Attorney Grievance v. Dailey ( 2020 )


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  • Attorney Grievance Commission of Maryland v. Jonathan Christian Dailey, Misc. Docket
    AG No. 1, September Term 2019. Opinion by Raker, J. (Senior Judge, Specially Assigned)
    ATTORNEY MISCONDUCT – DISCIPLINE – DISBARMENT – Respondent
    Jonathan Christian Dailey violated the Maryland Lawyers’ Rules of Professional Conduct
    1.6(a) and 8.4(a), (c), and (d) and the Maryland Attorneys’ Rules of Professional Conduct
    19-308.4(a), (c), and (d) when he solicited, received, and mismanaged financial
    transactions from a client shortly after the client received her settlement. Respondent took
    advantage of his client’s lack of legal sophistication and trust in him as an attorney to
    induce her into giving him money as “investments,” misappropriated it, and provided her
    repeatedly with misleading and false information about it. Disbarment is the appropriate
    sanction for respondent’s misconduct.
    Circuit Court for Montgomery County
    Case No. 464961
    Argued: December 9, 2019
    IN THE COURT OF APPEALS
    OF MARYLAND
    Misc. Docket AG No. 1
    September Term, 2019
    ______________________________________
    ATTORNEY GRIEVANCE COMMISION OF
    MARYLAND
    v.
    JONATHAN CHRISTIAN DAILEY
    ______________________________________
    Barbera, C.J.
    McDonald,
    Watts,
    Hotten,
    Getty,
    Booth,
    Raker, Irma S.
    (Senior Judge, Specially Assigned),
    JJ.
    ______________________________________
    Opinion by Raker, J.
    ______________________________________
    Filed: March 18, 2020
    Pursuant to Maryland Uniform Electronic Legal
    Materials Act
    (§§ 10-1601 et seq. of the State Government Article) this document is authentic.
    2020-03-18 12:02-04:00
    Suzanne C. Johnson, Clerk
    The Attorney Grievance Commission, acting through Bar Counsel, filed in this
    Court a Petition for Disciplinary Action against Jonathan Christian Dailey, respondent,
    alleging violations of the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”)
    and the Maryland Attorneys’ Rules of Professional Conduct (“MARPC”).1                 The
    Commission charged respondent with violating MLRPC 1.6(a) (Confidentiality of
    Information), 1.15(a) and (d) (Safekeeping of Property),2 5.4(a) (Professional
    Independence of a Lawyer), and 8.4(a), (c), and (d) (Misconduct). The Commission also
    charged respondent with violating MARPC 19-308.1(a) (Bar Admission and Disciplinary
    Matters) and 19-308.4(a)–(d) (Misconduct). Pursuant to Maryland Rule 19-727, we
    referred the matter to Judge Margaret M. Schweitzer in the Circuit Court for Montgomery
    County to make findings of fact and proposed conclusions of law. Judge Schweitzer held
    an evidentiary hearing and concluded that respondent violated MLRPC 1.6(a) and 8.4(a),
    (c), and (d) for his conduct occurring before July 1, 2016 and MARPC 19-308.4(a), (c),
    and (d) for his conduct occurring after July 1, 2016.3
    1
    The Commission charged respondent under both MLRPC, which were in effect
    prior to July 1, 2016, and MARPC, which became effective July 1, 2016, because
    respondent’s acts of misconduct occurred before and after July 1, 2016. Effective July 1,
    2016, MLRPC were renamed MARPC. Rules Order (June 6, 2016).
    2
    The Commission withdrew its MLRPC 1.15(a) charge following the hearing. The
    MLRPC 1.15(d) charge remained, but Judge Schweitzer did not discuss or state her
    conclusion of law on this charge. The Commission did not except to Judge Schweitzer’s
    lack of legal conclusion on this charge.
    3
    Judge Schweitzer’s summary of her conclusions of law referenced “MARPC 19-
    308.4(a)–(d).” It appears, however, that she did not mean to include MARPC 19-308.4(b),
    which applies to “a criminal act that reflects adversely on the (footnote continued . . .)
    I.
    Before the commencement of the July 30, 2019 hearing, Judge Schweitzer heard
    Respondent’s Motion to Dismiss Petition for Discipline or Remedial Action as a Matter of
    Law and denied it pursuant to Md. Rule 19-725(c).4 At the end of the hearing, the
    Commission withdrew the MLRPC 1.15(a) charge,5 and Judge Schweitzer made the
    following findings of fact and conclusions of law:
    attorney’s honesty, trustworthiness or fitness as an attorney in other respects” (emphasis
    added). The Commission’s only ground for charging respondent with MARPC 19-
    308.4(b) was for testifying falsely under oath and thus committing an act of perjury on June
    20, 2018, and Judge Schweitzer found that respondent did not testify falsely under oath.
    Furthermore, in Petitioner’s Recommendation for Sanction, the Commission excluded
    MARPC 19-308.4(b) when summarizing Judge Schweitzer’s conclusions of law.
    4
    Md. Rule 19-725(c) provides that in proceedings on a petition for disciplinary or
    remedial action, “[m]otions to dismiss the proceeding are not permitted.”
    5
    MLRPC 1.15(a) provides as follows:
    “(a) A lawyer shall hold property of clients or third persons that
    is in a lawyer’s possession in connection with a representation
    separate from the lawyer’s own property. Funds shall be kept
    in a separate account maintained pursuant to Title 19, Chapter
    400 of the Maryland Rules, and records shall be created and
    maintained in accordance with the Rules in that Chapter. Other
    property shall be identified specifically as such and
    appropriately safeguarded, and records of its receipt and
    distribution shall be created and maintained. Complete records
    of the account funds and of other property shall be kept by the
    lawyer and shall be preserved for a period of at least five years
    after the date the record was created.”
    2
    FINDINGS OF FACT
    “The Respondent, Jonathan Christian Dailey, was
    admitted to the Maryland Bar on December 12, 1995.
    ***
    Representation of Sherry Gaither
    “Since 2009, the Respondent has operated the Law
    Office of Jonathan C. Dailey, a sole proprietorship.[] The
    Respondent’s practice is focused primarily on representing
    plaintiffs in medical malpractice and personal injury matters. .
    ..
    “Sherry Renee Gaither has spent most of her career
    working in the security services industry. Ms. Gaither has also,
    at times, been employed as a driver for Uber Technologies, Inc.
    The highest level of education completed by Ms. Gaither is
    12th grade.
    “On April 11, 2011, Ms. Gaither retained the
    Respondent to represent her in an employment discrimination
    case in the United States District Court in the District of
    Maryland, Sherry Gaither v. Paragon Systems, Inc, Case No.
    8:12-CV-00086-RWT.        Around May 5, 2012, the parties
    reached a settlement for $17,000 with Paragon Systems, and
    3
    Ms. Gaither received $10,108.70 as her portion of the
    settlement funds.
    The Respondent Solicits Ms. Gaither to ‘Invest’ her
    Settlement Proceeds
    “As of May 2012, the Respondent was representing . . .
    Terry Hedgepeth[] in a medical malpractice lawsuit filed in the
    Superior Court of the District of Columbia in 2005. (Terry
    Hedgepeth v. WWC, et al.). The Respondent was representing
    Mr. Hedgepeth on a contingency fee basis and, as such would
    get a percentage of the proceeds.
    “In May 2012, within days after Ms. Gaither received
    her settlement funds from the Respondent, the Respondent
    approached Ms. Gaither with what he described to her as an
    opportunity to invest in his upcoming case. The Respondent
    advised Ms. Gaither that if she invested funds with his law
    firm, those funds would be used to finance the litigation of one
    of his firm’s pending case[s].       The Respondent told Ms.
    Gaither that whatever amount she invested would be
    ‘guaranteed’ and that he could possibly ‘double [her]
    money[.]’ The Respondent described the transaction to Ms.
    Gaither as ‘a real money-maker[.]’
    4
    “On May 15, 2012, only ten days after the Paragon
    settlement, the Respondent sent Ms. Gaither an email attaching
    a document entitled ‘Letter Agreement.’            The Letter
    Agreement required Ms. Gaither to pay an ‘Investment
    Amount’ of $27,000 to the Respondent and stated that the
    funds would be used by the Respondent ‘for the purpose of
    advancing the litigation against Whitman Walker Clinic
    (“WWC”) in the case of Terry Hedgepeth v. WWC, et al.’ The
    Letter Agreement also included a section titled ‘Obligation of
    Entrepreneur’ which stated:
    ‘In consideration of the investment in the
    [Hedgepeth] Case, Entrepreneur shall pay to
    Investor the full return sum of $27,000, by or
    before the end of the fiscal year 2012, if the Case
    settles or resolves by trial by jury for less than
    $500,000. The return sum of $27,000 is
    guaranteed and is not conditioned upon the
    outcome of the Case. In the event that the Case
    settles or resolves by trial by jury for more than
    $500,000, Investor shall be paid a return of 100%
    of the investment, or a total amount of $54,000,
    by or before the end of fiscal year 2012.
    Entrepreneur shall advise the Investor of the
    status of the Case every month and will make
    payment as set forth herein within 20 days of
    receipt of payment resulting from a settlement or
    verdict of the Case. It is the intention of the
    Entrepreneur to double the investment of the
    Investor, but only the principal investment of
    $27,000 is guaranteed.’
    5
    “The Court does not find that the agreement dated May 15,
    2012 was intended to be an agreement to share attorney’s fees
    with Ms. Gaither, a non-attorney. First, it should be noted that
    in the agreement, the $27,000 was to be repaid regardless of
    whether there were any fees collected by the Respondent.
    Despite the language in the agreement, the Court concludes
    based upon the actions and words of the Respondent that he
    never intended to share fees.          Unfortunately, for the
    Respondent, the Court is also of the opinion that the
    Respondent was not intending to abide by the agreement and
    its assurances, and that the guarantees were empty promises by
    him. The Court finds that the agreement was not an agreement
    to share fees but rather a vehicle containing alluring provisions
    to entice Ms. Gaither into turning over funds to the
    Respondent. This is supported by the fact that the Hedgepeth
    case settled in August 2012, just a few months after the
    agreement, for $400,000, of which Respondent received
    personally $140,000. When the Respondent received his fees,
    the Respondent did not: 1) return in full the guaranteed $27,000
    by or before the end of the fiscal year 2012; 2) advise Ms.
    Gaither of the state of the case every month, as Ms. Gaither
    6
    testified she got no information other than it was a financial
    loss to his firm; or 3) make payment within twenty days of the
    receipt of payment resulting from the settlement or verdict of
    the case.
    “In his May 15, 2012 email to Ms. Gaither, the
    Respondent stated the following, ‘[Mr. Hedgepeth] will not
    accept a settlement less than $1 Million[.]’. Respondent later
    testified that he meant to say that his own goal was to settle for
    that price, rather than stating Mr. Hedgepeth’s expectations.
    Respondent’s proposition contradicts the plain language of his
    statements to Ms. Gaither.          The Court finds that the
    Respondent intended to express Mr. Hedgepeth’s expectations
    for the case, and that Respondent made the statement to Ms.
    Gaither to induce her to ‘invest’ her funds.
    “In the May 15, 2012 email, the Respondent also made
    the following knowing and intentional misrepresentation to
    Ms. Gaither:
    ‘Please keep this Agreement, our emails and
    conversations confidential as instructed by [Mr.
    Hedgepeth]. He has authorized me to reveal
    details of his case to you for the purposes of this
    investment in his case.’
    7
    “The Petitioner contends, and the Court finds, that the
    Respondent failed to obtain Mr. Hedgepeth’s informed consent
    before disclosing confidential information to Ms. Gaither,
    specifically the amount Mr. Hedgepeth was willing to accept
    in settlement. The Court notes that the Respondent offered
    testimony regarding his communications with Mr. Hedgepeth
    that conflict with his representations to Ms. Gaither. During a
    statement under oath given on June 20, 2018, the Respondent
    testified that he never explicitly explained to Mr. Hedgepeth
    that he had entered into any loan arrangement with Ms.
    Gaither. At the hearing, when asked whether he had received
    authorization from Mr. Hedgepeth to share confidential
    information with Ms. Gaither, the Respondent testified, ‘I
    assured [Mr. Hedgepeth] that I was not going to share attorney-
    client privileged information with her. I simply said it was a
    loan against attorney’s fees that would have no effect on his
    case[.]’   Based on the Respondent’s testimony during the
    statement under oath and the hearing, the Court finds that the
    Respondent failed to obtain Mr. Hedgepeth’s informed consent
    before disclosing the amount Mr. Hedgepeth was willing to
    accept in settlement to Ms. Gaither.
    8
    “In a separate email to Ms. Gaither, also sent on May
    15, 2012, the Respondent instructed Ms. Gaither to wire the
    funds to his firm’s operating account maintained at the
    Community Banks of Colorado.[6]              Pursuant to the
    Respondent’s instruction, on May 16, 2012, Ms. Gaither wired
    $5,000 to the Respondent’s operating account, and on May 22,
    2012, she wired an additional $22,000 to the account.
    The Respondent Uses Ms. Gaither’s Funds for his
    Personal Benefit
    “In the May 15, 2012 email, the Respondent made the
    following statement to Ms. Gaither:
    ‘I have to prepare now for trial and your
    investment will go toward that preparation. I am
    sending funds to our infectious disease specialist
    and our psychiatrist as soon as investment funds
    are received.’
    “The Court finds this statement, too, to be a knowing
    and intentional misrepresentation Respondent made to Ms.
    Gaither. The Court received as evidence the Respondent’s
    operating account records from NBH Bank[7] for the period
    6
    The Respondent has never been admitted to the Colorado Bar nor has he ever
    practiced law in Colorado.
    7
    Community Banks of Colorado is a subsidiary of NBH Bank.
    9
    May 2012 through January 2016. A review of the records
    demonstrates that, prior to Ms. Gaither’s May 16, 2012 wire
    transfer, the Respondent’s operating account had a balance of
    $55.41. During the period of May 15 through June 18, 2012,
    the only deposits made into the account were Ms. Gaither’s two
    wire transfers totaling $27,000. The records demonstrate, and
    Respondent confirms, that between May 15 and June 18, 2012,
    the Respondent disbursed $26,200 of Ms. Gaither’s funds from
    his operating account to pay for a variety of personal expenses
    unrelated to the Hedgepeth case. Examples of his personal
    expenditures include: Revel Casino, Apparel Lacy Couture,
    Classic Beer and Wine and Netflix.com. The only transaction
    related to the Hedgepeth case was a check dated June 11, 2012,
    in the amount of $800 made payable to Dr. Donald Vogel, an
    expert witness.   By June 18, 2012, the Respondent had
    disbursed the entirety of Ms. Gaither’s funds and his operating
    account had a negative balance of -$1,056.20.
    “The Court finds that the Respondent knowingly and
    intentionally misrepresented to Ms. Gaither that her
    ‘investment’ would be used to fund the litigation of the
    Hedgepeth case. The fact that the Respondent spent almost the
    10
    entirety of Ms. Gaither’s funds on personal expenses in
    approximately four weeks makes it clear that the Respondent
    never had any intention of using Ms. Gaither’s funds to pay for
    litigation costs in the Hedgepeth case.      The Respondent’s
    ‘investment opportunity’ was a deception created by the
    Respondent for the purpose of obtaining funds from Ms.
    Gaither under false pretenses and then using those funds as an
    interest free personal loan. During her testimony, Ms. Gaither
    made it clear that she would never have given the Respondent
    any funds if she had known they would be used for his own
    personal expenses.
    The Hedgepeth Settlement
    “In August 2012, the Hedgepeth case settled for
    $400,000.    The settlement funds were deposited in the
    Respondent’s firm’s attorney trust account.[8] The Respondent
    testified at the hearing that his firm received approximately
    $160,000 in attorney’s fees as a part of the settlement, and that
    his   firm   retained   $140,000    and   paid    another   firm
    approximately $20,000 in fees. The Respondent failed to
    8
    The Respondent could not provide the specific date the funds were deposited in
    the account.
    11
    inform Ms. Gaither within 20 days, as per the agreement, that
    the Hedgepeth case had settled, the amount of the settlement,
    or the fact that his firm collected a large sum in attorney’s fees.
    The Respondent failed to deliver any portion of the Hedgepeth
    settlement funds to Ms. Gaither and instead, intentionally
    misrepresented to her that the case ‘didn’t do well’ and was a
    ‘huge loss.’ When questioned at the hearing why Ms. Gaither
    wasn’t considered as one of the firm’s creditors and considered
    as part of costs, Respondent replied, ‘In retrospect, I should
    have made a better decision.’
    The Cover-Up
    “In September 2012, the Respondent sent an email to
    Ms. Gaither stating the following:
    ‘Sherry,
    If you are interested, I am offering the same deal
    on my ‘severed pinky’ case that I offered on my
    HIV misdiagnosis case. You are currently owed
    $20,000[9] by the end of the year (or sooner).
    I would offer a ‘100%’ return on an investment
    of the $20,000—or $40,000, with a guarantee of
    a return of the initial $20,000 when the case
    9
    Throughout the correspondence between Ms. Gaither and the Respondent they
    both state that the investment amount is $20,000; however, the Respondent’s operating
    account records clearly show that Ms. Gaither gave the Respondent $27,000. Neither Ms.
    Gaither nor the Respondent could provide an explanation for this discrepancy.
    12
    settles. We filed suit and the case is no [sic] on-
    going. We expect a trial date next year.
    Because it is a permanent injury and our client is
    50, we expect a jury award between $400,000–
    $1M. I would offer the deal of a double return if
    the case settles/resolves by trial jury verdict of
    $350,000 or higher.
    Let me know!’
    “Ms. Gaither expressed interest in participating in the
    ‘investment.’ In December 2012, the Respondent sent Ms.
    Gaither another email and stated:
    ‘Sherry—I have two major HIV misdiagnosis
    cases that I recently signed based upon the
    publicity I gained in the last case. I am going to
    include these cases to your ‘pinky case’ to ensure
    that no matter what case settles, you will see the
    return from one of them (hence, giving you
    further assurance of your return, spread out to
    three cases, not just the pinky case, to secure
    your investment).
    I have appreciated the faith you have placed in
    me and want to make sure you feel confident and
    comfortable with the fact that you will see a
    return.’
    “The Respondent told Ms. Gaither that her funds would
    be ‘transferred’ to the three new cases. On January 1, 2013,
    the Respondent and Ms. Gaither entered into a second
    agreement. The terms of the January 1, 2013 Letter Agreement
    were identical to the May 15, 2012 Letter Agreement except
    13
    that Ms. Gaither’s funds were to be used to advance the
    litigation of Robert Dyer v. REL, Case No. 2012-CA-007315,
    in the Superior Court of the District of Columbia,[10] as well as
    two medical malpractice cases for Bobby Russell and Robert
    Blount that had yet to be filed.         The Respondent was
    representing the clients in all three of these cases on a
    contingency fee basis. The Respondent told Ms. Gaither that
    her funds would be used, ‘[f]or the case, for the witnesses, for
    the filing, for the different litigations, whatever was necessary
    as far as to build the case.’ Like the first agreement, the
    January 1, 2013 agreement included a section titled ‘Obligation
    of Entrepreneur’ which states:
    ‘In consideration of the investment in the [Dyer]
    Case, Entrepreneur shall pay to Investor the full
    return sum of $20,000 if the Case settles or
    resolves by trial by jury for less than $250,000.
    The return sum of $20,000 is guaranteed and is
    not conditioned upon the outcome of the Case.
    In the event that the Case settles or resolves by
    trial by jury for more than $400,000, Investor
    shall be paid a return of 100% of the investment,
    or a total amount of $40,000. Entrepreneur shall
    advise the Investor of the status of the Case (to
    include the two HIV cases) every month and will
    make payment as set forth herein within 20 days
    of receipt of payment resulting from a settlement
    10
    In their correspondence, the Respondent and Ms. Gaither refer to the Dyer case
    as the ‘pinky’ case.
    14
    or verdict of the Case. It is the intention of the
    Entrepreneur to double the investment of the
    Investor, but only the principal investment of
    $20,000 is guaranteed.’
    “The Court finds that, for the same reasons discussed in
    regard to the May 15, 2012 Letter Agreement, the
    Respondent’s January 1, 2013 Letter Agreement was not an
    agreement to share attorney’s fees with Ms. Gaither, a non-
    attorney.
    “For the period 2013 through 2017, the Respondent
    knowingly and intentionally misrepresented to Ms. Gaither
    that her funds were being used to finance the litigation of the
    three cases. When Ms. Gaither requested status updates on the
    cases, the Respondent would tell her they were either still in
    litigation or that they settled but ‘didn’t do well.’ The Court
    finds that the Respondent made the misrepresentations to avoid
    repaying Ms. Gaither, and to deceive her into believing that he
    was still in possession of her funds and that he was using them
    for the purpose stated in their agreement.
    Ms. Gaither Requests Refunds
    “Beginning in or about 2013, Ms. Gaither began to
    experience significant financial difficulties.   On April 27,
    2015, Ms. Gaither, believing the Respondent was still in
    15
    possession of her funds, sent an email to the Respondent in
    which she urgently requested that the Respondent return
    $5,000 of her funds explaining that she was experiencing
    financial hardship. At trial, Ms. Gaither testified that she was
    unemployed, was getting assistance from her brother, and was
    going through financial difficulties. She stated that she had
    ‘claimed’ bankruptcy and was going through depression. On
    the next day, April 28, 201[5], Ms. Gaither sent another email
    in which she requested that the Respondent return the entirety
    of her funds as soon as possible. On May 12, 2015, the
    Respondent provided Ms. Gaither with $5,000.
    “On August 14, 2015, in response to Ms. Gaither’s
    request for a status update for the Dyer case, the Respondent
    wrote:
    ‘Sherry,
    I need to assign other cases to your return as the
    ‘pinky’ case had to be settled for peanuts because
    my client could not pay trial costs. The $5,000
    sent earlier is a third of our attorney’s fee of
    $15,000 in that case—disappointing.
    BUT—I am going to assign the cases of Sean
    Taylor (assault and battery against a well-known
    restaurant/bar), Matthew Sateri (breach of
    contract against Enterprise for not paying life
    insurance when he was killed in a car accident
    with his rental) and Maurice Parker
    16
    (discrimination case pending in DC federal court
    right now). These cases WILL settle.
    As promised, I will get you the total principal
    back and a profit, through one case or another—
    I won’t let you down, Sherry.’
    “The Court does not find . . . these statements to be
    admissions of sharing attorney’s fees, but rather statements by
    the Respondent to assure Ms. Gaither that the Respondent was
    above board, dealing fairly with her regarding her
    investment.[11]
    “On March 3, 2016, at the request of Ms. Gaither, the
    Respondent provided her with an additional $5,000.           On
    September 3 and 12, 2016, Ms. Gaither sent the Respondent
    emails requesting that he return $10,000 to her by the end of
    the month. The Respondent replied to Ms. Gaither’s emails
    and stated, ‘I will work on getting something to you, but this is
    a particularly tight time for my law practice.’ Notably, in the
    Respondent’s testimony at the hearing, the Respondent
    acknowledged that nowhere in his agreements with Ms.
    Gaither did he condition returning her funds on the financial
    11
    The fee sharing was pursuant to the second Letter Agreement but did not comport
    with the terms of the Agreement. According to the Agreement, Ms. Gaither should have
    received the entirety of the Dyer attorney’s fees, purportedly $15,000.
    17
    circumstances of his law firm.      As previously noted, the
    Respondent admitted, however, that he viewed Ms. Gaither as
    a creditor that should have been considered as a part of the
    Respondent’s costs. As of the date of the hearing in this
    disciplinary matter, the Respondent has failed to return any
    additional funds to Ms. Gaither.
    ***
    Bar Counsel’s Investigation
    “On November 15, 2017, Ms. Gaither filed a complaint
    with Bar Counsel. During Bar Counsel’s investigation, the
    Respondent gave a statement under oath on June 20, 2018.
    ***
    “The Court finds that the Respondent did not knowingly
    and intentionally testify falsely in this deposition with Bar
    Counsel on June 20, 2018. The Court finds that the May 15,
    2012 Letter Agreement, expressly stating that in the event that
    the Hedgepeth case settles or resolves by trial for more than
    $500,000, the Respondent would repay Ms. Gaither $54,000,
    was not an agreement to share fees, but rather part of a
    concerted effort on the part of the Respondent to encourage
    Ms. Gaither to give Respondent her money. The Court does
    18
    not find, given the history of events in this case, that
    Respondent if he received a $500,000 settlement instead of the
    $400,000 that he did receive[] that the Respondent would have
    doubled Ms. Gaither’s money and returned to her $54,000.
    The Court is confident in this prediction since after receiving
    [the] $400,000 settlement, he failed to pay any of the
    ‘guaranteed’ $27,000.
    “The Court finds that the agreement is not what the
    Respondent purported it to be, a ‘guaranteed investment,’ but
    rather a personal ‘loan’ to the Respondent with ever-changing
    repayment and return provisions determined solely by the
    Respondent. The Court makes the same assessment of the
    August 14, 2015 email. The Court finds that the delivery of
    the $5,000 to Ms. Gaither, was not part of a fee but rather a
    token payment to support the illusion that he was abiding by
    the agreement and was a fair dealing partner in this venture.
    ***
    The Court views the emails and agreements as continuing
    empty promises solely intent on getting and retaining Ms.
    Gaither’s investment. Therefore, the Court does not find that
    19
    he made knowingly and intentional misrepresentations in his
    statement under oath regarding monies paid to Ms. Gaither.
    “Finally,   Petitioner    alleges    that,   during   the
    Respondent’s deposition, in response to a question regarding
    the Respondent’s use of Ms. Gaither’s funds, the Respondent
    knowingly and intentionally testified falsely . . . . The full
    reading of the transcript shows that when questioned about the
    expenditure after the deposit of Ms. Gaither’s monies, the
    Respondent admitted that while some expenditures were
    personal in nature, and some were possibly business but could
    be personal, only one check for $800, for an expert witness,
    was an expenditure to benefit a specific case. The statement
    by Respondent was, at best, an attempt to explain what he used
    the monies for, and the Court does not find it was a false
    statement viewed in the entirety of the deposition.
    Mitigating Factors
    “The Respondent did not present any evidence in
    mitigation.
    Aggravating Factors
    “The Court of Appeals has recognized the following
    aggravating factors:
    20
    ‘(1) Prior disciplinary offenses;
    (2) A dishonest or selfish motive;
    (3) A pattern of misconduct;
    (4) Multiple offenses;
    (5) Bad faith obstruction of the disciplinary
    proceeding by intentionally failing to comply
    with rules or orders of the disciplinary agency;
    (6) Submission of false evidence, false
    statements, or other deceptive practices during
    the disciplinary process;
    (7) Refusal to acknowledge the wrongful nature
    of conduct;
    (8) Vulnerability of victim;
    (9) Substantial experience in the practice of law;
    and
    (10) Whether he or she displayed indifference to
    making restitution.’
    “See Att’y Griev. Comm’n v. Sperling, 
    434 Md. 658
    ,
    676–77, 
    76 A.3d 1172
    , 1183 (2013) (citing Standard 9.22 of
    the American Bar Association Standards for Imposing Lawyer
    Sanctions). The Petitioner has alleged the existence of the
    following aggravating factors: (2) a dishonest or selfish
    motive; (3) a pattern of misconduct; (4) multiple offenses; (7)
    refusal to acknowledge the wrongful nature of conduct; (9)
    substantial experience in the practice of law; and (10)
    indifference to making restitution. This Court agrees.
    ***
    CONCLUSIONS OF LAW AS TO EACH CHARGE
    21
    “For the reasons stated below, this Court finds, by clear
    and convincing evidence, that the Respondent violated the
    following Maryland Lawyers’ Rules of Professional Conduct
    and the Maryland Attorney’s Rules of Professional Conduct:[]
    MLRPC Rule 1.6 Confidentiality of Information
    “Rule 1.6 provides, in part,
    ‘(a) a lawyer shall not reveal information related
    to the representation of a client unless the client
    gives informed consent, the disclosure is
    impliedly authorized to carry out the
    representation, or the disclosure is permitted by
    section (b) of this Rule.’
    “The Court finds that the Respondent violated Rule 1.6
    when he disclosed to Ms. Gaither, in his May 15, 2012 email,
    that Mr. Hedgepeth would not settle his case for less than one
    million dollars. Despite the Responden[t]’s insistence that he
    intended to express his own goals in his statements to Ms.
    Gaither regarding the Hedgepeth settlement, the Court cannot
    and will not ignore the plain and obvious meaning of ‘[Mr.
    Hedgepeth] will not accept a settlement less than $1 Million.’
    The Court similarly rejects Respondent’s argument that
    disclosing a client’s expectations for settlement does not
    constitute a violation of Rule 1.6 simply because lawyers do so
    regularly; the Court will not speculate on what attorneys do in
    22
    their day-to-day practice, but it will not accept the argument
    that regularity voids culpability. The Respondent failed to
    obtain Mr. Hedgepeth’s informed consent before making the
    disclosure, despite his assurances to Ms. Gaither that he had
    done so. Therefore, the Court concludes that the Respondent
    has violated Rule 1.6.
    MLRPC 5.4 Professional Independence of a Lawyer
    “Rule 5.4 provides, in part:
    ‘(a) A lawyer or law firm shall not share legal
    fees with a nonlawyer, except that:
    (1) an agreement by a lawyer with
    the lawyer’s firm, partner, or
    associate may provide for the
    payment of money, over a
    reasonable period of time after the
    lawyer’s death, to the lawyer’s
    estate or to one or more specified
    persons;
    (2) a lawyer who purchases the
    practice of a lawyer who is
    deceased or disabled or who has
    disappeared may, pursuant to the
    provisions of Rule 1.17, pay the
    purchase price to the estate or
    representative of the lawyer;
    (3) a lawyer who undertakes to
    complete unfinished legal business
    of a deceased, retired, disabled, or
    suspended lawyer may pay to that
    lawyer or that lawyer’s estate the
    portion of the total compensation
    which fairly represents the
    23
    services rendered by the former
    lawyer;
    (4) a lawyer or law firm may
    include nonlawyer employees in a
    compensation or retirement plan,
    even though the plan is based in
    whole or in part on a profit-sharing
    arrangement; and
    (5) a lawyer may share court-
    awarded legal fees with a nonprofit
    organization     that     employed,
    retained     or       recommended
    employment of the lawyer in the
    matter.’
    “The Court does not find that the Respondent violated
    Rule 5.4(a) when he paid Ms. Gaither $5,000. The Court is not
    convinced that the monies were in fact, fees attributable to the
    Dyer case. The Court believes that the agreements and emails
    were constructed and sent to lure Ms. Gaither into entering into
    an agreement with the Respondent’s firm and the Respondent
    never intended to abide by the time constraints or the
    guaranteed return on the investment. As such the Court cannot
    find that it was an agreement to share fees. Therefore, the
    Court does not find by clear and convincing evidence that the
    Respondent violated Rule 5.4(a).
    MARPC Rule 8.1 Bar Admission and Disciplinary
    Matters
    “Rule 8.1 provides, in part:
    24
    ‘An applicant for admission or reinstatement to
    the bar, or a lawyer in connection with a bar
    admission application or in connection with a
    disciplinary matter, shall not:
    (a) knowingly make a false statement of material
    fact.’
    “The Court does not find that the Respondent violated
    Rule 8.1(a). On June 20, 2018, during his statement under oath
    to Bar Counsel, the Respondent made several statements
    regarding his agreement with Ms. Gaither. As previously
    discussed, the Court does not find the statement to be knowing
    and intentional misrepresentations made under oath. Rather,
    the Court finds that since there was never any intent of the
    Respondent to comply with the initial agreement, his statement
    to Bar Counsel that he never intended to share fees with Ms.
    Gaither is not a knowing and intentional misrepresentation.
    Despite the language in the agreement, Respondent never
    intended and did not act in compliance with the contract or
    even the spirit of the contract. The Court, therefore, finds that
    there was not an agreement to share fees in the Hedgepeth and
    Dyer cases and as a result his statements to Bar Counsel were
    not knowing and intentional misrepresentations.
    25
    “The Respondent further testified under oath that he
    used Ms. Gaither’s funds for ‘anything the firm needed to keep
    things moving forward.’ Petitioner asserts that this directly
    contradicts the Respondent’s testimony at the July 30, 2019
    hearing, at which he readily confessed he spent most of the
    funds on personal expenses. A full reading of the transcript
    puts these statements in context and the Court is not convinced
    that the Respondent made false statements to Bar Counsel. The
    Respondent admitted that he used the funds for personal
    expenditures and the statements were an explanation for why
    he used the funds in the manner that he did. Therefore, the
    Court finds that this statement to Bar Counsel was [not] a
    knowing and intentional misrepresentation.
    MLRPC/MARPC Rule 8.4. Misconduct.
    “Rule 8.4 provides, in part:
    ‘It is professional misconduct for a lawyer/attorney to:
    (a) violate or attempt to violate the Maryland
    Lawyers’/Attorneys’ Rules of Professional
    Conduct, knowingly assist or induce another to
    do so, or do so through the acts of another[;]
    (b) commit a criminal act that reflects adversely
    on      the      lawyer’s/attorney’s     honesty,
    trustworthiness or fitness as an attorney in other
    respects;
    (c) engage in conduct involving dishonesty,
    fraud, deceit or misrepresentation;
    26
    (d) engage in conduct that is prejudicial to the
    administration of justice[.]’
    “The Court finds that the Respondent violated the
    sections of Rule 8.4 as charged. Having violated other Rules
    of Professional Conduct, the Respondent violated Rule 8.4(a).
    See Att’y Griev. Comm’n v. Foltz, 
    411 Md. 359
     (2009) (finding
    that where any attorney violated several other Rules of
    Professional Conduct, he necessarily violated Rule 8.4(a)).
    “. . . Additionally, the Respondent’s extensive use of
    deception and deceit in regard to his dealings with Ms. Gaither
    also constitutes a violation of Rule 8.4(c).         In Attorney
    Grievance Comm’n v. Coppock, the Court of Appeals held that
    Rule 8.4(c) applies not only to the practice of law, ‘but extends
    to actions by an attorney in business or personal affairs that
    reflect on the individual’s character and fitness to practice law.
    . . . ” Attorney Grievance Comm’n v. Coppock, 
    432 Md. 629
    ,
    644 (2013). As the attorney who represented Ms. Gaither in
    her employment discrimination case, the Respondent knew
    that Ms. Gaither had received a considerable sum of money as
    a result of the settlement and, taking advantage of their
    disparate levels of legal sophistication, proceeded to design a
    scheme to take those funds from her. The Court is persuaded
    27
    by the ruling of the Supreme Court of Appeals of West
    Virginia, which held in Lawyer Disciplinary Bd. v. Battistelli
    that “[i]f a lawyer converts [others’] monies to his or her own
    use without authorization, the attorney is subject to a
    disciplinary charge.    Such conduct obviously reflects a
    dishonest and deceitful nature which violates the general
    precept that an attorney should avoid dishonesty or deceitful
    conduct.” Lawyer Disciplinary Bd. v. Battistelli, 
    206 W.Va. 197
    , 203 (1999) (quoting Committee on Legal Ethics of West
    Virginia State Bar v. Hess, 
    186 W.Va. 514
    , 517 (1991)).
    “Here, the Respondent used Ms. Gaither’s funds for
    personal use and then lied to her about it repeatedly, stating
    that he would be applying her already-spent funds to upcoming
    cases. The intentional and calculated dishonesty necessary to
    carry out the Respondent’s scheme is precisely the violative
    conduct the West Virginia Supreme Court of Appeals
    addressed in Hess, and unmistakably exposes the Respondent
    to liability.
    ***
    “It should be noted that, although not argued by
    Petitioner, there is an open question of whether an attorney-
    28
    client [relationship] was still in existence at the time of the
    agreement between Ms. Gaither and the Respondent. Some
    courts have found when loans between attorneys and client[s]
    occur close in time to the legal services, especially when
    settlements are reached, that a continuation of the attorney-
    client [relationship] is found. (Hunniecutt v. State Bar of
    California, 
    44 Cal.3d 362
    , 
    748 P.2d 1161
     (1988) (finding that
    it [is] reasonable to examine the relationship between the
    parties to determine whether the attorney-client relationship
    still existed); Lawyer Disciplinary Bd. v. Battistelli, 
    206 W.Va. 197
    , 205 (1999) (finding that elements of trust, rapport, and
    gratitude were present to compel the conclusions that the
    attorney-client relationship had not terminated when the loan
    was procured.).     The Supreme Court of Minnesota has
    explained it as follows, ‘[s]ince the duty of fidelity and good
    faith arising out of the confidential relation of attorney and
    client is founded not on the professional relation per se, but on
    the influence which the relation creates, such duty does not
    always cease immediately upon the termination of the
    relationship but continues as long as the influence therefrom
    29
    exists.’ Colstad v. Levine, 
    243 Minn. 279
    , 
    67 N.W.2d 648
    ,
    654–55 (1954).
    “Since testimony and argument did not address this
    issue sufficiently for the Court to consider, the Court will not
    make that finding. However, the Court is not constrained in
    considering such a fact in rendering its decision involving an
    attorney, who had recently terminated an attorney-client
    relationship through the settlement of a case.       The Court
    concludes . . . as a matter of law that an attorney who uses
    information about a client’s recent settlement for a
    considerable amount of money who then solicits that same
    client for a loan brings the legal profession into disrepute in
    violation of Rule 8.4(d). This is especially true considering the
    following additional facts: that the client and the attorney had
    no previous relationship prior to their engagement; the client
    was not legally sophisticated in any respect; and the amount of
    time between the termination of the client-attorney relationship
    was short, days in this case.
    “The Court further concludes that the Respondent’s
    conduct, taken as a whole, most certainly brings the legal
    profession into disrepute in violation of Rule 8.4(d). As stated
    30
    throughout this opinion thus far, the Respondent used his status
    as an attorney to persuade a former client to provide him with
    funds under false pretenses. After the May 5, 2012 settlement,
    the Respondent wasted no time in approaching Ms. Gaither,
    and had an investment agreement drafted and ready for Ms.
    Gaither’s signature ten days later, on May 15, 2012. The
    Respondent took advantage of Ms. Gaither’s trust in him which
    was gained while he acted in the capacity of her attorney to
    induce her to give him $27,000 under the guise of a legitimate
    financial investment. The Respondent then misappropriated
    Ms. Gaither’s funds for his own personal use and made
    knowing and intentional misrepresentations to her regarding
    the use of her funds and the settlement of the Hedgepeth case.”
    (Footnotes in original).
    II.
    Judge Schweitzer found that respondent violated MLRPC 1.6(a) and MLRPC
    8.4/MARPC 19-308.4(a), (c), and (d). Respondent excepts to Judge Schweitzer’s findings
    of fact and conclusions of law.12 Respondent rejects Judge Schweitzer’s findings of facts,
    12
    Respondent notes that his “[e]xception is filed out of time with the consent of the
    Petitioner.”
    31
    presents before this Court the same arguments that he presented before her, and seeks
    essentially a de novo review of her findings. As to Judge Schweitzer’s conclusions of law,
    respondent excepts generally that the case at bar does not implicate MLRPC/MARPC and
    falls outside the mandate of the Commission because he and Ms. Gaither engaged each
    other as private citizens after their attorney-client relationship ended. Respondent argues
    as follows:
    “The [Commission] has taken what amounts to a business
    transaction between two individuals and attempted to construe
    it as [a] violation of an attorney’s fiduciary duties to a client.
    This is simply untrue.
    The Maryland Lawyers’ Rules of Professional Conduct are
    rules that should be interpreted and applied to the purposes of
    legal representation and of the law itself.”
    In respondent’s view, the matter between him and Ms. Gaither should be adjudicated
    instead as a common law contract dispute before the District Court.
    As to Judge Schweitzer’s findings of fact related to MLRPC 1.6(a), respondent
    argues that there is “no proof whatsoever” that he revealed confidential client information
    about Mr. Hedgepeth to Ms. Gaither. Respondent points out that the Commission could
    have but did not call Mr. Hedgepeth—“a critical witness in the Court’s analysis,” in
    respondent’s view—to testify. Respondent acknowledges that in his agreements with Ms.
    Gaither, “pending cases in litigation were referred to [in order to] support the vitality of the
    practice,” but argues that his conduct did not violate MLRPC 1.6(a) because such conduct
    32
    “occurs every day by lawyers across the country with loan companies who provide a client
    loan or attorney loan.”13
    As to Judge Schweitzer’s findings of fact related to MLRPC 8.4/MARPC 19-
    308.4(a), (c), and (d), respondent argues that there is “absolutely no evidence of deceit,
    dishonesty or fraud” on his part. As to her conclusion of law, respondent argues that “[t]his
    is a case of unfortunate results that caused financial hardship to two private citizens” and
    that “[b]ad luck and unfortunate case results do not equate to a violation of the rules of
    ethics.”
    III.
    This Court has “original and complete jurisdiction” in attorney grievance matters
    and “conducts an independent review of the record.” Att’y Grievance Comm’n v. Ambe,
    
    466 Md. 270
    , 286, 
    218 A.3d 757
    , 765–66 (2019). We accept the hearing judge’s findings
    of fact unless we conclude that they are clearly erroneous. Id. at 286, 218 A.3d at 766. If
    the hearing judge’s factual findings are based on “competent material evidence,” they are
    not clearly erroneous, and we will not disturb them. Id. On the other hand, we review the
    hearing judge’s conclusions of law de novo. Id.
    13
    At oral argument before this Court, respondent stated repeatedly that it is a
    “common practice in personal injury law” for attorneys to “tell [loan companies] the facts
    of the case, with the client’s permission.” He stated, “I did it with many other clients as
    well, with their permission.”
    33
    Although the Commission did not charge respondent with violating MLRPC
    1.8/MARPC 19-301.8 (Conflict of Interest; Current Clients; Specific Rules), whether Ms.
    Gaither continued to be respondent’s client at the time of their financial transactions,
    thereby triggering other applicable rules of professional conduct, is an important issue in
    this matter. This issue is central to respondent’s defense of his conduct.
    MARPC 19-301.8 governs business transactions between an attorney and a client
    and provides in pertinent part as follows:
    “(a) An attorney shall not enter into a business transaction with
    a client unless:
    (1) the transaction and terms on which the
    attorney acquires the interest are fair and
    reasonable to the client and are fully disclosed
    and transmitted in writing in a manner that can
    be reasonably understood by the client;
    (2) the client is advised in writing of the
    desirability of seeking and is given a reasonable
    opportunity to seek independent legal advice on
    the transaction; and
    (3) the client gives informed consent, in a writing
    signed by the client, to the essential terms of the
    transaction and the attorney’s role in the
    transaction, including whether the attorney is
    representing the client in the transaction.”14
    14
    “When necessary, the attorney should discuss both the material risks of the
    proposed transaction, including any risk presented by the attorney’s involvement, and the
    existence of reasonably available alternatives and should explain why independent legal
    advice is desirable.” Md. Rule 19-301.8, cmt. 2; see also In re Gold, 
    668 N.Y.S.2d 605
    (N.Y. App. Div. 1998) (holding that the attorney violated the New York equivalent of
    MARPC 19-301.8 by borrowing $57,000 from a former client and representing both
    borrower and lender in the transaction).
    34
    These safeguards are “intended to prevent ‘overreaching’ when a lawyer engages in a
    financial transaction with a client, given a lawyer’s skill and training and the relationship
    of trust with a client.” Att’y Grievance Comm’n v. Shapiro, 
    441 Md. 367
    , 388, 
    108 A.3d 394
    , 406 (2015); see Md. Rule 19-301.8, cmt. 1; see also People v. Culter, 
    277 P.3d 954
    ,
    959 (Colo. O.P.D.J. 2011) (holding that “[b]y neglecting to provide the safeguards that
    would alert the [clients] to [attorney’s] own self-interest, . . . Respondent acted without the
    vigilant dedication to his clients’ interests to which they were entitled”).
    Judge Schweitzer discussed this issue in her conclusions of law, but because the
    Commission had not charged a violation of MLRPC 1.8/MARPC 19-301.8, she
    characterized respondent’s relevant conduct as a violation of MLRPC 8.4(d) instead,
    explaining as follows:
    “The Court concludes . . . as a matter of law that an attorney
    who uses information about a client’s recent settlement for a
    considerable amount of money who then solicits that same
    client for a loan brings the legal profession into disrepute in
    violation of Rule 8.4(d). This is especially true considering the
    following additional facts: that the client and the attorney had
    no previous relationship prior to their engagement; the client
    was not legally sophisticated in any respect; and the amount of
    time between the termination of the client-attorney relationship
    was short, days in this case.
    The Court further concludes that the Respondent’s conduct,
    taken as a whole, most certainly brings the legal profession
    into disrepute in violation of Rule 8.4(d).”
    (Emphasis added).
    We reject respondent’s argument that Ms. Gaither was no longer his client when he
    entered into financial transactions with her and that MLRPC/MARPC are not applicable to
    35
    the case at bar. Whether the transaction is classified as a “loan” or an “investment,” Ms.
    Gaither continued to be a client of respondent. Our conclusion is informed by attorney
    discipline cases in our sister jurisdictions, where bar counsels have brought the charge of
    violating the equivalent of MLRPC 1.8/MARPC 19-301.8 against attorneys who solicited
    and received personal loans from “former” clients. In such cases, courts have held that
    attorney-client relationships persisted (1) if the transactions are “the result of overreaching
    or manipulation of the former relationship,” In re Ricco, 
    426 N.Y.S.2d 887
    , 888 (N.Y. App.
    Div. 1980), or, stated differently, (2) “if the circumstances are such that the former client
    reasonably expects the lawyer to exercise professional judgment therein for the protection
    of the [former] client,” In re Ioannou, 
    89 A.D.3d 245
    , 250 (N.Y. App. Div. 2011) (internal
    quotation omitted) (alteration in original); see also In re Imming, 
    545 N.E.2d 715
    , 721 (Ill.
    1989) (regarding loans from “former” clients for an attorney’s non-legal business, holding
    that they “occurred so close in time to the respondent’s legal services to each client as to
    cause the client to believe that the respondent’s business relations were a continuation of
    the attorney-client relationship”) (emphasis added); La. St. Bar Ass’n v. Williams, 
    498 So.2d 727
    , 728 (La. 1986) (“A lawyer may not enter into a business transaction with a
    client if they have differing interests therein and if the client expects the lawyer to exercise
    his professional judgment on that matter for the protection of the client[.]”) (emphasis
    added); Law. Disciplinary Bd. v. Battistelli, 
    523 S.E.2d 257
    , 263 (W. Va. 1999) (noting
    that the “former” client “still considered the Respondent his attorney and felt obligated to
    36
    give the Respondent the requested loan since the Respondent had assisted him in obtaining
    a favorable result” in his case).
    To determine if a financial transaction resulted from an overreaching or
    manipulation of the attorney-client relationship, courts have considered factors such as (a)
    the proximity in time between the last attorney-client interaction and the first conversation
    about the financial transaction at issue, (b) the location of the conversation (e.g., in the
    attorney’s office, “amidst the trappings of their attorney-client relationship”), (c) the
    attorney’s knowledge of the client’s possession of lendable money (in particular, a
    settlement received from the attorney’s representation), (d) the client’s willingness to make
    the transaction largely because of the attorney-client relationship (e.g., in the case of a
    former client “who said he had never before lent anyone more than $20”), (e) the client’s
    desire to help the attorney out of gratitude for the attorney’s representation, and (f) the
    client’s trust in the attorney (e.g., as demonstrated by the client’s not seeking independent
    legal advice about the transaction). In re Ioannou, 
    89 A.D.3d at 249
    . This is a “highly
    fact-specific inquiry.” 
    Id. at 250
    .
    In Hunniecutt v. State Bar, 
    748 P.2d 1161
    , 1167 (Cal. 1988), the Supreme Court of
    California held specifically that there is an attorney-client relationship as a matter of law
    where a client receives settlement proceeds and is then solicited by the attorney to invest
    “the fruits of the attorney’s representation” in the attorney’s (other, non-legal) business.
    The court explained as follows:
    “A client who receives the proceeds of a judgment or
    settlement will often place great trust in the investment advice
    37
    of the attorney who represented him in the matter. This is
    especially likely when the client is unsophisticated and a large
    amount of money is involved. This trust arises directly from
    the attorney-client relationship, and abuse of this trust is
    precisely the type of overreaching that rule 5–101[15] is
    designed to prevent. Accordingly, when an attorney enters into
    a transaction with a former client regarding a fund which
    resulted from the attorney’s representation, it is reasonable to
    examine the relationship between the parties for indications of
    special trust resulting therefrom. We conclude that if there is
    evidence that the client placed his trust in the attorney because
    of the representation, an attorney-client relationship exists for
    the purposes of rule 5-101 even if the representation has
    otherwise ended.”
    
    Id.
     at 1166–67; see also In re Imming, 545 N.E.2d at 721 (regarding loans from “former”
    clients for an attorney’s non-legal business, noting as significant that some of the clients
    had “directly invested the proceeds of the legal work respondent performed for them”);
    Williams, 498 So.2d at 728 (stating that “an unsophisticated client who is asked for a loan
    by her attorney out of her settlement proceeds is justified in believing the lawyer is acting
    as her attorney and guardian of her interests”). This construction does not “dramatically
    extend the definition of an ‘attorney-client relationship’ beyond its common
    understanding.” Hunniecutt, 
    748 P.2d at 1167
    . The Supreme Court of Minnesota has
    explained as follows:
    “Since the duty of fidelity and good faith arising out of the
    confidential relation of attorney and client is founded, not on
    the professional relation per se, but on the influence which the
    relation creates, such duty does not always cease immediately
    upon the termination of the relation but continues as long as
    the influence therefrom exists.”
    15
    The California equivalent of MLRPC 1.8/MARPC 19-301.8.
    38
    Colstad v. Levine, 
    67 N.W.2d 648
    , 654–55 (Minn. 1954).
    In the case at bar, the attorney-client relationship between respondent and Ms.
    Gaither continued through their financial transactions. Relevant factors we consider
    include the fact that respondent broached the topic of an “investment” just days after Ms.
    Gaither received her portion of the settlement fund and Ms. Gaither’s lack of legal
    sophistication. We overrule respondent’s exception.
    Regardless of whether Ms. Gaither is a current or former client of respondent, we
    hold that respondent violated MLRPC 1.6(a) and MLRPC 8.4/MARPC 19-308.4(a), (c),
    and (d). First, as to the charge of violating MLRPC 1.6(a), whether there was an attorney-
    client relationship between respondent and Ms. Gaither has no bearing on whether
    respondent violated his duty of confidentiality to his client Mr. Hedgepeth by disclosing
    Mr. Hedgepeth’s settlement expectation to Ms. Gaither without his informed consent.
    Second, as to the charge of violating MLRPC 8.4/MARPC 19-308.4(a), (c), and (d), we
    have held that this rule applies broadly to attorneys’ conduct inside and outside their
    practice of law. We have held specifically that MLRPC 8.4(c)/MARPC 19-308.4(c)
    “extends to actions by an attorney in business or personal affairs that reflect on the
    individual’s character and fitness to practice law.” Att’y Grievance Comm’n v. Coppock,
    
    432 Md. 629
    , 644, 
    69 A.3d 1092
    , 1100 (2013) (emphasis added).
    We hold that respondent violated MLRPC 1.6(a). Respondent, although denying
    that there is any proof of his violation, fails to address Judge Schweitzer’s factual finding
    regarding respondent’s May 15, 2012 email to Ms. Gaither, in which respondent wrote,
    39
    “[Mr. Hedgepeth] will not accept a settlement less than $1 Million[.]” Judge Schweitzer
    found, based on respondent’s testimony during his statement under oath and at the hearing,
    that respondent failed to obtain Mr. Hedgepeth’s informed consent before disclosing to Ms.
    Gaither the amount that Mr. Hedgepeth was willing to accept in settlement. This finding
    of fact is based on “competent material evidence” despite lack of testimony from Mr.
    Hedgepeth, and it is not clearly erroneous.
    Respondent claims that sharing information about pending cases with third-party
    litigation funders for client or attorney loans is commonplace and argues that this negates
    any wrongdoing. We agree with Judge Schweitzer in rejecting, without “speculat[ing] on
    what attorneys do in their day-to-day practice,” that “regularity voids culpability.”
    Attorneys must uphold their duty of confidentiality to their clients and secure the client’s
    informed consent before disclosing any confidential client information to third-party
    litigation funders. See, e.g., Phila. Bar Ass’n Prof’l Guidance Comm., Advisory Op. 2003-
    15 (2003); Md. St. Bar Ethics Comm., Advisory Op. 2000-45 (2000) (in discussing ethical
    implications of loans by private entity to personal injury plaintiffs, stating that “[a]ll
    courses of action must have the client’s consent”). Respondent’s disclosure as to the
    amount Mr. Hedgepeth was willing to settle for was a confidential matter.
    We hold that respondent violated MLRPC 8.4/MARPC 19-308.4(a), (c), and (d).
    Judge Schweitzer found extensive deception and deceit by respondent in his dealings with
    Ms. Gaither throughout their financial transactions. For example, Judge Schweitzer found
    that respondent used Ms. Gaither’s funds for personal use and then lied repeatedly to Ms.
    40
    Gaither about it, stating that he would apply her previously spent funds to upcoming cases.
    We overrule respondent’s exception of simply denying Judge Schweitzer’s findings, as
    they are not clearly erroneous.
    Respondent argues that his conduct was the result of “[b]ad luck and unfortunate
    case results . . . between two private citizens.” We overrule this exception to Judge
    Schweitzer’s conclusion of law. First, this is not a case of “two private citizens” because,
    as noted above, there was an ongoing attorney-client relationship between respondent and
    Ms. Gaither. Second, respondent violated MLRPC 8.4/MARPC 19-308.4 regardless of
    Ms. Gaither’s status as a former or current client because the rule extends to an attorney’s
    dishonest personal dealings outside his practice of law. See Coppock, 432 Md. at 644, 69
    A.3d at 1100. Finally, respondent’s characterization of the events and conduct in question
    as “[b]ad luck and unfortunate case events” goes directly against Judge Schweitzer’s
    findings of fact, which respondent has not shown to be clearly erroneous. Judge Schweitzer
    found that respondent, from the beginning, before any alleged misfortune took place,
    “never had any intention of using Ms. Gaither’s funds to pay for litigation costs.” She
    found that respondent’s “investment opportunity” was a deception created to obtain funds
    from Ms. Gaither under false pretenses and to use those funds as an interest-free personal
    loan. These findings are based upon the evidence before Judge Schweitzer and are not
    clearly erroneous.    Based on these factual findings, respondent violated MLRPC
    8.4/MARPC 19-308.4(a), (c), and (d).
    41
    IV.
    We now turn to the appropriate sanction to be imposed. Bar Counsel recommends
    disbarment for the “central issue in this case” of respondent’s “use of deception and deceit
    to obtain funds from a former client,” drawing similarities between the case at bar and Att’y
    Grievance Comm’n v. Agbaje, 
    438 Md. 695
    , 735–36, 
    93 A.3d 262
    , 285 (2014), in which
    we disbarred an attorney for providing false and misleading information to his current
    client with whom he entered into a (non-legal) business transaction. The Commission
    argues that “[l]ike the attorney in Agbaje, the Respondent took advantage of Ms. Gaither’s
    lack of experience, and her trust in him as an attorney, to induce her to giving him $27,000
    . . . and then provided Ms. Gaither with misleading and false information.” On the other
    hand, respondent, in his filed exception, recommends a private reprimand for “poor
    judgement with a prior client” as the appropriate sanction.16
    The purpose of sanctioning an attorney is to protect the public rather than to punish
    the errant attorney. See Att’y Grievance Comm’n v. Phillips, 
    451 Md. 653
    , 677, 
    155 A.3d 476
    , 490 (2017). Furthermore, it serves as deterrence against similar misconduct. 
    Id.
     The
    severity of the sanction depends on the particular facts and circumstances of each case,
    including consideration of any mitigating or aggravating factors. See Att’y Grievance
    Comm’n v. Angst, 
    369 Md. 404
    , 416–18, 
    800 A.2d 747
    , 755 (2002).
    16
    At oral argument before this Court, respondent did not recommend a particular
    sanction and deferred to the discretion of the Court. Respondent also stated that this was
    his first and only loan dealing with a former client.
    42
    Our cases make clear that “[d]isbarment ordinarily should be the sanction for
    intentional dishonest conduct.” Att’y Grievance Comm’n v. Vanderlinde, 
    364 Md. 376
    ,
    418, 
    773 A.2d 463
    , 488 (2001). In Angst, 
    369 Md. at 420
    , 
    800 A.2d at 757
    , we “iterated
    the unparalleled importance of honesty in the practice of law,” explaining as follows:
    “Unlike matters relating to competency, diligence and the like,
    intentional dishonest conduct is closely entwined with the most
    important matters of basic character to such a degree as to
    make intentional dishonest conduct by a lawyer almost beyond
    excuse. Honesty and dishonesty are, or are not, present in an
    attorney’s character.”
    (Internal quotation and citations omitted).
    Respondent presented no mitigating factors.         Judge Schweitzer noted several
    aggravating factors: a dishonest or selfish motive, a pattern of misconduct, multiple
    offenses, refusal to acknowledge the wrongful nature of conduct, substantial experience in
    the practice of law, and indifference to making restitution.17 We conclude that disbarment
    is the appropriate sanction for respondent’s misconduct.
    IT  IS   SO   ORDERED.
    RESPONDENT SHALL PAY
    ALL COSTS AS TAXED BY
    THE CLERK OF THIS
    COURT, INCLUDING COSTS
    17
    At oral argument before this Court, respondent made repeated representations as
    to restitution. He stated, “I will make her whole at any given moment, pursuant to promises
    of the contract, if she sues me in general District Court of Maryland or gets a . . . confessed
    judgment . . . unless we can just reach a settlement.” Respondent explained that he had not
    repaid Ms. Gaither in full as of now “only because [he] can’t be in touch with her at all
    while this [proceeding] is pending.”
    43
    OF   ALL    TRANSCRIPTS,
    PURSUANT TO MARYLAND
    RULE 19-709, FOR WHICH
    SUM     JUDGMENT       IS
    ENTERED IN FAVOR OF THE
    ATTORNEY      GRIEVANCE
    COMMISSION       AGAINST
    JONATHAN       CHRISTIAN
    DAILEY.
    44
    

Document Info

Docket Number: 1ag-19

Judges: Raker

Filed Date: 3/18/2020

Precedential Status: Precedential

Modified Date: 7/30/2024