STATE OF MICHIGAN Attorney Discipline Board
Grievance Administrator, Petitioner/Appellee, v Cheryl M. Warren, P-37448, Respondent/Appellant, Case Nos. 01-16-GA Decided: October 2, 2003 Appearances: Stephen P. Vella, for Grievance Administrator, Petitioner/Appellee Michael Alan Schwartz, for the Respondent/Appellant
BOARD OPINION
On November 6, 2002, Tri-County Hearing Panel #13 issued a report and order setting forth its conclusions that the respondent had violated the provisions of Michigan Rules of Professional Conduct 1.4(a) and (b), 1.5(a), 1.8(a), 1.14(a) and 6.5(a), based upon its findings that the charges of professional misconduct set forth in Counts One, Two and Three of the Grievance Administrator’s second amended formal complaint had been established. (The hearing panel’s report on misconduct filed November 6, 2002 is attached as Appendix A.) Following a separate hearing on discipline in accordance with MCR 9.115(J)(2), the panel issued its report and order on April 8, 2003. (The hearing panel’s report on discipline filed April 8, 2003 is attached as Appendix B.) Based upon its application of the American Bar Association’s Standards for Imposing Lawyer Sanctions and its consideration of the appropriate factors in aggravation and mitigation under ABA Standards 9.22 and 9.32, the hearing panel concluded that the respondent should be suspended from the practice of law for a period of 18 months and that, as conditions precedent to reinstatement under MCR 9.123(B) and MCR 9.124, the respondent should be required to accomplish the following:
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1. 2. 3. 4.
5.
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Prepare and execute a promissory note and mortgage securing a $70,000 loan from complainant, Michael Levine to respondent; Duly record that mortgage with the Wayne County Register of Deeds against the respondent’s office condominium property; Ensure that respondent is current with respect to all monthly payments under the note and mortgage; Pay additional restitution to the complainant in the amount of $9,800, representing fees deemed to be excessive and the additional amount of $4,650 for losses sustained in a transaction involving a condominium in the City of Ann Arbor; and Take and successfully pass the Multi-State Professional Responsibility Examination.
The respondent petitioned for review in accordance with MCR 9.118(A). The Grievance Administrator did not seek review of the hearing panel’s findings or the level of discipline imposed. The respondent’s petition for a stay of discipline pending review was denied by the Attorney Discipline Board in an order entered April 24, 2003. The respondent’s suspension from the practice of law became effective April 30, 2003. The Attorney Discipline Board has conducted review proceedings in accordance with MCR 9.118, including review of the record below and consideration of the briefs and arguments submitted by the parties at a public review hearing conducted June 18, 2003. For the reasons discussed below, we conclude that the hearing panel’s order of suspension and restitution should be modified with regard to the amount of restitution to the complainant but that in all other respects the hearing panel’s decision should be affirmed. I. Notice of Misconduct Charges The respondent argues that the panel made findings of misconduct which were not charged in the complaint. It is well settled in Michigan that “an attorney may only be found guilty of misconduct as charged in the complaint.” State Bar Grievance Administrator v Jackson, 390 Mich 147, 155 (1973). See also, In Re Ruffalo, 390 US 544, 551-552; 88 S Ct 1222, 1226; 20 L Ed 2d 117, 122-123 (1968). Review of the hearing panel’s rulings on admissibility during the course of these proceedings reveals that the hearing panel properly recognized that while the Grievance Administrator’s complaint must give a respondent notice of the charges of professional misconduct, the complaint need not provide a day-by-day, detailed description of every single act or omission which contributed to the charged misconduct. Moreover, the hearing panel’s report on misconduct reveals that its findings of misconduct were explicitly based on the conduct and rule violations charged in the Grievance Administrator’s second amended complaint. We conclude that the hearing
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panel’s findings of misconduct did not stray beyond the parameters of the second amended formal complaint. II. Evidentiary Support for the Panel’s Findings The respondent also argues that the hearing panel’s findings lacked proper evidentiary support. With the exception of the hearing panel’s determination as to the amount of respondent’s attorney fees deemed to be excessive, we conclude that the hearing panel’s findings do, in fact, have appropriate evidentiary support in the record and must therefore be affirmed under the standard of review applicable in these proceedings. See, Grievance Administrator v August, 438 Mich 296, 304; 304 NW2d 256 (1991); In Re Grimes, 414 Mich 483; 326 NW2d 380 (1982). For example, the respondent’s brief in this case attacks the credibility of witness Caren Burdi by suggesting that because Ms. Burdi did not retain a tape recording of the alleged statement from respondent regarding Ms. Burdi’s children, the conversation must not have occurred. As the Grievance Administrator has pointed out, there was no claim in the record that Ms. Burdi taped that particular conversation. More importantly, however, Ms. Burdi testified unequivocally that she had a direct telephone communication with the respondent during which respondent stated, “I know you have children and I can find them.” (Tr 02/13/02, pp 241-242, 323.) The respondent testified that she did not make such a statement. (Tr 07/16/02, pp 146-147.) The hearing panel resolved that issue of credibility in favor of Ms. Burdi and against respondent. When a hearing panel’s findings involve issues of credibility, the Board has traditionally deferred to the hearing panel, which had a first-hand opportunity to observe and assess the demeanor of the witnesses. Grievance Administrator v Eugene F. Williams, 98-203-GA (ADB 2000); Grievance Administrator v Neal C. Szabo, 96-228-GA (ADB 1998). We conclude, however, that there was insufficient evidentiary support for one aspect of the hearing panel’s findings, that is, the amount collected by respondent from Michael Levine which could properly be described as an “excessive fee.” In ordering that respondent make restitution to the complainant in the amount of $9,800 for excessive fees, the panel itself noted in footnote 1, page 4: The Panel acknowledges that it is not able to ascertain the precise amount by which Respondent overcharged Mr. Levine for legal services. Admittedly, some legal work of value was performed by Respondent. Nevertheless, the Panel is firmly convinced that the total of $19,600.00 paid by Michael Levine was grossly excessive
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given the nature of Respondent’s services. Consequently, the Panel has ordered reimbursement of fifty (50%) percent of the fees paid, believing that to be the minimum of the overcharge.
In its report on misconduct entered November 6, 2002, the hearing panel reported that the underlying factual allegations in Count One of the second amended formal complaint could be summarized as (1) failure of respondent to adequately inform Michael Levine of the nature and extent of legal services being provided; and (2) billing and collecting fees in the amount of $7,620 for services during the three week period of April 5, 1997 to April 22, 1997. The record discloses that the complainant, Michael Levine, suffered a heart attack and was hospitalized on or about April 1, 1997. On the same date, the complainant signed a durable power of attorney granting the respondent authority over his personal affairs as well as to perform his duties as the personal representative of the estate of his father, Abraham Levine (Ex. 102). Mr. Levine was released from the hospital on April 17, 1997 and returned home that day (Tr 07/16/02, p 170). On April 20, 1997, respondent Warren wrote a check to herself from Mr. Levine’s bank account in the amount of $3,000 (Ex. 105). On April 22, 1997, respondent wrote a second check to herself, from the complainant’s bank account in the amount of $4,620. During the period April 5, 1997 to April 22, 1997, respondent billed the complainant legal fees of $2,520 (18 hours at the rate of $140 per hour) for services described as “legal estate and tax planning” and the sum of $5,100 for personal services performed under the power of attorney. Those fees were billed at the rate of $75 per hour for 68 hours. With regard to the legal fees charged and collected by the respondent for the period April 5, 1997 to April 22, 1997, the panel found: Applying the factors enumerated in MRPC 1.5(a)(1) through (8), the Panel concludes that the amounts charged and collected by Respondent Warren were clearly excessive, and violative of the prohibitions of MRPC 1.5(a). In particular, it is noted that during the 18-day period in question (April 5 to April 22), “taking care” of Mr. Levine’s bills entailed writing a total of ten (10) checks. Between April 23 and May 10, Respondent wrote an additional five (5) checks. See, Petitioner’s Ex. #105. Of the fifteen checks written, three were payable to Respondent, herself.
Moreover, Respondent’s work on the probate estate consisted of the preparation and filing of routine form pleadings to commence an independent estate. No other work of significance was accomplished.
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It is also the opinion of the Panel that the provisions of MRPC 1.4(a) and (b) and 1.14 were violated, in that Respondent Warren failed to adequately apprise Mr. Levine of the nature of the services for which charges would be incurred. By accepting and promoting a purported “friendship” with Mr. Levine, and stating that “much of” the services would be provided without charge and “as a friend”, Respondent Warren failed to adequately explain both her intentions and the basis for her fees. This left Mr. Levine, a client under apparent disability, with inadequate information to make informed decisions regarding the scope and anticipated costs of Ms. Warren’s legal representation.
In short, the panel found that the fees charged and collected by the respondent during this period were excessive within the meaning of MRPC 1.5. The panel also found that the respondent failed to provide adequate information to a client under an apparent disability to allow him to make informed decisions regarding the scope and anticipated costs of her legal and personal representation. These findings form the basis for our conclusion that the fees of $7,620 charged during that period should be returned to the complainant. We affirm the panel’s decision to order additional restitution to Mr. Levine in the amount of $4,650 for his losses sustained in the Ann Arbor condominium transaction. The total restitution to be awarded to Mr. Levine should therefore be reduced from $14,450 to $12,270. III. Validity of MRPC 6.5(a) The Board has also considered the respondent’s argument that Michigan Rule of Professional Conduct 6.5(a) is unconstitutional for the reason that it suffers the fatal defects of vagueness and overbreadth. It is not charged in this case that the respondent treated any person discourteously or disrespectfully because of that person’s race, gender or other protected personal characteristics. The challenge before the Board is therefore with respect only to the first sentence of MRPC 6.5(a) which states: “A lawyer shall treat with courtesy and respect all persons involved in the legal process.” While the respondent raises many interesting and thought-provoking hypothetical situations which explore the gray areas between “courtesy” and “discourtesy,” and “respect” and “disrespect,” it is not necessary for the Board to venture into those areas in this case. This is not a case about failing to salute an officer, or failing to tip one’s hat, or failing to say “God bless you” after someone sneezes. This is a case about a lawyer’s yelling, screaming, belittling, harassing and threatening conduct. This is a case in which the hearing panel unanimously concluded that the respondent engaged in communications toward Mr. Levine and Ms. Burdi which were “insistent and
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badgering,” that she called Ms. Levine and Ms. Burdi repeatedly, at various times of the day and night, and that she spoke to them in an “aggressive or hostile tone.” The panel concluded: Perhaps most compelling is the tape recording of a series of telephone messages left by Respondent Warren on Mr. Levine’s answering machine. Petitioner’s Ex. #159; Tr., 10-22-01, pp. 154-167. These messages are replete with personal attacks and threats of legal retribution, all delivered in an angry, overbearing and browbeating fashion. These diatribes, alone, constitute disrespectful and discourteous treatment of a client. Moreover, the tape recordings evidence a hostile and vindictive personality capable of the implied threats communicated to Ms. Burdi regarding her children. [Hearing Panel Report, 11/06/02 p 21.]
The Board declines, therefore, to consider whether or not MRPC 6.5 as written is overly broad or vague when applied to hypotheticals of the type offered by respondent. The respondent’s conduct, as found by the hearing panel, would clearly be covered under even the most narrow interpretation of that rule. See In re Chmura, 461 Mich 517, 544 (2000). While the Attorney Discipline Board has previously entertained arguments concerning constitutional challenges to the disciplinary rules, it has yet to find that a rule promulgated by the Michigan Supreme Court in the realm of attorney discipline is unconstitutional. Grievance Administrator v William Ortman, 93-135-GA (1995); Grievance Administrator v James Tucker, 94-12-GA (1995). This is not to say that the Board could never make such a finding. As a general rule, however, the Board’s deference to the Court will include a presumption that the rules and procedures promulgated by the Court, as they concern the Board and lawyer regulation, are constitutional. IV. Level of Discipline Following the separate hearing on discipline conducted by the hearing panel in accordance with MCR 9.115(J)(2), the panel invited both parties to file written memoranda addressing the appropriate level of discipline to be imposed in light of the American Bar Association’s Standards for Imposing Lawyer Sanctions. After weighing the competing arguments of the parties, the panel concluded that the misconduct established in this case was most appropriately considered under ABA Standards 4.12, 4.32, 4.62 and 6.32, standards which suggest that suspension, rather than disbarment or reprimand, is generally appropriate. In the section of the ABA Standards for Imposing Lawyer Sanctions entitled “Theoretical Framework,” the ABA’s Joint Committee on Professional Sanctions observed:
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While there may be particular cases of lawyer misconduct that are not easily categorized, the standards are not designed to propose a specific sanction for each of the myriad of fact patterns in cases of lawyer misconduct. Rather, the standards provide a theoretical framework to guide the courts in imposing sanctions . . . the standards thus are not analogous to criminal determinate sentences, but are guidelines which give courts the flexibility to select the appropriate sanction in each particular case of lawyer misconduct.
Respondent takes issue with the panel’s reliance on Standard 4.32 which states: Suspension is generally appropriate when a lawyer knows of a conflict of interest and does not fully disclose to a client the possible effect of that conflict, and causes injury or potential injury to a client.
Respondent asserts that she “was not charged with such misconduct. Therefore, it is improper to utilize this Standard.” (Respondent’s Brief in Support of Petition for Review, p 34.) The Second Amended Complaint, in Count Two, charged respondent with violating MRPC 1.7(b) and 1.8(a). The panel expressly found a violation of MRPC 1.8(a), and, we think, found respondent to have violated MRPC 1.7(b) as well. (See Report and Order [on misconduct], a pp 19-20: “These circumstances placed Respondent Warren and Mr. Levine in an adversarial relationship, fraught with readily apparent conflicts of interest.”) We need not conclude that the panel found a violation of MRPC 1.7(b), however. Appendix 1 to the ABA Standards cross references MRPC 1.8 with Standard 4.3. Respondent also argues that her conduct as described by the panel in this case does not always fit neatly into pigeon holes based on particular ABA Standards. This is particularly true, for example, with regard to the panel’s findings that the respondent’s threatening or harassing statements to her client and to another attorney violated MRPC 6.5(a). Michigan’s Rule 6.5(a), which requires that Michigan attorneys be courteous and respectful to all persons involved in the legal process, has no precise counterpart in the ABA’s Model Rules of Professional Conduct and such conduct is not specifically addressed in the ABA Standards. Case law under this rule is yet in the early stages of development. To date, MRPC 6.5 cases calling for suspension requiring reinstatement proceedings under MCR 9.123 and 9.124 have involved an attorney’s serious abuse of power over a client. See, e.g., Grievance Administrator v Eugene F. Williams, No 98-203-GA (ADB 2000) (180 day suspension for attorney who solicited and received sexual favors from client during visitation in jail). Comparison of this case with Williams is, of course, quite difficult given
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the different nature of the misconduct. However, we are not prepared to say that the MRPC 6.5 violations here, including the respondent’s threats to others and her obvious loss of emotional control, should necessarily receive less than a suspension of 180 days were they standing on their own. The panel’s report evinces a concern regarding respondent’s fitness which we heed given their first hand observation of the evidence. Finally, this case illustrates the fact that the Standards, while providing a useful benchmark, will not dictate the precise quantum of discipline to be imposed. They do, however, provide a helpful framework and general guidance. We perceive no error in the panel’s analogies to certain standards recommending suspension as a rough way to approximate the proportionality of a given sanction. In this case, the Standards recommended suspension. We are persuaded that the hearing panel conscientiously followed the analytical framework in ABA Standard 3.0 to determine that initial sanction by properly considering the appropriate factors: (a) the duty violated; (b) the lawyer’s mental state; (c) the actual or potential injury caused by the lawyer’s misconduct; and (d) the existence of aggravating or mitigating factors. Moreover, the panel determined that the multiple acts of misconduct here implicated respondent’s fitness as a lawyer to the extent that, when aggregated, they required a period of suspension requiring reinstatement proceedings, and more than the minimum (180 days). We do not disagree. In fact, we consider the panel to have appropriately assessed the nature and gravity of the various offenses, the aggravating and mitigating factors, and the circumstances of the case generally to arrive at a just and proportionate sanction. V. Conclusion While we agree with the hearing panel’s conclusion that the respondent charged and collected excessive fees from the complainant Michael Levine, we conclude that the total amount of restitution which should be paid by the respondent is $12,270 which represents the fees of $7,620 charged by the respondent to the complainant between April 5, 1997 and April 22, 1997 and the sum of $4,650 for the losses sustained by the complainant in the Ann Arbor condominium transaction. In all other respects, we conclude that the hearing panel’s findings have evidentiary support in the record and that the panel acted appropriately in concluding that the respondent’s misconduct requires the suspension of her license to practice law in Michigan for a period of 18 months, with additional conditions imposed in accordance with MCR 9.106(2).
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Board members William P. Hampton, Marie E. Martell, Rev. Ira Combs, Jr., George H. Lennon, Lori M. Silsbury and Hon. Richard F. Suhrheinrich concur in this decision
Board members Theodore J. St. Antoine, Ronald L. Steffens and Billy Ben Baumann, M.D. did not participate.