Sperling Character

The Maryland Court of Appeals has suspended one brother for 90 days and continued the indefinite suspension of the other brother. 

The father already is disbarred.

And the rest of the story – the father’s activities played a significant role in the sanctions imposed on his sons. 

Samuel was admitted to the Maryland Bar in 1996, and Jonathan was admitted in 1998. Upon admission, both brothers began working as associates at a law firm operated as a sole proprietorship by their father, Leonard Sperling (“Leonard”). In March 2004, the Court of Appeals suspended Leonard from the practice of law. During his suspension, The Sperling Law Office, P.C. was formed. The Articles of Incorporation identify Samuel as the incorporator, and Samuel and Jonathan as the initial directors. The hearing judge found that there was no evidence that Samuel and Jonathan remained as directors or served as officers of the Firm beyond the initial formation. At the same time, the Firm also established an attorney trust account. Leonard, Samuel, and Jonathan were the only attorneys with signatory authority on the trust account.

Leonard was reinstated in July 2004 and resumed practice at the Firm. The hearing judge found that Leonard was the sole shareholder, and he ran the firm, including “managing the attorney trust account, assigning cases, settling cases, paying bills[,] and handling the payroll.”

In July 2013, Jonathan was indefinitely suspended from the practice of law. He was represented by Robert Hesselbacher, who continued advising Jonathan after his suspension about compliance with the Rules and reinstatement requirements. Hesselbacher met with Jonathan, Samuel, and Leonard to discuss the limitations on Jonathan’s activities as a suspended attorney. On July 10, 2013, the Firm employed Jonathan as a paralegal.

In September 2013, Leonard was indefinitely suspended from the practice of law. His suspension became effective in October 2013. At that time, there were three licensed attorneys working at the Firm: Samuel, Andrea Babest, and Michele Loewenthal. Leonard continued to work at the Firm following his suspension. In April 2014, Jonathan filed a Petition for Reinstatement, which Bar Counsel opposed. The Court of Appeals denied Jonathan’s reinstatement in July 2014.

In April and May 2014, Bar Counsel received notices stating that the Firm’s trust account was overdrawn. Samuel retained an experienced ethics attorney, Michael McCabe, to assist him in responding to Bar Counsel’s inquiries. McCabe advised him to start a new law firm or take over the Firm. On June 6, 2014, Samuel created The Sperling Firm, LLC (“the LLC”), where he currently practices, and is the sole member.

As to Samuel

The Attorney Grievance Commission of Maryland (“AGC”) contacted Samuel after the Firm’s trust account was overdrawn. At the time, both Leonard and Samuel’s brother, Respondent Jonathan Sperling, had been suspended from the practice of law. The AGC reviewed the account information and discovered that Jonathan had been writing checks on the trust account. Upon suspicion that Leonard and Jonathan continued to practice law despite their suspensions, and that all three Sperlings were engaged in misconduct, the AGC sought and received a temporary restraining order prohibiting the Firm from further operation and appointing a temporary receiver. The AGC discovered that Leonard had continued to practice law after his suspension, settled cases, and misappropriated substantial client funds. The trust account had been badly mismanaged, and numerous Firm clients were referred to the Client Protection Fund. Samuel had agreed to supervise Jonathan following his suspension but was apparently unaware of his brother’s use of the trust account and, although he placed client funds in the trust account, did not review account statements or reconcile the accounts.

Samuel violated: (1) MLRPC 1.15(a) (Safekeeping Property); MLRPC 5.3(b), (d)(2)(F), and (d)(3) (Responsibilities Regarding Nonlawyer Assistants) as to Jonathan; (3) MLRPC 5.4(d)(1) (Professional Independence of a Lawyer); and MLRPC 8.4(a) (Misconduct) when he failed to safeguard client funds and did not adequately supervise Jonathan’s post suspension conduct. Taken together, Samuel’s violations warrant a 90-day suspension from the practice of law.

And Jonathan

Respondent Jonathan Sperling violated the MLRPC in his capacity as a paralegal and suspended lawyer seeking reinstatement. Jonathan was indefinitely suspended from the practice of law in Maryland in 2013. While seeking readmission to the Bar, Jonathan submitted numerous affidavits and statements to the AGC attesting to his compliance with the Rules. Before his suspension, Jonathan represented Luvenia Jeter in a dispute with a local college regarding Jeter’s dismissal from a nursing program. Luvenia Jeter complained to the AGC that Jonathan neglected her matter, accepted payment without doing any work on her case, and failed to notify her when he stopped working on the case. When the AGC investigated the matter, it found reason to believe that Jonathan violated the MLRPC. The AGC also concluded that Jonathan made several misrepresentations in  his efforts to gain readmission to the Bar following his suspension in 2013, in violation of the MLRPC.

Jonathan violated: (1) MLRPC 5.3(d)(3) (Responsibilities Regarding Nonlawyer Assistants); (2) MLRPC 8.1(a) (Bar Admission and Disciplinary Matters); and (3) MLRPC 8.4 (a), (c) and (d) (Misconduct) when he failed to comply with his obligations as a suspended lawyer working in a law firm and made misrepresentations during his suspension and in his efforts to gain readmission to the Bar. Taken together, these violations warrant continuing his indefinite suspension.

Relevant sanction findings

Samuel has no prior disciplinary history. He did not misappropriate funds, or personally profit from Leonard or Jonathan’s activities and did not engage in dishonest conduct. Upon receipt of Bar Counsel’s initial correspondence, Samuel promptly retained McCabe, an experienced ethics attorney, to assist him in responding to Bar Counsel. Samuel responded to Bar Counsel’s requests for information, furnished requested documents, granted access to the Firm’s server, and participated in multiple depositions. He spent significant time working with Gilliss to identify victims of Leonard’s misconduct, obtain compensation for the Firm’s clients, and reduced his fees in some cases. Regarding the circumstances during which the misconduct took place, the hearing judge considered that it was “chaotic,” and Samuel worked with [associates] Babest and Loewenthal to keep the Firm going, despite Leonard’s retaining control of the Firm even after he was suspended. The hearing judge found that Samuel was remorseful.

Samuel has a positive reputation in his community and volunteers with various charitable organizations. He serves on the Board of his synagogue and devotes substantial time on Board activities. He also has performed free legal services for members of the congregation. Samuel also attends a Baltimore congregation, to achieve the necessary quorum to hold prayer services, and provides them with free legal services. The hearing judge favorably considered the testimony of Rabbi David Herman, who testified that Samuel was a “mensch,”  who “treats people with respect and sensitivity,” and who had always been truthful with him. Rabbi Binyamin Marwick submitted a letter attesting to Samuel’s good character.

A footnote

Mensch is a “Yiddish term meaning conscientious, compassionate, caring and responsible . . . .”

Jonathan’s mitigation

Jonathan served as the president of his synagogue for seven and a half years. He regularly meets with the rabbi, supervises all activities, including “raising money for charity, religious events[,] and hearing about problems from the congregants.” He spends 16 to 20 hours weekly on this work. He also volunteers with “an organization that provides and delivers meals to the poor.” Jonathan also “visits with the sick in hospitals and participates in the Northwest Citizen Patrol.” In addition, he volunteers at his son’s school and raises money for the school.

Jonathan testified that his life has been an “emotional hell” since the Firm’s implosion and that he has received counseling with a therapist and his rabbi to “right [himself].” Jonathan also has a positive reputation in his community. He submitted a character letter from Loewenthal describing him as a “man of honesty and integrity” who has performed “many hours of community service within the synagogue and in the service of the community.” Consistent with the mitigation discussed for Samuel,supra, Jonathan’s retention of skilled ethics counsel to assist him, not in defending against charges, but in his compliance with the Rules, is also a mitigating factor, in the sense that it shows a cooperative attitude toward an attorney discipline proceeding. Jonathan did not misappropriate funds or personally profit from his check-writing activity. The hearing judge also found that Jonathan cooperated with Gilliss and “expressed remorse for the [F]irm’s clients who suffered losses as a result of Leonard’s misappropriation of money.”

The court’s discussion of prevailing party costs may well affect future cases.

Dyer [where the court declined to order costs when Bar Counsel lost all but a single minor charge] demonstrates that equitable considerations animate our decision to award costs in attorney discipline matters, but it does not offer a clear analytic path to resolving who is the prevailing party…

Bar Counsel proved several violations by Respondents, and under these circumstances is entitled to a costs award. But we do not just rubberstamp every cost that Bar Counsel claims. See Md. Rule 19-709(a). We decline to award the following costs to Bar Counsel:

• $16,970.45 in consulting fees from Catzen to analyze the computer files from the Firm, and another $1,270.90 for Catzen’s video deposition and transcript. The monies expended on Catzen resulted in no finding of misconduct against either Respondent. As such, we conclude that these costs were not reasonable and necessary.

• $4,655.00 for Gilliss’s time spent corresponding with Bar Counsel and testifying. Gilliss was not an expert witness. Md. Rule 19-709(b)(2) permits the payment of reasonable and necessary costs related to expert witnesses but makes no such allowance for the payment of fact witness like Gilliss. See id. (b)(3).

• $6,940.00 for the retrieval and printing of the Firm’s bank records from Wells Fargo Bank. At trial, McCabe testified that Samuel had already provided the bank records after Bar Counsel served him with a subpoena. Samuel acquired these records from the bank and then forwarded them to Bar Counsel. Bar Counsel had no need—that they have explained—to acquire a second copy of these bank records at a substantial cost. We conclude that this cost was not “reasonable and necessary.”

The court majority rejected Bar Counsel’s assessment of sanction

 Bar Counsel argues that Samuel’s conduct is akin to that of the attorneys in Smith and Gracey, and merits disbarment. We disagree. Both of those attorneys engaged in far more severe misconduct than has been found in this case. 

And had good news for ethics experts 

we conclude that the hearing judge did not err in considering Respondents’ retention of experienced ethics counsel as mitigation.

Judge Watts concurred as to Samuel but dissented and would disbar Jonathan.

Given that Jonathan has continued to engage in dishonesty, disbarment is necessary to protect the public. Just as in Attorney Grievance Comm’n v. Ross D. Hecht, No. 97, Sept. Term, 2016, ___ Md. ___, ___ A.3d ___, 2018 WL 2146569, * 13 (Md. May 10, 2018) (Watts, J., dissenting), by imposing a second indefinite suspension, the Majority has given Jonathan “yet another bite at the apple with respect to harming the public and further eroding the public’s confidence in the legal profession.”

Judge Greene joined.

Oral argument linked here.   (Mike Frisch)