Attorney Grievance Commission v. Nichols

950 A.2d 778, 405 Md. 207, 2008 Md. LEXIS 323
Court of Appeals of Maryland·Decided June 17, 2008·No. Misc. Docket AG No. 25, Sept. Term, 2007·Published·Cited by 16 cases

Opinions

GREENE, J.

The Attorney Grievance Commission of Maryland (“Petitioner”), acting through Bar Counsel and pursuant to Mary[209] land Rule 16-751(a),1 filed a Petition For Disciplinary or Remedial Action against Respondent, Ernest S. Nichols on August 14, 2007. The Petition alleged that Respondent, who was admitted to the Bar of this Court on December 13, 1995, violated Rules 1.1 (Competence),2 1.3 (Diligence),3 1.5 (Fees),4 1.15 (Safekeeping Property),5 1.16(d) (Declining or Terminat[210] ing Representation),6 Rule 8.1(b) (Bar Admission and Disciplinary Matters),7 and 8.4(c) (Misconduct)8 of the Maryland [211] Rules of Professional Conduct (“MRPC”) during his representation of Charles Caralle in connection with a personal injury claim and in Chapter 7 bankruptcy proceedings. Pursuant to Maryland Rules 16-752(a)9 and 16—757(c),10 we referred the matter to the Honorable Lawrence R. Daniels of the Circuit Court for Baltimore County to conduct an evidentiary hearing and to submit to this Court proposed findings of fact and conclusions of law. Respondent did not answer the Petition, as required by Maryland Rule 16-754,11 and, therefore, an Order of Default was entered against him and the matter was [212] scheduled for an evidentiary hearing. See Maryland Rule 2-613(b).12 Although notified by the clerk of the court that the order of default had been entered, see Maryland Rule 2-613(c),13 Respondent did not move to vacate the order, as allowed by Rule 2-613(d).14 Respondent, however, did appear at the December 20, 2007 hearing.15

On January 29, 2008, Judge Daniels issued findings of fact and conclusions of law, in which he found that Respondent violated Rules 1.1, 1.3, 1.5(a), 1.15(a), 1.15(d) and (e), 1.16(d), 8.1(b), but not Rule 8.4(c). Judge Daniels’ findings of fact and conclusions of law read in pertinent part:

The Respondent, Ernest S. Nichols, Esquire, is a member of the Maryland Bar, with an office in Bel Air, Maryland. Charles Caralle retained Mr. Nichols to represent him in connection with personal injuries sustained in an automobile accident in 2003. Mr. Caralle subsequently retained Mr. [213] Nichols to represent him to file a petition for discharge in bankruptcy.
Mr. Nichols prepared and filed the bankruptcy petition, which failed to identify the personal injury claim as an asset. Mr. Nichols later disclosed the personal injury claim to the Bankruptcy Trustee, Bud Stephen Tayman, Esquire, at the meeting of creditors.
Mr. Tayman’s office wrote to Mr. Nichols on September 29, 2003, to determine the status of the personal injury case. On October 6, 2003, Mr. Nichols wrote to Mr. Tayman, stating that the case was still unsettled, that he believed that the medical bills exceeded the policy limits and that it was unlikely that Mr. Caralle would receive any money from the case.
The Bankruptcy Court discharged Mr. Caralle’s debts in late 2003. Mr. Nichols negotiated a settlement for policy limits, which was, in fact, $100,000.00. Mr. Caralle signed a release on January 23, 2004. Mr. Tayman wrote to Mr. Nichols on February 29, 2004, inquiring about the status of the case. On March 15, 2004, Mr. Nichols replied to Mr. Tayman, informing him that the case had settled for $100,000.00, that he disbursed $43,279.29 to himself for attorney’s fees and expenses, and that he disbursed $ 30,-000.00 to Mr. Caralle. He stated that he retained the remaining portion of the settlement proceeds in his escrow account to pay medical bills.
The Bankruptcy Trustee made several attempts to discuss this matter with Mr Nichols. He informed Mr. Nichols that the proceeds of the settlement of the personal injury claim were an asset of the Bankruptcy estate and that Mr. Nichols could not take a fee without approval of the Bankruptcy Court. Mr. Tayman believed that Mr. Nichols should have turned over the remaining funds to him.
Mr. Caralle discharged Mr. Nichols in August 2005, and directed him to send a copy of his file to Caralle’s new attorney, Thomas Dolina, Esquire. Mr. Nichols claims he sent the file to Mr. Dolina on February 21, 2006. Mr. Caralle filed a malpractice suit against Mr. Nichols. In [214] April 2006, he filed a complaint with the Attorney Grievance Commission.
Mr. Nichols forwarded a check to Mr. Tayman in the amount of $33,962.38 on August 31, 2006, representing the funds retained from the settlement proceeds. Although Mr. Tayman has repeatedly explained that Mr. Nichols is not entitled to his attorney’s fee without approval of the Bankruptcy Court, Mr. Nichols did not return that fee. Attorney Grievance Commission Investigator, Sterling H. Fletcher, interviewed Mr. Nichols on August 23, 2006. At that meeting, Mr. Fletcher asked Mr. Nichols to produce records concerning his escrow account and the transactions related to Mr. Caralle’s case. Mr. Nichols promised to submit the documents by September 16, 2006. Assistant Bar Counsel wrote to Mr. Nichols on October, 11, 2006, to request the records. Mr. Nichols failed to respond to that request.
The Petitioner alleges that Mr. Nichols violated Maryland Rules of Professional Conduct 1.1 (competence), 1.3 (diligence), 1.5(a) (fees), 1.15 (safekeeping of property), 1.16(d) (declining or terminating representation), 8.1(b) (bar admission and disciplinary matters) and 8.4(c) (misconduct).
Mr. Nichols failed to competently represent his client, Mr. Caralle, by failing to include his personal injury claim as an asset when he prepared the bankruptcy petition, by failing to notify the Bankruptcy Trustee of the settlement before funds were disbursed, and by disbursing a large portions of the settlement funds when the Bankruptcy Trustee had a claim to the funds. Respondent’s conduct violated Rule 1.1 of the Maryland Rules of Professional Conduct.

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Attorney Grievance Commission v. Nichols, 950 A.2d 778, 405 Md. 207, 2008 Md. LEXIS 323 (Md. 2008).

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