Opinion
No. 2429 Disciplinary Docket No. 3 No. 93 DB 2017
01-05-2018
Attorney Registration No. 38454 (Schuylkill County) ORDER PER CURIAM
AND NOW, this 5th day of January, 2018, upon consideration of the Recommendation of the Three-Member Panel of the Disciplinary Board, the Joint Petition in Support of Discipline on Consent is granted, and Michael Patrick Halcovage is suspended on consent from the Bar of this Commonwealth for a period of one year and one day. He shall comply with all the provisions of Pa.R.D.E. 217.
Respondent shall pay the costs incurred by the Disciplinary Board in the investigation and prosecution of this matter. A True Copy Patricia Nicola
As Of 1/5/2018 Attest: /s/_________
Chief Clerk
Supreme Court of Pennsylvania JOINT PETITION IN SUPPORT OF DISCIPLINE ON CONSENT PURSUANT TO Pa.R.D.E. 215(d)
Petitioner, the Office of Disciplinary Counsel (hereinafter, "ODC") by Paul J. Killion, Chief Disciplinary Counsel, and Ramona Mariani, Disciplinary Counsel and Respondent, Michael Patrick Halcovage(hereinafter "Respondent"), respectfully petition the Disciplinary Board in support of discipline on consent, pursuant to Pennsylvania Rule of Disciplinary Enforcement ("Pa.R.D.E.") 215(d), and in support thereof state:
1. ODC, whose principal office is situated at Office of Chief Disciplinary Counsel, Pennsylvania Judicial Center, Suite 2700, 601 Commonwealth Avenue, P.O. Box 62485, Harrisburg, Pennsylvania 17106, is invested, pursuant to Pa.R.D.E. 207, with the power and duty to investigate all matters involving alleged misconduct of an attorney admitted to practice law in the Commonwealth of Pennsylvania and to prosecute all disciplinary proceedings brought in accordance with the various provisions of the aforesaid Enforcement Rules.
2. Respondent, Michael Patrick Halcovage, was born on November 26, 1958, and was admitted to practice law in the Commonwealth on October 18, 1983. Respondent is on active status and his last registered address is 240 Sunbury Street, Minersville, Schuylkill County, Pennsylvania, 17954. Respondent is subject to the disciplinary jurisdiction of the Disciplinary Board of the Supreme Court.
SPECIFIC FACTUAL ALLEGATIONS ADMITTED
3. Respondent's affidavit stating, inter alia, his consent to the recommended discipline is attached hereto as Exhibit A.
CHARGE I
Complaint File No. C2-15-787
4. Florence M. Walsh died testate on March 17, 2011.
5. Ms. Walsh's will left her assets to a number of friends and family members, in varying dollar amounts and percentages.
6. The will named Respondent, who was related to Ms. Walsh, as her Executor.
7. The estate assets consisted of Ms. Walsh's home located in Pottsville, Pennsylvania, a bank account and a few securities.
8. Respondent moved into Ms. Walsh's home at some time either shortly before or after her death.
9. The two largest beneficiaries under Ms. Walsh's will are Beth Rinehart and Michelle Pfeifer, Ms. Walsh's nieces, each of whom is entitled to 20% of the residuary estate, which includes the house.
10. By email dated September 9, 2011, Respondent wrote to both Ms. Rinehart and Ms. Pfeifer and, among other things, provided them with a copy of the will.
11. In addition, Respondent told Ms. Rinehart and Ms. Pfeifer that he had been "identifying the assets" and he would begin "probating at the beginning of the week."
12. On October 4, 2011, Ms. Walsh's will was admitted to Probate, and the Register of Wills granted Respondent Letters Testamentary.
13. Thereafter, Respondent failed to carry out his duties as Executor, including promptly taking the following actions:
a. sending Notices to all beneficiaries pursuant to Pennsylvania Orphans' Court Rule 5.6;
b. filing the Certification of the sending of such Notices;
c. listing Ms. Walsh's house for sale;
d. providing an accounting of his administration to the beneficiaries or filing it with the court; and
e. filing the Pennsylvania Inheritance Tax Return and paying the taxes due.
14. By email sent on August 26, 2012, Ms. Rinehart wrote to Respondent and, among other things, she:
a. asked if he had filed the inheritance tax return;
b. asked if he had paid estimated taxes or requested an extension of time to do so;
c. asked if he had filed notice in several publications;
d. asked about the status of Ms. Walsh's house, including whether Respondent had placed it on the market or was interested in purchasing it himself; and
e. expressed concern about the length of time the matter was taking, given that Ms. Walsh died over a year ago.
15. Respondent answered by email dated August 30, 2012, in which, among other things, Respondent:
a. falsely claimed that he had filed for an extension of time in which to file the Inheritance Tax Return;
b. claimed he would file the return by the end of the next week;
c. stated that he had some work to do prior to putting the house on the market; and
d. claimed he would provide weekly updates on his progress as well as a copy of the filed inheritance tax return.
16. Respondent failed to provide the updates promised, failed to file the Inheritance Tax Return by the end of the following week and failed to place Ms. Walsh's house on the market.
17. Instead, Respondent continued to reside, rent free, in Ms. Walsh's residence.
18. Respondent failed to pay the real estate taxes on the residence for 2014, 2015 and 2016.
19. In addition to email communications, Ms. Rinehart contacted Respondent by text message multiple times between 2011 and 2014 seeking status in this matter.
20. In the spring of 2015 Ms. Rinehart and Ms. Pfeifer hired Sarah R. McCahon, Esquire, to assist them in connection with the Walsh estate.
21. Ms. McCahon sought to speak with Respondent about the estate.
22. On April 23, 2015, after efforts to resolve matters with Respondent proved unproductive, Ms. McCahon filed a "Petition to Compel Accounting and Administration of Estate" with respect to Ms. Walsh's estate with the Court of Common Pleas of Schuylkill County, Orphans' Court Division (hereinafter the "Court").
23. On April 28, 2015, the Court issued a Citation directing Respondent to show cause:
a. why he should not file an account of his administration;
b. why he should not be compelled to proceed with the administration of the estate, including filing the necessary Pennsylvania Inheritance Tax Return and be liable for any interest and penalties accrued; and
c. why he should not be personally surcharged for the payment of attorney's fees associated with the filing of the Petition to Compel.
24. The Citation further provided that unless Respondent showed cause on or before May 26, 2015, an accounting of his administration of Ms. Walsh's estate "shall be filed on or before Tuesday, June 23, 2015."
25. On May 6, 2015, Respondent received the Citation and Order.
26. Respondent failed to respond to the rule to show cause, or file an accounting as directed by the Court's Order.
27. Due to Respondent's violation of the Court's April 28, 2015 Order, on July 17, 2015, Ms. McCahon filed a Motion to Make the Rule Absolute.
28. On August 12, 2015, the Court entered an order making the April 28, 2015 Citation absolute and ordering Respondent to file an account of his administration of Ms. Walsh's Estate on or before September 9, 2015.
29. On September 3, 2015, Respondent received the Order.
30. Respondent failed to comply with the Court's Order.
31. As a result, on September 24, 2015, Ms. McCahon filed a Motion for Contempt.
32. On November 2, 2015, Respondent finally filed an Inheritance Tax Return.
33. By letter dated November 13, 2015, Respondent wrote to Ms. McCahon, provided a stamped copy of the Inheritance Tax Return for the Walsh Estate, and an Account for the Estate, and asked if those actions alleviated the need for the contempt hearing scheduled for November 23, 2015.
34. Ms. McCahon did not agree that all conditions had been satisfied; specifically, the Account was prepared as of the date of Ms. Walsh's death and was not restated to the present.
35. On November 23, 2015, the Court held a hearing on the Motion for Contempt.
36. Respondent appeared late for the hearing.
37. The Court ordered Respondent to provide an Accounting of the Estate to the present time within thirty days - by December 23 2015, or suffer the consequence of removal.
38. Respondent failed to file a timely accounting, instead, filing one five days late, on December 28, 2015.
39. Ms. McCahon, Ms. Rinehart and Ms. Pfeifer continued to raise questions about the Accounting, Respondent's continued presence in the home, and his continued failure to complete the Estate by making distribution and listing the home for sale or auction.
40. By Order dated April 21, 2016, the Court removed Respondent as the Executor, replaced him with Ms. Rinehart and Ms. Pfeifer, and ordered that Respondent turn over all assets and records to the successor co-administrators within thirty days.
41. At some point in 2016, Respondent finally vacated the home, leaving behind multiple unpaid property tax and other bills, many of which had accrued penalties due to Respondent's failure to make timely payments. The unpaid bills exceeded $7,000.00 and include the following:
a. real estate taxes and penalties for 2014 & 2015 $3,197.57;
b. delinquent garbage fees $954.00;
c. delinquent trash bills $731.00;
d. 2016 real estate taxes $803.25;
e. 2016 school taxes $705.00;
f. delinquent sewer bill $458.00;
g. locksmith fees $85.00;
h. cleaning and trash removal fees $350.00; and
i. electric bills $167.65.
42. In addition, the estate incurred the following expenses exceeding $25,000.00 both after Respondent's removal, and as a result of the efforts made in connection with Respondent's removal:
a. legal fees incurred in removing Respondent as Executor $10,560.49;
b. legal fees paid to complete all estate work $11,905.97;
c. delayed interest on estate taxes $859.76; and
d. interest and fees on decedent's unpaid medical bills totaling $1,590.00.
43. Respondent failed to timely respond to ODC's letter seeking a statement of Respondent's position (hereinafter "DB-7 letter") and subsequent correspondence concerning the Walsh Estate. In addition, Respondent failed to comply with ODC's subpoena seeking records. His noncompliance forced ODC to go to the extreme step of preparing and serving a Petition for Emergency Temporary Suspension and Related Relief. After personal service of the Petition, Respondent finally produced at least some of the documentation sought by ODC.
CHARGE II
Complaint File No. C2-16-705
44. On December 2, 2003, John Tarris died.
45. Mr. Tarris was survived by his ex-wife, Linda Tarris, and two minor children, Jonathan Tarris and Jennifer Megan Tarris, all of whom lived in Virginia.
46. Mr. Tarris died intestate.
47. Accordingly, Mrs. Tarris hired Respondent to handle Mr. Tarris's estate.
48. Respondent prepared an Affidavit which Mrs. Tarris signed on December 5, 2003, in which, among other things, Mrs. Tarris:
a. stated that Jennifer and Jonathan were the only children of the decedent and were his sole heirs; and
b. renounced her right to administer Mr. Tarris's estate in Respondent's favor, without the need to post bond.
49. According to the inventory Respondent filed on May 2, 2006, Mr. Tarris's estate consisted of total net assets of $197,605.34.
50. Respondent filed an Inheritance Tax Return in the Tarris Estate reflecting a net estate value of $221,371.98 as of May 3, 2006.
51. From that amount, Respondent deducted inheritance taxes due, $9,967.74, leaving a net balance of $211,410.24.
52. The documents prepared by Respondent indicate that he charged fees of $12,000.00 as a personal representative and $13,000.00 as an attorney, for a total fee of $25,000.00.
53. Respondent's fee is over 10% of the small estate.
54. Further, Respondent took the fee without notice to the beneficiaries, without making distribution to the beneficiaries and without completing the estate administration.
55. Respondent failed to set up a minor's account for Jennifer's share subject to Court approval and supervision.
56. Respondent failed to distribute Mr. Tarris's estate to his intestate heirs, Jennifer and Jonathan.
57. Respondent failed to communicate with either intestate heir with respect to Mr. Tarris's estate and their inheritance.
58. Mrs. Tarris died on March 4, 2011. At that time, as noted, Respondent had made no distribution of estate funds, and it is unclear whether and to what extent she and Respondent had communicated about the Tarris Estate.
59. In or around 2016, Jennifer Huffman, nee Tarris ("Ms. Huffman"), began investigating what had happened to her father's estate.
60. In or around the summer of 2016, Ms. Huffman contacted the Register of Wills Office in Schuylkill County and received copies of the inventory and inheritance tax return.
61. Thereafter, Ms. Huffman repeatedly attempted to contact Respondent to no avail.
62. As a result, on August 4, 2016, Ms. Huffman filed a Complaint with ODC.
63. By letter dated September 14, 2016, ODC sent Respondent a letter seeking a statement of respondent's position (hereinafter "DB-7 letter.").
64. On October 28, 2016, Respondent provided an answer.
65. In his answer, Respondent claims that he "lost touch" with the beneficiaries.
66. However, the Inheritance Tax Return reflects an address for the beneficiaries of 852 Furrs Mill Road, Lexington, VA 24450, which is where Mrs. Tarris resided until her death, and remains jointly owned by Jennifer Huffman and Jonathan Tarris. Ms Huffman and Mr. Tarris continue to receive mail at that address, and have no record of any effort by Respondent to communicate.
67. Respondent additionally stated that the remaining Tarris estate funds had escheated to the State of Pennsylvania.
68. Finally, Respondent claimed that he would provide Tarris estate bank records and the Tarris estate file under separate cover.
69. However, Respondent failed to timely produce the requested documents.
70. Jennifer Huffman filed an unclaimed property claim with the Pennsylvania Treasurer's Office, which confirmed to Ms. Huffman that monies were received in or about the calendar year 2015 from Respondent, amounting to $145,902.00.
71. The amount of money that escheated to the State is approximately $65,000.00 less than the amount that should have escheated based on the figures contained in the inheritance tax return.
72. In order to file a claim with the Unclaimed Property Division Ms. Huffman and her brother filed Petitions in the Orphans' Court to remove Respondent as administrator and have themselves co-appointed.
73. Respondent has failed to cooperate or participate in this process.
74. However, Respondent did, finally, file an undated account with the Orphans' Court on or around July 27, 2017, after ODC filed a Petition for Discipline.
75. The accounting reflects a gross estate of $205,037.90, less disbursements of $52,806.03, leaving a net principal balance of $152,231.87. That balance consists of $145,957.87 (the amount in the bank account as of the last statement produced by Respondent, dated February 28, 2014) plus the value of the late Mr. Tarris's motorcycle, $6,275.00. Respondent seems to attribute the discrepancy between the various accounts to three pieces of real estate that had to be sold. According to Respondent, his initial court filed inventory did not reflect the actual sale prices of the real estate.
There is no documentation supporting this valuation. --------
76. The final accounting purports to distribute the motorcycle to Jonathan Tarris. Respondent claims that Mrs. Tarris, accompanied by Jonathan, collected the motorcycle years ago. That claim would be vigorously disputed if the matter went to hearing, as both Ms. Huffman and Mr. Tarris would testify that Mr. Tarris did not receive the motorcycle, but wanted to have it as a keepsake of his father.
SPECIFIC RULES OF PROFESSIONAL CONDUCT VIOLATED
77. Respondent violated the following Rules of Professional Conduct:
A. RPC 1.1, which provides that a lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation;
B. RPC 1.3, which provides that a lawyer shall act with reasonable diligence and promptness in representing a client;
C. RPC 1.4(a)(3), which provides that a lawyer shall keep the client reasonably informed about the status of the matter;
D. RPC 1.5(a), which provides that a lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee. The factors to be considered in determining the propriety of a fee include the following: (1) whether the fee is fixed or contingent; (2) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (3) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (4) the fee customarily charged in the locality for similar legal services; (5) the amount involved and the results obtained; (6) the time limitations imposed by the client or by the circumstances; (7) the nature and length of the professional relationship with the client; and (8) the experience, reputation, and ability of the lawyer or lawyers performing the services.
E. RPC 1.15(b), which provides that a lawyer shall hold all Rule 1.15 Funds and property separate from the lawyer's own property. Such property shall be identified and appropriately safeguarded.
F. RPC 1.15(d), which provides that upon receiving Rule 1.15 Funds or property which are not Fiduciary Funds or property, a lawyer shall promptly notify the client or third person, consistent with the requirements of applicable law. Notification of receipt of Fiduciary Funds or property to clients or other persons with a beneficial interest in such Fiduciary Funds or property shall continue to be governed by the law, procedure and rules governing the requirements of confidentiality and notice applicable to the Fiduciary entrustment.
G. RPC 1.15(e), which provides that except as stated in this Rule or otherwise permitted by law or by agreement with the client or third person, a lawyer shall promptly deliver to the client or third person any property, including but not limited to Rule 1.15 Funds, that the client or
third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding the property; Provided, however, that the delivery, accounting and disclosure of Fiduciary Funds or property shall continue to be governed by the law, procedure and rules governing the requirements of Fiduciary administration, confidentiality, notice and accounting applicable to the Fiduciary entrustment;
H. RPC 1.15(f), which states that when in possession of funds or property in which two or more persons, one of whom may be the lawyer, claim an interest, the funds or property shall be kept separate by the lawyer until the dispute is resolved. The lawyer shall promptly distribute all portions of the funds or property, including Rule 1.15 Funds, as to which the interests are not in dispute.
I. RPC 1.15(a) (version in effect prior to September 2008), which provides that a lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a client-
lawyer relationship separate from the lawyer's own property. Such property shall be identified and appropriately safeguarded. Complete records of the receipt, maintenance and disposition of such property shall be preserved for a period of five years after termination of the client-lawyer relationship or after distribution or disposition of the property, whichever is later;
J. RPC 1.15(b) (version in effect prior to September 2008), which provides that upon receiving property of a client or third person in connection with a client-lawyer relationship, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client or third person, a lawyer shall promptly deliver to the client or third person any property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property;
K. RPC 8.4(c), which provides that it is professional misconduct for a lawyer to engage in conduct
involving dishonesty, fraud, deceit or misrepresentation; and
L. RPC 8.4(d), which provides that it is professional misconduct for a lawyer to engage in conduct that is prejudicial to the administration of justice.
SPECIFIC RECOMMENDATION FOR DISCIPLINE OF A ONE YEAR AND ONE DAY
LICENSE SUSPENSION
These two consolidated cases demonstrate a history of serial neglect. In the Walsh Estate Respondent had to be removed at great expense to the beneficiaries, all of whom are his family members. Aside from the expense incurred in seeking his removal, ODC would introduce documentary evidence and supporting testimony demonstrating multiple misrepresentations made by Respondent. Respondent's intransigence and inactivity caused the Walsh Estate to incur bills and expenses, including interest and penalties resulting from Respondent's failure to promptly pay estate bills during the time he resided (rent free) in Mrs. Walsh's home. In addition, the estate paid for school taxes, real estate taxes, maintenance and insurance bills for the years in which the house should have been, but was not, sold. Once the beneficiaries succeeded in removing Respondent, they were able to clean up and sell the house in less than a year. Had that occurred promptly after Ms. Walsh's death, the estate would have saved thousands of dollars.
In the Tarris estate, Respondent failed to make any effort to distribute the estate proceeds. He took excessive fees without completing the work. He failed to respond to inquiries from the beneficiaries or assist them in obtaining the estate funds that escheated to the state.
Precedent demonstrates that Respondent's misconduct requires a license suspension of at least one year and one day, which would require Respondent to petition for reinstatement and prove fitness prior to resuming the practice of law. In Office of Disciplinary Counsel v. Mark B. Peduto , No. 75 DB 2015 (2017) the Pennsylvania Supreme Court granted a Joint Petition seeking Discipline on Consent and suspended Respondent Peduto's license to practice law for three years for misconduct including misappropriation of estate funds and the failure to complete estate administration in one matter. More recently, in Office of Disciplinary Counsel v. Kevin Mark Wray , 19 DB 2017 (2017) the Court approved a Consent Petition imposing a one year and one day license suspension where Respondent Wray had engaged in criminal contempt in one client matter as well as neglect, failure to communicate, and retention of unearned fees in six other matters. As noted in Wray , a suspension of one year and one day is appropriate in cases involving serial neglect, failing to communicate, retaining unearned fees, failing to take steps to remedy the neglect, and failing to respond to inquiries from disciplinary authorities. See Office of Disciplinary Counsel v. Mark David Johns , No. 95 DB 2013 (S.Ct. Order 12/30/14); Office of Disciplinary Counsel v. Richard Patrick Reynolds , 179 DB 2011 (S.Ct. 3/31/14); Office of Disciplinary Counsel v. Ann-Marie MacDonald Pahides , No. 171 DB 2009 (S.Ct. 12/27/10); Office of Disciplinary Counsel v. Marc D. Collazzo , No. 165 DB 2010 (S.Ct. 11/30/10).
In mitigation, Respondent has no history of discipline in over thirty years of practice. Further, ODC and Respondent respectfully submit that Respondent's belated cooperation with ODC, as evidenced by this Joint Petition, is a mitigating factor.
A suspension of one year and one day requiring Respondent to prove his fitness at a reinstatement hearing protects the public and meets the goals of the disciplinary system.
WHEREFORE, Joint Petitioners respectfully pray that your Honorable Board:
a. Approve this Petition; and
b. File a recommendation for a one year and one day license suspension and this Petition with the Supreme Court of Pennsylvania.
Respectfully submitted,
OFFICE OF DISCIPLINARY COUNSEL
PAUL J. KILLION,
Attorney Registration No. 20955,
Chief Disciplinary Counsel 10/31/17
DATE
/s/_________
RAMONA MARIANI,
Disciplinary Counsel
Attorney Registration Number 78466
Office of Disciplinary Counsel
Suite 170, 820 Adams Avenue
Trooper, PA 19403
(610) 650-8210 10/27/2017
DATE
/s/_________
MICHAEL PATRICK HALCOVAGE
Respondent
VERIFICATION
The statements contained in the foregoing Joint Petition In Support of Discipline on Consent Discipline are true and correct to the best of my knowledge or information and belief and are made subject to the penalties of 18 Pa.C.S.A. §4904, relating to unsworn falsification to authorities. 10 / 31 / 17
DATE
/ s /_________
RAMONA MARIANI,
Disciplinary Counsel 10/27/2017
DATE
/s/_________
MICHAEL PATRICK HALCOVAGE
Respondent AFFIDAVIT UNDER RULE 215(d) , Pa.R.D.E. COMMONWEALTH OF PENNSYLVANIA:
COUNTY OF SCHUYLKILL:
Michael Patrick Halcovage, being duly sworn according to law, deposes and hereby submits this affidavit consenting to the recommendation of a suspension of one year and one day in conformity with Pa.R.D.E. 215(d) and further states as follows:
1. He is an attorney admitted in the Commonwealth of Pennsylvania, having been admitted to the bar on or about October 18, 1983.
2. He desires to submit a Joint Petition in Support of Discipline on Consent Pursuant to Pa.R.D.E. 215(d).
3. His consent is freely and voluntarily rendered; he is not being subjected to coercion or duress, and he is fully aware of the implications of submitting this affidavit.
4. He is aware that there is presently pending a proceeding into allegations that he has been guilty of misconduct as set forth in the Joint Petition in Support of Discipline on Consent Pursuant to Pa.R.D.E. 215(d) to which this affidavit is attached.
5. He acknowledges that the material facts set forth in the Joint Petition are true.
6. He submits the within affidavit because he knows that if charges predicated upon the matter under investigation were filed, or continued to be prosecuted in the pending proceeding, he could not successfully defend against then.
7. He acknowledges that he is fully aware of his right to consult and employ counsel to represent him in the instant proceeding. He has/has not retained, consulted and acted upon the advice of counsel, in connection with his decision to execute the within Joint Petition.
It is understood that the statements made herein are subject to the penalties of 18 Pa.C.S.A. §4904 (relating to unsworn falsification to authorities).
Signed this 27 day of October, 2017.
/s/_________
MICHAEL PATRICK HALCOVAGE Sworn to and subscribed before me this 27th day of October, 2017. /s/_________
Notary Public CERTIFICATE OF SERVICE
I hereby certify that I am this day serving the foregoing document upon all parties of record in this proceeding in accordance with the requirements of 204 Pa. Code §89.22 (relating to service by a participant).
First Class and Overnight Mail, as follows:
Michael Patrick Halcovage
240 Sunbury Street
Minersville, PA 17954-1346 Dated: 10/31/17
/s/_________
RAMONA MARIANI,
Disciplinary Counsel
Attorney Registration No. 78466
Office of Disciplinary Counsel
Suite 170, 820 Adams Avenue
Trooper, PA 19403
(610) 650-8210