VIRGINIA:
VIRGINIA STATE BAR DISCIPLINARY BOARD
IN THE MATTER OF EDITH CHARMAINE GRAY, ESQUIRE
VSB Docket Numbers 02-052-2811 and 02-052-2877
ORDER
This matter came on the 6th day of January, 2004, to be heard on the Agreed Disposition of the Virginia State Bar and the Respondent, based upon the Certification of the Fifth District Committee Section I. The Agreed Disposition was considered by a duly convened panel of the Virginia State Bar Disciplinary Board consisting of James Leroy Banks, Jr., Esquire, Bruce Taylor Clark, Esquire, Peter Allan Dingman, Esquire, Thaddeus T. Crump, and Roscoe Bolar Stephenson, III, Esquire, presiding.
Noel D. Sengel, Esquire, representing the Bar, and the Respondent, Edith Charmaine Gray, Esquire, by her counsel, Michael L. Rigsby, Esquire, presented an endorsed Agreed Disposition. The hearing was transcribed by *, Court Reporter, * (address and phone number).
Having considered the Certification and the Agreed Disposition, it is the decision of the Board that the Agreed Disposition be accepted, and the Virginia State Bar Disciplinary Board finds by clear and convincing evidence as follows:
1. At all times relevant hereto, the Respondent, Edith Charmaine Gray, Esquire (hereinafter Respondent), has been an attorney licensed to practice law in the Commonwealth of Virginia.
VSB Docket Number 02-052-2811
2. In late December of 2001, the Respondent contacted Lender's Service, Inc. to reinstate her status as closing agent to conduct real estate closings for the company. Lender's Service, Inc. ("LSI") is a company that assists real estate mortgage lenders with the administrative details associated with coordinating residential real estate closings.
3. George and Nancy Penn (the "Penns") had applied for a loan ("refinance loan") with Wells Fargo Home Mortgage, Inc. ("Wells Fargo") to pay off their existing first and second mortgages with Bank of American and First Union National Bank, respectively. Wells Fargo approved the loan, and Mr. and Mrs. Penn made an appointment with the Respondent to close the refinance loan. It is unclear whether the appointment was made through Wells Fargo or LSI, but the Respondent did schedule a meeting with the Penns on January 26, 2002 at the offices of Real Settlement Group for the purpose of closing the Wells Fargo refinance loan. Wells Fargo failed to provide the needed documentation to conduct the closing on that date, and the closing was rescheduled for January 29, 2002.
4. The Penns met with the Respondent on January 29, 2002. At that time, neither Bank of America nor First Union National Bank had provided the Respondent with the payoff amount necessary to payoff their respective loans. The Respondent completed the HUD 1 Settlement Statement for the transaction as completely as possible with the information then known to her.
5. The Respondent called Mrs. Penn on or about February 1, 2002 to enlist her aid in obtaining the payoff figures for the Penns' loans with Bank of America and First Union National Bank. The Respondent received the payoff amount from First Union National Bank by February 4, 2002, but did not receive the payoff amount from Bank of America until February 19, 2002.
6. The loan commitment from Wells Fargo was to expire on February 4, 2002. Wells Fargo sent its financing check to the Respondent who promptly deposited it in her real estate escrow account. The Respondent timely disbursed a payoff check to First Union National Bank. The Respondent did not inform the Penns, however, that she had paid off the First Union
National Bank mortgage or that she continued to have difficulty in obtaining the payoff amount from Bank of America for some two weeks.
7. The Respondent paid off the Bank of America mortgage by check dated February 18, 2002, and made further disbursements by checks dated February 19, 2002. The Respondent did not issue a check to the Penns for their net proceeds from the refinancing until February 26, 2002.
VSB Docket Number 02-052-2877
8. Between late January 2002 and February 15, 2002, LSI forwarded a number of residential real estate financing loans that had been approved by Wells Fargo. The Respondent was to schedule meeting dates with the borrowers, complete HUD 1 Settlement Statements, obtain signatures to notes and deeds of trust provided by Wells Fargo, receive loan proceeds from Wells Fargo, record the Wells Fargo Deed of Trust and disburse the loan funds as appropriate.
9. Between late January 2002 and February 15, 2002, LSI forwarded more than seventy (70) Wells Fargo loan closings to the Respondent for handling. The Respondent conducted thirty-four (34) of the Wells Fargo/LSI closings between late January of 2002 and February 15, 2002. On February 15, 2002, representatives from American Pioneer Title Insurance Company retrieved all the files that had been referred to the Respondent by Wells Fargo/LSI. Between February 19, 2002 and February 22, 2002, the Respondent and John Fries, an LSI employee, worked together to complete a number of HUD 1 Settlement Statements and disburse funds from the Respondent''s real estate escrow account. Those files for which the Respondent had not yet conducted settlements were transferred to another agent within the LSI network for settlement.
10. The Respondent acknowledges that she received more closing files from LSI than she could promptly and properly handle. The Respondent further acknowledges that as a result she did not always deposit the loan proceeds check from Wells Fargo upon receipt or disburse funds following the three­­business days right of rescission period in a refinance settlement.
11. During the approximately three (3) weeks the Respondent served as closing attorney for LSI, the Respondent did not ask LSI to refrain from sending her further closing files to handle despite the fact she could not handle the volume of work sent her by LSI and did not have the necessary staff to assist her.
12. During the approximately three (3) weeks the Respondent served as closing attorney for LSI, the Respondent''s real estate escrow account was always in trust.
13. All fees due the Respondent from LSI were held by LSI and used for the clients' benefit. LSI and Wells Fargo paid late fees, additional interest and settlement agent closing fees for the clients affected by the Respondents delayed disbursements.
The Board finds by clear and convincing evidence that such conduct on the part of Edith Charmaine Gray, Esquire constitutes a violation of the following Rule(s) of the Virginia Code of Professional Responsibility:
RULE 1.3 Diligence
(a) A lawyer shall act with reasonable diligence and promptness in representing a client.
RULE 1.15 Safekeeping Property
(c) A lawyer shall:
(4) promptly pay or deliver to the client or another as requested by such person the funds, securities, or other properties in the possession of the lawyer which such person is entitled to receive.
It is hereby ORDERED that the Respondent shall receive a Public Reprimand with Terms as representing an appropriate sanction if this matter were to be heard. The terms and conditions shall be met by January 31, 2005 are as follows:
1. The Respondent shall complete twelve (12) hours of continuing legal education approved by the Virginia State Bar in the areas of real estate law and/or law office management in addition to the mandatory continuing legal education hours required to maintain her license to practice law in the Commonwealth of Virginia. Upon completion of such term, the Respondent shall so certify under oath in writing to the Assistant Bar Counsel assigned to this case, and provide to Assistant Bar Counsel assigned to this case Virginia State Bar MCLE Form 2, listing the name, date and location of the continuing legal education course and number of hours attended.
2. When and if the Respondent resumes the private practice of law as a Virginia licensed attorney, including acting as a Registered Real Estate Settlement Agent under CRESPA, she shall thereupon promptly engage the services of law office management consultant Janean S. Johnston, 250 South Reynolds Street, #710, Alexandria, Virginia 22304-4421, (703) 567-0088, to review and make written recommendations concerning the Respondent''s law and real estate settlement practice policies, methods, systems, and procedures. The Respondent shall institute and thereafter follow with consistency any and all recommendations made to her by Ms. Johnston following her evaluation of the Respondent''s law and real estate settlement practice. The Respondent shall grant Ms. Johnston access to her practice from time to time, at Ms. Johnston's request, for purposes of ensuring that the Respondent has instituted and is complying with Ms. Johnston''s recommendations. The Virginia State Bar shall have access (by way of telephone conferences and/or written reports) to Ms. Johnston''s findings and recommendations, as well as her assessment of the Respondent's level of compliance with her recommendations. The Respondent shall be obligated to pay when due Ms. Johnston's fees and costs for her services (including provision to the Bar of information concerning this matter). The Respondent will have discharged her obligations respecting the terms contained in this Paragraph if she has fulfilled and remained in compliance with all of the terms contained in this Paragraph until January 31, 2005. The provisions of this Paragraph 2 shall not apply during any period while the Respondent is engaged in the private practice of law and/or as a Registered Real Estate Settlement Agent as a bona fide employee of a law firm or other business entity in which the Respondent has no interest whatsoever as owner, shareholder, director, officer, partner, member, or manager. Provided, however, that if and when the Respondent ceases to be a bona fide employee under the conditions referred to above, she shall engage, or re-engage, Ms. Johnston pursuant to the terms and conditions set forth above for the balance of any period prior to January 31, 2005.
Upon satisfactory proof that the above noted terms and conditions have been met, a Public Reprimand with Terms shall then be imposed. If, however, the terms and conditions have not been met by January 31, 2005, the alternative sanction shall be a suspension of the Respondent''s license to practice law in the Commonwealth of Virginia and her ability to register as an agent under CRESPA for a period of six months (6) months.
It is further ORDERED that, pursuant to the Rules of the Supreme Court of Virginia, Pt. 6, § IV, ¶¶ 13(B)(8)(c)(1), the Respondent shall be assessed an administrative fee and costs for this Agreed Disposition proceeding.
It is further ORDERED that this matter be removed from the Board's docket and placed among the closed files, since there is no further action to be taken unless the Respondent fails to
comply with the terms imposed by the Disciplinary Board, in which case a show-cause proceeding will be initiated.
It is further ORDERED that upon representation by the Assistant Bar Counsel to the Virginia State Bar Disciplinary Board that the Respondent has failed to comply with the terms and conditions as set forth above, a show-cause proceeding will be initiated before the Disciplinary Board seeking imposition of the alternative sanction. Any show-cause proceeding will be considered a new matter, and under Pt. 6, § IV, ¶¶ 13(B)(8)(c)(1) of the Rules of the Supreme Court of Virginia, the Respondent will be assessed an administrative fee and costs of such show-cause proceeding.
It is further ORDERED that a copy teste of this Order shall be mailed by Certified Mail, Return Receipt Requested, to the Respondent, at 10719 Maple St., Fairfax, VA 22030, her last address of record with the Virginia State Bar, and by regular first-class mail the Respondent's Counsel, Michael Rigsby, Esquire, at Michael L. Rigsby, Esq., Carrell, Rice & Rigsby, 7275 Glen Forest Dr., Forest Plaza II, Suite 309, Richmond, VA 23226, and to Senior Assistant Bar Counsel Noel D. Sengel, Virginia State Bar, 100 North Pitt Street, Suite 310, Alexandria, VA 22314.
Enter this Order this _____ day of _____________________________, 2004.
VIRGINIA STATE BAR DISCIPLINARY BOARD
By:_________________________________________
Chair