Opinion
No. 11 June Term 1974, Docket No. 55,291.
Decided October 30, 1974. Rehearing denied 393 Mich. 915.
Appeal from State Bar Grievance Board. Submitted June 7, 1974. (No. 11 June Term 1974, Docket No. 55,291.) Decided October 30, 1974. Rehearing denied 393 Mich. 915.
Disciplinary proceedings against Seymour Markowitz. Order entered suspending respondent from practicing law for two years. Respondent appeals. State Bar Grievance Administrator cross-appeals. Affirmed.
Louis Rosenzweig, for the State Bar Grievance Administrator.
Sommers, Schwartz, Silver, Schwartz, Tyler Gordon, P.C., for respondent.
We concur in that part of Justice LEVIN'S opinion which affirms the respondent's suspension, but cannot agree that the suspension imposed is excessive. Therefore, we would affirm the State Bar Grievance Board order without alteration.
We must not lose sight of what respondent has done. He has profited from his position as an attorney by acting as a middleman in child adoption proceedings, which comes within my definition of "gray marketing" of babies. He has not merely used the process to help join those who want to adopt with children who need adoption. He has abused the process in a piratical fashion. His suspension is not excessive.
The hearing panel found that respondent represented a married couple in adoption proceedings. He received a fee of $500. In addition to this fee, respondent demanded reimbursement for all medical costs attributable to the child's birth. The couple only agreed to pay so much as ordered by the probate court. The court disapproved reimbursement of some $800. Respondent then asked the adopting father to sign a petition for rehearing, threatening that if the father refused, respondent would file a motion in the name of the natural mother. This would result in the natural mother learning the names of the adopting parents. Petition for rehearing was filed. The probate court denied the petition.
It is this conduct which is characterized as "an idle, impetuous threat." The hearing panel obviously did not consider the threat in this light. The Grievance Board obviously did not so treat the threat. There is nothing submitted to this Court which would cause me to treat the threat any differently. Adoptive parents naturally want to preserve their anonymity. Respondent threatened his own clients with disclosure of information gathered during the course of his representation of them. Such conduct would be reprehensible in any case. It is especially so when an attorney conducts himself in such a manner against his own clients. The State Bar Grievance Board did not impose an inappropriate penalty.
As to the other allegation of misconduct here at issue, the hearing panel found that respondent accepted an appointment as guardian ad litem for the natural mother in an adoption proceeding. This occurred after he had received $500 from the adopting parents and had been promised an additional $500. The adopting parents had been told by their attorney that such a fee had to be paid to respondent. Previously respondent had directed the natural mother to contact the attorney representing the adopting parents. After these events occurred, respondent stated to a probate court attorney that he had no interest in the proceedings, nor was he associated with the attorney representing the adopting parents.
Respondent's statements to the probate court attorney are characterized as a failure "to respond accurately" as a "lack of candor" and as "dissembling". Call it what you will, respondent's conduct was clearly unprofessional. I find respondent's failure to tell the truth to the probate court attorney acting in an official capacity warrants the one-year suspension recommended by the hearing panel and affirmed by the State Bar Grievance Board.
The public should be able to expect and receive a high standard of ethical conduct from those who have been admitted to the practice of law. Indeed, the standard of conduct should be above that of the "average" person. Lawyers historically have been expected to obey laws and rules and to assist the court. To deceive the court is to undermine its very foundations, for it is a tenet of our judicial system that lawyers are officers of the court.
We affirm the order of the State Bar Grievance Board.
T.M. KAVANAGH, C.J., and WILLIAMS and J.W. FITZGERALD, JJ., concurred with M.S. COLEMAN, J.
Seymour Markowitz appeals a disciplinary order of the State Bar Grievance Board suspending him from the practice of law for two years — one year on Count II and one year on Count III of the complaint. The State Bar Grievance Administrator cross-appeals the hearing panel's dismissal of Count I. We would affirm the finding of professional misconduct but reduce the suspension to 120 days.
The three counts of alleged professional misconduct arise out of two separate private adoption proceedings. Counts I and II relate to the adoption of a child of Vicky X, and Count III to the adoption of a child of Patricia X.
I
The hearing panel dismissed Count I because it alleged violations of the new Code of Professional Responsibility and Canons which was not adopted until after commission of the acts charged. The Administrator counters that since the essential facts were alleged in the formal complaint and the claimed misconduct was violative as well of the former Canons of Professional Ethics, Markowitz received adequate notice.
We see no need to decide the question whether Markowitz received adequate notice as we are of the opinion that the record does not support a finding of professional misconduct under Count I. The facts are set forth in the margin.
In the spring of 1971, a former client referred an 18-year-old unwed pregnant woman, Vicky X, to Markowitz. Vicky wished to place the child for adoption.
In July, 1971, Mr. and Mrs. C retained Markowitz to represent them in the adoption of the child. Markowitz told them that his fee would be $500, and that they would be responsible for additional expenses such as doctor and hospital bills, clothing and transportation costs. Mr. and Mrs. C agreed to this arrangement.
In late August, when Vicky entered the hospital, she was told that a deposit was required. In labor, she called Markowitz who paid the deposit. Three days later, when Vicky attempted to leave the hospital with her child, she was asked for the balance due on her bill. Again she called Markowitz and he paid the bill.
Markowitz then arranged transportation for Vicky and her child to Oakland County Social Services where a boarding home placement was sought. There was testimony that Oakland County Social Services refused to provide housing because Vicky was a minor. Vicky and her child were brought to Markowitz's office. Several persons were called in an effort to obtain temporary shelter. Finally the woman who had driven Vicky to Oakland County Social Services, a part-time secretary for Markowitz, agreed to provide room and board for them pending the completion of the adoption proceeding. Mrs. C agreed to pay $100 a week for this service.
Mr. and Mrs. C took custody of the child on September 24, 1971. On December 14, 1971, a hearing was held in the probate court on Markowitz's petition for authority to pay fees and charges, including the hospital charges he had paid. The probate judge reaffirmed his prior ruling that he could not approve any prepaid items under MCLA 710.13; MSA 27.3178(553):
"No person or persons shall offer, give or receive any money or other consideration, or thing of value in connection with the placing of any child for adoption, or in connection with the consent to adoption, or with the petition for adoption except such charges and fees as may be approved by the probate court."
Markowitz appealed to the circuit court which affirmed on the ground that the probate judge had not abused his discretion in applying the Oakland County Probate Court policy disallowing reimbursement of prepaid items. The circuit judge did, however, express "serious reservations" about the policy limiting payment to unpaid items and suggested that the probate court reconsider its policy denying reimbursement of prepaid items. He found that Markowitz's construction of the statute and his claim for prepaid items were made in good faith.
The adopting parents had previously signed a document containing an itemized list of expenses. Before doing so, Mr. C inspected the hospital and medical bills. Mr. and Mrs. C then reiterated their agreement to reimburse Markowitz upon completion of the adoption. Vicky's name appeared on those bills and thus was disclosed to the adopting parents.
After the probate judge had ruled against reimbursement, Markowitz phoned Mr. C and asked him to sign a petition for rehearing relative to the prepaid items. Mr. C testified that before he responded to Markowitz's request, Markowitz threatened that if Mr. C did not sign, Markowitz would institute legal action against the adopting parents in the name of the natural mother, presumably on the theory that she otherwise would be liable to reimburse Markowitz, thereby revealing their identity to her. This threat is the basis for Count II of the complaint.
Count I is based on a request for investigation filed by Vicky. The hearing panel found that Markowitz told Vicky that her hospital and doctor bills would be paid for her; that he himself paid those bills without prior court approval; that he promised Vicky he would buy her a car with the $50 she would be reimbursed for expenditures made by her for the baby's clothing; and that he suggested to Vicky that she misrepresent her residence in making a statement to the probate court in connection with the adoption proceedings. The hearing panel, nevertheless, dismissed Count I because it alleged violation of disciplinary rules of the new Code of Professional Responsibility and Canons which had not been adopted until after the occurrence of Markowitz's acts of alleged misconduct.
Markowitz's statement to Vicky that her hospital and doctor bills would be paid for her violated no rule of law, ethical or disciplinary standard. When he paid those bills without prior court approval, he ran the risk that he would not be reimbursed. His request for reimbursement was ultimately refused.
In seeking reimbursement, Markowitz advanced a construction of a statute (see fn 1) contrary to the view of the probate judge. On appeal, the circuit judge found arguable merit in the view advanced by Markowitz. Markowitz sought, but was denied, leave to appeal by the Court of Appeals. This is an even clearer case than State Bar Grievance Administrator v Corace, 390 Mich. 419; 213 N.W.2d 124 (1973), where we set aside a disciplinary order entered against a lawyer who had in good faith acted on a view of the law different than that advanced by judges of the Common Pleas Court of the City of Detroit. Markowitz did not act on his view of the law in opposition to the court, but simply petitioned the court for reimbursement. When the court rejected his petition, he was out-of-pocket over $700 expended for Vicky's hospitalization.
The finding that Markowitz told Vicky he would buy her a car for $50 upon receipt of that sum from the adopting parents, as reimbursement for money Vicky had expended for the baby's clothing, stands by itself unconnected with other evidence and would not support a finding of professional misconduct. The Administrator's effort to show that Markowitz unduly pressured Vicky to induce her to part with the child failed when the hearing panel refused to permit such a charge to be added belatedly. An attorney for the Oakland County Probate Court testified that he was satisfied that Vicky acted voluntarily in consenting to the child's adoption.
There was evidence that Markowitz was in a position to procure a driveable used automobile for $50.
The most serious charge under Count I is the claim and finding by the panel that Markowitz suggested to Vicky that she misrepresent her residence to the probate court.
The testimony and evidence on that issue is contradictory. Vicky told the probate court attorney that her address was the address of the woman who had agreed to care for the child pending the adoption proceedings. This woman testified that Markowitz had arranged for both Vicky and her child to stay with her. Vicky testified that she knew that she was supposed to live with the baby in the woman's home pending the completion of the adoption proceedings. However, she did not, but continued to live at her sister's home.
At one point in her testimony Vicky, who was then hostile to Markowitz, stated that he told her to give a "fake address". She then added that this had something to do with "the counties". This prompted the hearing panel to suggest that Markowitz was attempting to perpetrate a fraud on the probate court by having Vicky give a "fraudulent address to confer jurisdiction upon the court".
The statute, however, made the residence of the adopting parents determinative of jurisdiction. Additionally, both the home of Vicky's sister and the home of the woman caring for the child were located in Wayne County. Thus, even if the residence of the natural mother had some effect on the jurisdiction of the Oakland County Probate Court, no fraud could have been perpetrated on that court by substituting one Wayne County address (where the child was living) for another (where the natural mother was living).
MCLA 710.1; MSA 27.3178(541). Subsequently ( 1972 PA 235), the statute was amended to permit the petition to be filed in either the county of residence of the adopting parents or where the child "is found".
The probate court attorney's testimony did not refer to the circumstances surrounding the giving of the address of the woman caring for the child. It does not appear that Markowitz knew that Vicky did not intend to live with her child in the woman's residence.
There is no basis for the charge that Markowitz acquired an interest in the litigation. Vicky repeatedly testified that she knew that she was ultimately responsible for the medical bills if the adoption was not completed; she acknowledged that she was obliged to reimburse Markowitz if the adopting parents did not take the child. The adopting parents testified that they had agreed to assume responsibility for the doctor and hospital bills, clothing and transportation costs.
The record does not support a finding of professional misconduct under Count I.
II
The hearing panel found (Count II) that Markowitz threatened to sue the adopting parents in the name of the natural mother which would reveal their identity to her. Markowitz argues that Count II failed to provide adequate notice of this charge in that it did not state the date, place and time of the alleged threat. He argues that he did not know which of his former clients was referred to as the aggrieved party.
Markowitz was, however, adequately informed of the charge. In the request for investigation the complainant, Mr. C, stated that the threat was made over the telephone on October 26, 1971 at 2:30 in the afternoon. The formal complaint refers to the adoption of Vicky's child and alleges that Markowitz threatened his clients, the adopting parents, with litigation and to reveal their identity to the natural mother. It is apparent from both Markowitz's response to the request for investigation and his answer to the formal complaint that he understood the charge.
III
Count III arises out of a second adoption proceeding. Patricia X, a previously married 20-year-old pregnant woman, was introduced to Markowitz by her employer. Markowitz referred her to Edward Gold, an attorney who represented the adopting parents in the adoption of Patricia's child. The adopting parents agreed that Markowitz would receive $1,000 compensation. Markowitz paid Patricia's hospital expenses and reimbursed the natural father who had paid the doctor. The adopting parents agreed to reimburse him subject to probate court approval; the court refused to authorize reimbursement. Markowitz was appointed and acted as guardian ad litem for Patricia; subsequently, and before the adoption was completed, a substitute guardian ad litem was appointed.
The probate court attorney testified that after the foregoing arrangements had been made and $500 of Markowitz's fee had been paid and before the substitute guardian ad litem was appointed, Markowitz, in the course of an interview with the attorney, stated, in response to a question, that he had no interest in the outcome of the adoption and was not associated with Edward Gold. In the same interview, Markowitz acknowledged that he had paid Patricia's hospital and medical expenses.
IV
Markowitz did not testify in his own defense. He offered no evidence to refute Mr. C's testimony in respect to Count II that the threat was made. Nor did Markowitz offer any evidence to refute the probate court attorney's testimony in respect to Count III that Markowitz did not disclose his interest in the Patricia X adoption when asked about it.
The hearing panel's findings that Markowitz threatened to commence an action against his client and failed to respond accurately to an inquiry by the probate court attorney are supported by probative evidence and support the conclusion that he was guilty of professional misconduct.
The old Canons of Professional Ethics provided: "The lawyer owes `entire devotion to the interest of the client * * * '." (Canon 15); it is his duty "to preserve his client's confidences". He may not use these confidences "to the disadvantage of the client * * *." (Canon 37.) Under the present code, "[a] lawyer shall not intentionally * * * prejudice or damage his client during the course of the professional relationship * * *." (DR 7-101-[A] [3].) He may not "[u]se a confidence or secret of his client to the disadvantage of the client". (DR 4-101-[B][2].)
Although Patricia was a 20-year-old emancipated minor and there may have been no need for a guardian ad litem, that did not relieve Markowitz of the obligation to refrain from making a response less than wholly truthful and candid. Under the old Canons, a lawyer owes a duty of candor and fairness to the court and other lawyers. (Canon 22.) The new Canons similarly provide that a lawyer is obliged to refrain from conduct that is contrary to "honesty". State Bar Rule 15, § 2(3). Similarly, see DR 1-102-(A)(4).
V
One of the three members of the hearing panel excused himself from the hearing shortly before the Administrator's evidence was completed. He did not hear any of the evidence proffered by Markowitz. Markowitz's attorney objected to the continuation of the hearing in the absence of the missing panel member. The report of the hearing panel states that the absent member did not participate in the deliberations regarding Count III.
Markowitz objects to the panel deciding Count III with only two members participating, and objects to the decision on Count II on the ground that the member who excused himself from the hearing did not hear Markowitz's evidence.
There is arguable merit in Markowitz's position that all three members of a hearing panel should hear all the evidence and that no decision should be made in which all three do not participate. State Bar Rule 16.3.2 provides, however, that two members of a hearing panel shall constitute a quorum. If this rule does not adequately protect the rights of the public and of lawyers, this Court should change it. Unless and until it is changed, the Grievance Board and hearing panels are justified in relying on it as written.
While the evidence presented by Markowitz's witnesses did cast doubt on Vicky's veracity, the testimony of Mr. C regarding the threat (Count II) and the testimony of the probate court attorney regarding the failure to disclose an interest in an adoption (Count III) were not contradicted or refuted in any way. On the two crucial findings, that Markowitz had threatened his client with litigation and had failed to disclose his interest in an adoption, Markowitz offered no evidence which the missing member would have heard had he been present. It is entirely true, however, that the missing member, by not participating in the decision on Count III, denied Markowitz the benefit of a third opinion.
VI
The request for investigation in respect to Count III, dated December 9, 1971, was signed by the Assistant State Bar Grievance Administrator. The formal complaint is dated May 8, 1972.
The State Bar Rules were amended, effective September 1, 1972, to add subparagraph .8 to Rule 16.4:
"Sec. 16.4 State Bar Grievance Administrator; Staff; Powers and Duties
The Board shall appoint an attorney to be State Bar Grievance Administrator. He shall serve at the pleasure of the Board. He shall: * * *
".8 — In the absence of a specific complaint, initiate investigation of misconduct of attorneys and prepare and serve in his own name Requests for Investigation, with the prior approval of one member of the Board."
Markowitz contends that Count III is defective because the request for investigation was signed by the Administrator before the adoption of the amendment adding subparagraph .8 authorizing the Administrator to serve requests for investigation in his own name. This technical defense is manifestly correct as the Administrator had no authority to initiate an investigation until the rule was changed. Before the rule was changed, the Administrator was limited to "[a]ssist[ing] members of the public in preparation of requests for investigation". State Bar Rule 16.4.3. (Emphasis supplied.)
The Administrator relies on State Bar Rule 16.33(c) which provides that "[n]o investigation or proceedings hereunder shall be held invalid by reason of any nonprejudicial irregularity, nor for any error not resulting in a miscarriage of justice".
This Court, in other contexts, has defined "miscarriage of justice" as having the same meaning as "prejudicial error" so that "the question of reversal is controlled by determination of whether the error was prejudicial".
People v Robinson, 386 Mich. 551, 562; 194 N.W.2d 709 (1972); People v Mobley, 390 Mich. 57, 65; 210 N.W.2d 327 (1973); People v Nichols, 341 Mich. 311, 322; 67 N.W.2d 230 (1954); Soltar v Anderson, 340 Mich. 242, 244; 65 N.W.2d 777 (1954).
Markowitz claims that he was prejudiced because a letter from the probate court attorney to the State Bar Grievance Administrator, spelling out the charge that Markowitz did not disclose his interest in the Patricia X adoption when asked, was withheld until after the probate court attorney had completed his testimony at the hearing. Thus, Markowitz claims he was not adequately informed of the true nature of the charge until after the attorney had testified.
Before the hearing Markowitz filed a motion to require production of documents stating that at a meeting with the Administrator before the formal complaint was filed he "was advised that a Request for Investigation had been filed by someone from the Oakland County Probate Court", that the name of the person requesting such investigation was not given to him, nor were the contents of the request made available to him, that his request for a copy of the request was denied, that the request contains information necessary for his defense and that he had a right to know his accuser. This motion was denied. A week after the probate court attorney had completed his testimony the hearing panel "sua sponte" reconsidered its order and granted Markowitz's motion. He was advised that he would be given an additional opportunity to present evidence and to cross-examine again the probate court attorney.
The "Request for Investigation" received from the probate court attorney could not properly be deemed to be the request for investigation, rather than the request signed by the Assistant State Bar Grievance Administrator, because of the failure to serve on Markowitz the request received from the probate court attorney as required by State Bar Rule 16.6.
Although the gravamen of Count III was Markowitz's failure to disclose that the adopting parents had paid him $500 and had agreed to pay him an additional $500, neither the request for investigation signed by the Assistant State Bar Grievance Administrator nor the formal complaint, nor even the amended formal complaint, filed after the hearings were completed, charged Markowitz with failure to disclose his interest in the adoption or made any reference to the probate court attorney or to a conversation between Markowitz and the probate court attorney. In State Bar Grievance Administrator v Jackson, 390 Mich. 147, 155; 211 N.W.2d 38 (1973), we ruled that "[a]n attorney may only be found guilty of misconduct as charged in the complaint" and that a hearing panel errs in finding an attorney "guilty for misconduct not charged in the complaint".
Similarly, see State Bar Grievance Administrator v Freid, 388 Mich. 711, 715; 202 N.W.2d 692 (1972); State Bar Grievance Administrator v Corace, 390 Mich. 419; 213 N.W.2d 124 (1973).
The State Bar Rules carefully spell out the procedures to be followed before a formal complaint may be filed. There are a number of safeguards designed to sift out meritless claims. No formal complaint can properly be filed except in accordance with those procedures. Even now, under amended Rule 16.4.8, the Administrator may not serve a request for investigation in his own name except with "the prior approval of one member of the Board". If we were to validate proceedings on a formal complaint filed without a proper request for investigation, it would be tantamount to saying that the present limitation of prior approval of one member of the Board need not be observed. Even the present safeguard might fall into desuetude.
See State Bar Rules 16.6-16.10.
VII
The discipline — two years' suspension — is, in our opinion, excessive.
Markowitz's threat to commence litigation (Count II) appears as an idle, impetuous threat. There is no evidence that Markowitz really intended to sue his client and, most importantly, he never did use his client's confidences "to the disadvantage of the client". The identity of the adopting parents was not revealed to the natural mother.
Although Markowitz has a good technical defense precluding the imposition of discipline under Count III, we note that his lack of candor during the interview with the probate court attorney is a serious matter. While this is not as offensive as would be a similar response to a judge, it, nevertheless, is below the standard of the profession. Markowitz's dissembling did not, again, result in imposition on client or court. The probate court became fully informed of the facts before the adoption was completed. A substitute guardian ad litem was appointed.
We have compared the discipline imposed in this and other recent cases. In State Bar Grievance Administrator v Albert, 390 Mich. 234; 212 N.W.2d 17 (1973), a one-year suspension was imposed for accepting retainers and failing to perform services in five separate cases resulting in the loss of a right to appeal, a default judgment and dismissal of a complaint. In State Bar Grievance Administrator v Sauer, 390 Mich. 449; 213 N.W.2d 102 (1973), a one-year suspension was imposed for filing a false tax return. In State Bar Grievance Administrator v Moes, 389 Mich. 258; 205 N.W.2d 428 (1973), a one-year suspension was imposed for failure to do anything in a case resulting in the entry of a default judgment. In all these cases the attorneys' misconduct was not inchoate, as here, but resulted in actual prejudice and harm.
In State Bar Grievance Administrator v Grossman, 390 Mich. 157; 211 N.W.2d 21 (1973), the lawyer was found to have lied to police officers and was reprimanded. Another case of lawyer prevarication is noted in the Synopses of Cases published by the Grievance Board; a 90-day suspension was imposed for falsely testifying at a grievance hearing on a matter involving a former partner and for failing to respond to a motion to dismiss resulting in a dismissal which the lawyer failed to report to his client or to attempt to rectify.
In reviewing the discipline imposed by the Grievance Board as set forth in its Synopses of Cases, it appears that 1-year suspensions have been imposed for conduct involving conversion or commingling of funds of clients, forging the signature of a client, and failure to proceed with action resulting in dismissal or default judgment. Six-month suspensions have been imposed for income tax evasion, accepting retainers and failing to do anything resulting in loss of clients' rights, and the like. One to three-month suspensions have been imposed for such nefarious conduct as commingling funds, failure to take timely action resulting in loss of clients' rights, and the like. Reprimands have been imposed in innumerable cases where lawyers have failed to attend to their clients' business resulting in loss to the client.
We are mindful that Markowitz, in a prior disciplinary proceeding, was suspended for one month.
We would affirm the finding of professional misconduct but, in exercise of our power of superintending control (Rule 16.33[a], Rules Concerning the State Bar of Michigan), reduce the discipline to suspension for 120 days.
T.G. KAVANAGH, J., concurred with LEVIN, J.
SWAINSON, J., did not sit in this case.