Panel Sanction Affirmed

The Michigan Attorney Discipline Board vacated one misconduct finding but affirmed a hearing panel’s 180-day suspension of an attorney

As to Count One of the formal complaint, the allegations involve respondent’s repeated misuse of his client trust account, and the factual allegations are not contested. As earlier indicated, the panel found violations of MRPC 1.15(b)(3), (d), and (f). As to MRPC 1.15(d) and (f), the record establishes that respondent made multiple payments made from his IOLTA account for personal or business expenses including to his wife, his daughter, and Attorney Randall Mattson, unrelated to any legal matters for which funds were rightfully being held in his trust account. The total amount of the checks written for personal and business expenses from respondent’s IOLTA totaled over $90,000.

Respondent argues that the violations were “technical” and “issues of trivial matter.” (Respondent’s Brief p 14.) Respondent bases his argument on the fact that there is no evidence that he misappropriated client funds. While respondent is correct that there is no evidence of misappropriation in this case, the absence of one violation is not a defense to the commission of another. Further, respondent’s chronic and regular misuse of his client trust account is not merely “technical,” as he argues. Commingling of this variety is significant misconduct, and can be a precursor to misappropriation. There is adequate evidentiary support in the record for these findings.

However, as to the panel’s finding that respondent violated MRPC 1.15(b)(3), we do not find that there was evidentiary support in the record for this finding. The panel’s finding as to this charge is based solely on two checks written from respondent to clients Michael Mango and Lucretia Ali that were returned for insufficient funds because respondent’s bank placed a “hold” on a settlement check deposited into respondent’s IOLTA account. No evidence was presented that either party did not receive their portion of the funds, nor that there was any substantial delay in their receipt of the funds. The receipt by the Grievance Administrator of an overdraft notice pursuant to MRPC 1.15(A) is not, by itself, sufficient to establish a violation of MRPC 1.15(b)(3) without other facts supporting such a violation. The finding that respondent violated MRPC 1.15(b)(3) is vacated.

As to Count Two, respondent first argues that the panel erred in “compelling discovery” in excess of what is allowable or required under MCR 9.115(F)(4). Respondent’s argument is directed at the panel’s “order compelling discovery” issued on December 14, 2023, in which the panel identified, without limitation, exhibits that had been identified for hearing, required the parties to exchange exhibit lists, and required the parties to file witness lists of all witnesses that would testify at hearing. While the panel’s order is, perhaps, poorly titled, the content of the order simply does not require the parties to take any actions outside of the purview of the panel’s responsibility to manage and mediate pre-trial procedure in a disciplinary matter. The order did little more than what is already required or allowable under MCR 9.115(F)(4)(a), which provides for the exchange of documentary evidence prior to hearing and allows either party to demand the names and addresses of any witnesses to be called at hearing. The panel’s order was a routine pre-trial order setting forth deadlines and narrowing issues for hearing, and the panel was well within their discretion to do so.

Respondent further argues that the panel erred in declining to allow the testimony of Attorney Mattson, who showed up at the hearing to testify on respondent’s behalf, despite not having been listed as a witness in respondent’s response to the panel’s December 14, 2023 order. When questioned by the panel as to why Attorney Mattson had not been listed as a witness, respondent’s counsel indicated that Attorney Mattson was believed to have had a medical condition that would prohibit him from testifying, but that it had subsided. After consideration, the panel determined that respondent had not indicated that Attorney Mattson would testify in response to their order, and had not provided notice to the Grievance Administrator prior to the hearing that he intended on calling Attorney Mattson in this regard. Thus, the panel declined to allow Mr. Mattson to testify. We find that the panel’s decision was a proper exercise of the panel’s authority.

Sanction

We are not persuaded that the 180-day suspension imposed by the panel is outside the range of appropriate sanctions to be imposed in consideration of the misconduct found in this case, nor contrary to uniform precedent. Respondent’s handling of his IOLTA account is highly troubling, and indicates that he either simply does not know how to, or will not endeavor to, manage his IOLTA account correctly. Further, his description of these issues as merely “technical” does nothing to assuage these concerns. Additionally, the obligations of MCR 9.119(A) and (B) are very clear. Respondent was aware at the time he filed his affidavit as required by MCR 9.123 that he had not satisfied those requirements, but he nonetheless indicated that he had. Instead of admitting the error and offering remorse, respondent again attempts to minimize it by arguing that the ”acceptance” by the Grievance Administrator of the affidavit at the time it was filed somehow absolves respondent for the falsehood contained in it.

Lastly, respondent’s prior disciplinary history is a significant aggravating factor in this case. Respondent has been admonished five times, and has a prior 60-day suspension. The Board has previously endorsed the concept of progressive discipline under the appropriate circumstances. Grievance Administrator v Carolyn J. Jackson, 18-58-GA (ADB 2019) citing Matter of Leonard R. Eston, DP 24/87 (ADB 1988). Furthermore, we have found that “repeated misconduct may evidence the need for more severe discipline.” Matter of O. Lee Molette, 35391-A (ADB 1981). Likewise, misconduct may be aggravated by a respondent’s recidivism and conscious disregard for the discipline system. Matter of Ross John Fazio, DP 36/82 (ADB 1983). We find the principles articulated in these cases to be applicable in this case.

We believe that the misconduct in this case, coupled with respondent’s apparent lack of understanding or remorse, and his prior disciplinary history, warrants the 180-day suspension ordered by the panel.

(Mike Frisch)