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Attorney Grievance Commission v. Giannetti

Court of Appeals of Maryland

December 15, 2017


          Argued: November 7, 2017

         Circuit Court for Anne Arundel County Case No. C02CV16003430

          Barbera, C.J., Greene, Adkins, McDonald, Watts, Hotten, Wilner, Alan M. (Senior Judge, Specially Assigned), JJ.


          Greene, J.

         This attorney discipline case arises out of an attorney's failure to file federal and state tax returns as well as his failure to satisfy federal and state tax obligations for a seven-year period.

         The Attorney Grievance Commission of Maryland ("Petitioner" or "Commission"), acting through Bar Counsel, charged Respondent, John Alexander Giannetti, Jr., with several violations relating to his failure to file and pay federal and state incomes taxes for the years 2008 through 2015. Specifically, the Commission charged Respondent with violating the Maryland Lawyers' Rules of Professional Conduct ("MLRPC" or "Rule") 8.4 (Misconduct), [1] and the Commission filed a Petition for Disciplinary or Remedial Action, pursuant to Maryland Rule 16-751(a).

         This Court referred the matter to Judge Glenn L. Klavans (the "hearing judge"), of the Circuit Court for Anne Arundel County, on November 4, 2016, to conduct an evidentiary hearing and make findings of fact and conclusions of law. The hearing judge scheduled the case for a hearing on April 28, 2017.

         Petitioner served Respondent with discovery requests in the form of Interrogatories, Request for Production of Documents and/or Electronically Stored Information, and Requests for Admissions of Fact and Genuineness of Documents. Respondent failed to file any response. Upon Petitioner's Motion for Sanctions Upon Failure to Provide Discovery, the hearing judge found that Respondent's failure to respond was "without excuse or objection, was purposeful and willful, and that Respondent made no good faith effort to resolve the discovery dispute." As a result, the hearing judge deemed admitted Petitioner's Requests for Admissions of Fact and Genuineness of Documents, and prohibited Respondent from testifying or introducing evidence in opposition to Petitioner's claims. Respondent was also prohibited from offering mitigation witnesses, other than his own personal testimony. On the eve of trial, Respondent filed a Request for Postponement to Prepare Defense based on New Information and Other Facts, along with a Motion to Shorten Time for Petitioner's Response. The hearing judge heard the motion orally as a preliminary matter on the day of trial, April 28, 2017, and upon Respondent's argument as well as Petitioner's response, the hearing judge denied the motion. The Circuit Court heard evidence from Petitioner, and although Respondent was permitted to testify on his behalf as to any mitigation evidence, he did not offer any mitigation evidence. After the hearing, Judge Klavans issued his Findings of Fact and Conclusions of Law, in which he concluded that Respondent had violated Rule 8.4(a), (b), (c) and (d).


         The Hearing Judge's Findings

         The hearing judge made the following findings of fact by clear and convincing evidence. See Md. Rule 19-727(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 April 6, 1995. Beginning in January 2008 and continuing through December 2015, Respondent maintained an office for the practice of law in Anne Arundel County, Maryland, where he was self-employed and, therefore, was not working for an employer who withheld payroll taxes. The hearing judge found that Respondent knew he had an obligation to file tax returns and pay taxes to both the federal and state governments. With respect to the filing and payment of those federal and state tax obligations, the hearing judge found:

4. Beginning on or about April 15, 2008 and continuing through April 15, 2015, Respondent knowingly failed to timely file both federal and Maryland income tax returns. Admission 5.
5. In some years, Respondent requested and received extensions for filing his tax returns. In the years Respondent requested and received extensions, Respondent did not file a return prior to the extended date. Admission 6-7.
6. Respondent paid no Maryland State Income taxes for tax years 2008 through 2014. Admission 8.
7. On occasions when Respondent filed untimely federal and Maryland tax returns, he did not include payments for taxes owed. Admission 9.
8. During the period 2008 through 2015, Respondent made one payment on his federal income tax liability. Payment was made in 2011 and was applied to Respondent's 2007 tax liability. Admission 10-11.
* * * *
11. Respondent did not keep accurate and complete financial records of his income during the years 2008 through 2015. Admission 14.
* * * *
16. The total amount owed by Respondent for federal income taxes, according to the records provided by Respondent, was $38, 107.97, which included penalties and interest for failure to file and failure to pay as of February 26, 2016.
17.The exact amount of Respondent's income tax obligation to the State of Maryland cannot be determined by this [Circuit] Court, since Respondent provided no information regarding his state tax liability to Bar Counsel. The State, however, has a tax lien in excess of $112, 000.00 against Respondent. Judge Klavans noted that Respondent "chose not to testify as to the presence of any

         physical and/or mental health problem and/or other mitigating factors related to his failure to file timely tax returns and pay his tax obligations." The hearing judge found that Petitioner's investigator, and sole witness at trial, did not suspect Respondent of having a substance abuse problem. Finally, the hearing judge found that although the Petitioner's witness did not understand all of the information on the Internal Revenue Service ("IRS") reports, "it was clear from the records that for each tax year 2008 through 2014, the IRS had imposed penalties for not paying income taxes in a timely manner and for every tax year 2008 through 2014, the IRS imposed penalties for not filing a return in a timely manner."


         The Hearing Judge's ...

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