A Sleeper Case Of Huge Potential Significance

A District of Columbia Hearing Committee has recommended approval of a consent disposition of a partially-stayed six month suspension for negligent misappropriation.

The evidence supports Respondent’s admission that he violated Rule 1.15(a) in that the stipulated facts describe that Respondent provided settlement checks to two clients whose funds had not been deposited in his bank account, and then withdrew his own fees in that matter, resulting in the withdrawal of funds belonging to another client

The committee noted that the proposed sanction is more lenient than the Court of Appeals has ever imposed for comparable misconduct

The Court has routinely imposed six-month suspensions even for isolated instances of negligent misappropriation. See In re Davenport, 794 A.2d 602, 603 (D.C. 2002) (“When the Board finds that an attorney has commingled and negligently misappropriated funds, we have uniformly imposed a suspension for a period of no less than six months.”); see also, e.g., In re Frank, 881 A.2d 1099, 1100 (D.C. 2005) (per curiam) (six-month suspension for negligent misappropriation); In re Katz, 801 A.2d 982, 982 (D.C. 2002) (per curiam) (providing that a six-month suspension was appropriate before taking into account disability mitigation under In re Kersey, which resulted in a stayed suspension); In re Evans, 578 A.2d 1141, 1143 (D.C. 1990) (per curiam) (six-month suspension for negligent misappropriation). Thus, a partially stayed six-month suspension falls slightly below the sanction Respondent would likely receive in a contested case. However, because a strict comparability analysis does not apply in negotiated discipline cases, and because there are mitigating factors, but no aggravating factors, the Hearing Committee concludes that the sanction is not “unduly” lenient.

Not routinely but invariably. 

Having litigated the six-month floor in similar circumstances, and while I am an advocate for the wider use of consent discipline, I must confess some concern that Disciplinary Counsel did not insist on a straight up six-month suspension here. 

In the Reed case (linked above), I opposed the Board on Professional Responsibility’s proposed stayed suspension for negligent misappropriation and prevailed. 

The Board has recommended that a six-month suspension be imposed but that the suspension be held in abeyance during a two-year period of probation. The governing rule provides that we should adopt the Board’s recommended disposition unless to do so would foster a tendency toward inconsistent disposition for comparable conduct or would otherwise be unwarranted. D.C.App. R.XI § 9(g)(1) (1995). Because the Board’s recommendation here is itself a departure from an unbroken line of cases in which an actual suspension of at least six months has been imposed for the same conduct, and there are insufficient mitigating factors to justify such departure, we do not accept the Board’s recommendation. See, e.g., Choroszej, supra, 624 A.2d at 436 (six-month suspension imposed); Evans, supra, 578 A.2d at 1142 (same): Hessler, supra, 549 A.2d at 703 (same).

It may be that, under certain circumstances, in light of the inexperience of counsel and the other factors relied upon by the Board, holding a suspension in abeyance for this kind of violation might be appropriate. We neither endorse nor reject such a course, and we will always give due consideration to any such recommendation, as we have in this  case. We are unwilling to take that step here, however, because we are troubled by respondent’s failure to explain the circumstances relating to the three or four other checks drawn on the client’s escrow account for respondent’s own use.

Can Disciplinary Counsel now negotiate for a lesser sanction than disbarment for intentional or reckless misappropriation? Is that a good or a bad development?

Honestly I am not sure of the answer to the second question.

It may well be a good thing if Disciplinary Counsel and an attorney can agree to three-year suspension with fitness for intentional misappropriation, thereby avoiding years of litigation during which the attorney can continue to practice and removing the offending attorney from practice on a fast track.

On the other hand, if such a future consent is interpreted as a signal from Disciplinary Counsel that undermines the court’s en banc Addams precedent, I surely do not favor that. 

The hearing committee here consisted of Theodore C. Hirt, Esquire, Webster M. Beary, Esquire, and Dr. Robin J. Bell.

The report in In re Perlesta A. Hollingsworth, Jr. can be accessed here. (Mike Frisch)