The D.C. Court of Appeals handed down eight disciplinary opinions today, including one that clarifies the standard used by the court when an attorney is found to have intentionally misappropriated client funds. While most of today’s opinions were reciprocal matters, in one case a three-judge panel determined for the first time since 1990 that an attorney’s intentional misappropriations of client funds did not require disbarment.
The court’s 21-page opinion in In re Willie N. Hewett determined that Hewett’s conduct met the standard laid out in the court’s 1990 en banc decision in In re Addams for an “extraordinary circumstances” exception to the presumptive discipline of disbarment for intentional misappropriation.
The opinion, written by Judge Vanessa Ruiz and joined by judges Noel Kramer and Anna Blackburne-Rigsby, adopted the Board on Professional Responsibility’s recommended sanction of a six-month suspension that was stayed in favor of probation.
According to the opinion, in March 1992, Hewett, who practiced law in Washington for 15 years without any ethical complaints filed against him, was appointed to serve as conservator for Ralph Jewell, who had been a ward of the court since 1985. Jewell lived in a nursing home and was fed through a feeding tube until his death on April 21, 2003.
The order said that Hewett was the only person who attended Jewell’s funeral. According to the complaint, both the D.C. Office of Bar Counsel and the board found that Hewett “completely fulfilled his duties . . . . and took steps, based on basic human kindness, which went beyond his legal responsibility to his ward.”
The trouble for Hewett arose, the opinion said, when he was informed in 2001 that Jewell would be undergoing a Medicaid eligibility review in the next few months and that his cash assets “could not exceed $2500 or he would be disqualified for Medicaid.”
Jewell’s nursing home care was paid for by Medicaid; his only source of income was $90 per month from the Veterans Administration. After he was appointed conservator, Hewett established a bank account in Jewell’s name, in which the monthly V.A. checks were deposited. In March 2001, there was a total of $7,820.79 in Jewell’s account -- $5,320.79 over the maximum allowed to maintain Medicaid eligibility.
To address the additional funds, Hewett began spending it down. He bought a blue suit and gloves that Jewell had requested and paid a funeral home for “pre-need funeral expenses.” Despite that spending, Jewell was still approximately $750 over the limit at the time the Medicaid report was due.
On May 31, 2001, Hewett filed a fee petition with the D.C. Superior Court’s Probate Court, seeking a fee of $2006.25 for his legal services. That petition was denied when the probate court determined that some of Hewett's actions taken on behalf of Jewel weren’t “legal in nature.” The probate court also determined that the amount that Hewett was seeking was well above the limit set by the court’s probate rules.
According to those rules, Hewett was only entitled to receive 5% of the amount disbursed from the estate; that is, about $23.67 for the 16 hours of “ordinary services” he devoted to Jewell.
Three days after filing the Dec. 9, 2002 accounting form regarding the funds in Jewell’s estate, Hewett deposited the $2006.25 as payment for his services. Judge A. Franklin Burgess Jr. referred Hewett to bar counsel because he had “without court approval, paid himself a fee at a rate inconsistent with the applicable fee.”
During the disciplinary process, Hewett, who was represented by Ronald Douglas, assistant dean for student services at North Carolina Central University School of Law, argued that disbarment was not appropriate because there was no “evidence of fraud, self-dealing, misrepresentation, conflict of interest, or any pattern of inappropriate conduct.”
Assistant bar counsel Ross Dicker argued that there were aggravating circumstances that should prohibit the court from determining that Hewett’s actions met the “extraordinary circumstance” exception set out by Addams—among those was the fact that Hewett paid himself the full $2006.25 he said he was owed as opposed to simply drawing the $750 that would have brought Jewell’s account under the Medicaid limit.
The board, which was represented by its executive attorney, Elizabeth Branda, argued that Hewett’s actions did in fact meet the “extraordinary circumstance” exception.
In today’s opinion, which comes almost two years after the case was argued on Feb. 6, 2009, Ruiz agreed with Hewett and the board, finding that a six-month suspension stayed in favor of probation was a more fitting punishment than outright disbarment. Ruiz also ordered Hewett to reimburse Jewell’s estate in the amount of interest accrued while he was in possession of the misappropriated funds.
“[A]lthough we agree with Bar Counsel that Willie Hewett intentionally misappropriated funds, we conclude that the facts of this case – in particular that the motivation for the misappropriation was protection of the client’s interest – present the type of “extraordinary circumstances” in which disbarment is not the appropriate sanction,” Ruiz wrote.
D.C. Bar Counsel Wallace “Gene” Shipp Jr. said that Hewett’s case presented an “extraordinary” set of facts. “This is the first time in the history of the office that we’ve seen a case in which the attorney misappropriated funds to assist the client. It’s pretty remarkable,” Shipp said.