Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Attorney Grievance Commission of Maryland v. Kane

Court of Appeals of Maryland

August 26, 2019


          Argued: June 6, 2019

          Circuit Court for Montgomery County No. 447490-V

          Barbera, C.J. [*] Greene McDonald Watts Hotten Booth Battaglia, Lynne A. (Senior Judge, Specially Assigned), JJ.


          Booth, J.

         This attorney discipline matter against Respondent, Eugene Ignatius Kane, Jr. ("Respondent" or "Mr. Kane") arises out of Mr. Kane's representation of two clients, Mrs. Lonergan and Mr. Arvin, in separate matters, as well as his personal bankruptcy filings in the United States Bankruptcy Court for the District of Maryland, his personal tax return filings and the related investigations of the Attorney Grievance Commission ("AGC").

         On May 1, 2018, the AGC, through Bar Counsel, filed a Petition for Disciplinary or Remedial Action ("Petition") against Mr. Kane alleging that he had violated several provisions of the Maryland Lawyers' Rules of Professional Conduct ("MLRPC"). Specifically, Bar Counsel charged him with violating Rules 1.1 (Competence), 1.2 (Scope of Representation and Allocation of Authority Between Client and Attorney), 1.3 (Diligence), 1.4 (Communication), 1.7 (Conflict of Interest: General Rule), 1.15 (Safekeeping Property), 1.16 (Declining or Terminating Representation), 3.1 (Meritorious Claims and Contentions), 3.3 (Candor Toward the Tribunal), 3.4 (Fairness to Opposing Party and Counsel), 8.1 (Bar Admission and Disciplinary Matters), and 8.4 (Misconduct) of the Maryland Lawyers' Rules of Professional Conduct.[1] Mr. Kane was also charged with violating Maryland Rule 16-606.1[2]

         Pursuant to Maryland Rule 19-722(a), this Court designated the Honorable David W. Lease of the Circuit Court for Montgomery County to conduct an evidentiary hearing (the "attorney grievance hearing" or "hearing") regarding the alleged violations, and to provide findings of fact and conclusions of law pursuant to Maryland Rule 19-272. The attorney grievance hearing was held between December 10, 2018 and December 14, 2018. Mr. Kane represented himself throughout the hearing.

         The hearing judge issued Findings of Fact and Conclusions of Law on March 14, 2019, in which he found by clear and convincing evidence that Mr. Kane violated MLRPC 1.1, 1.2, 1.3, 1.4, 1.7, 1.16, 3.1, 3.3, 3.4, 8.1, and 8.4.[3] The hearing judge did not find a violation of Maryland Rule 16-606.1.

         Bar Counsel filed one exception, which was to the hearing judge's failure to find Mr. Kane's prior warning by the AGC to be an aggravating factor. Mr. Kane filed a number of exceptions to both the hearing judge's findings of fact, as well as his conclusions of law.[4]

         Concerning the appropriate sanction, Bar Counsel recommends that Mr. Kane be disbarred for his violations of the MLRPC. Mr. Kane requests that this Court impose a reprimand as the appropriate sanction. On June 6, 2019, this Court heard oral arguments in this matter. Mr. Kane appeared and was represented by counsel. We address the parties' exceptions below. For the reasons set forth herein, we hold that Mr. Kane's violations warrant the sanction of indefinite suspension.

         I. The Hearing Judge's Findings of Fact

         When no exception is made to a hearing judge's finding of fact, we accept it as established. Md. Rule 19-741(b)(2)(A). When a party excepts to a finding, we must determine whether the finding is established by the requisite standard of proof-in the case of an allegation of misconduct, clear and convincing evidence. Md. Rules 19-741(b)(2)(B), 19-727(c). The standard of review for a hearing judge's factual findings where a party excepts to the findings is the clearly erroneous standard. Attorney Grievance Comm'n v. Chanthunya, 446 Md. 576, 588 (2016) (cleaned up). We summarize the hearing judge's findings of fact and other undisputed matters in the record. We also address any exceptions in relation to the findings to which they pertain as follows.

         Mr. Kane's Credentials and Practice[5]

         Mr. Kane graduated from Georgetown Law School in 1983 and was admitted to the Maryland Bar on December 20, 1983. He is a solo practitioner with a virtual office located in Montgomery County, Maryland. While Mr. Kane's mail was delivered to his virtual office, he conducted meetings in public places, such as restaurants and coffee shops, and otherwise worked from his home, also located in Montgomery County. Mr. Kane did not have any administrative support, other than a receptionist at his virtual office.

         The Lonergan Matter

         In 2006, Brian Lonergan and his wife ("Mrs. Lonergan") purchased a PostNet franchise. Soon thereafter, Mr. Lonergan established Montgomery Business Solutions, LLC ("MBS") to operate the printing and shipping franchise. MBS traded under the names PostNet and PostNet MD 112 (hereinafter "PostNet"). Mr. Lonergan was the sole member and owner of MBS and managed the day-to-day operations of the store. Mrs. Lonergan, an attorney, was not involved in the operation of the MBS business venture.

         1. PNC v. MBS

         In November 2010, Mr. Lonergan retained Mr. Kane to represent MBS in connection with collection efforts by PNC Merchant Services Company ("PNC") after it was discovered that MBS had been the target of a credit card scam. The transaction at issue involved a large order placed by a third-party that was paid for with a stolen credit card. PNC claimed that MBS owed approximately $50, 000 due to a charge back to MBS's account after the transaction was determined to have been fraudulent. PNC cancelled MBS's merchant account and placed MBS on a "blacklist," preventing MBS from conducting credit card transactions.

         During their initial meeting, Mr. Kane indicated that he could attempt to negotiate a resolution with PNC. Mr. Lonergan, through PostNet, retained Mr. Kane. Mr. Lonergan testified that he did not recall discussing an hourly rate with Mr. Kane, but he understood that Mr. Kane would charge him an hourly rate for his services.

         Mr. Kane attempted to negotiate a resolution with PNC, to no avail. PNC would not agree to remove MBS from the blacklist, which had the effect of preventing MBS from accepting credit card payments from its customers. As a result, in September of 2011, PNC filed a complaint against MBS in the Circuit Court for Montgomery County. Prior to trial, PNC offered to settle the matter by removing MBS from the blacklist in exchange for a payment of $50, 719.25. It became apparent to Mr. Kane that MBS had no defense, so he investigated other options.

         In early June of 2012, Mr. Kane advised Mr. Lonergan that he had consulted with a bankruptcy attorney, who recommended that they create a new entity to operate PostNet so that the business could continue to operate.[6] Mr. Kane indicated that the new entity would be able to process credit cards. Mrs. Lonergan, skeptical of this advice, asked Mr. Kane whether his proposed course of action could be successful, and whether there would be any associated risk. Mr. Kane told Mrs. Lonergan that there was nothing wrong with attempting to operate under the new entity, although it might not be successful. Mr. Kane advised that the only potential risk was that the credit card processing company might discover a connection between MBS and the newly formed company, which could lead to the loss of the filing fees paid to create the new entity.

         Based upon Mr. Kane's advice, the Lonergans agreed that Mr. Lonergan would form a new company. The day before the PNC trial, Mr. Kane filed articles of organization with the Maryland State Department of Assessment and Taxation ("SDAT") establishing Matrix Printing, LLC ("Matrix"). Matrix was registered to the same address as MBS and was intended to control and continue MBS's printing and shipping franchise.

         The following day, Mr. Kane appeared in the circuit court on behalf of MBS. Mr. Kane advised PNC and the court that MBS would not contest the matter. The circuit court entered judgment in favor of PNC against MBS in the amount of $50, 719.25. Mr. Kane did not inform PNC or the circuit court of the formation of Matrix prior to the entry of the judgment; however, there was no duty to disclose such information.

         PNC commenced efforts to collect on the judgment and garnished MBS's bank accounts. Mr. Kane advised Mr. Lonergan that MBS should explore filing bankruptcy because PNC was unrelenting. Mrs. Lonergan requested a telephone call with Mr. Kane regarding the potential bankruptcy filing. She again asked if there was risk or anything illegal about the creation of Matrix. Mr. Kane was adamant that there was no risk. Mr. Kane spoke with MBS's accountant, Mr. Burstein, as well as a bankruptcy attorney, and they both agreed with his recommendation.

         2. MBS Chapter 7 Bankruptcy

         Mr. Kane filed a Chapter 7 Bankruptcy petition on behalf of MBS in the United States Bankruptcy Court for the District of Maryland ("Bankruptcy Court") in March of 2013. The filing contained numerous deficiencies, including the failure to file many schedules. On April 2, 2013, the Bankruptcy Court dismissed the petition because the deficiencies had not been cured.

         The following day, Mr. Kane filed an appearance of counsel and an affidavit for explanation of non-compliance and disclosure, wherein Mr. Kane advised that he did not have an account to electronically file MBS's pleadings. Mr. Kane also filed a motion to reinstate Chapter 7, associated schedules, and a statement of financial affairs. Mr. Kane's filings once again contained deficiencies. He failed to include the required declaration from the debtor or to file a certificate of service as required by the bankruptcy rules.

         The Bankruptcy Trustee ("Trustee") retained counsel, Jeffrey M. Orenstein, to investigate MBS and Matrix. The bankruptcy judge granted the Trustee's motion to vacate the dismissal of the bankruptcy, which allowed the Trustee to continue his investigation. In the course of his investigation, Mr. Orenstein reviewed the bankruptcy petition prepared by Mr. Kane on behalf of MBS. Mr. Orenstein noted that the petition stated that MBS had no assets; however, there was no disclosure of any transfers by MBS or any closed bank accounts. Mr. Orenstein investigated the PNC litigation and concluded that there were potential claims that could be pursued on behalf of the bankruptcy estate.[7]

         On February 2, 2014, Mr. Kane emailed Mr. Lonergan and advised that there were no updates in the Chapter 7 bankruptcy case. In this email, Mr. Kane inquired about how he was going to be compensated. At no time between November 2010 and February 2014 did Mr. Kane provide an invoice or billing statement in connection with his representation of MBS. Mr. Kane stated that "if [I] did an itemized bill based on time it would be excessive. Thoughts on alternatives to hourly arrangement?" Mr. Kane and Mr. Lonergan agreed on a total fee of $12, 000 with $5, 000 to be paid immediately and the remainder in monthly installments of $1, 000. Mr. Lonergan's father sent two checks totaling $5, 000 on behalf of Mr. Lonergan in February of 2014. One check in the amount of $2, 000 referenced "Services/PostNet." The other check in the amount of $3, 000 referenced "PostNet Legal Services."

         On April 15, 2014, Mr. Lonergan requested a statement representing the agreed-upon amount owed. Mr. Kane provided Mr. Lonergan an invoice that day, which included time spent on the matter through March 9, 2011, as well as a "general entry" in the amount of $4, 776.68 on April 15, 2014, which brought the total invoice amount of $11, 999. The invoice did not account for the February 2014 payments. Mr. Lonergan testified that his understanding was that the $12, 000 would cover the case to its conclusion. Mr. Kane testified that he had a clear understanding that he would handle the bankruptcy matter without charge.

         3. Adversary Proceeding Against MBS, Mr. Lonergan, Mrs. Lonergan, and Mr. Kane

         The Trustee's investigation led to the filing of a Complaint to Avoid Transfers, for Declaratory Judgment, and to Recover Monetary Damages against Matrix, Mr. Lonergan, Mrs. Lonergan, and Mr. Kane. The Complaint, which was filed in June of 2014 in the Bankruptcy Court, consisted of ten counts, including civil conspiracy and a fraudulent conveyance based on the transfers allegedly made by the Lonergans and Mr. Kane between MBS and Matrix on the eve of trial in the PNC case (the "Adversary Proceeding").

         Mr. Kane discussed the Adversary Proceeding with Mr. Lonergan and advised him that he believed that the case was defensible because Mr. Kane had spoken to a bankruptcy attorney and to MBS's accountant prior to creating Matrix and filing MBS's bankruptcy. In August of 2014, Mr. Kane filed a Motion to Dismiss Complaint, or Alternatively, a Motion for More Definite Statement of Same on behalf of Matrix, the Lonergans, and himself. Mr. Kane had not discussed the complaint or his motion with Mrs. Lonergan, nor did he have her authorization to take any action on her behalf.

         From the outset of the Adversary Proceeding, counsel for the Trustee, Mr. Orenstein, had several discussions with Mr. Kane wherein he expressed concern regarding Mr. Kane's ongoing representation of the Lonergans and Matrix. Specifically, Mr. Orenstein expressed concern about the fact that Mr. Kane was a named defendant against whom the Trustee was seeking damages, and that he would be a primary witness in the case. Mr. Orenstein told Mr. Kane several times that he did not believe that Mr. Kane could represent the Lonergans or Matrix in the Adversary Proceeding because Mr. Kane was also a defendant.

         In August of 2014, the Bankruptcy Court held a pretrial hearing. Mr. Kane appeared on behalf of the defendants. As before, Mr. Kane had not discussed the complaint or the hearing with Mrs. Lonergan, nor was he authorized to appear on her behalf. [8] The Lonergans were not present. At the hearing, the Trustee advised the Bankruptcy Court that Mr. Kane would be a witness and therefore, could not serve as counsel for the Lonergans or Matrix. After the hearing, Mr. Kane emailed Mr. Lonergan and informed him that the Trustee intended to file a motion to disqualify him as counsel in the case because a lawyer cannot be a witness and act as counsel at trial. Mr. Kane stated that: "[w]e will wait to see what the Trustee files." Mr. Kane did not withdraw as counsel for the Lonergans and Matrix in the Adversary Proceeding at that time, nor did he discuss his conflict of interest with the Lonergans.

         In September of 2014, the Trustee served interrogatories and requests for production of documents on each of the Lonergans. In November of 2014, the Trustee filed an amended complaint, wherein he added claims against the Lonergans and Mr. Kane related to the alleged fraudulent conveyance. Mr. Kane failed to communicate in any manner with Mrs. Lonergan about the amended complaint.

         On December 12, 2014-more than two months after the discovery had been propounded-Mr. Kane emailed Mr. Lonergan and asked how he was doing on the "discovery preparation." On December 16, Mr. Orenstein wrote to Mr. Kane concerning the overdue discovery responses and stated that if responses were not received on or before December 20, the Trustee would seek sanctions against the Lonergans. That same day, Mr. Kane emailed Mr. Orenstein and stated: "Client has been working on the responses. This is a very busy time of the year for the company. Anticipate responses shortly." At that time, Mr. Kane still had not had any communications with Mrs. Lonergan about the lawsuit that had been filed in which she was a named defendant, the outstanding discovery requests, or the response deadline.

         On January 4, 2015, Mr. Kane emailed Mr. Lonergan about the discovery responses. Mr. Kane indicated that he was "very certain" that Mr. Orenstein was "going to insist [they] file the discovery responses this week." Mr. Kane did not advise Mr. Lonergan that the responses were overdue or of the content of Mr. Orenstein's December 16 letter.

         In January of 2015, Mr. Kane filed an Answer to the Amended Complaint on behalf of all the defendants, including himself. Again, Mr. Kane was not authorized by Mrs. Lonergan to take any action on her behalf.

         On February 3, 2015, Mr. Orenstein once again wrote to Mr. Kane regarding the overdue discovery responses. Mr. Orenstein advised that if discovery responses were not received by February 10, he would file a motion for sanctions. On February 4, Mr. Kane emailed Mr. Lonergan and indicated that they needed to "resume" their efforts on the discovery responses. Mr. Kane stated that he had a new deadline of February 10 to submit discovery responses. Mr. Kane did not advise Mr. Lonergan that the Trustee intended to file a motion for sanctions if responses were not received by February 10. The deadline passed without any further communication between Mr. Kane and Mr. Orenstein.

         Having received no response from Mr. Kane to his February 4 email, Mr. Orenstein filed a motion for sanctions and motion to compel discovery against the Lonergans on February 16. On February 17, Mr. Kane, for the first time, emailed draft responses to Mr. Lonergan and requested that Mr. and Mrs. Lonergan review and sign the responses. Mr. Kane did not advise the Lonergans of the pending motion for sanctions that had been filed against them. On March 4, Mr. Kane emailed Mr. Lonergan and inquired about the status of the responses. Again, Mr. Kane failed to advise Mr. Lonergan of the pending motion for sanctions. On March 7, Mr. Kane emailed Mr. Lonergan about the discovery responses and advised that a "motion to compel" had been filed. Mr. Kane stated that he wanted to get the discovery filed to "keep from sanctions for non-filing."

         As of March 7, Mr. Kane had failed to have any direct communications with Mrs. Lonergan about the discovery and failed to advise either of the Lonergans that a pending motion for sanctions had been filed against them three weeks earlier.

         The Bankruptcy Court scheduled a hearing for March 23, 2015. On March 19, Mr. Kane finally provided complete discovery responses to Mr. Orenstein. Mr. Kane filed a response to the motion for sanctions on the day before the hearing.

         On March 23, the Bankruptcy Court heard the Trustee's motion for sanctions. Mr. Kane appeared on behalf of the Lonergans, who were not present. At the conclusion of the hearing, the Bankruptcy Court granted the Trustee's motion. After the hearing, Mr. Kane failed to advise the Lonergans that sanctions had been entered against them. Instead, Mr. Kane sent Mr. Lonergan an email advising him that the Bankruptcy Court had granted the motion to compel and requested "the Trustee provide an estimate of the costs of preparing the motion and will [sic] us to negotiate, if possible, a reasonable reimbursement for the cost of the motion." On April 17, 2015, the Bankruptcy Court entered an Order of Sanctions against the Lonergans in the amount of $3, 197.25. Once again, Mr. Kane failed to advise Mrs. Lonergan about either the Court's grant of the motion to compel or the sanctions order.

         In the fall of 2015-over a year after the initial case was filed-Mr. Kane advised Mr. Lonergan that the Lonergans needed to retain new counsel because the Trustee intended to call Mr. Kane as a witness at trial. The Lonergans retained Michael P. Coyle as successor counsel. When the Lonergans consulted with Mr. Coyle, Mrs. Lonergan learned, for the first time, that she was a named defendant in the Adversary Proceeding and that sanctions had been entered against her.

         Mr. Coyle recommended that the Lonergans attempt to negotiate a settlement with the Trustee. Prior to Mr. Coyle's involvement in the case there had not been any legitimate settlement discussions between Mr. Orenstein and Mr. Kane.[9] Mr. Coyle entered his appearance and negotiated a settlement with the Trustee prior to trial. The terms of the settlement required that the Lonergans and Matrix pay approximately $16, 500 and that the Lonergans pay an additional $3, 197.25 as sanctions associated with the parties' discovery violations. Mr. Kane never reimbursed the Lonergans for the amounts paid toward the sanctions.

         Trial proceeded on January 12, 2016, with Mr. Kane as the only defendant. The Trustee and Mr. Kane each made opening statements and conducted direct and cross-examination of Mr. Lonergan. During the lunch break, Mr. Kane, for the first time, advised Mr. Orenstein that he had filed a personal Chapter 13 bankruptcy petition in September of 2015. Mr. Orenstein immediately advised the bankruptcy judge of Mr. Kane's Chapter 13 filing, which required that the proceedings against him be stayed immediately. The following exchange occurred with the bankruptcy judge:

MR. ORENSTEIN: Your Honor, I have to apologize to you and everybody else in this courtroom for wasting your time because Mr. Kane just informed me that in September[, ] he filed a Chapter 13 bankruptcy petition.
THE COURT: Oh, no.
MR. ORENSTEIN: And this case, as a result, is stayed as to him, although the trustee was not listed as a creditor and we knew nothing about that until just this moment. And you know how much time and effort and money we have spent on this because Mr. Kane has, once again, thrown us into the deep end. But we cannot, as a matter of law, go forward with this trial at this point.
MR. KANE: Let me respond to that. I have been trying to - - first of all, for personal privacy reasons, I have been trying to keep that out of any and all professional matters. That's number one for my rationale. Number two, once I became the sole defendant, and I asked counsel at the break, because we haven't had any discussions since they left me as the sole defendant, monetarily, what are they seeking from me. Okay? I was given a number, okay, and I said that's not even workable for me. The difficulty for me is that I'm trying to, as you can see, from September - - I'll give you the case number if you need it, Your Honor.
MR. KANE: It's 15-22874. It's a mortgage issue. I'm trying to work out a mortgage issue with the mortgage company, and I'm trying to resolve that issue on modification with Wells Fargo. And that's what I've been dealing. So[, ] on a personal note, I believed, and still do believe that the only financial exposure, if there is any in this case, is it relates to my former clients, not for me. I've always provided professional advice.
THE COURT: It doesn't matter. You've been sued[, ] and you should have advised the Court that you're a Chapter 13. People who are - - it stays the matter. And he could have made some other decisions, either about how he was going to settle it because you're in Chapter 13, or chose not to pursue it, or whatever, or you could have agreed on a claim in the Chapter 13 case.
But to have gone forward when there is an automatic stay that goes into effect, and to have cause these people and the Court all of this time is - -
MR. KANE: But the Court was also clear, on several days, that you wanted this case tried today.
THE COURT: But is wasn't going to be - -
MR. KANE: And I wasn't going to let that interfere.
THE COURT: It can't be - -
MR. KANE: I didn't want my personal life to interfere.
THE COURT: It can't be tried if there's an automatic stay. Even if I'm the judge, and I don't know that I am in the 13, there is an automatic stay that goes into effect, and it can't be pursued unless they file a motion for relief from automatic stay. They can't do it, ethically.
All right. Well, we're done for today; that's for sure. Let's just wrap this up.
THE COURT: Okay. Are they listed as a creditor? They didn't get notice.
MR. KANE: I list two creditors, Your Honor, the first and second mortgage; that's the only people - -
THE COURT: They're a - -
MR. KANE: I'm going to have to amend at this point. I understand I'm going to have to do all of that now that they're made me a direct point of contact in this case. I thought it was peripheral; that's my perception of it. But apparently the trustee doesn't think so.
THE COURT: Well, it's not a matter of "apparently the trustee"; it's the law. Read Section 362 of the Bankruptcy Code.
MR. KANE: But I - - you know, honestly, Your Honor, I get where - - you know, if I get somebody that sues me for a court reporter bill for $300, I don't list them on any financial reportings, and I do with any venue. Those are just minor things. I saw my role, personally, as far as personal exposure, as minor.
THE COURT: It doesn't matter; it's still a claim. It needed to have been listed.
MR. KANE: All right.

         At the attorney grievance hearing, Mr. Kane advanced various reasons for his failure to disclose the Adversary Proceeding and list the Trustee as an unsecured creditor in his bankruptcy petition. The hearing judge found that Mr. Kane's reasons for purposely omitting the listing of the Adversary Proceeding were not permissible. The hearing judge determined that Mr. Kane knowingly and intentionally withheld material information from the Bankruptcy Court by failing to identify the Adversary Proceeding. The hearing judge found that Mr. Kane was aware that he needed to list the claim. Mr. Kane acknowledged the willful nature of his omission to list the Adversary Proceeding in his personal bankruptcy filing when he advised the Bankruptcy Court that he failed to disclose the claim because "I have been trying to keep that out of any and all professional matters. . . ."

         Subsequently, the automatic stay was lifted, and the Adversary Proceeding against Mr. Kane went forward. The Bankruptcy Court found for Mr. Kane and entered a judgment in his favor.

         Mr. Kane excepts to the factual finding that he "knowingly and intentionally filed a false bankruptcy petition," claiming that he firmly believed that he did not have to list the Adversary Proceeding because it was an "inchoate claim." Although this may have been Mr. Kane's belief, it was nonetheless incorrect. And the record described above shows that Mr. Kane's omission was intentional. Based upon the facts outlined above, the hearing judge's finding is not clearly erroneous. We overrule Mr. Kane's exception.

         4. Bar Counsel Investigation into Lonergan Complaint

         Mrs. Lonergan filed a complaint with the Attorney Grievance Commission in June of 2016. Bar Counsel forwarded the complaint to Mr. Kane on September 6 and requested that Kane provide a written response within fifteen days. When Mr. Kane did not respond to Bar Counsel's request, Counsel sent a follow-up request asking Mr. Kane to respond within ten days. On October 19, 2016, Mr. Kane represented to Bar Counsel that his representation of MBS was on a pro bono basis.[10]

         Bar Counsel requested that within ten days, Mr. Kane provide "additional information and documentation" including "copies of all records created and maintained for the receipt, maintenance and disbursement of funds from the Lonergans, MBS and Matrix," as well as "copies of cancelled checks and a full accounting of any payments" received. Mr. Kane neglected to timely respond to this request.

         Mrs. Lonergan provided supplemental information to Bar Counsel at the end of October 2016. On November 16, Bar Counsel requested that Mr. Kane respond in writing, within seven days, to the new information provided by Mrs. Lonergan. Three weeks later, Mr. Kane provided a compact disc containing electronic files related to his representation of the Lonergans, MBS, and Matrix. However, the information provided by Mr. Kane did not include "records associated with the receipt, maintenance and disbursement of client funds" that had been requested by Bar Counsel. Mr. Kane ultimately provided Bar Counsel with a photograph of the front of two checks but failed to produce a copy of another check in the amount of $1, 000 that he received from Matrix.

         Mr. Kane excepts to the hearing judge's findings in connection with Bar Counsel's investigation into Mrs. Lonergan's complaint, arguing that "[t]he Court should have found that the record supports a finding that the [R]espondent's family issues (serious illness of his in-laws) delayed his response to Bar Counsel's inquiries and that the [R]espondent ultimately appropriately engaged with Bar Counsel." Mr. Kane's exception is overruled. The hearing judge's failure to make a specific finding that Mr. Kane's delayed response was caused by his in-laws' failing health is not clearly erroneous. See Attorney Grievance Comm'n v. Vanderlinde, 364 Md. 376, 385 (2001) ("Exceptions to the findings of our hearing judges in attorney discipline matters should be directed to facts that he [or she] finds, or facts that he [or she] expressly rejects or expressly refuses to consider."). As discussed infra, as a mitigating factor in Mr. Kane's favor, the hearing judge found that Mr. Kane's in-laws' failing health affected Mr. Kane emotionally and required significant time and energy for their care.

         Mr. Kane's Personal Bankruptcy Filings and Tax Returns

         1. Serial Bankruptcy Filings

         Mr. Kane filed five individual voluntary bankruptcy petitions under Chapters 7 and 13 between February 26, 2014, and April 4, 2017. Each of the bankruptcy petitions were filed "on the eve of a foreclosure on his home" and were signed under the penalty of perjury. The hearing judge found that Mr. Kane's "frequent and unsuccessful filings constituted an abuse of the bankruptcy process."

         Mr. Kane filed his first Chapter 13 bankruptcy petition in February of 2014. The petition, schedules, and income statement were all deficient and contained incorrect or misleading information. Specifically, Mr. Kane reported significantly less money in his checking account than his bank records demonstrated. Other items disclosed included monthly expenses, household furnishings, wearing apparel, and a vehicle, all of which were inconsistently reported on later bankruptcy filings. The Bankruptcy Court denied Mr. Kane's Chapter 13 plan with leave to amend; however, Mr. Kane neglected to file an amended plan. In July of 2014, the Bankruptcy Court dismissed this bankruptcy petition.

         When Mr. Kane initiated his second Chapter 13 filing in September of 2015, the Adversary Proceeding to which he was a party with the Lonergans and Matrix was pending in Bankruptcy Court. As noted supra, Mr. Kane failed to disclose the Adversary Proceeding or list the Trustee as an unsecured creditor. In addition to these omissions, Mr. Kane's petition, schedules, and income statement again were incomplete and contained false or misleading information. At the attorney grievance hearing, Mr. Orenstein testified that the information that Mr. Kane failed to provide on his schedules included, but was not limited to, information relating to his bank account, ownership interest in his law practice, and office lease. The Bankruptcy Court dismissed this Chapter 13 petition in April of 2016, determining that Mr. Kane had "'not properly prosecuted [the] action' either by electing to convert it from a Chapter 13 case to another chapter or dismissing the action."

         Approximately seven weeks later, in June of 2016, Mr. Kane filed a third Chapter 13 petition. Less than a month later, Mr. Kane filed amended schedules on which he listed claims for household goods and furnishings, electronics, and clothes. On Schedule E/F, he also listed unsecured creditors whom he had not previously disclosed on his 2014 or 2015 bankruptcy filings. Additionally, on Schedule J, Mr. Kane listed expenses for "telephone, cell phone, internet, satellite and cable; food and housekeeping; clothing and laundry and dry cleaning; personal care products and services; medical and dental expenses; travel expenses; entertainment; charitable contributions and religious donations; and insurance[, ]" none of which he had listed on his two earlier bankruptcy petitions. This petition was dismissed in December of 2016.

         Less than two months later, Mr. Kane filed a fourth bankruptcy petition for Chapter 7 bankruptcy. However, the same day, Mr. Kane filed a motion requesting that the case be converted to a Chapter 13 bankruptcy. This motion was granted. Nonetheless, the petition was dismissed in February of 2017 due to Mr. Kane's failure to complete filings required by the Bankruptcy Court.

         Once again, less than two months after his last petition was dismissed, Mr. Kane filed a fifth Chapter 13 petition in April of 2017. The Chapter 13 Trustee filed a Motion to Dismiss with Prejudice for Bad Faith. In Mr. Kane's response to this motion, he admitted that his serial bankruptcy filings were commenced in an effort to obtain a loan modification. The Trustee's motion was granted; however, the order was later vacated after Mr. Kane established that he was current on his plan payments. Ultimately, the Chapter 13 Plan was denied, and in February of 2018, the Chapter 13 petition was dismissed for failure to properly prosecute the action.[11]

         The hearing judge found that Mr. Kane's frequent and unsuccessful filings constituted an abuse of the bankruptcy process. The hearing judge found that Mr. Kane's explanation at trial that "skeleton filings" are permitted in Bankruptcy Court and that he filed the petitions "late at night when he was exhausted" does not absolve him from his repeated "omissions and inaccuracies in his filings" because they are evidence of "a knowing disregard for the accuracy of the multiple petitions filed . . . under oath."

         The hearing judge found that Mr. Kane disclosed to the bankruptcy judge that he intentionally does not include what he considers to be minor items when Mr. Kane stated that, "If I get somebody that sues me for a court reporter bill for $300 I don't list them on any financial reportings, and I do [sic] with any venue. They are just minor things."

         Mr. Kane excepts to the hearing judge's finding that his frequent and unsuccessful filings were an abuse of the bankruptcy process. He claims that the filings are an attempt "to force a recalcitrant creditor to the negotiating table," which is a "common practice" and the different amounts in various schedules in the bankruptcy filings are explained by the fluid nature of a person's financial situation. We overrule this exception. Based upon our review of the record, the hearing judge's finding is not clearly erroneous. As set forth above, Mr. Kane filed multiple bankruptcy filings replete with incomplete and inconsistent information, and in each instance, the petition was dismissed. The hearing judge did not clearly err in finding that these multiple, serial incomplete filings constituted an abuse of the bankruptcy process.

         2. Tax Returns

         During the attorney grievance hearing, Mr. Kane testified that he deducted 100% of his communication expenses for his sole proprietorship on his 2014 and 2015 Individual Tax Returns, even though his wife and three children, who are not employees, also use these services. He also confirmed that he deducted amounts not related to the operation of his law practice, including the cost of his FIOS television. In his Findings, the hearing judge stated that, "[W]hile the Court acknowledges that ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.