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Attorney Grievance Commission of Maryland v. McLaughlin

Court of Appeals of Maryland

October 20, 2017

ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
LOUISA CONTENT MCLAUGHLIN

         Circuit Court for Harford County Case No.: 12-C-16-002780

          Argued: September 11, 2017

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

          OPINION

          ADKINS, J.

         The Attorney Grievance Commission of Maryland ("AGC"), acting through Bar Counsel, filed a Petition for Disciplinary or Remedial Action ("Petition") against Respondent Louisa Content McLaughlin. Bar Counsel charged McLaughlin with violating the Maryland Lawyers' Rules of Professional Conduct ("MLRPC")[1] during her representation of Doris Leedom.

         The AGC investigated after Paula McCabe, Ms. Leedom's daughter and power of attorney, filed a complaint. Bar Counsel alleged that McLaughlin violated the following: (1) Rule 1.3 (Diligence);[2] (2) Rule 1.4(a) and (b) (Communication);[3] (3) Rule 1.5(a) (Fees);[4] (4) Rule 1.15(a) and (e) (Safekeeping Property);[5] (5) Rule 8.1(a) and (b) (Bar Admission and Disciplinary Matters);[6] (6) Rule 8.4 (a), (c) and (d) (Misconduct);[7] and Maryland Code (1957, 2010 Repl. Vol.), § 10-306 of the Business Occupations and Professions Article ("BP") (Misuse of Trust Money).[8]

         We transmitted the matter to the Honorable Kevin J. Mahoney ("the hearing judge") of the Circuit Court for Harford County to hear the case. After trying and failing to serve McLaughlin, Bar Counsel served the Client Protection Fund of the Bar of Maryland pursuant to Maryland Rule 19-723(b). The Fund mailed the Petition to McLaughlin at three different addresses. When McLaughlin did not answer the Petition, Bar Counsel moved for an Order of Default under Maryland Rule 2-613(b), which the Circuit Court granted. McLaughlin was sent notice of the Default Order and served with Bar Counsel's discovery requests. McLaughlin never responded to Bar Counsel, nor sought to overturn the default.

         McLaughlin did not appear at the Circuit Court hearing on March 20, 2017. The hearing judge concluded that because McLaughlin had defaulted, all requests for admissions in Bar Counsel's discovery requests were deemed admitted pursuant to Maryland Rule 2-424(b). The hearing judge issued Findings of Fact and Conclusions of Law, based on the admitted facts, in which he found by clear and convincing evidence that McLaughlin violated MLRPC 1.3, 1.4(a) and (b), 1.5(a), 1.15(a) and (e), 8.1(a) and (b), 8.4(a), (c), and (d), and BP § 10-306. He found multiple aggravating factors and no mitigating factors.

         THE HEARING JUDGE'S FINDINGS OF FACT

         The hearing judge made the following findings of fact. McLaughlin was admitted to the Maryland Bar on June 15, 2004 and has substantial experience in the practice of law.

         In 2011, Ms. Leedom, then age 86, and a resident of New York, retained McLaughlin to prepare estate planning documents. Ms. Leedom gave her son George Leedom ("Mr. Leedom") her power of attorney, and her daughter, Mrs. McCabe, was identified as his successor. When Ms. Leedom moved to Maryland in 2013, McLaughlin drafted a Maryland power of attorney for her, which named Mr. Leedom as her agent. In 2013, Ms. Leedom sold her New York home and gifted the proceeds, over $500, 000, to Mr. Leedom. McLaughlin provided some advice regarding this gift. The hearing judge found that Mr. Leedom managed his mother's finances from 2011 to June 2014. At that time,

Mr. Leedom entered a rehabilitation for substance abuse issues, and Mrs. McCabe notified [McLaughlin] . . . . However, [McLaughlin] did not advise Ms. Leedom of the risks of allowing Mr. Leedom to continue to serve as her power of attorney at any time after June 2014. In fact, [McLaughlin] did not communicate with Ms. Leedom at all in June 2014, and never discussed Mr. Leedom's substance abuse issues with Ms. Leedom.
On August 12, 2014, Ms. Leedom, with [McLaughlin's] assistance, sold two pieces of property located in Aberdeen, Maryland. The sale of the two properties resulted in net proceeds to Ms. Leedom of approximately $95, 000.00. [McLaughlin] agreed to serve as an escrow agent, holding the proceeds of the sale in her Attorney Trust Account. Respondent was not to disburse the proceeds of the sale until [Mr.] Leedom and Mrs. McCabe agreed on the disposition of the funds.

         The hearing judge found that despite this agreement, McLaughlin disbursed $10, 000 to Mr. Leedom in October 2014. McLaughlin did not notify Mrs. McCabe or obtain her consent to the disbursement.

         In December 2014, Ms. Leedom executed a power of attorney, naming McLaughlin as her agent. The next month, McLaughlin "paid herself $5, 175.00 from Ms. Leedom's funds held in her trust account without Mrs. McCabe's authorization or consent." McLaughlin did not provide invoices or billing statements to Ms. Leedom, or to Mr. Leedom when he had his mother's power of attorney.

         Ms. Leedom executed another power of attorney in April 2015, naming Mrs. McCabe as her agent. Mrs. McCabe immediately sent McLaughlin a letter asking "for an accounting of and the return of her mother's funds." The hearing judge found that McLaughlin provided an accounting in May, "but refused to return the balance of Ms. Leedom's funds unless and until Mrs. McCabe signed a waiver releasing [McLaughlin] from any and all liability." He also found that Mrs. McCabe signed this release under duress.

         In July 2015, Mrs. McCabe filed a complaint with the AGC. Bar Counsel sent McLaughlin a copy of the complaint and requested a written response. McLaughlin submitted a written response on September 18. The hearing judge found that McLaughlin made "knowing and intentional misrepresentations to Bar Counsel" in her response, specifically:

[McLaughlin] stated that 'Doris Leedom . . . was adamant that she did not want her daughter [Paula McCabe] involved. I had been told by [Mr.] Leedom on several occasions that his mother became very agitated and combative when Paula wanted to take her to a hair appointment or when her name came up. I witnessed this on several occasions in meetings just between Doris Leedom and myself.'
[McLaughlin] also misrepresented to Bar Counsel that she was in frequent contact with [Mr.] Leedom, including in person meetings, in the fall of 2014. Additionally, [McLaughlin] misrepresented that she wrote a letter to Mrs. McCabe on May 15, 2015, when in fact she had not. [McLaughlin] also misrepresented that Mike McCabe, Paula McCabe's husband, '[o]n more than one occasion . . . said he did not want to deal with Paula or have her get involved and finally on May 8, 2015 said he was not getting involved with this and that he had told Paula he wanted nothing to do with her actions.' Finally, [McLaughlin] misrepresented that she 'explained on several occasions to Mrs. McCabe [that] there was never an [escrow] account in Doris Leedom's name.'

         Bar Counsel sent a letter to McLaughlin dated November 13, 2015, which explained that the matter had been docketed for further investigation, enclosed additional correspondence from Mrs. McCabe, and requested a response. Bar Counsel sent a similar letter on January 11, 2016. McLaughlin received both of these letters, but never responded.

         An AGC investigator interviewed McLaughlin in February 2016. McLaughlin told the investigator that she did not think she had to respond to Bar Counsel's November 13 letter, and that she "did not recall" receiving the January 11 letter. Bar Counsel sent McLaughlin additional copies of the previous correspondence through U.S. mail and e-mail. McLaughlin received, but did not respond to these communications.

         THE HEARING JUDGE'S CONCLUSIONS OF LAW

         The hearing judge found that an evidentiary hearing was unnecessary because the Circuit Court had entered an Order of Default and McLaughlin had not moved to vacate the order. He found that the admitted facts were "sufficient by a clear and convincing standard" to justify the court's conclusions of law that McLaughlin violated MLRPC 1.3, 1.4(a) and (b), 1.5(a), 1.15(a) and (e), 8.1(a) and (b), 8.4(a), (c), and (d), and BP § 10-306.

         MLRPC 1.3: Diligence

         The hearing judge concluded that McLaughlin violated Rule 1.3 when she "fail[ed] to promptly advise her client, Doris Leedom, of the risks of continuing to have [Mr.] Leedom act as her power of attorney when [Mr.] Leedom was experiencing problems with substance abuse." This "increased the likelihood that her client would suffer adverse financial consequences."

         MLRPC 1.4: Communication

         The hearing judge found that McLaughlin violated 1.4(a) by failing "to provide information, advice and counsel to her client regarding the propriety of having [Mr.] Leedom, who had known substance abuse issues, continue as her power of attorney." This omission left Ms. Leedom without "sufficient information to participate in making decisions regarding the representation." The hearing judge found that McLaughlin's failure "to explain to [Ms.] Leedom in any manner, the risks of having [Mr.] Leedom continue as her power of attorney" violated Rule 1.4(b) because she never explained the matter to permit her client to make an informed decision.

         MLRPC 1.5(a): Fees

         The hearing judge found that McLaughlin never provided an invoice or billing statement for the $5, 175 fee to either her client or her power of attorney. She simply deducted the money from her IOLTA account, and the only justification for this fee was a notation: "through 08/2014." The hearing judge found that "[w]ithout any basis to substantiate her charges in this case, [McLaughlin's] fee is unreasonable, " and violated Rule 1.5(a).

         MLRPC 1.15(a) and (e): Safekeeping Property

         The hearing judge found that McLaughlin "violated . . . Rule [1.15(a)] when she failed to keep her own property, i.e., the $5, 175 in fees she earned in August 2014, separate from [Ms.] Leedom's own property, " because "she failed to withdraw the funds from the IOLTA account until January 24, 2015." The hearing judge found that McLaughlin violated Rule 1.15(e) "by disbursing $10, 000 to George Leedom in October 2014 without Mrs. McCabe's consent. . . . [and] when she disbursed $5, 175.00 to herself for attorney's fees without Mrs. McCabe's consent."

         MLRPC 8.1: Bar Admission and Disciplinary Matters

         The hearing judge concluded that McLaughlin violated Rule 8.1(a) when she repeatedly made false statements to Bar Counsel in her September 18, 2015 letter. The hearing judge found that McLaughlin violated Rule 8.1(b) because she received three requests for information from Bar Counsel and never responded.

         MLRPC 8.4: Misconduct

         The hearing judge determined that McLaughlin violated Rule 8.4(a) because she violated other Rules of Professional Conduct. The hearing judge concluded that McLaughlin's five misrepresentations to Bar Counsel in the September 18 letter violated Rule 8.4(c), which prohibits conduct involving dishonesty or misrepresentation.

         The hearing judge found that McLaughlin's "failures to communicate with her client, failures to safeguard her client's funds, misrepresentations to [Bar Counsel], and failures to respond to [Bar Counsel's] lawful requests for information" were "likely to impair public confidence in the profession and impact the image of lawyers in the public eye." Such conduct was prejudicial to the administration of justice, and violated 8.4(d).

         Business Occupations & Professions § 10-306: Misuse of Trust Money

         The hearing judge found that McLaughlin violated § 10-306 when she disbursed $10, 000 to Mr. Leedom and $5, 175 to herself contrary to the agreement that she would not disburse any proceeds from the sale of the Aberdeen properties until Mr. Leedom and Mrs. McCabe could agree on the disposition of the funds.

         Aggravating and Mitigating Factors

         Relying on Attorney Grievance Comm'n v. Shuler, 443 Md. 494, 506-07 (2015), the hearing judge considered: (1) the rules McLaughlin violated; (2) her mental state; (3) the injury her misconduct caused, or could have caused; and (4) aggravating and mitigating factors. He found that McLaughlin had violated numerous Rules of Conduct and BP § 10-306. The hearing judge concluded that McLaughlin's mental state "seem[ed] to be intentional and deliberate" based on her September 18 letter. He found that Ms. Leedom lost $10, 000 when McLaughlin released funds to Mr. Leedom without Mrs. McCabe's consent, and $5, 175 when McLaughlin transferred the fee to herself without "proper documentation that [she] had earned those fees." Ms. Leedom may have lost additional funds when McLaughlin failed to advise her client of the dangers of retaining Mr. Leedom as her power of attorney.

         The hearing judge found multiple aggravating factors. He found that McLaughlin had violated multiple rules and BP §10-306. She engaged in "bad faith obstruction of the attorney discipline proceedings" because she "failed to respond to [Bar Counsel's] last three letters. . . . failed to file an answer to the PDRA, which resulted in a default judgement being entered against her. . . . [and] she failed to respond to any of [Bar Counsel's] discovery requests." McLaughlin "submitted false statements, false evidence, and engaged in other deceptive practices" by making multiple misrepresentations in her response to Bar Counsel. McLaughlin did not acknowledge the wrongful nature of her misconduct because she "never admitted that she violated any Rules of Professional Conduct. . . . [and] never apologized for her misconduct."

         The hearing judge found that Ms. Leedom was a vulnerable victim because she was 89 years of age at the time the misconduct occurred. McLaughlin had substantial experience in the practice of law. McLaughlin was indifferent to making restitution or correcting her misconduct because she never refunded her fees, nor apologized. He also found that McLaughlin was likely to repeat her misconduct, because "absent recognition of and remorse for her wrongdoing, there is a substantial likelihood that she will repeat it." The hearing judge found that McLaughlin had no available mitigating factors because she had not provided any evidence, nor had she "participated in any way during these proceedings . . . ."

         DISCUSSION

         In proceedings before this Court, McLaughlin was limited to addressing sanctions because of the default entered against her. We issued a per curiam order disbarring McLaughlin on September 11, 2017. See Attorney Grievance Comm'n v. McLaughlin, Md. (2017). We now explain the basis for that order.

         Standard of Review

         "In attorney discipline proceedings, this Court has original and complete jurisdiction and conducts an independent review of the record." Attorney Grievance Comm'n v. McClain, 406 Md. 1, 17 (2008). The Court will accept the hearing judge's findings of fact unless they are clearly erroneous. Attorney Grievance Comm'n v. Page, 430 Md. 602, 626 (2013). Both parties may file "exceptions to the findings and conclusions of the hearing judge[.]" Maryland Rule 19-728(b)(1). Because neither party filed an exception in this case, we choose to "treat the findings of fact as established." Md. Rule 19-741(b)(2)(A); see also Attorney Grievance Comm'n v. De La Paz, 418 Md. 534, 552 (2011). We review the hearing judge's conclusions of law without deference, "even where default orders and judgments have been entered at the hearing level." Attorney Grievance Comm'n v. Harrington, 367 Md. 36, 49 (2001).

         The Order of Default

         The hearing judge entered an Order of Default under Md. Rules 2-613(b) and 19-724(c) because McLaughlin never filed a response to the Petition. He relied on Attorney Grievance Comm'n v. Thomas, 440 Md. 523, 550-51 (2014), to ...


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