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Attorney Grievance Commission of Maryland v. Mahone

Court of Appeals of Maryland

December 19, 2016

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
WILLIE JAMES MAHONE

          Argued: November 3, 2016

         Circuit Court for Montgomery County Case No.: 32111

          Barbera, C.J., Greene, Adkins, McDonald, Watts, Hotten, Getty, JJ.

          OPINION

          ADKINS, J.

         On February 29, 2016, the Attorney Grievance Commission of Maryland ("AGC"), acting through Bar Counsel, filed a Petition for Disciplinary or Remedial Action against Respondent Willie James Mahone. Bar Counsel charged Mahone with violating the Maryland Lawyers' Rules of Professional Conduct ("MLRPC"), Maryland Rules governing attorney trust accounts, and a statutory provision regarding misuse of trust money.[1] Specifically, Bar Counsel alleged that Mahone violated the following provisions: (1) MLRPC 1.1 (Competence);[2] (2) MLRPC 1.4 (Communication);[3] (3) MLRPC 1.15(a), (c), and (d) (Safekeeping Property);[4] (4) MLRPC 8.1(b) (Bar Admission and Disciplinary Matters);[5] (3) MLRPC 8.4(a), (c), and (d) (Misconduct);[6] (4) Maryland Rule 16.606.1 (Attorney Trust Account Record-Keeping);[7] (5) Maryland Rule 16-607 (Commingling of Funds);[8] (6) Maryland Rule 16-609 (Prohibited Transactions);[9] and (7) Maryland Code (1957, 2010 Repl. Vol.), § 10-306 of the Business Occupations and Professions Article ("BP") (Misuse of Trust Money).[10]

         We transmitted the matter to the Circuit Court for Montgomery County and designated the Honorable Cynthia Callahan ("the hearing judge") to conduct an evidentiary hearing. Following a one-day hearing, the hearing judge issued Findings of Fact and Conclusions of Law, in which she found by clear and convincing evidence that Mahone violated MLRPC 1.1, MLRPC 8.1(b), MLRPC 8.4(a), (c), and (d); Maryland Rules 16.606.1, 16-607, 16-609; and BP § 10-306.

         THE HEARING JUDGE'S FINDINGS OF FACT

         Mahone was admitted to the Maryland Bar in May 1980. The AGC's investigation of Mahone was triggered when Sandy Spring Bank notified the AGC that an overdraft of his attorney trust account had occurred. The hearing judge made the following findings of fact by clear and convincing evidence:

         In February 2014, an overdraft in the amount of $86.48 occurred in Mahone's attorney trust account. On March 10, 2014, Bar Counsel sent Mahone a letter requesting an explanation of the overdraft and client ledgers, monthly bank statements, deposit slips, and canceled checks from November 2013 to March 2014. The letter requested a response within 10 days. Mahone responded on March 31, 2014, but did not provide the requested client ledgers or deposit slips. His response was also 10 days late.

         Bar Counsel sent Mahone follow-up letters requesting the client ledgers and deposit slips on April 10, 2014, November 18, 2014, and December 10, 2014. Despite these repeated requests, Mahone never responded.

         Due to Mahone's failure to provide the requested information, Bar Counsel subpoenaed Sandy Spring Bank for Mahone's attorney trust account records for November 2013 to December 2014. A forensic investigator for the AGC, Charles E. Miller, IV, analyzed Mahone's attorney trust account records. Miller created a transaction summary and client ledger summary from these records, which indicated: (1) negative balances in nine client trust accounts; (2) earned attorney's fees deposited into nine client trust accounts; (3) remaining balances in five client trust accounts; (4) 11 electronic transfers, including several checks Mahone made out to himself; and (5) a $1, 500 cash withdrawal.

         On April 9, 2015, Bar Counsel provided Mahone with Miller's summaries and requested additional information related to the transactions in the summaries by April 24, 2015. Although Mahone was granted a 14-day extension, Bar Counsel did not receive a response. Bar Counsel then requested a response by May 18, 2015. Mahone responded by letter on May 20, 2015, stating that he would provide the requested information by June 1, 2015. Mahone finally responded to Bar Counsel's request on August 16, 2015, but failed to provide a satisfactory explanation or any of the requested supporting documentation. Mahone later sent Bar Counsel a supplemental response, but none of the information he provided addressed Bar Counsel's requests.

         On June 23, 2016, Bar Counsel deposed Mahone. During his deposition, Mahone admitted that he failed to create and maintain proper records, failed to create records associated with electronic transactions, and commingled funds. Mahone also answered questions related to four transactions in Miller's summaries. Miller updated his summaries to reflect this new information, and the summaries were received into evidence. The summaries demonstrated the following by clear and convincing evidence:

         1. Mahone caused negative balances in the following client matters:

06/25/2014

Acoota

-$800.00

12/01/2014

Harrison

-$525.00

10/08/2014

Juarez

-$1, 472.00

10/16/2014

Leppo

-$1, 365.00

06/16/2014

Mahmood

-$516.00

08/29/2014

Mahmood

-$2, 035.20

12/17/2014

Patty

-$2, 000.00

09/25/2014

Rice

-$1, 575.11

02/12/2014

Unknown

-$86.48

         2. Mahone deposited earned attorney's fees into his attorney trust account in the following matters:

11/16/2014

Anzures

$238.75

11/04/2014

Branson

$125.00

11/04/2014

Fletcher

$125.00

11/16/2013

Goldberg

$300.00

09/10/2014

Knill

$125.00

09/10/2014

Lopez

$350.00

11/04/2014

Marks

$125.00

12/04/2014

Marks

$625.00

11/08/2013

Smith-Jasper

$260.00

         3. Mahone improperly maintained funds in his attorney trust account belonging to clients, third parties, and sometimes himself in the following matters:

04/02/2014

Duckett

$27.31

08/06/2014

Hickman

$600.00

01/27/2014

Hopkins

$200.00

08/11/2014

Salahudding

$537.00

08/19/2014

Yamada

$1, 628.00

         4. Mahone failed to maintain records associated with the following electronic funds transfers from his attorney trust account:

01/29/2014

Unknown

-$1, 000.00

10/02/2014

Unknown

-$2, 000.00

         5. Mahone failed to maintain any records associated with the following transactions and cannot identify whose money was withdrawn from the attorney trust account:

09/09/2014

Hopehill United Methodist Church

-$100.00

10/02/2014

Check to Mahone

-$2, 000.00

11/29/2013

Check to Mahone

-$800.00

12/30/2013

Check to Mahone

-$900.00

02/12/2014

Cash Deposit

$125.00

02/18/2014

Cash Deposit

$100.00

04/25/2014

Cash Deposit

$1, 500.00

11/19/2014

Check to Mahone

-$500.00

11/25/2014

Check to Mahone

-$865.00

         6. On September 9, 2014, Mahone made a $100 personal donation to his church from his attorney trust account.

         THE HEARING JUDGE'S CONCLUSIONS OF LAW

         From these facts, the hearing judge concluded that Mahone violated MLRPC 1.1, 8.1(b), and 8.4(a), (c), and (d). The hearing judge also found that Mahone violated Maryland Rules 16-606.1, 16-607, and 16-609, and BP § 10-306.[11]

         MLRPC 1.1: Competence

         MLRPC 1.1 requires attorneys to represent their clients with the necessary legal knowledge, skill, thoroughness, and preparation. The hearing judge found that Mahone violated MLRPC 1.1 when "he failed to competently handle client and third party funds deposited into his trust account." In addition, the hearing judge found that Mahone violated MLRPC 1.1 when "he failed to create and maintain records of the deposits and withdrawals of client and third party funds."

         MLRPC 8.1: Bar Admission and Disciplinary Matters

         MLRPC 8.1 imposes an obligation on Maryland attorneys to fully cooperate with disciplinary investigations. The hearing judge found that Mahone violated MLRPC 8.1(b) by failing to timely and completely respond to Bar Counsel's letters requesting additional information on March 10, 2014, April 10, 2014, and November 18, 2014.

         MLRPC 8.4: Misconduct

         MLRPC 8.4 defines professional misconduct for attorneys. The hearing judge found that Mahone violated MLRPC 8.4(a), (c), and (d). He violated MLRPC 8.4(a) by breaching other rules of professional conduct. Mahone violated 8.4(c) "when he created negative balances in his trust account for individual client matters and when he over-drafted his account." Lastly, the hearing judge concluded that Mahone's conduct, taken as a whole, harms the reputation of the legal profession in violation of MLRPC 8.4(d).

         Rule 16-606.1: Attorney Trust Account Record-Keeping

         Maryland Rule 16-606.1 requires attorneys to create and maintain records reflecting the status and activity of attorney trust accounts. The hearing judge found that although Mahone did not act with "malice or for personal gain, " he violated this Rule:

[Mahone] did not create and maintain records for the receipt [or] disbursement of funds [for] clients or [ ] third persons. He was unable to identify which client matters were associated with numerous transactions. [Mahone] admits that he failed to perform monthly reconciliations of his trust account. He was unable to reconcile many of the individual client ledgers or account for the balance of the funds maintained in his account at any given time. [Mahone] failed to create or maintain any records associated with the electronic transfers from his account.

         Rule 16-607: Commingling of Funds

         Maryland Rule 16-607 prohibits attorneys from depositing personal funds into an attorney trust account. The hearing judge found that Mahone violated Rule 16-607 by "routinely [leaving] his own funds in his trust account as a 'buffer'" and depositing earned attorney's fees into the trust account. Additionally, the hearing judge found that none of the exceptions in Rule 16-607 b-which provides situations in which an attorney may commingle personal funds with the clients'-applied.

         Rule 16-609: Prohibited Transactions

         Under Maryland Rule 16-609, attorneys are prohibited from using funds within a trust account for any unauthorized purpose, withdrawing cash from a trust account, and creating a negative balance within a trust account. The hearing judge found that Mahone violated Rule 16-609 by using trust funds for unauthorized purposes, withdrawing $1, 500 in cash from his trust account, and creating negative balances in accounts belonging to Juarez, Leppo, Mahmood, Rice, and "Unknown."

         BP ยง 10-306: ...


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