Opinion
MISC. No. 03-51 T
September 8, 2003
REPORT AND RECOMMENDATION
This matter is before the Court on the application of Attorney John H. Brown for readmission to practice before the United States District Court for the District of Rhode Island. Chief Judge Ernest C. Torres appointed this writer to file a report and recommendation on the petitioner's application for readmission to the bar of this Court.
A hearing was held on September 4, 2003. Upon consideration of the hearing and the record submitted by the petitioner, I recommend that Attorney John H. Brown's application for readmission to the bar of this Court be granted.
I. Background
John H. Brown was admitted to the Rhode Island bar and admitted to practice before the United States District Court for the District of Rhode Island in 1986. In 1998, the Disciplinary Counsel of the Rhode Island Supreme Court alleged that Attorney Brown violated various Rules of the Rhode Island Rules of Professional Conduct. See In the Matter of John H. Brown. 735 A.2d 774 (R.I. 1999). A Disciplinary Board thereafter convened a hearing and the petitioner admitted to the facts alleged and the Rule violations charged. The Disciplinary Board thereafter issued a recommendation that the petitioner be suspended from the practice of law for one year. The Rhode Island Supreme Court agreed and ordered a one year suspension.
The petitioner's suspension from the practice of law in the state courts operates as a suspension from practice before this Court.See Rule 4(e)4, Local Rules of the United States District Court for the District of Rhode Island. The Rhode Island Supreme Court has now reinstated the petitioner. In the present application, Attorney Brown seeks to remove the suspension from the bar of this Court under Local Rule 4(e)4.
II. Findings
The undisputed facts which culminated in Attorney Brown's suspension from the practice of law are as follows:
John Venditti retained Attorney Brown to represent him in a personal injury claim. Attorney Brown negotiated a settlement of the claim in the amount of $23,000 and received the settlement funds on March 25, 1995. He deposited the settlement funds into a business checking account in which he also maintained personal funds.
On March 30, 1995, Attorney Brown disbursed $11,696.70 to Venditti as his portion of the settlement proceeds after making a deduction for his fee and for payment of a $215 medical bill incurred by Venditti. Additionally, Attorney Brown withheld $2,550 to be held by him in escrow to pay a potential subrogation claim assertable by Venditti's own insurance carrier. Attorney Brown, however, failed to pay the medical bill, maintain the escrow funds or the funds for the payment of the medical bill in his account, and converted those funds to his own use.
Attorney Brown continued to represent Venditti regarding a possible claim against his own insurance carrier. In March of 1997 Venditti retained new counsel to pursue that claim and requested that Attorney Brown transfer the file to his new counsel. Attorney Brown did not comply, and Venditti filed a complaint against Attorney Brown with the Office of Disciplinary Counsel on February 10, 1998. On February 25, 1998, after the disciplinary investigation commenced, Attorney Brown paid the outstanding medical bill and delivered the purportedly escrowed subrogation funds to Venditti. The investigation of the disciplinary complaint filed by Venditti led to the discovery of other incidents of Rule violations detailed below.
Michelle LeB run retained Attorney Brown to rep resent her in a claim for dam ages for injuries resulting from an auto accident. In June of 1996 Attorney Brown settled her claim, cashed the check and paid LeBrun her proceeds in cash, less an amount for attorney's fees, costs, and outstanding medical bills. He paid one medical bill but did not pay LeBrun's outstanding debt to another health care provider until July 31, 1998. Attorney Brown did not maintain those funds in a separate account and converted those funds to his own use.
Attorney Brown represented Anthony Faella in a claim for personal injuries. On February 15, 1997, Attorney Brown received a settlement check in the amount of $25,000 on behalf of Faella. Attorney Brown cashed the check. Attorney Brown withheld $825 from Faella's settlement to pay a claim owed to Faella's accountant. Attorney Brown did not maintain those funds in a separate client's account and converted those funds to his own use. On March 6, 1998, after disciplinary counsel's investigation had begun, Attorney Brown paid the accountant.
Moira Vestri was involved in a motor vehicle accident on December 24, 1994, and she also retained Attorney Brown. He negotiated a settlement of her case, and on August 30, 1996, Attorney Brown received a check in the amount of $9,000 on her behalf. He deposited the settlement proceeds into a business checking account. Attorney Brown withheld funds from Vestri's portion of the settlement to pay a hospital bill and a separate bill owed to her physician. He, however, did not pay those bills on her behalf and converted the funds to his own use. On November 6, 1998, Attorney Brown paid the hospital bill and forwarded the funds to Vestri which had been purportedly set aside for payment of the doctor's bill.
Lastly, the final claim in this disciplinary proceeding arose from Brown's representation of Anne Olson, who was injured in an automobile accident on July 27, 1992. The case settled and Attorney Brown received a settlement check which he deposited into his business account on January 5, 1993. He withheld $3,206 from the settlement for payment of medical bills owed by his client. Those funds were not paid by Attorney Brown until late 1998. Those funds did not remain in a separate account and had been converted to his own use.
Accordingly, the board determined, and the Rhode Island Supreme Court agreed, that Attorney Brown violated Article V, Rules 1.15(a) (b), 1.17(d), and 8.4(c), of the Supreme Court Rules of Professional Conduct.See Brown, 735 A.2d at 776.
III. Factors in Mitigation
At the hearing before the Disciplinary Board, Attorney Brown offered the following evidence in mitigation. At the time, Attorney Brown was a sole practitioner and operated his law office out of his home, which he shared with his mother. Attorney Brown had a long history of alcohol and other substance abuse, which predated his admission to law school. In February of 1996, his mother passed away after a long illness. In February of 1997, he was involved in a serious motor vehicle accident and acknowledged that his alcohol abuse was a contributing factor to that accident.
After the accident, and prior to the filing of any disciplinary complaint, Attorney Brown voluntarily sought hospitalization for treatment of his alcohol and substance abuse. He successfully completed a residential detoxification program and participated in rehabilitation groups including Alcoholic's Anonymous, mental health group counseling, the Rhode Island Employee Assistance Program, and his church. He fully and freely admitted his misconduct before the Disciplinary Board, and they found his statements of remorse to be "sincere, heartfelt, and insightful." Id.
IV. Discussion
It is undisputed that federal district courts have a right to establish their own standards for admission to practice. In re Mitchell 901 F.2d 1179, 1183 (3rd Cir. 1990). A federal district court is not bound by determination of a state grievance board concerning reinstatement to the federal bar after suspension or disbarment. In re Culpepper, 770 F. Supp. 366, 367 (E.D. Midi. 1991).While not being bound by reinstatement of the petitioner by the Rhode Island Supreme Court, I must, and do, give that determination considerable deference in making my recommendation. See In re Braverman, 549 F.2d 913, 921 (4th Cir. 1976); In re Abrams, 521 F.2d 1094, 1101 (3rd Cir. 1975), cert. denied 423 U.S. 1038(1975).
The Local Rules for the District of Rhode Island do not delineate the burden of proof relative to reinstatement to the bar of this court. While acknowledging that there is some law to the contrary, I believe the proper standard is and should be that the applicant for readmission bears the burden by clear and satisfactory evidence that the applicant has undergone such a moral change as to now render him a fit person to enjoy the public confidence and trust once forfeited. Petition of Olkon, 605 F. Supp. 784, 787 (D. Minn. 1985), aff'd, 795 F.2d 1379 (8th Cir. 1986). Any doubts as to the applicant's fitness to practice in federal court must be resolved in favor of the public and the court. Petition of Olkon, 605 F. Supp. at 788.
This approach is similar to that of the Rhode Island Supreme Court which places the burden on the applicant for reinstatement. The applicant must demonstrate by clear and convincing evidence that he or she has the moral qualification, competency, and learning in law required for the practice of law and that his or her resumption of the practice of law will be neither detrimental to the integrity and standing of the Bar or the administration of justice nor subversive of the public interest.See Rhode Island Supreme Court Rules, Article III, Rule 16(c).
On September 4, 2003, a hearing was held in this matter. There, Attorney Brown expressed sincere regret and apologized for his violation of the Rules of Professional Conduct. Attorney Brown explained that since his reinstatement to the practice of law by the state courts in December 2002, he has been working to develop a practice with a mentor attorney. He indicated that a CPA audits his client accounts on a regular basis. He also indicated that he submits to a monthly screening to test for drugs and alcohol, and that no outstanding complaints are lodged against him.
During the hearing, the Court learned that in October of 1996, Judge Lagueux found Attorney Brown in default of his student loans and entered judgement against him. Since that time, payment of the judgement has not been regularly made. In fact, from October of 1996 until January of 1998, no payments were made. Attorney Brown explained that during this time period, he suffered from alcohol addiction. It is also noteworthy to point out that during this time period the disciplinary infractions occurred.
Thereafter an agreement was reached between the Government and Attorney Brown, requiring him to pay $500.00 a month to satisfy the judgment. He did so until he was suspended from the practice of law by the state supreme court. Attorney Brown explained that after his suspension, he could not afford to make any further payments. He indicated that to make ends meet during his suspension, he worked at a local grocery store earning $150-$200 per week. Since he resumed the practice of law, however, Attorney Brown indicated that his cash flow is increasing and he intends on paying the judgement. Indeed, the CPA who audits Attorney Brown's client accounts has been helping him reorganize his debt, in an effort to pay it off.
Attorney Brown expressed regret and was remorseful for his conduct which lead to the disciplinary action. More importantly, he has taken steps to get his life in order. Accordingly, I recommend that he be readmitted to practice before this Court.
V. Conclusion
Upon consideration of the foregoing, I recommend that Attorney Brown be readmitted to the bar of this Court. An approval/disapproval page is attached.