ATTORNEY GRIEVANCE COM'N OF MARYLAND v. Atkinson

BELL, Chief Judge,

dissenting:

I dissent. In overruling the respondent’s exceptions to the hearing court’s finding that she violated Maryland Rule of Professional Conduct 8.4(b) and (c), the majority has taken an act of omission' — the failure to file personal income taxes — and *660held, without any evidence that the act of omission has impacted the respondent’s practice of law, that it also reflects adversely on her fitness to practice law and was conduct involving dishonesty. Notwithstanding the majority’s protestations characterizing its action as distinguished from the present case, to reach the result it does requires overruling part of the recent case of Attorney Griev. Comm’n v. Post, 350 Md. 85, 710 A.2d 935 (1998),which addressed Rule 8.4(b) and found it to be inapplicable. Moreover, the majority must rely on Attorney Griev. Comm’n v. Walman, 280 Md. 453, 374 A.2d 354 (1977) and give it a significance it does not have.1 Finally, the result the majority mandates in this case creates the anomalous situation in which a failure to file that has, and, indeed, could have no adverse impact on anyone except the taxpayer is treated more harshly than one, often occurring without considering its impact on innocent third parties, that affects, and potentially could adversely impact, such persons.

In maintaining that the hearing court incorrectly found that she violated Rule 8.4(b) merely because she failed to file income tax returns, the respondent relies primarily on our decision in Post. In that case, Post had failed timely to file withholding income tax returns, to remit the taxes withheld, and to hold the withheld taxes in trust, as required by § 10-*661906, Maryland Code (1957, 1999 Replacement Volume) of the Tax General Article,2 resulting in his being charged with a violation of Rule 8.4(b). The hearing court, having noted that it did not believe, and Bar Counsel did not contend, that Post intended to defraud the Comptroller or the federal authorities, and being unconvinced that the conduct adversely reflected on his honesty or trustworthiness, nevertheless concluded that the conduct reflected on his fitness as an attorney, reasoning:

“[o]ne of the most fundamental of a lawyer’s functions is to give sound legal counsel to his or her clients, meaning that he or she must, when called upon to do so, advise the clients of their various lawful rights and duties, and concomitantly is bound to urge them to comply with those legal duties. An attorney, almost without regard to his reasons therefor, who does not ‘practice’ what he or she is required to ‘preach’ surely diminishes the stature and fitness of his role as a provider of legal counsel. Therefore, notwithstanding a degree of sympathy which Respondent’s quandary may create, it cannot be doubted that his conduct reflected adversely on his fitness as a lawyer and, consequently, that he is in violation of Rule 8.4(b)”.

Id. at 94, 710 A.2d at 939. This Court sustained Post’s exception. We explained:

“We do not believe that, under the circumstances of this case, that the respondent’s conduct ‘reflects adversely on his fitness as a lawyer.’ The only basis for the court’s conclusion that it does reflect adversely on his fitness as a lawyer *662is that failure to practice what one preaches undermines one’s credibility as a provider of legal counsel. But that is simply another way of saying that the administration of justice may be prejudiced. The court was specific in rejecting any suggestion that, by his actions, the respondent’s honesty or trustworthiness was compromised, the conclusion that one could most logically be expected to draw. Moreover, the court also diagnosed the problem as one involving the respondent’s office management skills rather than ‘his performance or abilities as an attorney.’ ”

Id. at 99, 710 A.2d at 942 (footnote omitted). We had earlier addressed what was required to be shown to prove a violation of Rule 8.4(b):

“Rule 8.4(b) recognizes, by its reference to character traits, rather than enumerating specific crimes, that commission of some crimes evidenced] or demonstrate^] a character flaw that, were the person committing them applying for admission to the bar, would constitute a significant impediment, if not outright prohibition, to his or her admission or, having been admitted, could result in his or her disbarment. The rule identifies two such traits. In addition to those traits, however, it includes as a catchall object, ‘fitness as a lawyer in other respects.’ Since the Rule is specific in the requirement that the criminal act reflect adversely on the character traits or fitness as a lawyer, it follows that what the Rule contemplates is that the criminal act evidence another character trait, which, like honesty and trustworthiness, is relevant or critical to the practice of law.”

Id. at 97, 710 A.2d at 941.

Conceding, in this case, that the hearing court did not make a finding that the respondent intended to defraud the “government,” to the majority, as to the hearing court, it is enough that the respondent “willfully, knowingly, and purposefully failed to file income tax returns from 1986 to 1996,” the willful failure to file being a crime that adversely reflects on a lawyer’s fitness to practice law. The majority relies on Attorney Griev. Comm’n v. Walman, 280 Md. 453, 374 A.2d 354 *663(1977), which to be sure, does stand for the proposition for which the hearing court cited it, i.e. “Willful failure to file income tax returns adversely reflects on the lawyer’s fitness to practice law,” see id. at 463, 374 A.2d at 360 (“the crime of which respondent stands convicted represents conduct prejudicial to the administration of justice and, under the particular circumstances of this case, reflects upon his fitness to practice law is beyond debate”). It must be remembered, however, that Walman was prosecuted for, and convicted, of a crime, 26 U.S.C. § 7203, which, although not requiring proof of intent to defraud and to evade payment of taxes, required proof beyond a reasonable doubt of a voluntary, intentional violation of a known legal duty and that the failure to file was not through accident or mistake or other innocent cause. Id. at 461, 374 A.2d at 359. While the hearing court may have concluded by clear and convincing evidence that the respondent failed to file, it is to me significant that the respondent has neither been prosecuted nor convicted of any such crime. In that regard, I think it quite telling that, although referring quite specifically to “the particular circumstances of this case,” Walman identified only the conviction, and no other circumstance, to explain the Court’s conclusion that failing to file adversely reflected on Walman’s fitness to practice law.3

Noting a distinction between Post and Walman — “while frequently failing to pay the withholding taxes due, Post nonetheless had not steered himself completely clear of the taxing authorities. Post continued to withhold taxes from employee wages, kept the necessary records, filed withholding taxes intermittently, and at times submitted withheld taxes”— *664the majority asserts that there is no such distinction between the respondent and Walman, stating, that the respondent “purposefully avoided almost all contact with both the state and federal income taxing authorities.” To the majority, it is also significant that this Court in Post commented that the hearing court in that case did not conclude “that, by his action, the respondent’s honesty or trustworthiness was compromised, the conclusion that one could most logically be expected to draw,” while, in this case, both the hearing court and the Inquiry Panel did.

I have already responded to the first point, that the respondent, unlike Walman, has neither been prosecuted nor convicted of any crime, not even the wilful failure to file and, thus, in that respect this case is in fact distinguishable from Walman. As to the second point, the majority fails to appreciate the context in which the statement was made. The failure to file withholding tax returns or pay employee withholding taxes is “directly related to the operation of [a] law practice,” Matter of Discipline of Johnson, 414 N.W.2d 199, 202 (Minn.1987), but more than that, may be directly relevant to a .lawyer’s honesty and trustworthiness. Because withholding taxes are paid on behalf of the lawyer’s employees and is an obligation placed on the employer, how the lawyer handles that responsibility is an important consideration in assessing his fitness; it “may well reflect upon the seriousness with which [a lawyer] regards his professional obligation in handling other people’s money.” Id. In the context of withholding tax returns and taxes, one could much more likely conclude from the circumstances surrounding their payment and the filing of the returns that the lawyer’s honesty and trustworthiness had been compromised, than from the failure of the lawyer to file or pay his or her personal returns.

I remain satisfied that Post enunciates the proper standard. Applying the Post rationale — the conduct must involve a character trait which, like honesty and trustworthiness, is relevant to the practice of law — produces a clear result. While it is true that the respondent failed to file the income tax returns, there are no circumstances other than that failure from which *665it can be determined that the respondent’s conduct adversely reflected upon her fitness as a lawyer; the only basis upon which it could be inferred that the respondent’s fitness as a lawyer is compromised is her failure to file the returns and pay the taxes due. In the absence of evidence of something more than a failure to file and in the face of evidence attesting to the respondent’s fitness to practice law, there simply is no basis for the hearing court’s conclusion that the respondent violated Rule 8.4(b).

The hearing court, relying on the fact that the respondent, having already failed to file, obtained information as to how to correct the situation, but then failed to act on that information, also concluded that the respondent’s failure to file income tax returns likewise violated Rule 8.4(c). As the court put it, “[h]er failure to contact an IRS agent to remedy the situation was, at best, dishonest.” The majority overrules the respondent’s exception, asserting that “the substantial duration in time over which she failed to pay both state and federal income taxes” suffices as justification for the hearing court’s conclusion.

Neither Attorney Griev. Comm’n v. Casalino, 335 Md. 446, 644 A.2d 43 (1994) nor Attorney Griev. Comm’n v. Clinton, 308 Md. 701, 521 A.2d 1202 (1987), which the hearing court cited as authority, supports that conclusion. As the respondent points out, neither Casalino nor Clinton held that the failure to file tax returns is conduct involving dishonesty, fraud, deceit or misrepresentation. Indeed, in both cases, the respondent had been convicted of tax evasion. It is well settled that, while tax evasion is a crime involving dishonesty, fraud, deceit or misrepresentation, it is distinguishable, and has been distinguished, from willful failure to file. See Walman, 280 Md. at 462, 374 A.2d at 360. The respondent argues that “Judge Shepherd’s statement that ‘[the respondent’s] failure to contact an IRS agent to remedy the situation was, at best, dishonest’ is a conclusion not supported by the facts or the statutory scheme, which makes failure to file a crime. Dishonesty is not an element of the failure to file at the state *666or the federal level.” I agree and, thus, I would sustain the respondent’s exception.

As the appropriate sanction to be imposed, the majority settles upon an indefinite suspension with the right to apply for readmission after one year. Believing that sanction to be unduly harsh, even punitive, under the circumstances, I dissent from the sanction as well.

It is well settled that: “ ‘conduct prejudicial to the administration of justice,’ delegates or confirms to the courts the power and duty to consider particular conduct of one who is an officer of the court, in relation to the privileges and duties of a public calling that specially invites complete trust and confidence.” Rheb v. Bar Ass’n of Baltimore, 186 Md. 200, 205, 46 A.2d 289, 291 (1946). Moreover, the purpose of attorney discipline is the protection of the public and not punishment of the attorney. See Attorney Griev. Comm’n v. Gittens, 346 Md. 316, 697 A.2d 83 (1997); Attorney Griev. Comm’n v. Kahn, 290 Md. 654, 431 A.2d 1336 (1981); Attorney Griev. Comm’n v. Bailey, 286 Md. 630, 408 A.2d 1330 (1979). And the “severity of sanctions depends upon the facts and circumstances of the particular case.” Attorney Griev. Comm’n v. Kandel, 317 Md. 274, 281, 563. A.2d 387, 390 (1989). The attorney’s prior grievance history, as well as facts in mitigation, constitute part of those facts and circumstances. Attorney Griev. Comm’n v. Franz, 355 Md. 752, 762-63, 736 A.2d 339, 344 (1999); Maryland State Bar Ass’n v. Phoebus, 276 Md. 353, 362, 347 A.2d 556, 561 (1975). “One of the most relevant considerations in determining a sanction for failure to file income tax returns is the intention and motive of the respondent.” Attorney Griev. Comm’n v. Breschi, 340 Md. 590, 601, 667 A.2d 659, 665 (1995).

The length of time during which the respondent failed to file tax returns and pay the taxes due is very troublesome. So, too, is the fact that, during the entirety of that time, the respondent was aware of the obligation, but simply let things continue to snowball. Although indicating that the respondent did not have any extraordinary financial hardships during the *667period in question, the hearing court acknowledged that perhaps one of the reasons the respondent allowed the situation to fester was her knowledge that she could not pay the taxes due. That fact negates a fraudulent intent, although it does not diminish the seriousness of the conduct. Walman, 280 Md. at 462, 374 A.2d at 360. See Attorney Grievance Commission v. Barnes, 286 Md. 474, 480, 408 A.2d 719, 723 (1979)(“Unlike Walman, Barnes did not attribute his failure to file to an inability to pay his taxes, although notwithstanding his substantial income in 1969 and 1970, he did say, without elaboration, that he was under a financial strain during those years.”). Also, as in Walman, no evidence has been presented to show that the respondent’s failure to file the returns was accompanied by a fraudulent or dishonest intent or an intent to avoid the ultimate payment of taxes. Indeed, as the respondent points out, “[her] behavior in response to the investigation reveals that she had no intention to conceal, or misrepresent her obligation to file or pay taxes.” Moreover, the respondent was, for the entire period, the primary, and at times, the sole, breadwinner for the family, even when pregnant with her two children.

Although the obligation has not been discharged, the respondent has cooperated with the IRS to settle the amount due and to reach a payment plan to discharge the obligation. That has now been accomplished and the respondent professes to be prepared to meet her responsibility under that agreement. It is also significant that neither the IRS nor the Maryland Comptroller has prosecuted her for the failure to file. Finally, the respondent has not previously been disciplined and has had no prior disciplinary complaints lodged against her.

Under the circumstances, I believe the appropriate sanction to be an indefinite suspension with the right to apply for readmission after 60 days.

Judges ELDRIDGE and CATHELL join in the views herein expressed.

. The majority cites Attorney Griev. Comm’n v. Baldwin, 308 Md. 397, 407-08, 519 A.2d 1291, 1296-97 (1987) for the propositions, "existence of tax cases involving failure to file ... reveal type of disorganized behavior with regard to continuing responsibilities that would alarm any client whose affairs demanded systematic attention” and " ‘By willfully failing to file his tax returns, a lawyer appears to the public to be placing himself above [the] law.' ” (quoting Attorney Griev. Comm’n v. Walman, 280 Md. 453, 464-65, 374 A.2d 354, 361 (1977)). 357 Md. 646, 657, 745 A.2d 1086, 1092 (2000). Neither is apposite or assists the majority’s analysis. Both address perception. An unfavorable perception prejudices the administration of justice. It does not, however, prove that the conduct giving rise to the perception involves dishonesty or adversely affects the fitness of the person engaging in it to practice law. That inquiry is a more narrowly focused one and requires facts addressing those specific circumstances. No such focus or facts were presented, or even attempted, in this case. All that the petitioner showed in this case, or attempted to show, for that matter, is that the respondent did not file her personal income tax returns.

. As relevant, § 10-906 provides:

"(a) Except as provided in § 10-907 of this subtitle, each employer or payor shall:
“(1) withhold the income tax required to be withheld under § 10-908 of this subtitle; and
"(2) pay to the Comptroller the income tax withheld for a period with the withholding return that covers the period.
"(b) Any income tax withheld is deemed to be held in trust for the State by the employer or payor who withholds the tax.
"(c) An employer or payor who withholds income tax shall keep a separate ledger account for withholdings that indicates clearly:
"(1) the amount of income tax withheld; and
"(2) that the income tax withheld is the property of the State.”

. As the majority points out, Walman was charged with three counts of failure to file and pled guilty to one of those counts. Attorney Griev. Comm’n v. Walman, 280 Md. 453, 454, 374 A.2d 354, 355-56 (1977). As a result of the guilty plea, he was sentenced to imprisonment for 1 month and placed on 23 months probation. Id. Shortly thereafter, he was disbarred by the United States District Court for the District of Maryland. Certainly, the sentence he received adversely impacted, at least for the period of the sentence, Walman's fitness to practice law. See, In the Matter of the Application of Dortch, 344 Md. 376, 687 A.2d 245 (1997). So too could his disbarment.