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.
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
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. Mr. Kane was also charged with violating
Maryland Rule 16-606.1
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.
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. The hearing judge
did not find a violation of Maryland Rule 16-606.1.
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.
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
The Hearing Judge's Findings of Fact
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
Kane's Credentials and Practice
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.
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.
PNC v. MBS
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.
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.
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
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. 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
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.
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.
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
MBS Chapter 7 Bankruptcy
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
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.
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.
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."
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.
Adversary Proceeding Against MBS, Mr. Lonergan, Mrs.
Lonergan, and Mr. Kane
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").
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.
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
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.
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
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.
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.
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.
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.
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.
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."
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
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.
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.
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.
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. 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.
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.
THE COURT: Sure.
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
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
THE COURT: It can't be - -
MR. KANE: I didn't want my personal life
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: No.
THE COURT: Oh.
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
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.
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. . . ."
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.
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.
Bar Counsel Investigation into Lonergan Complaint
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
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.
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.
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.
Kane's Personal Bankruptcy Filings and Tax Returns
Serial Bankruptcy Filings
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."
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.
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."
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
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.
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.
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."
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
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.
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 ...