney grievances cases with respect to sanctions that " our goal is not ‘ to punish the attorney,’ but rather ‘ to protect the public and the public's confidence in the legal profession [and] to deter other lawyers from violating the Rules of Professional Conduct.’ To achieve this goal, the sanction should be ‘ commensurate with the nature and the gravity of the misconduct and the intent with which it was committed.’ " Attorney Grievance v. Dore, 433 Md. 685, 717, 73 A.3d 161, 180 (2013) (alterations in original), quoting Attorney Grievance v. Taylor, 405 Md. 697, 720, 955 A.2d 755, 768 (2008) (citations omitted).

In Attorney Grievance v. O'Toole, 379 Md. 595, 843 A.2d 50 (2004), in which we imposed a thirty day suspension for willful failure to file federal and state income tax returns for three years, with an attendant arrearage of $7,354.98, we articulated the then existing range of sanctions in disciplinary cases for willful failure to file tax returns:

[436 Md. 644] Where we have found misconduct for an attorney's failure to meet his or her tax obligations, the sanctions have ranged widely depending on the circumstances in each case. See, e.g., Attorney Grievance Comm'n v. Tayback, 378 Md. 578, 837 A.2d 158 (2003) (imposing suspension with right to reapply after 60 days for willful failure to timely file and timely pay federal and state income tax returns); Attorney Grievance Comm'n v. Thompson, 376 Md. 500, 830 A.2d 474 (2003) (suspending attorney indefinitely with the right to reapply after one year for, inter alia, failing to pay federal and state withholding taxes); [ Attorney Grievance v. ] Clark, 363 Md. [169], 183-85, 767 A.2d [865], 873-74 [ (2001) ] (suspending with immediate right to reapply for repeated failures to file and pay withholding tax returns); Attorney Grievance Comm'n v. Atkinson, 357 Md. 646, 745 A.2d 1086 (2000) (imposing indefinite suspension with right to reapply after one year for willful failures to file and pay state and federal tax returns over at least ten years); Attorney Grievance Comm'n v. Gavin, 350 Md. 176, 711 A.2d 193 (1998) (issuing a reprimand for failure to correct tax payment and filing

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delinquencies); [ Attorney Grievance v. ] Post, 350 Md. [85], 100-01, 710 A.2d [935], 942-43 [ (1998) ] (suspending indefinitely with right to reapply in thirty days for failing to timely file and timely pay state withholding taxes); Attorney Grievance Comm'n v. Breschi, 340 Md. 590, 667 A.2d 659 (1995) (imposing 180-day suspension for failure to timely file and pay federal income tax returns for two years); [ Attorney Grievance Comm'n v. ] Walman, 280 Md. [453], 465-66, 374 A.2d [354], 362 [ (1977) ](suspending attorney for three years for failing to file and pay returns).

379 Md. at 614-15, 843 A.2d at 61-62. Subsequently, we addressed the appropriate sanction for willful failure to file tax returns in Attorney Grievance v. Jones, 424 Md. 626, 37 A.3d 316 (2012), in which we imposed an indefinite suspension with the right to apply for reinstatement no sooner than six months where federal and state personal income tax returns had not been filed for a period of four years, with an attendant arrearage of $108,000.

[436 Md. 645] The parties agree, as do we, that, in the abstract, a suspension of six months may be an appropriate sanction in many cases, but they differ in two respects. Bar Counsel recommends that Worthy receive an indefinite suspension with the right to apply for reinstatement after six months, while Worthy requests a six month suspension.

Worthy also asks that we accede to his request that the suspension be coincident with his incarceration, because he did not practice law during that period. Worthy advises that prior to his incarceration he notified clients in writing of the situation, closed his law office by locking the doors and removing signs identifying it as a law practice and did not have the office phone answered, but instead routed all calls to a voicemail for return by another lawyer to notify clients that Worthy could not practice law or be contacted. Worthy asserts that he " didn't just walk away" when he went to prison and " let the clients fend for themselves."

Addressing the latter request first, we must emphasize that Worthy's actions in anticipation of his unavailability while incarcerated were whet we would expect of any member of the Bar in his situation of incapacity to practice while incarcerated. In this respect, Rule 16-760(c) reflects our expectations when an attorney becomes incapable of representing clients due to disbarment, suspension or inactive status, situations which certainly are akin to what Worthy experienced:

(c) Duties of respondent. Unless otherwise stated in the order, an order that disbars or suspends a respondent or places a respondent on inactive status shall operate as an immediate directive that the respondent perform each of the following duties in a timely manner:
(1) The respondent shall not accept any new clients or undertake any new or further representation of existing clients.
(2) The respondent shall take any action necessary to protect current clients.
[436 Md. 646] (3) The respondent shall conclude any current client matters that can be concluded within 15 days after the date of the order.
(4) Within 15 days after the date of the order, the respondent shall supply to Bar Counsel or an attorney designated by Bar Counsel a list of the attorney's clients (by name, address, and telephone number) whose legal matters have not been concluded by the respondent and identify any client matters (by name, tribunal, and docket reference) currently

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pending in any court or agency.[[9]]
(5) Within 15 days after the date of the order, the respondent shall mail a letter to each client whose legal matter has not been concluded, to counsel for any other party or to any unrepresented party in a pending action or proceeding, and to all attorneys with whom the respondent is associated in the practice of law, notifying each of them of the order and the fact that the respondent will be unable to practice law after the effective date of the order.[[10]] The respondent shall supply copies of the letters to Bar Counsel or an attorney designated by Bar Counsel.
(6) Within 30 days after the date of the order, the respondent shall withdraw from all client matters.[[11]]
[436 Md. 647] (7) Unless suspended for a definite period of not more than one year, the respondent shall promptly request the publisher of any telephone directory or law listing to remove any listing or reference that suggests that the respondent is eligible to practice law.
(8) The respondent shall deliver promptly to clients with pending matters any papers or other property to which the clients are entitled or notify the clients and any co-counsel of a suitable time and place to obtain the papers and other property and call attention to any urgent need to obtain them.
(9) The respondent shall promptly notify the disciplinary authority in each jurisdiction in which the respondent is admitted to practice of the disciplinary sanction imposed by the Court of Appeals.
(10) Within 30 days of the effective date of the order, the respondent shall file

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with the Commission an affidavit that states (A) the manner and extent to which the respondent has complied with the order and the provisions of this section, (B) the names of all state and federal jurisdictions in which and administrative agencies before which the respondent [436 Md. 648] has been admitted to practice, (C) the residence and any other address of the respondent to which future communications may be directed, (D) the policy number and the name and address of each insurer that provided malpractice insurance coverage to the respondent during the past five years and the inclusive dates of coverage, and (E) the date and manner that a copy of the affidavit required by this subsection was served upon Bar Counsel. The affidavit shall be accompanied by copies of the list required by subsection (c)(4) of this Rule and the letters mailed under subsection (c)(5) of this Rule.
(11) If the respondent is or becomes employed or retained by or associated with a lawyer, the respondent shall comply with Rule 5.3(d) of the Maryland Lawyers' Rules of Professional Conduct and assist the supervising lawyer in complying with the supervising lawyer's obligations under the Rule.
(12) The respondent shall maintain records of the various steps taken to comply with this section and the order of the Court of Appeals and make those records available to Bar Counsel on request.
Although Worthy urges that he had done all that would have been expected of him were he to have been suspended from practice during incarceration, Bar Counsel maintains that Worthy did not because Worthy did not submit the appropriate notices to Bar Counsel and because his actions after release from incarceration were not consistent with the argument that he complied with the tenets of the Rule, as he resumed his legal practice upon release from incarceration and continues to practice law. As a result, what Worthy did in anticipation of incarceration, notifying clients of his situation and closing his law practice, was in keeping with what an attorney should do, but less than what an attorney must do if rendered incapable of practicing law.[12]

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[436 Md. 649] We also disagree with Worthy as to the imposition of a finite, nunc pro tunc suspension for six months rather than an indefinite suspension with the right to apply for reinstatement after a period of six months. Our resolution emanates primarily from the fact that at oral argument, Worthy could not specify what, if any, money he has paid to the Internal Revenue Service to satisfy his arrears, which apparently [436 Md. 650] stems from the fact that his original agreement to pay the Internal Revenue Service was in default. In this regard, imposition of an indefinite suspension is appropriate in instances in which the attorney is in arrears with his repayment of taxes, is not in compliance with a payment plan, or there is uncertainty as to the status of payments and filings. In Attorney Grievance v. Tayback, 378 Md. 578, 837 A.2d 158 (2003), for instance, we explained considerations when determining sanctions to include " ‘ the nature and gravity of the violations and the intent with which they were committed’ ... the attorney's remorse for the misconduct, and the likelihood of the conduct being repeated" and determined that for willful failure to file federal and state income tax returns resulting in a criminal conviction, indefinite suspension was the appropriate sanction. Id. at 593-94, 837 A.2d at 167, quoting Attorney Grievance v. McClain, 373 Md. 196, 211, 817 A.2d 218, 227-28 (2003). In Attorney Grievance v. Clark, 363 Md. 169, 184-85, 767 A.2d 865, 873-74 (2001), we determined that for the attorney's willful failure to file withholding tax returns and remittances, an indefinite suspension was the appropriate sanction, requiring the attorney to provide written documentation that he was in good standing with his tax obligations upon application for reinstatement.

The reporting obligations attendant on petitioning for reinstatement relative to filing of tax returns and reporting of tax payments emanate from Rule 16-781(d)(1) which requires that an attorney sanctioned for an indefinite period or for more than six months must submit:

(A) the petitioner's current address and telephone number;
(B) the address of each residence during the period of discipline, with inclusive dates of each residence;
(C) documentary evidence supporting the petitioner's claim that the criteria specified in section (g) have been satisfied;
(D) the name, address, and telephone number of each employer, associate, and partner of the petitioner during the period of discipline, with the inclusive dates of each employment, association, and partnership, the positions held, the [436 Md. 651] names of all supervisors, and, if applicable, reasons for terminating the employment, association, or partnership;
(E) the case caption, general nature, and disposition of each civil and criminal action pending during the period of discipline to which the petitioner was a party or in which the petitioner claimed an interest;

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(F) a statement of monthly earnings and all other income during the period of discipline, including the source;
(G) a statement of the petitioner's assets and financial obligations;
(H) the names and addresses of all creditors;
(I) a statement that any required restitution has been made and the amounts paid;
(J) a statement indicating whether the petitioner has applied for reinstatement in any other jurisdiction and the present status of each application;
(K) a statement identifying all other business or occupational licenses or certificates applied for during the period of discipline and the current status of each application;
(L) the name and address of each financial institution at which the petitioner maintained or was signatory on any account, safe deposit box, deposit, or loan during the period of discipline;
(M) written authorization for Bar Counsel to secure financial records pertaining to any account, safe deposit box, deposit, or loan at any financial institution identified in subsection (d)(1)(L) of this Rule;
(N) copies of the petitioner's state and federal income tax returns for the three years preceding the effective date of discipline and each year thereafter; and
(O) any other information that the petitioner believes is relevant to determining whether the petitioner possesses the character and fitness necessary for reinstatement.[[13]]

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[436 Md. 652] Specifically, Rule 16-781(d)(1) requires the sanctioned attorney to submit " state and federal income tax returns for the [436 Md. 653] three years preceding the effective date of discipline and each year thereafter," as well as financial information regarding the attorney's monthly income, assets, creditors, financial obligations, and restitution paid. Worthy, then, should he petition for reinstatement, would have to demonstrate more attentiveness in his obligations to the publicans than he has on the record before us.

We, therefore, determine that the imposition on Michael Ron Worthy of an indefinite suspension with the right to apply for reinstatement after six months is the appropriate sanction.

IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY THE CLERK OF THIS COURT, INCLUDING THE COSTS OF ALL TRANSCRIPTS, PURSUANT TO MARYLAND RULE 16-761, FOR WHICH SUM JUDGMENT IS ENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMMISSION AGAINST MICHAEL RON WORTHY.


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