VIRGINIA STATE BAR DISCIPLINARY BOARD
IN THE MATTER OF EDITH CHARMAINE GRAY, ESQUIRE
VSB Docket Numbers 02-052-2811 and 02-052-2877
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
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
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
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