Matter of Pro Hac Vice ( 2014 )

IN THE SUPREME COURT OF THE STATE OF DELAWARE
IN THE MATTER OF PRO §
HAC VICE COUNSEL § N0. 544, 2014
SUPREME COURT OF THE §
STATE OF DELAWARE: § Board Case No. 111845—B
§
ALEX J. BROWN, §
Respondent. §
Submitted: October 17, 2014
Decided: October 21, 2014
Before HOLLAND, RIDGELY, and VALIHURA, Justices.
O R D E R
This 21st day of October 2014, it appears to the Court that:
(1) This is a lawyer disciplinary proceeding. On September 25, 2014,
the Board on Professional Responsibility filed a report with this Court
recommending, among other things, that the respondent, Alex I. Brown, be
publicly reprimanded and pay the costs of the proceeding. A copy of the
Board’s report is attached to this order. Neither the Office of Disciplinary
Counsel nor Katz has filed any objections to the Board’s report.
(2) The Court has considered the matter carefully. We find the
Board’s recommendation of a public reprimand to be appropriate. We,
therefore, accept the Board’s findings and recommendation for discipline and
incorporate the Board’s findings and recommendation by reference.
NOW, THEREFORE, IT iS ORDERED that the Board’s September 25,
2014 report is hereby ACCEPTED. The Office of Disciplinary Counsel shall
disseminate this Order in accordance with Rule 14 of the Deiaware Lawyers’
Rules of Disciplinary Procedure.
BY THE COURT:
/s/ Hegry duPont Ridgely
Justice
representation issue, which Brown further addressed by
seeking to withdraw his appearance in this proceeding.28
The Court of Chancery fined Respondent and required Respondent to se1f~
report his actions to the disciplinary authorities in Maryland and Delaware.29
III. Violation of the Rules
Delaware Professional Conduct Rule 3.4(0) states that “[a] lawyer shall not
knowingly disobey an obligation under the Rules of the tribunal, except for an
open refusal based on an assertion that no valid obligations exists.” ReSpondent
has admitted a violation of Rule 3.4(c). By filing the Maryland Action,
Respondent admits that he knowingly violated the Seizure Order that enjoined
persons with notice of the Seizure Order from bringing claims against Indemnity in
any court other than the Court of Chancery.30
Delaware Professional Conduct Rule 8.4(d) states that it is professional
misconduct for a lawyer to “engage in conduct that is prejudicial to the
administration of justice.” Respondent has admitted that by knowingly disobeying
the Seizure Order, he engaged in conduct that is prejudicial to the administration of
justice in violation of Rule 8.4(d).31
2" Id.
29 Idaho
30 Answerfl 19.
3‘ 1d.1[21.
IV. Recommended Sanctions
To determine the appropriate sanctions, the Panel starts with the four part
test set forth in the American Bar Association Standards for Imposing Lawyer
Sanctions (“ABA Standards”).32 At the outset the Panel makes a preliminary
determination of the appropriate sanction by assessing the first three prongs of the
test: (1) the ethical duty violated; (2) the lawyer’s state of mind; and (3) the actual
or potential injury caused by the lawyer’s conduct. Following the preliminary
determination, the Panel decides whether an increase or decrease in the preliminary
sanction is justified because of mitigating or aggravating factors. The Panel must
also consider Supreme Court of Delaware precedent for similar violations.
(1) The ethicai duties violated.
Respondent has admitted violating Rules 3.4(c) and 8.4(d).
(2) State of mind.
Under Delaware Professional Conduct Rule 1.0(f), an attorney acts
“knowingly” when one has “actual knowledge of the fact in question.” The Rule
violations charged here required “knowing” conduct, which Respondent admitted.
(3) Injugy caused by the misconduct.
Under the ABA Standards, “Injury” is defined as “harm to a client, the
public, the legal system, or the profession which results from a lawyer’s
32 In re Steiner, 817 A.2d 793, 796 (Del. 2003).
10
misconduct. The level of injury can range from ‘serious’ injury to ‘little or no“
injury; a reference to ‘injury’ alone indicates any level of injury greater than ‘little
or no” injury.” “‘Potential injury’ is the harm to a client, the public, the legal
system or the profession that is reasonably foreseeable at the time of the lawyer’s
miscmduct, and which, but for some intervening factor or event, would probably
have resulted from the lawyer’s misconduct.”33
Respondent argues that there was little or no actual or potential harm
because Jeffrey Cohen had filed a case pro 56 against Indemnity in Maryland in
violation of the Seizure Order before Respondent filed his case. Respondent also
claims that his case was never made public and was quickly withdrawn.34
The Panel finds to the contrary.35 The testimony of the witnesses
demonstrated actual harm to the parties and prejudice to the administration of
33 1991 ABA Standards as amended 1992 — Definitions. It appears that the American Bar
Association re-adopted in 2012 the ABA Standards, but rescinded the adoption of the
commentary to the ABA Standards. See ABA Resolution 107, available at
htt _://Www.americanbar.or news/abanewsfaba-news-archWes/2013/08/10? - ado ted -
reafhtml.
Although the Maryland Action was not initially filed under seal, the record is conflicting on
whether Respondent did so intentionally, or whether there were issues with the clerk’s office in
applying to file under seal. There was also a dispute as to whether the Maryland Action ever
became public. The Panel does not need to resolve this diSpute as part of its sanction
recommendation.
35 The parties dispute whether the Maryland Action filed by Respondent was ever made public
before it was withdrawn. Respondent claims that he made every effort to file the complaint
under seal, but issues with the clerk’s office caused a delay in sealing the complaint. ODC
maintains that the complaint became public because news sources reported the details in articles
about indemnity. The Panel need not resolve this factual dispute because the filing of the
complaint, even if kept confidential from the public, still caused Indemnity and the Insurance
Commissioner harm, as well as prejudice to the administration of justice.
11
justice. Indemnity, who was then Respondent’s client, had to take actions to
respond to the Maryland Action, including appointment of outside counsel to
defend the action and interacting with its insurance carrier.36 The Insurance
Department also had to address the Maryland Action in the Delaware case, by
filing motions, briefing the rule to show cause issues, and conducting the hearing.37
The Court of Chancery had to review the submissions, conduct a hearing, and write
an opinion, where it found that Respondent’s actions violated the Seizure Order.38
Standards 622 and 6.23 both speak in terms of injury or potential injury, meaning
only a minimal amount of injury under the definitions. The Panel determines that
there was actual injury and prejudice to the administration of justice.39
The Presumptive Sanction
The parties agree that ABA Standard 6.2 applies to determine the
presumptive sanction. Under 6.2, there are an array of possible sanctions for
failure to obey the rules of the tribunai, depending on the attorney’s state of mind
and seriousness of the harm. For purposes of determining the presumptive
36 Hr’ g Tr. 30-34; 38-41.
37 1d. at 66-69.
38 H1" g Ex. M4).
39 See aiso In re Abbott, 925 A.2d 482, 486-87 (Del. 2007) (Superior Court was required to
strike brief containing inflammatory and unprofessional writing, wastingjudicial resources and
describing behavior as prejudicial to the administration of justice); In re Shaman, 765 A.2d 930,
939 (Del. 2000) (filing of a iawsuit in contradiction to a court order was prejudicial to the
administration of justice).
12
sanction, the parties dispute whether suspension or reprimand is appropriate. ABA
Standards 6.22 and 6.23 provide as foliows:
6.22 Suspension is generally apprOpriate when a lawyer knows that
he or she is violating a court order or ruie, and causes injury or
potential injury to a client or a party, or causes interference or
potential interference with a legal proceeding.
6.23 Reprimand is generally appropriate when a lawyer negligently
fails to comply with a court order or rule, and causes injuiy or
potential injury to a client or other party, or causes interference or
potential interference with a legal proceeding.
The parties do not dispute that Respondent’s state of mind was “knowing.”
Respondent argues, however, that knowing conduct is not the same as intentional
conduct. Because he was not charged with “intentional” conduct, the presumptive
sanction according to Respondth should be reprimand not suspension.
The argument is a bit hard to follow. ABA Standard 6.22 requires
“knowing” conduct, which ReSpondent has admitted. The Panel believes
Respondent is conflating the definition of “knowing” for purposes of establishing a
Rule violation, with the definition of “knowing” when applying the ABA
Standards to determine the appropriate discipline. Delaware Professional Conduct
Rule 1.0(t) does not distinguish between knowing and intentional conduct. Under
the Rules, one acts “knowingly” when one has “actual knowledge of the fact in
question.” Knowing and intentional conduct are the same for purposes of charging
a Rule violation.
l3
In contrast, the ABA Standards distinguish between the two mental states
and add a third. “Intent” is defined as “the conscious objective or purpose to
accomplish a particular result.” “Knowledge” is defined as “the conscious
awareness of the nature or attendant circumstances of the conduct but without the
conscious objective or purpose to accomplish a particular result.” There is also the
lesser standard of “Negligence” — “the failure of a lawyer to heed a substantial risk
that circumstances exist or that a result will follow, which failure is a deviation
from the standard of care that a reasonable lawyer would exercise in the
situation.”40
Respondent acted with the most culpable state of mind when filing the
Maryland Action. Admittedly aware of the Seizure Order, he filed the Maryland
141
Action to exert leverage over Indemnity and its counse Respondent hoped to
get the attention of his former colleague in Maryland, thinking that he could make
142
an end run around the Delaware proceedings and counse He also saw the
Maryland Action as a way to get Jeffrey Cohen an audience with new attorneys
who might see the wisdom of allowing Cohen back in the doors of Indemnity.43
40 ABA Standards — Definitions.
‘” Hr’g Tr. 94—95;
42 Id. at 112—14.
43 Id. at 107—03; 167.
14
Finally, he wanted the Maryland court to review the scope of the companion order
filed in Maryland, claiming it was broader than authorized by the Delaware court.44
Applying the three factors of Standard 3.0, the Panel finds that Respondent
acted intentionally in violation of the Rules, caused actual injury to a party,
interfered with a legal proceeding, and caused prejudice to the administration of
justice. The presumptive sanction is suspension.
Aggravating and Mitigating Factors
Following the determination of the presumptive sanction of suSpension, the
Panel must consider aggravating and mitigating circumstances before
recommending the final sanction to be imposed.45 Aggravating factors or
circumstances are those that might justify an increase, and mitigating factors are
those that mightjustify a decrease, in the degree of discipline to be imposed. From
the list of factors included in ABA Standard 9.22, ODC has raised three
aggravating factors:
9.221%)! dishonest or selfish motive
ODC argues that Respondent acted with a selfish motive when intentionally
Violating the Seizure Order. Respondent was brought in to his new firm to develop
the firm’s commercial litigation practice, and specifically to represent Jeffrey
4“ Id. at 115-16.
45 ABA Standard 9.1.
l5
Cohen and his businesses.“ Although ReSpondent had for the most part
terminated his professional relationship with Cohen several months before the
Delaware proceedings due to nonpayment and other issues, he resumed the
representation when Cohen called desperate for representation.47 According to
ODC, Respondent violated the Seizure Order on Cohen’s orders in the hopes of
collecting unpaid fees and collecting future fees for the Maryland Action.
The Panel heard Respondent’s testimony and assessed his credibility at the
hearing. We conclude that this aggravating factor should be applied, but not with
full force. ReSpondent had in mind the substantial overdue fees when he decided
to represent Cohen in the Delaware proceedings. He may also have had these fees
in mind when filing the Maryland Action. The Panel also finds, however, that
Cohen was a demanding and difficult client, and no doubt exerted extreme pressure
on Respondent.48 Although client pressure is neither an aggravating nor mitigating
factor under the ABA Standards, the Panel does find it to be a partial explanation
for Respondent’s violation of the Seizure Order rather than solely selfishness.
9.22 refusal to acknowled e wron ful nature of conduct
ODC also argues that Respondent has hedged when it comes to
acknowledging the wrongfulness of his conduct. The Panel finds that Respondent
46 Hr’ g Tr. 154-55.
47 Id. at 16263.
48 Id. at 140—43
16
took responsibility for his actions in the Answer and also at the hearing.49 The
Panel concludes that this aggravating factor should not be applied.
9.22m substantial experience in the practice of law
The parties agree that Respondent has substantial experience in the practice
of law.50 He also has particular experience with insurance proceedings, having
spent a number of years in both public and private practice dealing with insurance
regulatory matters.” Therefore the Panel finds that ReSpondent’s substantial
experience is an aggravating factor.52
Respondent argues for a number of mitigating factors to consider when
determining the appropriate sanction.
9.32 a absence of a rior disci lina record
The parties agree that Respondent has no prior disciplinary record.
4" Id. at 168-71.
5° Id. at 158—62.
5‘ Id. at 101—03.
52 Respondent argues that he had no experience in liquidation proceedings, and therefore he
should not be viewed as an experienced practitioner. Under Delaware law, however, the inquiry
primarily centers on years in practice, rather than expertise in any particular area of the law. See
In re Murray, 2012 WL 2324172, at *32 (Del. June 18, 2012) (aggravating factor found even
though disciplinary vioiation arose in an area of practice outside attorney’s main practice area);
Ir: re Melvin, 807 A.2d 550, 554 (Del. 2002) (inexperience with area of the law not a mitigating
factor).
17
9.32( b) absence of a dishonest or selfish motive
The Panel has previously found that Respondent may have acted partly with
a selfish motive. As with the aggravating factor, the Panel will not apply this
mitigating factor with full force.
9.32 c ersonal 01' emotional roblerns
Respondent argues that Jeffrey Cohen was a bully, harassed Respondent,
and caused him emotional distress leading to the fiiing of the Maryland Action.
From this, Respondent apparently argues that Cohen’s harassment caused
Respondent personai or emotional problems which led him to violate the Seizure
Order.
ReSpondent did not present any testimony from a professional that the
client’s behavior caused Respondent to suffer from personal or emotional
problems. It also appears that this mitigating factor is reserved for personal or
emotional problems unrelated to the conduct that led the attorney to commit the
ethical violation. Finally, as discussed previously, dealing with a difficult client is
neither an aggravating nor a mitigating factor.
18
Filing ID 56089359
Cm umber 544,20“
BOARD OF PROFESSIONAL RESPONSIBILITY
OF THE SUPREME COURT OF DELAWARE
IN THE MATTER OF
PRO HAC VICE COUNSEL
SUPREME COURT OF THE
) W
)
)
STATE OF DELAWARE: )
)
)
)
BOARD CASE NO. 111845-B
ALEX J. BROWN,
RESPONDENT.
BOARD REPORT AND RECOMMENDATION OF SANCTION
Before a panel of the Board of Professional Responsibility is a Petition for
Discipline. The Respondent, Alex J. Brown, Esquire, a member of the Maryland
Bar, was admitted pro hac vice by the Court of Chancery and is subject to the
jurisdiction of the Supreme Court of Delaware for disciplinary action.1
Respondent represented several parties before the Court of Chancery where
the court entered a Seizure and Injunction Order placing an insurance company
under control of the Delaware Insurance Commissioner. The court enjoined the
filing of litigation against the insurance company in any other forum. Respondent
acted in contempt of the Seizure and Injunction Order by filing suit in Maryland
state court against the insurance company after the injunction had been entered.
The Office of Disciplinary Counsel has brought a Petition alleging
professional misconduct under Rules 3.4(c) and 8.4(d) of the Delaware Lawyers”
1 Delaware Lawyers” Rules of Disciplinary Procedure 5(a).
9.32(d) timeiy good faith effort to make restitution or to rectify
conseguences of misconduct
Once Respondent became aware of the court’s displeasure with the filing of
the Maryland Action, Respondent immediately dismissed the Maryland Action.53
He withdrew from the case, paid the costs assessed by the court, and apologized to
the court. 54 He also terminated Jeffrey Cohen as a client. The Panel finds this to
be a mitigating factor.
9.32(e) full and free disclosure to disciplinary board or cooperative attitude
toward proceedings
The parties agree that Respondent was forthcoming with CDC and
cooperated with these proceedings.
9.32 inex erience in the ractice of law
As discussed previously, Respondent has substantial experience in the
practice of law. His inexperience in liquidation proceedings is not a mitigating
factor.
9.32 character or re utation
Respondent’s character witnesses testified that Respondent is of good moral
character and reputation at the bar, and has had a successful practice as a public
and private lawyer.
53 Hr’g Tr. I71.
54 Id. at 168-70.
19
932(k) imposition of other penaities or sanctions
The Court of Chancery has imposed a monetary sanction on Respondent for
his contumacious conduct. The Maryland disciplinary authority has issued
Respondent a warning.55
9.32 l remorse
The Panei finds that Respondent has expressed remorse for his actions.
After reviewing the aggravating and mitigating factors, the Panel finds that
the mitigating factors outweigh the aggravating factors, and that the presumptive
sanction of suspension should be reduced to public reprimand. It is important to
note that much of the case presented by Respondent revolved around the
difficulties he had with Jeffrey Cohen as a client. Respondent and his other
Witnesses testified convincingly that Cohen exceeded every standard of appropriate
client conduct towards his attorney. But, as all parties agreed at the hearing, a
difficult or impossible client is neither an aggravating nor mitigating factor.56 The
reason for this hard and fast ruie is apparent. The lawyer owes duties not just to
the client, but to the legal system. As the Supreme Court of Delaware said in In re
55 Hr’ g Ex. D. The Attorney Grievance Commission of Maryland dismissed the compiaint made
by Bar Counsel. As part of the dismissal, the Grievance Commission found that Respondent
violated Maryland Rule of Professional Conduct 1.9 by filing suit against a former ciient, and
Rule 8.4(d) by violating the Court of Chancery Seizure Order. The Grievance Commission
issues a warning for these violations, which under Maryland rules, is not discipline. The parties
to this proceedings agree that the Panel is not bound by Maryland’s determination.
56 ABA Standard 9.4 provides as follows: “The foliowing factors should not be considered as
either aggravating or mitigating: (b) agreeing to the client’s demand for certain improper
behavior or result. . ..”
20
Abbott, “[t]his responsibility to the ‘Court’ takes precedence over the interests of
the client because officers of the Court are obligated to represent these clients
zealousiy within the bounds of both the positive law and the rules of ethics?”-7
Delaware Disciplinafl Decisions
Although the ABA Standards are used as a guide to determine the
appropriate sanction, Delaware precedent must also be considered. ODC cites a
number of Supreme Court of Delaware decisions where public reprimands were
ordered for Rule 3.4(c) and 8.4(d) violations.58
Respondent attempts to distinguish the foregoing cases on their facts. The
Panel finds, however, that regardless of the particular facts of these cases, the
common thread is a public reprimand for violation of court rules or orders where
the attorney acted with a culpable state of mind when disregarding court orders or
interfering with the judicial process.
Respondent submitted to the Panei summaries of a number of disciplinary
cases where private admonitions were imposed for Rule 3.4(c) violations. After
reviewing each of these cases, the Panel finds them all distinguishable. Many
’7 925 A.2d at 487-88 (citing Nix v. Whiteside, 475 U.S. 157, 168 (1986)).
58 See In re Guy, 1994 WL 202279 (Del. May 5, 1994) (public reprimand for acting in contempt
of court in violation of Rule 3.4(c)); In re Mekler, 1993 WL 61674 (Del. Feb. 9, 1993) (public
reprimand for disobeying court rules in violation of Rule 3.4(c)); In re Abbott, 925 A.2d 482(public reprimand for filing briefs containing undignified, discourteous, and degrading
language); In re Murray, 2012 WL 2324i 72 (engaging in conduct prejudicial to the
administration of justice warranted a public reprimand); In re Wilson, 2005 WL 3485738 (Dei.
Nov. 9, 2005) (public reprimand for disobeying rules of a tribunal in violation of Rule 3.4(c)).
21
involved a failure to comply with mandatory continuing legal education
requirements59 or resulted from transgressions much less serious than the conduct
in this case, or personal issues unrelated to an attorney’s professional judgment.60
Here, the Respondent intentionally violated a court order to benefit his client,
causing injury to Indemnity and the Insurance Commissioner, and caused prejudice
to the judicial system.
CONCLUSION
After applying the ABA Standards, weighing the aggravating and mitigating
factors, and considering the Delaware case law and other authorities, the Panel
recommends that Respondent be publicly reprimanded, and pay the costs of this
proceeding.
Dated: September 25, 2014
59 Board Case No. 1, 1995; Board Case No. 10, 1995; Board Case No. 2007-0338-B; Board
Case No. 23, 1997; Board Case No. 44, 1993; Board Case No. 9, 1995; Board Case No. 96,
1997.
60 Supreme Court No. 62, 2013 (faiied to dismiss an appeal or prosecute an appeal); Board Case
Nos. 46, 2006 and 26, 2007; Board Case No. 309, 2007 (failed to appear for court and meet court
deadlines); Board Case No. 47, 2005; Board Case No. 46, 2005 (failure to comply with efiling
directives); Board Case Nos. 42 and 43, 2001 (advising client not to comply with court order
until adversary complied); Board Case No. 41, 1992 (failing to pay child support and ignoring
ODC requests for information); Board Case No. 24, 2003 (failing to probate estate in a timeiy
manner); Board Case No. 2012-0307-13 (appearing without Delaware counsei during a court
call); Board Case No. 746, 2010 (violating protection from abuse order).
22
23
Danielle Esq, H
Debbi-ah
23
Collins 1.. Scitz, In, Esq,
x//’ \
' 1
Ir.
'DebOrah I. Armistcad
23
Collins J. Seitz, In, Esq,
Danielle Yearibk, Esq,
Deborah L Amistflad
APPENDIX A
JOINT EXHIBITS
Ex. A Documents related to In the Matter of State of Delaware, ex rel, The
Ex. B
Honorable Karen Weldin Stewart, CIR~M—L Insurance Commissioner of
the State of Delaware v. Indemnity Insurance Corporation, RRG, CA.
No. 8601—VCL
A; 1) Confidential Seizure and Injunction Order (May 30, 2013)
A121 Order Regarding Hearing on November I, 2013 (Rule to Show
Cause)
Ag 31 Alex J. Brown’s Response to Show Cause Order
A14) Order Granting Motion to Withdraw (January 13, 2014)
A{ 5) Transcript — Oral Argument on Jeffrey B. Cohen’s Motion to
Stay Pending Appeal and on the Court’s Order to Show Cause
Regarding Alex J. Brown (January 10, 2014)
A; 6) Theodore A. Kittila, Esquire’s letter to The Honorabie J. Travis
Laster (October 31, 2013)
AH) Motion for Admission Pro Hac Vice (August 15, 2013)
A18) In the Matter of Rehabilitation of Indemnity Insurance
Corporation, 2014 WL 185017 (Del. Ch. Jan. 16, 2014)
A193 Cohen, et a]. v. State of Delaware, 89 A.3d 65 (Del. 2014)
Documents related to IDG Companies, LLC, et a]. v. Indemnity Insurance
Corporation, RRG, er a].
B11) Complaint filed in the Circuit Court for Baltimore County
(October 1 1, 2013)
B12) Email from Alex J. Brown, Esquire to Phillip Metcalf (October
11, 2013)
Aul
EX. C
EX. D
EX. E
EX. F
Ex. G
Ex. H
EX. I
Ex. I
Respondent’s correspondence to ODC (January 16, 2014)
Maryland Dismissal With Warning
College Bound Foundation/About Us
Super Lawyers: Rating a Lawyer
A.M. Best Press Release
Complaint (October 8, 2013)
Motion to Unseal Record or Permit Access to Court File
Order Unseaiing Court Record
Rules of Professional Conduct. Respondent admitted that he acted in contempt of
the Court of Chancery injunction, and violated these Rules. Therefore, the issue
for the Panel is the appropriate sanction.
The Panel has reviewed the hearing evidence using the framework from the
Standards for Imposing Lawyer Sanctions adopted by the American Bar
Association Standing Committee on Professional Discipline. We have also
considered Supreme Court case law on sanctions and other authorities. The Panel
recommends that a public reprimand be imposed, and that Respondent pay the
costs of this proceeding.
1. Procedural Background
The Office of Disciplinary Counsel (“ODC”) filed the Petition for Discipline
(“Petition”) on June 19, 2014. Respondent, through his counsel, filed an answer to
the Petition on July 7, 2014 (“Answer”) and admitted ali facts alleged in the
Petition except one iimited aliegation.2 The Respondent aiso admitted violating the
Deiaware Rules of Professional Conduct (“Rules”) alleged in Counts I and II.
2 Respondent denied part of paragraph eight of the Petition where the Insurance Commissioner
claimed that Respondent “kept secret and never served” a iawsuit filed in September 2012
against the Insurance Department and others arising from their oversight of Indemnity, the
insurance company. The record shows, however, that the Court made a finding consistent with
the allegation. Hearing Exhibit A(4) at 1] C (“[Tlhe court has found the following facts to be true
a lawsuit that Brown had filed on behalf of indemnity in September 2012 against the
Commissioner and others arising from their oversight of Indemnity, but which Brown had fried
under seal, kept secret, and never served. . ..” Because this earlier lawsuit did not form the basis
for any of the current disciplinary charges, the Panel does not find Respondent’s denial material
to this proceeding.
On August 19, 2014, the Panel heard evidence and argument regarding
sanctions. Appendix A lists the joint exhibits and additional hearing exhibits
admitted into evidence, all Without objection. At the hearing ODC cailed Philip
Metcalf, Esquire, General Counsel of Indemnity Insurance Corporation, RRG
(“Indemnity”); W. Harding Drane, J r., Esquire, an attorney formerly with the
Delaware Department of Justice Civil Division; and Respondent. Respondent
called Theodore A. Kittila, Esquire, an attorney with the Greenhill Law Group,
LLC and Respondent’s Delaware counsel for part of the Court of Chancery
proceedings;3 and Respondent’s law partner, Brian Thompson, Esquire with the
law firm Silverman, Thompson, Slutkin, & White LLC in Baltimore, Maryland.
Respondent also testified as part of his defense. Counsel for the parties concluded
the hearing with closing arguments.
II. Factual Findings
The following factual findings are determined from the admissions in the
Answer to Petition for Discipline, the hearing exhibits, and the testimony at the
hearing.
3 Wilks, Lukoff & Bracegirdle moved for Respondent’s admission pro hac vice. After the court
granted the Wilks’ firm’s motion to withdraw, the Greenhill Law Group substituted for the Wilks
firm. By the time of the substitution of counsel, Respondent had committed the act leading to
this disciplinary proceeding. August 19, 20M Hearing Transcript (abbreviated “Hr” g TL”) at
139.
Indemnity is a Delaware domiciled risk retention group that sells insurance
policies to restaurants and nightclubs and for special events.4 Jeffrey Cohen
founded Indemnity and served as its president, chairman and chief executive
officer.5 Indemnity is subject to the regulatory authority of the Delaware
Department of Insurance (“Department”). The Department is charged with
protecting insurance consumers by making sure that insurance companies are abie
to pay claims as welt as investigate and prosecute insurance fraud.6
On May 30, 2013, the Department filed a seizure petition in the Court of
Chancery because of its concern about Indemnity’s financial viability and its
suspicion that Jeffrey Cohen had engaged in fraud.7 The Court of Chancery
reviewed the seizure petition ex parte, found it to be supported by sufficient
evidence and entered a confidential seizure and injunction order on the same day
(“Seizure Order”).8
The Seizure Order enjoined persons with notice of the Seizure Order from
bringing claims relating to Indemnity, except in the Court of Chancery:
10. All persons and entities having notice of these proceedings or of
this Seizure and Injunction Order, are hereby enjoined and restrained
from asserting any claim against the Commissioner, her authorized
agents, or IICRRG in connection with their duties as such, or against
4 Petition 1; 3.
5 142111 4.
6Mja
7 In the Matter of the Rehabilitation of Indemnity Insurance Corporation, RRG, GA. No. 8601 ~
VCL.
8 Hearing Exhibit (abbreviated “Hr” g Ex”) AU).
4
the Assets, except insofar as such claims are brought in the [sic] these
seizure proceedings or any subsequent delinquency proceedings
pursuant to 18 Del. C. ch. 59.9
On August 9, 2013, the court extended the Seizure Order, and on September
10, 2013, amended the Seizure Order to address violations by Jeffrey Cohenw
Following an evidentiary hearing the court imposed sanctions against Jeffrey
Cohen on September 25, 2013 and permitted limited discovery to determine
whether further sanctions were warranted against Cohen for violating the Seizure
Order (“Sanctions Order”). 11
At the time of the disciplinary violations, Respondent was a member of the
Maryland Bar and practicing with the Baltimore, Maryland law firm Silverman,
Thompson, Slutkin & White, LLC.12 During June, July and August 2013,
Respondent advised Indemnity as its counsel with respect to at least the following
matters: the Department’s investigation of Indemnity leading up to the Seizure
Order, the Court of Chancery seizure action, and a lawsuit Respondent filed on
behalf of Indemnity in September 2012 against the Department and others arising
out of the Department’s oversight of Indemnity.13
On August 2, 2013, Delaware counsel for Indemnity moved to admit
Respondent pro hac vice as counsel for Indemnity in the Court of Chancery
9 Id.
1“ Hr’g Ex.A(2).
” Id.
‘2 Petition 1m 1~2.
‘3 Id. at1[ s; Hr’g Ex. A(4).
proceeding.” On August 6, 2013, Delaware counsel for Indemnity voluntarily
withdrew Brown’s motion for admission pro hac vice as counsel of record for
Indemnity in the Court of Chancery.15
On August 15, 2013, Delaware counsel for the pr0posed intervener RB
Entertainment Ventures, LLC (“RB Entertainment”) moved to admit Respondent
pro hac vice as counsel of record for RB Entertainment in the Court of Chancery
proceeding.16 RB Entertainment is an entity controlied by Jeffrey Cohen and holds
99% of the equity of Indemnity.l7 Hr’ g EX. A(2). The Court granted the motion.18
On October 11, 2013, ReSpondent filed an action in the Maryland Circuit
Court of Baltimore County on behalf of a number of entities owned by or affiliated
with Jeffrey Cohen, against Indemnity and a number of Indemnity’s directors,
officers and employees (the “Maryland Action”).19 The Maryland Action related
to the Department’s oversight of Indemnity, and was adverse to Indemnity’s
interests.20 Filing the Maryland Action violated the Seizure Order. The Maryland
*4 Hr’g Ex. A(4).
‘5 Id.
‘6 Id.
” Hr’g Ex. A(8), at *2; Hr’g Ex. A(2).
18 Hr’g Ex. A04).
‘9 1d,; Ex. 13(1).
20 Because the Maryland Action was adverse to Indemnity, the Panel raised a possible Rule
violation relating to conflicts of interest. The Office of Disciplinary Counsel had considered the
charge, but did not bring disciplinary charges for this potential violation, claiming that the
Maryland disciplinary authorities had jurisdiction over this charge. Hr’ g Tr. 9.
6
Action also contained a number of volatile allegations against Indemnity and the
Department, its agents and the individual defendants.2E
On October 30, 2013 Indemnity moved to disqualify ReSpondent in the
Delaware action and to revoke his admission pro hac vice on the grounds that
Respondent’s representation of RB Entertainment violated the Delaware Rules of
Professional Conduct and that Respondent violated the Seizure Order by filing the
Maryland Action.22 On October 31, 2013, Delaware counsel for RB
Entertainment, a company controlled by Jeffrey Cohen, represented to the Court of
Chancery that ReSpondent would be withdrawing his appearance for Indemnity.23
The Court of Chancery issued an order noting that under Court of Chancery Rule
5(aa) Respondent could not withdraw his appearance without leave of court.
As part of the same order the Court of Chancery issued a rule to show cause
that required Respondent to appear and show cause why he should not be held in
contempt of the Seizure Order, why his admission pro hac vice should not be
revoked, and why other sanctions should not be ordered. The court also found as a
preliminary matter that the filing of the Maryland Action constituted a knowing
violation of paragraphs 9, 10, and 15 of the Seizure Order, paragraphs 2 and 3 of
the Amended Seizure Order, and paragraphs 1, 6, 7, and 8 of the Sanctions Order.
21 Hr’g EX. 13(1).
22 Hr’g Ex. A(4).
23
Such violations, according to the court, established a primafacie case for both civil
. . 24
and criminal contempt.
Shortly after the October 31, 2013 show cause order, Respondent dismissed
the Maryland Action.25 On January 10, 2014, after briefing on the show cause
order, the Court of Chancery held an evidentiary hearing. ReSpondent appeared
with counsel and testified at the hearing, as did Indemnity representatives.
Respondent admitted that by filing the Maryland action he acted in contempt of the
Seizure Order.26 The Court of Chancery found that Respondent “testified credibly
that he was under great pressure from his client to file the Maryland Action, that he
knew that it violated the Seizure Order, but that he chose to carry out his client’s
wishes rather than respect the Seizure Order.”27
On January 13, 2014, the Court of Chancery issued an Order granting
Respondent’s motion to withdraw as counsel for Indemnity. The court also held:
Brown’s filing of the Maryland Action was contumacious
and violated the Seizure Order. That act and Brown’s
representation of Indemnity at the same time he sued
Indemnity in the Maryland Action threatened to prejudice
the fairness of this proceeding. Brown mitigated his
contempt by dismissing the Maryiand Action promptly
after the issuance of the Show Cause Order. The
dismissal of the Maryland Action also mitigated the
2“ Hr’g Ex. AC2).
2-“ Petition‘fl 13.
26 Answer ii 15.
27 Hr’ g Ex. A(4).