Office of Disciplinary Counsel v. Davis , 532 Pa. 22 ( 1992 )

OPINION OF THE COURT

PAPADAKOS ^*, Justice.

The disciplinary matter under review here encompasses two petitions for discipline filed by the Office of Disciplinary Counsel (ODC) charging Respondent with violations of the Code of Professional Responsibility for conduct which occurred in 1982-1983.

The first petition was filed on October 5,1987, and docketed at No. 74 DB 87. Respondent was charged there with numerous Code violations involving improper venue in divorce cases for purposes of obtaining lower filing costs in his representation of Mrs. Michelle A. Dietrich and Mrs. Deborah R. Wescott.

A second petition was filed on February 12, 1988, and docketed at No. 12 DB 88. These charges of misconduct involved Respondent’s failure to return master fees in divorce cases in Lancaster County and commingling of funds. This misconduct also took place in 1982 and 1983.

A Hearing Committee considered both petitions, found that Respondent had committed serious breeches of discipline, and also taking into account his numerous other violations, recommends disbarment. By contrast, the Disciplinary Board, while deciding that several Code rules had been broken, recommends suspension for six months to run concurrently with his last suspension dated January 18, 1985. Disciplinary Counsel urges us to reject the report of the Disciplinary Board in favor of the Hearing Committee’s findings and disbar Respondent. For reasons listed below, we agree with the Hearing Committee and Disciplinary Counsel that disbarment is fully warranted in this case.

It is important to note that at present Respondent remains suspended from the practice of law pursuant to our order dated May 21, 1984, for other disciplinary violations.¹

I. Factual and Procedural History

A. No. 71p DB 87

Charge I: Mrs. Dietrich

Following passage of the new Divorce Code in 1980,² Respondent advertised widely his low cost services for “No Fault” actions. It appears that he began accepting an average of over 100 cases per week. All of these cases were filed in Allegheny County regardless of the client’s residence. Because of the large number of non-resident cases filed there, court officials insisted on strict enforcement of venue requirements. Respondent then began filing non-resident cases in Cameron County which charged the lowest filing fee for nonresidents. On April 23, 1982, we ordered all president judges to observe the requirements of Pa.R.C.P. 1920.3 which provides that divorce actions must be brought only in the county where either the plaintiff or defendant resides.³

Respondent had undertaken representation of Mrs. Dietrich prior to our order of 1982 and planned to file in Cameron County. Following the order, however, he indicated to his client that he could not file in Cameron County. Mrs. Dietrich, whose permanent address was really Montgomery County, then told Respondent that she lived in Philadelphia with her aunt and that Montgomery County, which address appeared on correspondence with Respondent, was a temporary college address. Mrs. Dietrich filed the divorce complaint in Philadelphia. The court there, however, requested an affidavit for the Philadelphia address, and Respondent sent her the affidavit which she signed and which was presented in support of the Philadelphia domicile. At the scheduled hearing, which Mrs. Dietrich attended alone because she refused to pay additional attorney fees, the court confronted her with records from the Department of Welfare indicating that her permanent address was Montgomery County. Mrs. Dietrich then admitted that she lived in Montgomery County to where the divorce action was transferred for disposition.

The issue for our review is whether Respondent knew that Mrs. Dietrich lived in Montgomery County but counseled her to file in Philadelphia where fees were lower and sent a supporting affidavit which she signed affirming her status as a resident of Philadelphia.

The following relevant considerations also are taken into account in evaluating this issue. First, Respondent was aware that Mrs. Dietrich, and almost simultaneously Mrs. Westcott for that matter, was seeking to file her action in a county with the lowest costs. Secondly, once Mrs. Dietrich learned from Respondent that Philadelphia’s fees were lower, she told him that she, in fact, lived in Philadelphia, and Respondent acted on this designation of her address by having her file a complaint and affidavit with the court in Philadelphia even though he had corresponded with her at the Montgomery County address.

As to the charges involving Mrs. Dietrich, Respondent has steadfastly denied that he ever counseled her to use the fictitious Philadelphia address in filing her complaint there. He insists that he inadvertently believed that the Montgomery County address was being used by his client as a mere convenience for receiving mail while he accepted her statement that she. was a resident of Philadelphia. Any discrepancies on this matter were due to poor office management brought about by inexperience, failure to supervise his office staff properly, and most importantly the crush of a burgeoning caseload which forced him to work long hours for seven days per week.

These factors, he argues, led to specific filings which were not intentional on his part. The file jacket for Mrs. Dietrich’s case, for example, lacked any notation that her Montgomery address “was merely a school address,” as he testified in his defense (H.C.T., p. 54), while failures to investigate further were traceable to sloppy business procedure and secretarial mismanagement.⁴

On this basis, the Hearing Committee concluded that Respondent had committed the following violations of the Disciplinary Rules:

DR 7-102(A)(6): participation in the creation of evidence which he knew was false;

DR 7-102(A)(5): conduct prejudicial to the administration of justice in filing the complaint and affidavit upon statements of fact which he knew to be false;

DR 7-102(A)(7): counseling a client in conduct he knew to be illegal and fraudulent;

DR 7-102(A)(5): advising his client to make a false affidavit, constituting conduct prejudicial to the administration of justice;

DR 1 — 102(A)(4): conduct involving dishonesty, fraud, or misrepresentation;

DR 1-102(A)(6): conduct reflecting adversely upon a lawyer’s fitness to practice law.

The Committee’s analysis found that Mrs. Dietrich was an “unsophisticated and unlearned person” who could not have decided to file in Philadelphia “unless she was advised by Respondent.” In sum, the Committee believed that Respondent was the initiator and perpetrator of fraud on the court in relationship to the use of the fictitious address in Philadelphia. Respondent also could not be believed because he should “have examined Dietrich very closely” when the Philadelphia court requested an affidavit for residency. Furthermore, “such conduct was a pattern and not simply an isolated error of judgment.” The Committee took special note of the fact that Mrs. Dietrich’s file jacket had a Montgomery County address without any notation that it was merely a college address.

The Disciplinary Board, on the other hand, arrived at somewhat different conclusions. Although Mrs. Dietrich appeared unsophisticated, “we are convinced that she was astute enough to understand that if she lived in Philadelphia, the divorce ... would be cheaper” (D.B.Rpt., p. 19). On the issue of whether Respondent knew that the Philadelphia address was fictitious, the Board’s report appears contradictory. The report (at p. 9) first concludes: “Given the circumstances surrounding this case, Respondent knew or should have known that Mrs. Dietrich did not live in Philadelphia and that the Court of Common Pleas of Philadelphia County did not have proper venue in this matter.” At p. 19, however, the report states: “We believe that the Respondent filed the divorce complaint without knowing or having reason to know that Mrs. Dietrich’s Philadelphia address was false.”

The Board went on to conclude that Respondent is guilty of ignoring “warning signals,” such as two addresses and the request for an affidavit. These, however, in the Board’s view were due to Respondent’s inexperience and practice of law “like a mail order business.” The Board, nevertheless, found that in Mrs. Dietrich’s case, Respondent did violate DR 7-102(A)(6), participating in the creation of evidence (the affidavit) and DR 1-102(A)(6), conduct adversely reflecting on fitness to practice (the affidavit). The Board held, nevertheless, that it was “not convinced that his misconduct rises to the level of an intentional act” (D.B.Rpt., p. 20).

A critical piece of evidence before the Hearing Committee and the Disciplinary Board was the testimony of Mrs. Dietrich that Respondent knew of and advised her to use the fictitious Philadelphia address. Mrs. Dietrich did not appear personally before the Hearing Committee; the Office of Disciplinary Counsel offered a stipulation that “Michael Davis told me to use my aunt’s address in Philadelphia.” Respondent stipulated as to how she would testify without stipulating that the unsworn statement was true but accepted its admissibility without the right of cross-examination.

The Hearing Committee report does not address the issue, but the Disciplinary Board concluded that “the stipulation is not credible” (at p. 18). Additionally, the Board found that Mrs. Dietrich lied about her address before the court in Philadelphia, a falsity which, in the Board’s view, casts suspicion on all of her testimony.

Charge II: Mrs. Wescott

Similar to the prior case and almost parallel in time, Mrs. Westcott, a resident of Montgomery County, retained Respondent to represent her in a divorce action. Respondent informed her that he was barred from filing in Cameron County. A great deal of confusion followed. Mrs. Wescott fired Respondent, then rehired him; correspondence was missing, and her file could not be located; and there was a refund and repayment of fees. Except that they reveal once again poor office management, these factors are not pertinent to the issue at hand. The issue arises from the two facts that Mrs. Wescott told him that she lived at an address in Bucks County where he should file the complaint, and that she accused Respondent in the same stipulation of the Dietrich hearing of knowledge that the Bucks County address was false, but he still counseled her to use the fictitious address. We note that Respondent did not file a complaint in divorce for Mrs. Westcott in Bucks County or anywhere else prior to terminating his representation of this client.

The issues of this charge, therefore, are whether Respondent ever counseled Mrs. Westcott to use a fictitious address and whether his incredibly disorganized handling of her file led him to be neglectful in investigating the residency question.

The Hearing Committee determined that Respondent violated DR 7-102(A)(7) and DR 1-102(A)(4). The Disciplinary Board found no violations.

B. No. 12 DB 88

The facts indicate that between 1982 and 1984, Respondent represented seven clients in divorce actions in Lancaster County. During this period, Lancaster County required such plaintiffs to pay a master fee of $50.00, refundable if the master was not employed in the case. Upon praecipe by Respondent, the fees paid by these clients were returned because a master was not used. The problem in this case arises because Respondent deposited them in the account of his partner, marked “Howard R. Singer Special Account” and failed to notify the clients that the money had been returned after he had closed representation. In September, 1986, after receiving an inquiry from the Office of Disciplinary Counsel regarding the fees, Respondent checked personally with Lancaster County officials to determine whether the fees had been returned and then refunded the proper amount to each client.

The Hearing Committee found that Respondent committed the following Code violations:

DR 9-102(A): commingling of funds;

DR 9-102(B)(l): failure to notify clients promptly of the return of funds;

DR 2-110(A)(2): failure to deliver client property upon cessation of representation;

DR 1-102(A)(6): conduct reflecting adversely on fitness to practice law.

The Disciplinary Board rejected the Hearing Committee’s findings as to each Code violation either as being inapplicable under the facts or unsubstantiated by facts. Regarding the charge of commingling, the Board determined that Respondent’s conduct, while the product of “ignorance,” was not intentional. Respondent had admitted in testimony that he was not aware of a rule against commingling of funds. (D.B. Rpt., p. 22; Respondent’s admission of “ignorance” of the commingling rule appeared in the Board’s report at p. 13). The Board concluded further that all aspects of the problem of the master fees again was attributable to the fact that Respondent “did not seem to understand that practicing law is different than (sic) running other businesses.” (Id., p. 23).

II. Analysis and Conclusion

The history of this case presents us with starkly contrasting conclusions regarding the charges of Code violations brought against Respondent. Our de novo review convinces us that the analyses and recommendations of the Hearing Committee are correct.

First, we find that he had knowledge that both Mrs. Dietrich and Mrs. Westcott were filing divorce complaints in courts of improper venue but advised them to proceed. In the former’s case, we take particular note of the affidavit he forwarded to the Court of Common Pleas in Philadelphia. In both cases, it would strain logic to presume that these clients would have had knowledge of lower court costs without prompting by a lawyer. The identical patterns of conduct in two parallel cases, moreover, creates an unmistakable pattern of intentional fraud on the courts of this Commonwealth. Mrs. Dietrich’s false testimony before the Philadelphia court was the product of his advice.

On the issue of commingling, the Disciplinary Board determined that Respondent did not act intentionally to conceal the funds. DR 9-102(A) contains no requirement of an intentional act, but rather provides for strict liability.⁵ We would be remiss at this point if also we did not reject out of hand the Board’s curious suggestion that Respondent’s ignorance of professional rules constitutes an excuse for his conduct.

Although neither Mrs. Dietrich nor Mrs. Wescott appeared before the Hearing Committee, the surrounding circumstances of their actions convince us that Respondent knowingly and intentionally guided their actions. In disciplinary cases, our standard of review is de novo, and we are not bound by the findings of the Hearing Committee or the Disciplinary Board, except as guidelines for judging credibility of witnesses. Deference must be given to the former as the trier who views the witnesses, Office of Disciplinary Counsel v. Campbell, 463 Pa. 472, 345 A.2d 616 (1975), as well as to the recommendations of the Board, Office of Disciplinary Counsel v. Costigan, 526 Pa. 16, 584 A.2d 296 (1990). Also see, Office of Disciplinary Counsel v. Kissel, 497 Pa. 467, 442 A.2d 217 (1982). While we require a preponderance of competent evidence which must have a persuasive influence, unprofessional conduct may be proven solely by circumstantial evidence. In re Berlant, 458 Pa. 439, 328 A.2d 471 (1974); Office of Disciplinary Counsel v. Grigsby, 493 Pa. 194, 425 A.2d 730 (1981). Lastly, we give weight to the horrendous disciplinary record compiled by Respondent. See, Grigsby, 493 Pa. at 200, 425 A.2d 730 (“Respondent’s record of repeated disciplinary violations cannot be ignored”).

Disbarment is the most serious form of disciplinary discipline. Pa. Rule of Disciplinary Enforcement 204(a)(1); Matter of Leopold, 469 Pa. 384, 366 A.2d 227 (1976). It is our responsibility, nevertheless, to protect the public and preserve public confidence in the legal profession and the judicial system, Office of Disciplinary Counsel v. Lewis, 493 Pa. 519, 426 A.2d 1138 (1981), even though we must proceed with due caution. E.g., In re Shigon, 462 Pa. 1, 329 A.2d 235 (1974).

A pattern of misconduct, including neglect of legal matters, counseling clients to undertake dishonest acts in court proceedings, deceitful use of an affidavit, and commingling of entrusted funds, warrant disbarment. See, Office of Disciplinary Counsel v. Knepp, 497 Pa. 396, 441 A.2d 1197 (1982); Office of Disciplinary Counsel v. Ewing, 496 Pa. 35, 436 A.2d 139 (1981); and Office of Disciplinary Counsel v. Herman, 493 Pa. 267, 426 A.2d 101 (1981). Even if we were to view Respondent’s office mismanagement as a mitigating factor, which we do not, the sanction would remain the same. See, Knepp.

Our last duty is to address the issue of whether Respondent’s misconduct should be overlooked because of his grossly inept and amateurish attempt to practice law in the face of an overwhelming case load. Respondent, and the Disciplinary Board, admitting that he should have uncovered the problems of improper venue and commingling had he not ignored warning signals, urge us to find that his careless office procedure prevented him from doing so, and that this is a valid defense. According to this view, what he should have known as a lawyer, but did not, is excusable because of the nature of his practice as a lawyer. His conduct, under this theory of the case, thereby was neglectful but not intentional.

We are not prone to accept arguments which stand professional responsibility on its head. Respondent’s office practice may be an explanation, but certainly it is not a justification. The fact is that he knowingly and intentionally accepted a volume of cases far beyond his capacity to deal with. It is also a fact that he found no reason to familiarize himself with the rules of conduct for lawyers. Such knowing and intentional acts formed the predicate for his conduct in the cases under review. Between his deliberate decision to practice in this fashion and the instant citations of misconduct, there exists a causal link that any first-year law student would have foreseen or corrected. As he sowed intentionally, so did he reap the consequences. To have it otherwise would put the legal profession and the judiciary in the position of justifying misconduct resulting from abhorrent office procedure and lack of discipline.

Accordingly, the Rule to Show Cause is made absolute and Respondent, Michael E. Davis, is hereby disbarred, effective May 21, 1986.

LARSEN and ZAPPALA, JJ., did not participate in the consideration or decision of this case. CAPPY, J., files a Dissenting Opinion. McDERMOTT, J., did not participate in the decision of this case.

* Reassigned to this writer.

1 . Respondent was suspended three times by this Court: on May 21, 1984 (six months); on September 7, 1984 (one year, consecutive); and on February 28, 1985 (six months, consecutive). He has also been subject to twenty-three informal admonitions, of which all but one were administered in 1982 and 1983. Respondent has not applied for reinstatement pending resolution of the instant complaints.

2 . Act of 1980, April 2, P.L. 63, No. 26, 23 P.S. § 101, et seq.

3 . As amended in 1989, the rule presently permits that a divorce action also may be brought in any county agreed upon by the parties.

4 . Respondent raised the doctrine of laches in his defense. The Disciplinary Board initially remanded the matter back to the Hearing Committee to consider the question of laches arising from the time lapse between the alleged misconduct in 1982 and the filing of the Petitions for Discipline in 1987 and 1988. The Hearing Committee determined that laches was not an issue, and reasserted its recommendation that Respondent be disbarred. The Board accepted this recommendation as to laches. We agree that the defense of laches is not applicable as Respondent contributed to the delay and has not demonstrated the requisite prejudice arising from such delay.

5 . The Board cites to Office of Disciplinary Counsel v. Lucarini, 504 Pa. 271, 472 A.2d 186 (1983), and Office of Disciplinary Counsel v. Knepp, 497 Pa. 396, 441 A.2d 1197 (1982), for the proposition that so far, at least, we have interpreted DR 9-102(A) to require an intent to convert commingled funds. Those cases merely address the Code violation in factual circumstances where an intent to convert was present.

DR 9-102 Preserving Identity of Funds and Property of a Client (A) All funds of clients paid to a lawyer or law firm, other than advances for costs and expenses, shall be deposited in one or more

identifiable bank accounts maintained in the state in which the law office is situated and no funds belonging to the lawyer or law firm shall be deposited therein except as follows:

(1) Funds reasonably sufficient to pay bank charges may be deposited therein.

(2) Funds belonging in part to a client and in part presently or potentially to the lawyer or law firm must be deposited therein, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client, in which ¿vent the disputed portion shall not be withdrawn until the dispute is finally resolved.

(B) A lawyer shall:

(1) Promptly notify a client of the receipt of his funds, securities, or other properties.

(2) Identify and label securities and properties of a client promptly upon receipt and place them in a safe deposit box or other place of safekeeping as soon as practicable.

(3) Maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his client regarding them.

(4) Promptly pay or deliver to the client as requested by a client the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive.