In re Schuman ( 2021 )

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 19-BG-630
IN RE JONATHAN R. SCHUMAN, RESPONDENT.
A Member of the Bar of the District of Columbia Court of Appeals
(Bar Registration No. 459087)
On Report and Recommendation of the
Board on Professional Responsibility
(BDN-020-18)
(Argued October 28, 2020 Decided June 10, 2021)
Jonathan R. Schuman, pro se.
Jelani C. Lowery, Assistant Disciplinary Counsel, with whom Hamilton P.
Fox, III, Disciplinary Counsel, and Myles V. Lynk, Senior Assistant Disciplinary
Counsel, were on the brief, for the Office of Disciplinary Counsel.
Before BECKWITH, MCLEESE, and DEAHL, Associate Judges.
DEAHL, Associate Judge: Schuman & Felts—a law firm serving landlords in
the District of Columbia—received refund checks totaling several hundred thousand
dollars from the D.C. Superior Court in 2013. The checks refunded court fees paid
to carry out evictions that never occurred. Though the court fees were originally
paid out of Schuman & Felts’s operating account, the firm was reimbursed by its
2
clients for advancing the fees. Any refund thus belonged to the firm’s clients and
not to the firm. Jonathan Schuman, the firm’s sole managing partner, decided how
to handle the refund checks. Current clients received their refunds. Former clients
did not and were unaware of their existence. Their refunds were instead deposited
into Schuman & Felts’s operating account and used to pay the firm’s business
expenses.
That scheme ultimately came to light. Now the Board on Professional
Responsibility recommends that Schuman be disbarred for it. More specifically, it
recommends disbarment based on in its view that Schuman violated the following
District of Columbia Rules of Professional Conduct: Rule 1.15(a), commingling and
intentional misappropriation of client funds; Rule 1.15(a), failure to keep proper
records; Rule 1.15(c), failure to notify and deliver client funds; and Rule 8.4(c),
engaging in conduct involving dishonesty. Schuman challenges the Board’s
recommendation as to each rule violation found. His primary retort is that the Board
misinterpreted Rule 1.15. He contends that the refunded court fees were not
entrusted client funds—and thus, could not have been misappropriated under that
rule—because the court fees were paid out of Schuman & Felts’s operating account
and were originally paid by the firm’s clients to satisfy a legal bill. We disagree and
3
hold that the refund checks were entrusted client property that Schuman was required
to handle in accordance with Rule 1.15.
Because Schuman misappropriated his former clients’ funds, disbarment is
the presumptive sanction. In re Addams, 579 A.2d 190, 191 (D.C. 1990) (en banc).
Schuman contends this presumption is overcome here because his misconduct
stemmed from severe depression and, in his view, that qualifies as an “extraordinary
circumstance[]” worthy of mitigating the presumptive sanction. Based on the record
before us, we cannot fault the Board for determining that Schuman failed to establish
a causal connection between his depression and his misconduct. We therefore adopt
the Board’s recommended sanction and disbar him.
I.
In 1998, Schuman became a member of the D.C. Bar and joined his father’s
law firm, Schuman & Felts. He later joined the ranks of partner alongside his father
and another attorney, Timothy Cole, with each possessing a one-third partnership
interest in the firm. In 2012, Schuman’s father retired, transferring his one-third
share of the partnership to Schuman. Displeased with this decision, Cole left
Schuman & Felts in early 2012, “taking as many as 70 percent of the firm’s clients
with him.” The “[l]oss of clients to Mr. Cole’s new firm caused considerable . . .
4
financial damage to Schuman & Felts” and “the need for additional income to
replace that lost to Mr. Cole’s firm became critical by early 2013.”
As if on cue, in January 2013, Schuman & Felts began receiving checks—
sometimes hundreds of checks at a time—from the D.C. Superior Court for $165
each. The checks came without warning or explanation, with the only identifying
feature on each being a landlord/tenant docket number. Schuman’s staff called the
Clerk of the Landlord & Tenant Branch of the D.C. Superior Court, who advised
that the checks were refunds for certain “Writ of Restitution” fees paid by Schuman
& Felts, dating back to 2009. Writs of Restitution are orders permitting a landlord
to evict a tenant. The refunds were for the many instances where writs were paid for
but never executed. While Schuman & Felts had initially paid the writ fees out of
its operating account, by the time it began receiving the refund checks, its clients
had reimbursed the firm for those expenses. The refunds, in short, belonged to the
clients who had paid for the unexecuted writs.
Schuman acted accordingly as to refunds owed to his firm’s current clients:
he forwarded their respective refund checks or, when authorized to do so, credited
their refunds to their accounts. But former clients were left in the dark. Their
refunds were deposited into Schuman & Felts’s operating account and used to pay
5
the firm’s expenses. Schuman later offered an explanation for the disparate
treatment. As he explained it, writ refunds were forwarded to current clients not out
of financial obligation but “as a matter of goodwill,” to “demonstrat[e] his
attentiveness to his clients.” He simply had no similar need or desire to build
goodwill with clients who had left the firm.
From January 2013 to February 2014, the firm deposited $316,220 worth of
clients’ writ refund checks into its operating account. Yet bank records showed the
operating account’s balance fell to about $85,000 in February 2014. In other words,
if not for the writ refunds, the firm’s operating account balance would have been in
the negative by more than $230,000 in February 2014; bank records further showed
that the account’s balance—absent the writ refunds—would have been in the
negative in all but one month of the preceding year. Schuman confirmed as much
when he testified that the refunds belonging to former clients were used to “float the
firm.”
The scheme started to unravel in early 2014 when Cole, Schuman’s former
partner, inquired whether Schuman & Felts had received any writ refunds for his
client, WDC-1 (previously a client of Schuman & Felts). Schuman replied that he
“endorsed the backs of the checks and . . . forwarded to the clients.” When Cole
6
pressed for more information, including documentation, Schuman testified that he
checked with a staff member and then informed Cole that “[a]nything that came in
for WDC-1 should have gone to them.” The staff member in question testified, to
the contrary, that Schuman never asked her to look into the WDC-1 refunds. Cole
then contacted the D.C. Courts Financial Operations Budget & Finance Division and
discovered that Schuman had deposited two writ refund checks belonging to WDC-1
into Schuman & Felts’s operating account. After learning this, Cole filed a
complaint with the Office of Disciplinary Counsel.
Following Cole’s inquiry, Schuman consulted with an attorney about his
handling of the writ refunds. On counsel’s advice, he then began forwarding writ
refunds to former clients. By the end of March, Schuman & Felts had returned
$257,400 worth of writ refunds to former clients. During Disciplinary Counsel’s
investigation into Cole’s complaint, Schuman was asked to account for the $58,820
difference between the amount of writ refunds deposited into the firm’s operating
account and the amount Schuman refunded to former clients. Schuman provided
records accounting for $24,429 of the shortfall, but was unable to account for the
remainder.
7
After its investigation, Disciplinary Counsel charged Schuman with violating
Rules 1.15 and 8.4 of the District of Columbia Rules of Professional Conduct. A
Hearing Committee then held a multi-day hearing in August and October 2018.
II.
The Hearing Committee found that Disciplinary Counsel established by clear
and convincing evidence that Schuman violated Rule 1.15(a) by commingling and
intentionally misappropriating client funds; Rule 1.15(c) by failing to promptly
notify clients of Schuman & Felts’s receipt of the writ refunds, as well as failing to
promptly deliver those funds; and Rule 8.4(c) by acting dishonestly in retaining and
spending his former clients’ writ refunds. It did not, however, find that Disciplinary
Counsel carried its burden in proving that Schuman violated Rule 1.15(a)’s record
keeping requirements relating to the unaccounted-for $34,391 worth of writ refunds
deposited into Schuman & Felts’s operating account. And it did not find it necessary
to consider Schuman’s misstatements to Cole regarding WDC-1’s writ refunds to
reach its decision that Schuman violated Rule 8.4(c). On review, the Board largely
agreed with the Hearing Committee’s findings but found that Disciplinary Counsel
had carried its burden of establishing that Schuman violated Rule 1.15(a)’s record
keeping requirements and that, in addition to the dishonesty inherent in Schuman’s
8
handling of the writ refunds, Schuman also violated Rule 8.4(c) when he made false
statements to Cole regarding WDC-1’s writ refunds.
Schuman takes exception to each of the rule violations found by the Board,
primarily arguing that his conduct did not violate the relevant rules. We address
each rule violation in turn, accepting the Board’s “findings of fact ‘unless they are
unsupported by substantial evidence of record,’” and reviewing “questions of law
and ultimate facts de novo.” In re Martin, 67 A.3d 1032, 1039 (D.C. 2013) (first
quoting In re Pierson, 690 A.2d 941, 946 (D.C. 1997), and then citing In re
Anderson, 778 A.2d 330, 339 n.5 (D.C. 2001)).
A. Rule 1.15(a) (Safekeeping Property)
The Board found that Schuman intentionally misappropriated and
commingled client funds in violation of Rule 1.15(a) when he retained and spent
writ refunds belonging to former clients. Schuman does not challenge the Board’s
factual findings as to either violation, but instead asserts that the Board’s threshold
legal premise—that the writ refunds fall within the purview of Rule 1.15(a)—was
faulty. He argues the writ refunds were not “entrusted funds” because he did not
receive them from a client; they were instead refunds from the D.C. Superior Court
9
for fees that had originally been paid from Schuman & Felts’s operating account.1
Because the funds were not “entrusted,” Schuman claims he could not have violated
Rule 1.15. See In re Ekekwe-Kauffman, 210 A.3d 775, 792 (D.C. 2019) (per curiam)
(“Misappropriation is defined as ‘any unauthorized use of client’s funds entrusted to
a lawyer.’”) (quoting In re Edwards, 808 A.2d 476, 482 (D.C. 2002)). 2
We disagree and conclude the refunded amounts were entrusted funds. There
is no meaningful distinction between this case and one where an attorney misuses,
for his own purposes, a client’s funds received from a third party pursuant to a
settlement agreement. Such instances are examples of “clear misappropriation.” In
re Pierson, 690 A.2d at 947; see also In re Pels, 653 A.2d 388, 393–95 (D.C. 1995)
1
Schuman also argues that the writ refunds were property of Schuman &
Felts, not of its clients, as a further reason for the inapplicability of Rule 1.15(a).
Schuman offers no legal argument to support this contention, and we have no reason
to disagree with the Board that the writ refunds were client property. Schuman all
but conceded this point when he stated during oral argument that his clients were
legally entitled to the writ refunds, as well as when he testified before the Hearing
Committee that keeping the writ refunds was “improper” and “wrong.”
2
Although our cases often define misappropriation as the “unauthorized use
of a client’s entrusted funds,” In re Gray, 224 A.3d 1222, 1229 (D.C. 2020)
(emphasis added), this court suggested recently that misappropriation might occur
even where no “entrustment” has taken place, see In re Harris-Lindsey, 242 A.3d
613, 626 n.1 (D.C. 2020) (Glickman, J., joined by Beckwith, J., concurring). We
need not grapple with this question—or what type of conduct would fall within this
potential gray area—because there was “entrustment” in this case.
10
(finding misappropriation where attorney used settlement proceeds to pay personal
and business expenses). As with settlement proceeds, Schuman received funds from
a third party that belonged to his clients and he was obligated to handle those funds
in accordance with Rule 1.15.
Schuman insists there is a difference between settlement proceeds and the writ
refunds received here. In his view, when clients reimbursed the firm for the
advanced writ fees, they were paying a legal bill, not entrusting any funds to the
firm. That is perhaps a fair description of what the clients did at one moment in
time. But it is of no help to Schuman because the pertinent moment in time is when
those advanced fees were refunded to the firm by the D.C. Superior Court. At that
point, Schuman & Felts did hold entrusted client property in connection with a
representation, as covered by Rule 1.15(a). That Schuman’s clients did not expect a
refund does not render the writ fees any less entrusted. See In re Anderson, 979 A.2d
1206, 1211, 1219 (D.C. 2009) (appended Board report) (finding misappropriation
where respondent, unbeknownst to his clients, negotiated reductions of his clients’
medical bills after settlement, but did not remit the savings to his clients). What
matters is that Schuman’s clients trusted that his firm would use their funds only as
authorized: to pay for Writs of Restitution. When they did not go to that purpose
and were instead refunded, the firm held—and then misappropriated—entrusted
11
client funds.3 Schuman’s clients clearly did not authorize using their payments (of
purported fees that were ultimately refunded) to line the firm’s pockets and pay for
its unrelated business expenses.
Schuman persists that his conduct did not amount to misappropriation because
his retention of the writ refunds is analogous to that of an attorney double billing or
overbilling a client which, he contends, is not chargeable as misappropriation. We
reject that argument for two reasons.
3
This also aligns with our court’s recent exposition on the meaning of
“entrusted funds.” As we explained in In re Harris-Lindsey, the “entrustment of
funds has to do with giving funds over to the care of an attorney with confidence
that the funds will be as safe as they would be if the client were to continue to hold
them.” 242 A.3d at 622. Such was the case here: Schuman’s clients reimbursed his
firm for advancement of a court fee, believing their money would be handled as
safely as if they had paid the fee themselves—including a return of those funds in
the event an eviction never occurred. In In re Harris-Lindsey we exercised some
leniency, giving only prospective force to our new articulation of what it means for
funds to be entrusted. Id. at 617, 624. Because that was the first time we had
articulated “what it means for client or third party funds to be ‘entrusted’ to a lawyer
and expand[ed] our application of the term ‘unauthorized use’ for purposes of
determining whether funds have been misappropriated,” we “decline[d] to sanction
respondent for misappropriation” given the novelty of our pronouncement. Id. at
624–25. There is no similar cause for leniency here. Schuman was sufficiently on
notice that his conduct amounted to misappropriation given this court’s previous
decisions regarding the mishandling of settlement proceeds. And, unlike the issue
presented in In re Harris-Lindsey, 242 A.3d at 624–25, prior guidance from this
court and the Board is not contrary to the outcome reached today.
12
First, its premise is questionable, as we are unaware of any case where we
have held that double billing or overbilling cannot amount to misappropriation, at
least not as a categorical matter. 4 In In re Cleaver-Bascombe, we said that
submitting a falsified voucher under the Criminal Justice Act—seeking payment for
services not from a client but from the court—did “not involve misappropriation of
client funds” despite the “obvious similarities between the two situations.” 892 A.2d
396, 412 n.15 (D.C. 2006) (emphasis in original). But if anything, that we chose to
emphasize the word client in that declaration suggests we thought the only thing
keeping the conduct from being misappropriation was that the attorney bilked the
public fisc rather than a client. Lacking in controlling precedents, Schuman places
undue reliance on Disciplinary Counsel’s practice of typically charging such cases
as a violation of Rule 8.4(c) for dishonest conduct, rather than for misappropriation.
Disciplinary Counsel’s charging decisions have little legal bearing on the question
before us. Those charging decisions may reflect nothing more than the practical
reality that it is often easier to prove dishonest conduct than it is to prove
misappropriation. For instance, misappropriation generally requires Disciplinary
4
It might depend on what, exactly, the attorney is overbilling for. It is perhaps
a stretch to say that attorneys who inflate their contracted-for rates thereby make
“any unauthorized use of client’s funds.” In re Ekekwe-Kauffman, 210 A.3d at 792
(defining misappropriation). But it is not such a stretch to say an attorney who
overbills for particular expenses incurred and then pockets the overage and uses it
for personal expenses has done so. We ultimately do not confront that question.
13
Counsel to prove that the account holding the client’s funds dropped below the
amount owed to the client, In re Ekekwe-Kauffman, 210 A.3d at 792–94, an element
not required to prove dishonest conduct, see id. at 795. That Disciplinary Counsel
tends not to charge violations of Rule 1.15(a) when an attorney double bills or
overbills a client does not establish that it could not do so in an appropriate case.
Second, even if we were to accept its premise as true, the analogy still fails.
If Schuman had simply billed clients for the same Writ of Restitution twice, having
only paid for them once, then it is possible we might say he procured the client funds
through dishonesty, but made no unauthorized use of entrusted funds. Assuming
that is true—and it is far from clear—here we have the opposite situation. There
was nothing dishonest in Schuman’s procurement of the client funds; there is no
dispute that his firm advanced the fees for the writs and properly billed clients for
reimbursement. The impropriety came in how Schuman chose to dispose of those
funds: not to pay for Writs of Restitution, ultimately (in light of the refunds), but for
his firm’s business expenses. That is classic misappropriation. We attach no
significance to the fact that the funds were once used precisely as authorized for
Writs of Restitution. Once the amounts were refunded, they were client funds
entrusted to Schuman and he misappropriated them.
14
Having determined that the writ refunds were subject to Rule 1.15(a), we
adopt the Board’s findings that Disciplinary Counsel proved by clear and convincing
evidence that Schuman commingled and intentionally misappropriated entrusted
client funds. Schuman engaged in commingling when he deposited the writ refunds
into his firm’s operating account rather than into a separate account. See In re
Ekekwe-Kauffman, 210 A.3d at 792 (“To guard against the loss of clients’ money,
Rule 1.15(a) . . . requires a lawyer to hold client funds in a separate trust account and
to avoid commingling [his] clients’ funds with [his] own property.”). He then
misappropriated client funds by using the writ refunds—without client approval—
to pay Schuman & Felts’s expenses, causing the balance in the firm’s operating
account to drop below the amount due to his clients. See id. at 792–94. The
misappropriation was intentional, as clearly evidenced by Schuman’s conscious
decision to reimburse current clients but not former clients, a distinction he could
not credibly explain. 5
5
On February 18, 2020, Schuman filed a motion for partial summary
affirmance on the ground that his conduct, as a matter of law, did not amount to
misappropriation. In light of our finding otherwise, the motion is denied.
15
B. Rule 1.15(a) (Record Keeping)
The Board found that Schuman violated Rule 1.15(a)’s record keeping
requirements when he failed to account for the disposition of $34,391 worth of writ
refunds deposited into Schuman & Felts’s operating account. Schuman challenges
the Board’s finding on two grounds: first, the writ refunds were not entrusted client
funds, and second, Disciplinary Counsel “never complained that [Schuman] did not
provide enough information to satisfy its inquiry” regarding the unaccounted for writ
refunds.
The first contention fails for the reasons articulated above, in Part II.A. The
second is without merit because Disciplinary Counsel requested all billing
statements issued to Schuman’s clients “whose writ refunds [were] deposited into
the firm’s operating account from January 2013 through April 2014,” as well as an
analysis of any writ refunds that were applied as credits to clients’ outstanding bills.
In other words, Disciplinary Counsel asked for a full accounting of the $58,820
worth of writ refunds that were deposited into Schuman & Felts’s operating account
16
but not refunded to clients in March 2014. Schuman’s failure to respond fully is of
his own doing, not a lack of clarity or diligence on the part of Disciplinary Counsel.6
Given the above, we agree with the Board that Disciplinary Counsel proved
by clear and convincing evidence that Schuman violated Rule 1.15(a)’s requirement
that an attorney maintain complete records of all client funds in his possession when
he failed to provide documentary records accounting for $34,391 of the writ refunds
deposited into Schuman & Felts’s operating account.
C. Rule 1.15(c) (Prompt Notification and Delivery)
The Board found that Schuman violated Rule 1.15(c)’s instruction that
attorneys “promptly notify [a] client or third person” “[u]pon receiving funds or
other property in which a client or third person has an interest,” and “promptly
deliver to the client or third person any funds or other property that the client or third
6
Schuman suggests in passing that he satisfied Disciplinary Counsel’s request
for a full accounting based on his belief that his staff forwarded all writ refunds to
Schuman & Felts’s clients. He is wrong. A belief that funds were handled in a
certain way that is unsubstantiated by documentary evidence is insufficient to satisfy
Rule 1.15(a)’s record keeping requirements. See In re Dailey, 230 A.3d 902, 913
(D.C. 2020) (stating that “[t]he purpose of Rule 1.15(a) is to ensure that the
documentary record itself tells the full story of how the attorney handled client or
third-party funds”) (emphasis added and internal quotation marks omitted).
17
person is entitled to receive.” D.C. R. of Prof. Conduct 1.15(c). Schuman takes
exception to this finding, claiming that Disciplinary Counsel did not carry its burden
of proof. Yet he offers no argument in support beyond the aforementioned threshold
premise that the writ refunds were not client property entrusted to Schuman & Felts.
Having rejected that premise, we agree with the Board that Disciplinary Counsel
carried its burden in proving by clear and convincing evidence that Schuman
violated Rule 1.15(c) when he failed to promptly notify his former clients for a year
or more regarding his receipt of the writ refunds. Cf. In re Ross, 658 A.2d 209, 211
(D.C. 1995) (finding “eleven-month delay was not prompt”).
D. Rule 8.4(c) (Dishonesty)
Finally, the Board determined that Schuman engaged in dishonest conduct in
violation of Rule 8.4(c) in two separate respects: “he withheld writ refunds from his
former clients” and “he made false statements in emails to Mr. Cole about refunds
due to a former client” of Schuman & Felts. Schuman argues, first, that Disciplinary
Counsel did not prove by clear and convincing evidence that he acted with dishonest
intent by withholding the writ refunds, and second, that the Board’s factual findings
about his interactions with Cole were not supported by substantial evidence. We
take these arguments in turn.
18
i. Retaining and spending former clients’ writ refunds
According to Schuman, he did not act with dishonest intent when he retained
his former clients’ writ refunds and then subsequently used the funds to pay his
firm’s expenses because he “made a mistake” and “did not fraudulently induce
clients to make unearned payments.” To begin, fraudulent inducement is not
necessary to establish dishonest intent. In re Romansky, 825 A.2d 311, 315 (D.C.
2003) (“[D]ishonesty does not always depend on a finding of intent to defraud or
deceive.”) (quoting In re Estate of Corriea, 719 A.2d 1234, 1242 (D.C. 1998)). The
fact that Schuman was a passive recipient of refunds that he wrongly retained, as
opposed to actively soliciting the money through fraud, does not preclude the Board
from determining he acted dishonestly. Perhaps it lessens his moral culpability in
the way one might think a person who finds and keeps another’s wallet—even if
they know the owner and where they might return it—is not as abject as the
pickpocket. But his conduct was dishonest no less.
As to Schuman’s assertion of mistake, we again agree with the Hearing
Committee and the Board: Schuman’s decision to keep writ refunds belonging to
former clients, while forwarding those belonging to current clients, evidenced not a
mistake, but a conscious decision amounting to intentional dishonest conduct in
19
violation of Rule 8.4(c). See In re Romansky, 825 A.2d at 315 (stating that “[o]ur
case law has consistently found that when . . . an action is obviously wrongful and
intentionally done, the performing of the act itself is sufficient to show the requisite
intent for a violation”).
ii. Statements to Cole
The Board found that Schuman acted dishonestly when he falsely
misrepresented to Cole that Schuman & Felts had endorsed and forwarded writ
refund checks to WDC-1. Schuman argues this finding was not supported by
substantial evidence because the Board’s reasoning was based, in part, on a
misplaced belief that the Hearing Committee credited the testimony of Katherine
Parker, a prior staff member of Schuman & Felts, over that of Schuman. 7 Schuman
is correct that no such credibility determination was made and the Board was
mistaken to say otherwise. The Hearing Committee merely noted that Schuman’s
and Parker’s respective testimonies were at odds, without explicitly crediting one
over the other. But the Board’s error is of no moment. As Disciplinary Counsel
7
Schuman also notes an alleged factual misstatement made by the Hearing
Committee. Even if he is correct, there is no indication that the Board relied on this
alleged misstatement in rendering its findings.
20
correctly notes, the Board did not rely only on the tension between Schuman’s and
Parker’s testimonies when reaching its finding, and the other evidence it relied upon
independently supports its finding of this Rule 8.4(c) violation.
At the time he communicated with Cole, Schuman was aware that his firm
forwarded writ refund checks only to current clients. He was also aware that WDC-1
was a former client. Based on these two uncontested facts alone, the Board was right
to find that Schuman’s representations were, at a minimum, recklessly dishonest.8
Any purported mistaken reliance on his staff—which the Board could, in any event,
rightfully view with wariness given Parker’s testimony that she was never asked
about the WDC-1 refunds—does not afford Schuman a free pass. Even assuming
Schuman was told by Parker that “anything that came in for WDC-1 should have
gone to them,” he should have known that was not true. He knew writ refunds were
not sent to former clients and that WDC-1 belonged in that category.
Like the Hearing Committee, we do not mean “to impose on the members of
the Bar a strict ethical requirement that honesty apply to every possible incidental
8
Dishonesty can be established by sufficient proof of recklessness—i.e., proof
that Schuman “consciously disregarded the risk” created by his actions. In Re
Romansky, 825 A.2d at 317.
21
conversation or email with a fellow lawyer, whether one competing for clients or an
adversary in court.” But this was no white lie. A former client wanted their refund,
improperly retained by Schuman, and Schuman chose to double down on his ruse
rather than admitting that he had kept their refund checks. He was neither competing
nor advocating for a client when he made false representations to Cole; he was
thwarting Cole’s attempts to recover money that rightly belonged to Schuman &
Felts’s former client.
Based on the foregoing record, we agree that Disciplinary Counsel established
by clear and convincing evidence that Schuman acted dishonestly during his
interactions with Cole in violation of Rule 8.4(c).
III.
We next turn to the Board’s recommendation that Schuman be disbarred.
Disbarment is the presumptive sanction for intentional misappropriation. In re
Addams, 579 A.2d 190, 191 (D.C. 1990) (en banc). Schuman asserts that he
overcame that presumption and demonstrated “extraordinary circumstances” so that
the Board should have mitigated his punishment. Id. In his view, he satisfied the
three-prong mitigation test we outlined in In re Kersey, 520 A.2d 321 (D.C. 1987).
“In order to qualify for a reduced sanction under the Kersey doctrine,” an attorney
22
must demonstrate “(1) by clear and convincing evidence that he had a disability; (2)
by a preponderance of the evidence that the disability substantially affected his
misconduct; and (3) by clear and convincing evidence that he has been substantially
rehabilitated.” In re Lopes, 770 A.2d 561, 567 (D.C. 2001).
There is no dispute that Schuman suffered from depression at the time of his
misconduct. But the Board concluded that Schuman was not entitled to Kersey
mitigation because (1) his depression was under control so that it was not disabling
under Kersey’s first prong, and (2) for the same reason—that his depression was
under control at the time of his misconduct—Schuman could not demonstrate that
his depression substantially affected his misconduct under Kersey’s second prong.
We first recount the evidence presented to the Hearing Committee related to this
Kersey defense. We then address whether it mitigates his presumed disbarment. We
agree with the Board that Schuman did not satisfy Kersey’s second prong and
conclude that mitigation is not appropriate here. We therefore disbar Schuman from
the practice of law in the District of Columbia.
A. The Record on Mitigation
In support of his Kersey defense, Schuman offered testimony from Dr. Nuha
Abudabbeh, a clinical and forensic psychologist. Dr. Abudabbeh was retained solely
23
for litigation and did not know Schuman during the timeframe in which the
misconduct occurred. But she interviewed Schuman on multiple occasions in 2018
and reviewed various records, including (i) an evaluation report dated November 26,
2012, performed by Dr. Jennifer Coughlin at the Johns Hopkins Department of
Psychiatry; (ii) notes from Schuman’s treating psychiatrist, Dr. Lauren Hodas, from
2012-2014; (iii) a 2017 letter from Dr. John R. Lion, a clinical professor of
psychiatry at the University of Maryland; and (iv) a 2017 letter from Denise Perme,
a licensed clinical social worker at the D.C. Bar Lawyer Assistance Program. We
briefly recount these records below.
Dr. Coughlin’s 2012 evaluation indicated that Schuman had a “long personal
history of recurrent major depressive episodes” and diagnosed him with “[m]ajor
depressive disorder.” Not long after Dr. Coughlin’s evaluation was conducted,
Schuman began receiving treatment from a psychiatrist, Dr. Hodas. Dr. Hodas’s
notes from late 2012 outlined the symptoms of Schuman’s major depressive
disorder, which included “paralyzing terror,” having a “deer in the headlights”
feeling, heart palpitations, and wanting to “always be in bed.” After Schuman
altered his medications, his mental condition appeared to improve by January of
2013, when he began receiving the writ refunds: Dr. Hodas noted that Schuman was
“sleeping well,” no longer had a “deer in the headlight feeling,” and was not
24
“obsessing & worrying constantly.” The Board summarized the remainder of Dr.
Hodas’s treatment notes through March 2014 (i.e., the time period between
Schuman’s decision to retain writ refunds belonging to his former clients and his
decision to return said refunds) as generally showing continued “mental
improvement” and that Schuman “reported more energy, less worry, and more
optimism.”
Dr. Lion, who reviewed materials related to Schuman’s misconduct and
interviewed Schuman on several occasions in late 2017, opined that Schuman
“suffered from a Major Depressive Disorder during the time of his alleged
misconduct” and that his “depressive condition was the cause of [his] misconduct
and substantially affected it.” Denise Perme, who also reviewed materials and
conducted interviews in 2017, opined that “Schuman met the . . . symptom criteria
for Major Depressive Disorder,” and emphasized that although Dr. Hodas’s notes
seemed to “indicate that Mr. Schuman verbalized some improvement,” that did “not
mean that Mr. Schuman was asymptomatic or functioning well in general during that
time period.” She concluded that “[b]ut for the Major Depressive Disorder . . . Mr.
Schuman would not have allowed the deposit of the subject court refunds to the
firm’s operating account” and that his depression “greatly affected his ability to think
about, and decide how to respond, when refund checks began arriving to the office.”
25
Based largely on the above medical records, Dr. Abudabbeh testified that
Schuman was “suffering from a major depressive disorder” when he began receiving
writ refunds from the D.C. Superior Court in January 2013. When asked if
Schuman’s depression affected his mishandling of the writ refunds, Dr. Abudabbeh
testified that she thought “there was a connection” and that although Schuman “may
have been in . . . ‘partial remission’ from the major depressive disorder, there may
have been remnants of that depression that might have affected [him] at that time.”
To rebut the Kersey defense, Disciplinary Counsel offered an expert report
and testimony from Dr. Philip Candilis. Dr. Candilis acknowledged that Schuman
had a history of depression. Based on his interview with Schuman and an evaluation
of the relevant medical records, however, Dr. Candilis opined that Schuman was not
disabled by his depression. His conclusion was based, in part, on Schuman’s ability
to handle personal and professional matters, such as “maintaining his schedules, his
deadlines, his cases; . . . meeting payroll, having meetings with staff; [being
involved] in the day-to-day activities of a busy law firm[;]” and buying a new home.
If Schuman was disabled by his depression, Dr. Candilis opined that it “would [have
been] evident in other parts of his life,” not just in his handling of the writ refunds.
Dr. Candilis also noted in his expert report that Schuman’s visits with Dr. Hodas
diminished during his time of misconduct and that “[t]here were no documented
26
phone calls or crises” emblematic of a patient with an “acute debilitating illness.”
For all the same reasons, Dr. Candilis opined that Schuman’s depression did not
cause his misconduct.
B. Schuman’s Depression Did Not Substantially Affect His Misconduct
A sanction for intentional misappropriation short of disbarment may be
appropriate if an attorney suffered from depression that substantially affected their
misconduct and they are now rehabilitated. See In re Peek, 565 A.2d 627, 633 (D.C.
1989); Kersey, 520 A.2d at 327. “[I]t is not enough to say the [attorney suffers from
a disability] and ipso facto causation is proven.” Kersey, 520 A.2d at 325. The
attorney must show that “but for [his disabling condition], his misconduct would not
have occurred.” In re Zakroff, 934 A.2d 409, 423 (D.C. 2007) (quoting Kersey, 520
A.2d at 327) (alterations in original).
Both the Hearing Committee and the Board found that Schuman did not prove
by a preponderance of the evidence that his depression substantially affected his
misconduct.9 There were two primary reasons for the Hearing Committee’s
9
The Board also found that Schuman failed to establish he was suffering from
a disability at the time of his misconduct (the first prong of Kersey) based on the
contemporaneous notes from Dr. Hodas suggesting Schuman’s depression was
27
determination on this point: First, besides his misconduct, Schuman did not identify
any area of his personal or professional life that was adversely affected by his
depression, which “strongly suggest[ed] that [Schuman’s] disability claim was one
of convenience rather than the impact of an acknowledged illness.” Second, the
Hearing Committee credited the testimony and report of Disciplinary Counsel’s
expert, Dr. Candilis, over that of Schuman’s expert, Dr. Abudabbeh. More
specifically, the Hearing Committee found Dr. Candilis’s logic and analysis “far
more persuasive than a simple formula ‘depression equals disability’ with implied
causation,” which appeared to be the methodology used by Dr. Abuddabeh. On
review, the Board adopted and incorporated the Hearing Committee’s reasoning, but
added that Dr. Hodas’s contemporaneous notes reported improvements in
Schuman’s depression throughout his course of misconduct, which “significantly cut
against any causation argument.”
Schuman offers two counterpoints. First, he asserts the Board misapplied
Kersey by requiring him to demonstrate that his depression affected other areas of
improved at the time he began receiving the writ refunds from D.C. Superior Court.
The Hearing Committee disagreed, finding that Schuman’s allegedly improved
condition was a consideration for determining causation (the second prong of
Kersey), not for determining whether he was suffering from a disability. We take
no position on that disagreement because, in any event, Schuman was not entitled to
mitigation because he did not carry his burden of demonstrating causation.
28
his life, rather than just the misconduct amounting to the charged rule violations.
But the Board did no such thing. This was just one factor—a mere piece of
evidence—that the Board considered when determining that Schuman’s depression
did not substantially affect his misconduct. And it is a perfectly reasonable factor to
consider. After all, if depression had driven Schuman to this extreme, protracted,
and self-serving misconduct in his professional life, it stands to reason it would have
impacted his personal and professional lives in other ways as well. See, e.g., Kersey,
520 A.2d at 324 (noting broad impact alcoholism had on respondent’s life beyond
his legal practice); In re Temple, 596 A.2d 585, 590–91 (D.C. 1991) (noting broad
impact of prescription drug abuse on respondent’s life beyond legal practice).
Evidence that his depression had a broader and more disabling impact on his life
would have supported Schuman’s mitigation defense, and the absence of such
evidence detracted from it.
Second, Schuman asserts the Board failed to consider the totality of the
evidence offered in support of his Kersey defense. To the contrary, the Board did
not ignore relevant evidence; it simply found that the evidence presented by
Disciplinary Counsel was more credible and persuasive than that offered by
Schuman. For good reason. Schuman relied largely on Dr. Abudabbeh, who opined
that Schuman was suffering from major depressive disorder at the time of the
29
misconduct but could only speculate that Schuman’s depression “might have
affected him” during the time period when his misconduct transpired. The
supporting letters from Denise Perme and Dr. Lion—who did not testify and whose
opinions were offered only as foundation for Dr. Abudabbeh’s opinions 10—
concluded that Schuman’s major depressive disorder was the cause of Schuman’s
misconduct but offered no persuasive explanation as to why. And while Dr.
Coughlin’s report diagnosed Schuman with major depressive disorder, it offered no
opinion whatsoever as to causation.
In contrast, Disciplinary Counsel’s expert, Dr. Candilis, provided a detailed
report—supported by his testimony before the Hearing Committee—explaining why
Schuman’s depression did not substantially affect his misconduct.11 That opinion
found support in Dr. Hodas’s notes taken from the time when Schuman’s misconduct
10
Their letters were admitted into evidence as sources of information relied
upon by Dr. Abudabbeh in rendering her expert opinion.
11
Schuman argues that Dr. Candilis should not have been qualified as an
expert because he “refused to address [the Kersey] elements and concocted his own.”
But Dr. Candilis did address the Kersey elements—his entire testimony related to
whether Schuman suffered from depression and whether his depression was a
substantial cause of his misconduct. That Dr. Candilis did not use the exact
terminology utilized in the case law is of no concern. Dr. Candilis was not offered
as a legal expert, and to the extent he misstated a legal element or phrase, the Board
was not led astray from the correct legal principles.
30
began, indicating that his depression had substantially improved as a result of
treatment and medications.
In sum, Schuman wrongly retained and spent hundreds of thousands of dollars
belonging to former clients. That he received those funds “passive[ly],” a point he
ascribes great exonerating weight to, does not change that he misappropriated those
funds. And he did not demonstrate that his misconduct was substantially affected
by his depression. We agree with the Board that the most compelling evidence on
that issue was to the contrary.
IV.
It is therefore ORDERED that Schuman is disbarred from the practice of law
in the District of Columbia. It is FURTHER ORDERED that he return the
unaccounted for $34,391 to his clients if it can be traced back to them or, if it cannot,
that he disgorge that amount to the D.C. Bar’s Clients’ Security Fund.12 D.C. Bar
R. XI, § 3(a)(1), (b). For purposes of reinstatement, we refer Schuman to the
requirements under D.C. Bar R. XI, § 16(c).
12
On February 18, 2020, Schuman filed a motion to lift his suspension from
the practice of law pending final disposition of his appeal. In light of Schuman’s
disbarment, we deny that motion.
31
So ordered.