BEFORE THE VIRGINIA STATE BAR DISCIPLINARY BOARD
IN THE MATTER OF SALVAGE DELACY STITH
VSB Docket No. 00-000-2051
DISSENTING OPINION TO THE ORDER OF RECOMMENDATION
We report our recommendation as a divided panel; the majority having voted to recommend reinstatement. However, two panel members, Roscoe B. Stephenson, III and Donna A. DeCorleto, would recommend against reinstatement for the reasons expressed in this opinion.
We dissent because there is substantial doubt about Mr. Stith's fitness to practice law. The majority takes comfort in his proffer "that he would not practice law as a solo practitioner, that he would not handle client's money himself, and that he would work in an environment where someone who understood the ethical responsibilities of trust accounts would handle the accounts of the firm." This is false confidence. The proffer can neither be monitored nor be enforced by the Virginia State Bar ("VSB"). A lawyer who cannot be trusted to practice by himself or to handle client funds is a lawyer who lacks the requisite fitness to practice law. Viewing the evidence within the Hiss categories, our misgivings are the following:
THE SEVERITY OF THE PETITIONER'S MISCONDUCT INCLUDING, BUT NOT LIMITED TO THE NATURE AND CIRCUMSTANCES OF THE MISCONDUCT.
Mr. Stith was licensed September 21, 1973. His active legal career, net of suspensions, was roughly 17 years. During those years the VSB concluded eleven complaints that resulted in discipline against him. The disciplinary orders placed in evidence at this hearing show the following:
November 27, 1978 Private reprimand - Neglect of appeals; cited for contempt by Supreme Court of Virginia.
January 25, 1983 Dismissal on agreement to refrain from making loans to clients.
December 11, 1984 Private reprimand - Trust account commingling, failure to keep trust account records, failure to make trust account reconciliations.
June 25, 1986 Private reprimand - Neglect, failure to inform client.
August 22, 1986 Dismissal - Rule III D (1) (c).
April 24, 1987 Suspension for three years commencing July 1, 1987 - Serious trust account violations including commingling and expropriation of client funds (two cases). This was an order of the Supreme Court affirming a three-year suspension imposed by the Disciplinary Board on September 17, 1985.
November 9, 1987 Public reprimand - Neglect of divorce case.
October 1, 1993 Suspension for twelve months - Dishonesty, deceit, fraud or misrepresentation; failure to withdraw; lack of competence and promptness; intentional damage to client. (Order of Three-Judge Court).
November 12, 1993 Public reprimand - Lack of competence and promptness, intentional failure to seek lawful objectives of client.
June 24, 1994 Revocation - Four cases involving gross trust account violations and neglect of client matters.
At the time of Mr. Stith's revocation there were two additional complaints then pending against him on the docket of the Disciplinary Board and five additional complaints then pending against him on the docket of the First District Committee, all of which were dismissed without prejudice because of the revocation.
Mr. Stith's pattern of misconduct undermines the bedrock of legal ethics. There were repeated infractions involving lack of diligence or competence, dishonesty to clients, and willful trust account violations. This pattern of misconduct can only be characterized as severe. The continuing occurrence of violations, following repeated discipline meted out by VSB is indicative of a recalcitrant disregard of the principles designed to ensure honesty, integrity, and competence in the legal profession and to preserve public trust in the legal system. Stith was reprimanded in December, 1984 for trust account violations. He was suspended July 1, 1987 for trust account violations. Assumably he re-entered the practice of law on or about July 1, 1990; and yet, when again brought onto the carpet for trust account violations, he had no trust account records for 1991 or 1992, and he acknowledged commingling and misappropriating client funds during that period.
To be reinstated in the wake of this record, we would expect to hear convincing evidence of change in the petitioner's attitude toward the profession. We would expect to hear convincing evidence that the petitioner had fully mastered the relatively simple concepts behind the trust account rules. We would expect to hear convincing evidence that petitioner would re-enter practice using efficient methods of office organization. None of this was presented. In fact, Mr. Stith made no explanation of what has changed in his life that would take him out of his prior pattern of misconduct.
THE PETITIONER'S ACTIVITIES SINCE DISBARMENT, INCLUDING, BUT NOT LIMITED TO HIS CONDUCT AND ATTITUDE DURING THAT PERIOD OF TIME.
We see troubling indications in the petitioner's activities, attitude, and conduct since he was disbarred. Despite substantial income reported on his tax returns he has repeatedly underpaid his federal and state income taxes. As recently as August, 2000 he tendered checks to the U.S. Internal Revenue Service ("IRS") that were returned for insufficient funds. In fact, the evidence shows that since his disbarment the petitioner has tendered six worthless checks to the IRS totaling $7,770.38, as follows:
April 17, 1998 $ 2,169.00
May 28, 1998 $ 2,212.38
April 15, 1999 $ 690.00
August 25, 2000 $ 864.72
August 25, 2000 $ 35.28
This persuades us that he remains irresponsible in financial matters, particularly financial accounting, to the present. We also see a component of fraud or deceit in his propensity to tender worthless checks.
Since September, 1993 Mr. Stith has filed Chapter 13 bankruptcy petitions six times. None of these petitions has been pursued to a discharge. None of the Chapter 13 plans has been completed. From the witness stand Mr. Stith stated that he never intended to pursue his bankruptcy filings to conclusion. He filed only for the purpose solely to hinder and delay the creditors (primarily IRS); action subject to possible sanctions if done by a lawyer.
THE PETITIONER'S FAMILIARITY WITH THE VIRGINIA RULES OF PROFESSIONAL CONDUCT AND HIS CURRENT PROFICIENCY IN THE LAW.
At the reinstatement hearing Mr. Stith demonstrated a lack of familiarity or an indifference to the trust accounting duties required of a lawyer. He testified that he understood the trust account rules at the time of his infractions, but did not follow them. When asked to elaborate on his duties arising from the receipt of fee advances ($2,000 to $3,000) made by Ronald L. Turner in November, 1992 (the subject of a docketed VSB complaint not pursued because of petitioners' prior disbarment) he showed a lack of understanding or appreciation for the duty to escrow unearned fees. When the duty was explained to him by a panel member his reply was, "The rule hasn't always been like that. It was changed recently to require this." VSB reimbursed Turner out its Client Protection Fund.
Continuing on the topic of trust accounting, Mr. Stith volunteered that his legal ability centers on litigation. He stated that in the past he knew, but did not follow, the trust accounting rules. Further, he testified that if he is re-licensed he should not have responsibility over client funds and attorney trust accounts. We do not believe that Mr. Stith has demonstrated the necessary proficiency with the trust accounting rules.
Another aspect of Mr. Stith's testimony makes us question whether he is currently proficient in the law. When discussing one of his several failures to comply with a criminal appeal filing deadline he stated that procedures are available to remedy the default, but that he was unable to correct this for his client because his license had been revoked. He did not elaborate on what procedures exist to put such a client back on the same legal footing the client would have enjoyed had the filing been timely made. We doubt such remedies exist.
THE PETITIONER'S SINCERITY, FRANKNESS AND TRUTHFULNESS IN PRESENTING AND DISCUSSING FACTORS RELATING TO HIS DISBARMENT AND REINSTATEMENT.
There were some topics of Mr. Stith's testimony about which we question whether he was sincere, frank, and truthful. Early on, in discussing his tax problems, Mr. Stith testified that all of his income tax arrearage arose prior to his disbarment and was the result of his income loss after disbarment. He unequivocally stated that since 1993 he had paid all his taxes for each year. The VSB evidence obtained from IRS refutes this testimony. Mr. Stith has substantial tax arrearages for 1990 and 1991 (prior to disbarment). As noted before, he has chronically underpaid during the years since disbarment, compounded by the worthless checks.
Likewise, we do not believe Mr. Stith was forthright in the discussions about what led to his three-year suspension. Again and again he stressed to the Board that the suspension had to do with the negligent or inadvertent misappropriation of $150.00 from trust, but a review of the order of the Disciplinary Board dated September 17, 1985 shows that his misconduct was far more serious. Even if we assume he was intending to discuss this honestly, his rendition shows a serious lack of understanding of his proven misconduct and the rules he breached.
THE IMPACT UPON PUBLIC CONFIDENCE IN THE ADMINISTRATION OF JUSTICE IF THE PETITIONER'S LICENSE TO PRACTICE LAW IS RESTORED.
Restoration of Mr. Stith's license will undermine public confidence in the legal system. Imagine the impression in the mind of the average citizen, who being aware of Mr. Stith's past transgressions learns that the self-regulating legal profession has again allowed Mr. Stith to practice law. Then imagine the impression in the mind of the average citizen, who being unaware of any prior misconduct by Mr. Stith, then falls victim to him, should he again transgress. Prior lengthy suspensions have not stopped his propensity for misconduct. We see the real likelihood that this propensity is so ingrained that it will again surface.
In minimizing this danger the majority place reliance on Mr. Stith's promise not to practice by himself or to handle client funds. The VSB and its Disciplinary Board have no authority under existing law to impose a conditional reinstatement. As to whether Mr. Stith would actually follow through with his promise we take note of his testimony descriptive of his prior effort to do just that. He told the Board that after his three-year suspension he re-entered practice in association with another lawyer who was to take charge of office procedures and trust accounting. The association did not last. The other lawyer departed, leaving Mr. Stith responsible for those duties. Thereupon he committed the violations resulting in his disbarment. We have no assurance that the same will not occur in the future despite Mr. Stith's proffer.
The difference in our view of this petition may well hinge on differing perceptions of the role of the disciplinary system and the philosophy of its rules. How does the disciplinary system balance its duty to protect the public weighed against the desires of a disbarred lawyer to return to the practice? Obviously the lawyer has untold amounts of time and considerable money invested in his chosen profession. Disbarment is not the "death sentence" of the profession, else the provisions of Part 6, ß IV, Para. 13. J. of the Rules of the Supreme Court of Virginia would not be on the books. The answer to this rhetorical question lies in the rule itself. The reinstatement provision places a heavy burden of proof on the petitioning attorney to "show by clear and convincing evidence that he or she is a person of honest demeanor and good moral character and possesses the requisite fitness to practice law." Thus, protection of the public is foremost. Those who clearly and convincingly demonstrate rehabilitation are reinstated. Those who are not rehabilitated are not reinstated. Ambiguity in the evidence is fatal to the petition, as the evidence fails to meet the standard of "clear and convincing." Thus, the rule requires the Board to err on the side of caution for the public interest and against the private concerns of the petitioner. Under this system there may indeed be worthy petitioners who are denied reinstatement. Fitness to practice law must be clearly and convincingly shown. Fitness must be comprehensive. A petitioner cannot make his case by saying he is 75% fit and he will isolate himself from the other 25% where he is lacking. Yet this is just the proposition on which Mr. Stith has built his case. The Disciplinary Board has no choice but to adhere to the standard of Para. 13. J. We do not believe the majority has followed this standard.
ROSCOE B. STEPHENSON, III
DONNA A. DeCORLETO