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Attorney Grievance Commission of Maryland v. James Aloysius Powers

Court of Appeals of Maryland

July 10, 2017


          Argued: February 6, 2017

         Circuit Court for Montgomery County Case No. 32033-M

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


          Greene, J.

         This attorney discipline case involves an attorney who failed to abide by his client's instructions concerning the handling of the client's case, failed to communicate with the client to permit him to make informed decisions about his case, and publicly disclosed confidential client information in the course of suing the former client and a third person in federal court, in a state where neither the former client nor the third party either resided or had any contacts, in an effort to collect attorney's fees.

         On April 20, 2016, Petitioner, the Attorney Grievance Commission of Maryland ("Commission"), acting through Bar Counsel, filed a Petition for Disciplinary or Remedial Action against Respondent, James Aloysius Powers, pursuant to Maryland Rule 16-751(a).[1] The Commission charged Respondent with violating the Maryland Lawyers' Rules of Professional Conduct ("MLRPC" or "Rule") 1.2 (Scope of Representation); 1.4 (Communication); 1.6 (Confidentiality of Information); 1.9 (Duties to Former Clients); 1.16(d) (Termination of Representation); 3.1 (Meritorious Claims and Contentions); 4.4 (Respect for Rights of Third Persons); 8.4 (Misconduct).

         This Court transmitted the matter to the Circuit Court for Montgomery County on April 21, 2016 and designated the Honorable Michael D. Mason (the "hearing judge") to conduct an evidentiary hearing and make findings of fact and conclusions of law. The hearing judge scheduled the case for a hearing on September 26 and 27, 2016, subject to the approval of this Court. On July 25, 2016, this Court granted a motion to extend the time to complete the hearing because it was scheduled to be completed more than 120 days after service on Respondent of the order designating a judge to hear the case. See Md. Rule 16-575(a) (noting that the judicial hearing in a disciplinary matter "shall be completed within 120 days after service on the respondent of the order designating a judge.").

         Petitioner served the Respondent with discovery requests in the form of Interrogatories, Request for Production of Documents, and Requests for Admissions of Fact and Genuineness of Documents on July 13, 2016. In addition, Petitioner filed various other pre-trial motions; however, Respondent failed to file any response. On September 26, 2016, Petitioner appeared for a hearing on the merits; however, Respondent failed to appear or respond as of that date to any of Petitioner's discovery requests. As a result of Respondent's failure to appear at the hearing on the merits or respond to the request for admissions of fact, the hearing judge deemed admitted Petitioner's Requests for Admissions of Fact and Genuineness of Documents. The hearing culminated with the hearing judge's adoption of Petitioner's Proposed Findings of Fact and Conclusions of Law.


         The Hearing Judge's Findings

         The hearing judge made the following findings of fact by clear and convincing evidence. See Md. Rule 16-757(c) (noting that "Bar Counsel has the burden of proving the averments of the petition by clear and convincing evidence."). Respondent was admitted to practice law in Maryland on June 23, 1993. He is also admitted to practice in New York and Virginia.[2] On February 22, 2012, Jeff A. Braun, a resident of Allendale, New Jersey, retained Respondent to represent him in anticipation of litigation involving a dispute between Mr. Braun and his business partner. Initially, Mr. Braun payed Respondent $5, 000 as a retainer. The events that led up to Mr. Braun's retention of Respondent began in November 2010 when "Mr. Braun [had] purchased a sports park business know as Golden Goal Tournament located in Fort Ann, New York." The dispute between Mr. Braun and his business partner began in 2011 and led to a lawsuit filed against Mr. Braun (hereinafter, "the Golden Goal litigation, " or "New York litigation") on March 5, 2012 in the Supreme Court of the State of New York, Fort Edward, New York (a trial court). "Fort Edward is approximately 180 miles or 3 hours from Mr. Braun's [New Jersey] residence."

         In the Golden Goal litigation, Mr. Braun's business partner requested a Temporary Restraining Order ("TRO") against Mr. Braun. At the inception of the lawsuit, Respondent explained to Mr. Braun that "this case can be substantially won over the next 20 days." Respondent assured Mr. Braun that "he would have the suit removed to federal court or move for a change of venue to the New York City area (where virtually all of the parties reside)." Mr. Braun instructed Respondent not to consent to the TRO. Inconsistent with Mr. Braun's directions, Respondent consented to the TRO, failed to seek removal of the case to federal court or move for a change of venue to the New York City area and failed to respond to the plaintiff's request for discovery. Although the court found Mr. Braun in contempt of court for failure to respond to discovery, Respondent neither informed Mr. Braun of the discovery violation nor the fact that Respondent had consented to the TRO on Mr. Braun's behalf.

         Nathan Fink was a friend of Mr. Braun and also a tax attorney licensed in the state of New Jersey. Apparently, Mr. Braun had communicated with his friend about the legal and business problems confronting Mr. Braun before Mr. Braun retained Respondent. As a result of this prior relationship, Mr. Braun authorized Mr. Fink to communicate with Respondent "so that Mr. Braun could better understand what was going on in the Golden Goal litigation" and "because [Respondent] failed to communicate with Mr. Braun in laymen's terms." Seven months after Mr. Braun retained Respondent, "[i]n September 2012, Respondent withdrew from representation of Mr. Braun." It appears that "Mr. Braun requested that Respondent return his file on September 24, 2012[;] however, Respondent did not do so until November 15, 2012" even though the Golden Goal litigation was ongoing.

         After Respondent terminated his representation, he sent a final bill to Mr. Braun for $9, 470. Mr. Braun disputed the final bill because he had already paid Respondent approximately $48, 000 and, in Mr. Braun's opinion, the invoices were vague. In response to Mr. Braun's refusal to pay the final bill, Respondent "sent threating emails to Mr. Braun and Mr. Fink. [He] threatened to report Mr. Fink to the New York attorney disciplinary authorities, and threaten[ed] to sue both Mr. Braun and Mr. Fink." Although Mr. Braun asked to arbitrate the fee dispute, Respondent rejected the offer of arbitration.

         In June of 2013, Respondent sued Mr. Braun and Mr. Fink in the United States District Court for the District of Maryland alleging Breach of Contract with respect to Mr. Braun and Tortious Interference and Unfair Competition with respect to Mr. Fink. Respondent claimed damages in the amount of $1, 015, 000. Specifically, he alleged "that Mr. Braun owed him attorney's fees (plus interest) of approximately $15, 000 and that Mr. Fink had hindered the representation of Mr. Braun and interfered with the attorney/client relationship between Respondent and Mr. Braun."

         Allegations contained in the complaint filed in the federal court touched upon "matters from the New York litigation that were privileged due to the attorney/client relationship and the accountant/client relationship." In response to a Motion to Dismiss or, in the Alternative, to Strike, Mr. Braun's attorney argued that the federal court had "no personal jurisdiction over Mr. Braun, no subject matter jurisdiction, and that the Complaint contained privileged information." In formulating a response to the Motion to Dismiss, "Respondent filed affidavits from Mr. Braun's former attorney (Mr. Goodman), former accountant (Mr. Gallo), and from Respondent, all of which revealed privileged information, strategic information related to the Golden Goal litigation, and information intended to disparage Mr. Braun." After Mr. Braun's attorney filed a reply to Respondent's pleading, Respondent withdrew his complaint.

         The hearing judge in this disciplinary case had before him, as evidence, the documents that contained the privileged information. The hearing judge noted that when the District Court judge issued her Memorandum Opinion and Order for dismissal of the federal case, she ordered, among other things, that "the 'majority' of the information that Mr. Braun sought to redact was confidential according to the attorney-client privilege and 'much' of the information [that] Mr. Braun sought to redact was confidential according to the accountant-client privilege."

         The plaintiff in the Golden Goal litigation, having obtained the privileged information that Respondent disclosed in his complaint against Mr. Braun, used that information against Mr. Braun in the New York litigation.

         Approximately ten months after Respondent had withdrawn as counsel for Mr. Braun in the Golden Goal litigation, Respondent, on July 23, 2013, filed, with the court in Fort Edward, an "Expedited Motion to Show Cause before the New York court hearing the Golden Goal litigation." In that motion, he requested that Mr. Braun show cause why he should not pay the legal fees owed to Respondent and requested that the court investigate Mr. Fink's alleged misconduct. In his motion, Respondent specifically contended that "[a] prior motion on this matter was filed, wisely sealed by this court[, ] and eventually withdrawn-but not because anything in that motion was false or factually incorrect. Rather, because it was filed in haste including more personal affect than legal effect which this motion endeavors to address." In addition to the July 23, 2013 Expedited Motion to Show Cause, a previous Expedited Motion was also filed on May 6, 2013, after Respondent had withdrawn from the representation of Mr. Braun. The Fort Edward court did not rule on either Expedited Motion. Eventually, venue in the Golden Goal litigation was transferred from the Fort Edward, New York area to the Manhattan, New York City area. Apparently, in a continuing effort to collect attorney's fees, in January 2014, Respondent wrote to Judge Charles E. Ramos, Judge of the New York State Supreme Court, Commercial Division, and requested that Judge Ramos advise Respondent on how he could best present a Motion to Compel Payment of Fees to the Court. Judge Ramos declined the request.


         The Hearing Judge's Conclusions of Law The hearing judge adopted Petitioner's proposed conclusions of law and found by clear and convincing evidence that Respondent violated MLRPC 1.2; 1.4; 1.6; 1.9; 1.16(d); 3.1; 4.4; 8.4(a) and 8.4(d).

         Conclusions of Law

         Rule 1.2 Scope of Representation and allocation of authority between client and lawyer

Rule 1.2(a) provides that a lawyer "shall abide by a client's decisions concerning the objectives of the representation and, when appropriate, shall consult with the client as to the means by which they are to be pursued." Further, "[a] lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by a client's decision whether to settle a matter." An attorney violates Rule 1.2(a) if he or she fails to inform a client of the status of his or her case, thereby denying the client the ability to make informed decisions. Attorney Grievance [Comm'n] v. Hamilton, 444 Md. 163, 182, 118 A.3d 958, 968 (2015).
In order for a lawyer to abide by a client's decisions concerning representation, the client must be able to make informed decisions as to the objectives of the representation. Id. at 182, 968-69. In order for a client to make informed decisions, an attorney must give the client honest updates regarding the status of his or her case. Id., citing Attorney Grievance [Comm'n] v. Shapiro, 441 Md. 367, 380, 108 A.3d 394, 402 (2015). An attorney may violate Rule 1.2(a) if he or she fails to follow the instructions of the client. Attorney Grievance [Comm'n] v. Sperling, 432 Md. 471, 493, 69 A.3d 478, 490-91 (2013) (quoting Attorney Grievance [Comm'n] v. Reinhardt, 391 Md. 209, 220, 222, 892 A.2d, 533, 539-40 (2006) (internal quotations omitted).
In this case, Respondent violated Rule 1.2 when he failed to abide by Mr. Braun's instructions not to consent to the Temporary Restraining Order (hereinafter, "TRO"). He also failed to file a motion to change venue to New York City, and he failed to have the case removed to federal court. See Petitioner's Exhibit 1, Tab 1. Further, Respondent failed to inform Mr. Braun that Respondent agreed to produce Mr. Braun's tax returns to opposing counsel. When such tax returns were not produced, the court held Mr. Braun in contempt of court. Id.
Rule 1.4 Communication
Rule 1.4 provides that:
(a) A lawyer shall:
(1) promptly inform the client of any decision or circumstance with respect to which the client's informed consent, as defined in Rule 1.0(f), is required by these Rules;
(2) keep the client reasonably informed about the status of the matter;
(3) promptly comply with reasonable requests for information; and
(4) consult with the client about any relevant limitation on the lawyer's conduct when the lawyer knows that the client expects assistance not permitted by the Maryland Lawyers' Rules of Professional Conduct or other law.
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.
Attorneys violate Rule 1.4 when they fail to communicate with their clients and keep them informed of the status of their legal matters. Attorney Grievance [Comm'n] v. Kwarteng, 411 Md. 652, 658, 984 A.2d 865, 868-69 (2009). In Attorney Grievance [Comm'n] v. De La Paz, Respondent in that matter failed to tell his client that his case had been dismissed, which fact the client learned only after traveling to the courthouse to inquire. 418 Md. 534, 554, 16 A.3d 181, 192-93 (2011). Similarly, in Attorney Grievance [Comm'n] v. Fox, the attorney violated Rule 1.4 when he did not know that the client's case was dismissed and accordingly did not communicate that fact to the client. 417 Md. 504, 517, 11 A.3d 762, 769 (2010). In Attorney Grievance [Comm'n] v. Thomas, the attorney violated Rule 1.4 when he ceased communicating with the client after he told the client not to appear at his removal (deportation) hearing, and then failed to tell the client that he had been ordered removed in absentia. 440 Md. 523, 553-54, 103 A.3d 629, 647 (2014).
In the case at bar, Respondent violated Rule 1.4(a) when he failed to inform Mr. Braun that he had consented to the TRO. See Petitioner's Exhibit 1 at 18. He also violated Rule 1.4(a) by failing to tell Mr. Braun that he needed to produce his tax returns, and later, after he failed to do so, that Mr. Braun had been found in contempt of court. Id. at 21. Respondent violated Rule 1.4(b) because he failed to explain what was happening in the Golden Goal litigation in a manner that Mr. Braun could understand. Id. at 25. As such, Mr. Braun had enlisted the help of his friend, attorney Nathan Fink, to communicate with Respondent. Id. at 24-25.
Rule 1.6 Confidentiality of information

"A lawyer shall not reveal information relating to representation of a client unless the client gives informed consent [and] the disclosure is impliedly authorized in order to carry out the representation[.]" Rule 1.6(a). Only the client has the power to waive the attorney-client privilege. Newman v. State, 384 Md. 285, 863 A.2d 321 (2004). The importance of the attorney client privilege has been described as follows:

By turns both sacred and controversial, the principle of the confidentiality of client information is well-embedded in the traditional notion of the Anglo-American client-lawyer relationship. CHARLES W. WOLFRAM, MODERN LEGAL ETHICS § 6.1.1, at 242 (1986). "The professional rules ... [embrace] a broad ethical duty not to divulge information about a client." Id. (emphasis added). An attorney's duty of confidentiality applies not only to privileged "confidences, " but also to unprivileged secrets; it "exists without regard to the nature or source of the information or the fact that others share the knowledge." Perillo v. Johnson, 205 F.3d 775, 800 n. 9 (5th Cir. 2000) (quoting ABA Model Code of Professional Responsibility Canon 4, DR 4-101 and EC 4-4) (internal quotation marks and alterations omitted). "The confidentiality rule applies not merely to matters communicated in confidence by the client[, ] but also to all information relating to the representation, whatever its source." Id. at 800 n. 10 (quoting ABA Model Rules of Professional Responsibility 1.6 & cmt.5) (emphasis added); accord, United States v. Edwards,39 F.Supp.2d 716, 724 (M.D. ...

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