Two reprimanded for foreclosure problems

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Maryland’s top court has unanimously reprimanded a former managing partner and part-time attorney at a law firm for their involvement in improper signatures on foreclosure documents in about 900 cases.

The Court of Appeals found that John S. Burson, who headed the former firm of Shapiro & Burson LLP, violated Maryland Lawyers’ Rules of Professional Conduct by failing to supervise attorneys and staff properly. In addition, Burson failed to have a policy in place forbidding one lawyer from signing another lawyer’s name on documents and having a notary public at the firm vouch for the improper signatures, the court said.

Matthew John McDowell, a patent lawyer who worked nights and weekends at the firm, violated the MLRPC by reviewing the documents but signing the name of his supervising attorney, William M. Savage, the court said. A notary later notarized the documents as having been signed by Savage, the Court of Appeals added.

The high court issued a reprimand — its lightest professional sanction — against Burson after noting his lack of supervision was negligent rather than intentional and caused no injury to any party.

30-day suspension rejected

The Attorney Grievance Commission had urged the high court to suspend Burson for 30 days, but the judges agreed with Burson, who said a reprimand would be appropriate.

Burson was not personally aware of the practice while it was happening, and took steps to ban it once he learned of it, the opinion said. It also cited Burson’s previously unblemished 28-year legal career, his subsequent adoption of a clear policy, his remorse and voluntary withdrawal from the firm that no longer bears his name.

“To be clear, we caution partners — and lawyers who possess comparable managerial authority — that our decision to reprimand Burson is based on this attorney discipline proceeding’s unique circumstances,” Judge Shirley M. Watts wrote for the high court. “We recommend that partners and lawyers who possess comparable managerial authority at law firms that represent mortgagees in foreclosure actions consider how to avoid Burson’s situation and ensure that their firms have in effect measures that will assure that the conduct of their subordinates is consistent with the professional obligations of the supervising lawyer.”

The high court found that Burson had violated rules 5.1 and 5.3, which regard the supervision of lawyers and nonlawyer assistants, respectively.

‘Relatively blameless’

As for McDowell, the court accepted a joint petition filed by the lawyer and bar counsel calling for a reprimand based on his violation of Rule 8.4(d), conduct prejudicial to the administration of justice.

“Although McDowell signed trustee’s deeds and affidavits on Savage’s behalf, McDowell had a relatively blameless mental state in doing so, as McDowell did so at Savage’s direction and believed that doing so was not improper,” Watts wrote. “Although McDowell’s misconduct is aggravated by a pattern of misconduct and multiple violations of the MLRPC, McDowell’s misconduct is mitigated by the absence of prior attorney discipline, the absence of a dishonest or selfish motive, a cooperative attitude toward the attorney discipline proceeding, and sincere remorse.”

Savage earlier received a “Commission Reprimand” for his involvement — that is, a private action by the AGC without involving the Court of Appeals.

Shapiro & Burson LLP was based in Fairfax, Va., but handled foreclosure work in Maryland. The firm is now Shapiro Brown & Alt LLP, and handles Maryland foreclosures from its Manassas, Va. office.

Burson, McDowell and Bar Counsel Glenn M. Grossman, who brought action on the Attorney Grievance Commission’s behalf, declined to comment Monday on the case and the Court of Appeals’ decision.

The high court, in ordering the reprimands, distinguished Burson and McDowell’s cases from those of attorneys G. Jacob Geesing and Thomas P. Dore, who were suspended for 90 days in 2013 for having authorized others to sign their names on foreclosure documents. Geesing and Dore, unlike Burson and McDowell, were the architects of the improper practice, the court said.

“Although Burson made no efforts to ensure that the Shapiro firm had in effect measures giving reasonable assurance that lawyers did not robo-sign documents and that notaries public did not falsely notarize documents, Burson did not participate in (or even know of) the robo-signing and false notarizations; thus, Burson’s misconduct was negligent rather than knowing or intentional,” Watts wrote for the court.

Revelations about Shapiro & Burson’s foreclosure practice prompted Freddie Mac to recommend in March 2011 that its mortgage supervisors stop referring foreclosure cases to the firm.

Shapiro & Burson was one of several firms engaged in similar practices in Maryland during the foreclosure boom prompted by the 2008 economic crisis. The practice led the Court of Appeals to adopt an emergency rule in fall 2010 to investigate irregularities in the foreclosure process.

The signature irregularities at Shapiro & Burson came to light in March 2011 after a disgruntled former employee circulated an affidavit explaining the firm’s practice. Burson responded by thoroughly investigating the matter and issuing a written policy banning the practice.

The Attorney Grievance Commission filed a petition for disciplinary action against McDowell and Burson in October 2012. The Court of Appeals appointed Montgomery County Circuit Judge Marielsa A. Bernard as the hearing judge.

Burson was managing partner of the firm from 1985 to 2012 and was responsible for overseeing its day-to-day operations. He left the firm and stopped practicing law in 2012.

WHAT THE COURT HELD

Case:

Attorney Grievance Commission v. Burson and McDowell CA, Misc. Docket AG No. 50, Sept. Term 2012. Reported. Opinion by Watts, J. Argued April 29, 2014. Filed June 19, 2014.

Issue:

Is a reprimand appropriate in this case for 1) lack of attorney and nonlawyer supervision in the signing of foreclosure documents and 2) deference to a supervising attorney in signing his name to foreclosure documents?

Holding:

Yes to both; “We recommend that partners and lawyers who possess comparable managerial authority at law firms … assure that the conduct of their subordinates is consistent with the professional obligations of the supervising lawyer.”

Counsel:

James N. Gaither for petitioner; Deborah M. Whelihan for respondent Burson and Stanley J. Reed and Michael J. Neary for respondent McDowell.

RecordFax #14-0619-20 (27 pages)