No. 73, September Term, 1998. Misc. Docket (Subtitle AG)Court of Appeals of Maryland.
Filed: October 8, 1999.
Bell, C.J., Eldridge, Rodowsky, Raker, Wilner, Cathell, Karwacki, Robert L. (Retired, Specially Assigned). JJ.
Per Curiam
The Attorney Grievance Commission of Maryland (the “Commission”), the petitioner, by Bar Counsel, acting pursuant to Maryland Rule 16-709, filed a Petition for Disciplinary Action against Frances C. Gambo, the respondent, alleging that she did engage in misconduct. In the Petition, the respondent was charged with violating Rule 8.4 (d) of the Maryland Lawyers’ Rules of Professional Conduct.[1] The Petition was referred, pursuant to Maryland Rule 16-711 (a),[2] to the Hon. Barbara Kerr Howe, of the Circuit Court for Baltimore County, for hearing and to make finding of fact and conclusions of law.
Following a hearing, the hearing court, as required, filed Findings of Fact as follows:
“Based on the testimony given, the affidavits and exhibits received, and the stipulations made, the following are found to be facts:
“1. The Respondent, Frances C. Gambo (Gambo), was admitted to the Bar of Maryland on November 8, 1979. She currently maintains an office for the practice of law in Baltimore County.
“2. Gambo has been a sole practitioner since February 1984.
“3. In February 1984, Gambo requested that the Comptroller of the Treasury of the State of Maryland (Comptroller) open an employer’s withholding tax account in the name of `Frances Gambo, Attorney-at-law.’ Gambo was placed on a quarterly filing and payment schedule for the withholding tax.
“4. On March 1, 1993, Gambo’s withholding tax account entered the Comptroller’s automated system due to Gambo’s failure to file the required tax return and to make payment for the quarter ending December 1992.
“5. On November 15, 1993, the Comptroller filed a Notice of Lien for Judgment for Unpaid tax against Gambo in the Circuit Court for Baltimore County. The Comptroller claimed a lien for delinquent and unpaid tax in the amount of $451.00, plus interest of $35.85 and a penalty of $67.65, for a total of $554.50.
“6. In May of 1994, Gambo’s withholding tax account had been classified by the Comptroller as `hard core’, meaning the account had numerous delinquencies that had not been resolved by Gambo.
“7. On April 28, 1995, the Comptroller filed a second Notice of Lien of judgment for Unpaid Tax against Gambo in the Circuit Court for Baltimore County. The Comptroller claimed a lien for delinquent and unpaid tax in the amount of $770.45, plus interest of $181.33 and a penalty of $123.53, for a total of $1,075.31.
“8. In October of 1995, the Comptroller requested issuance of a Writ of Garnishment on a bank account held by Gambo at NationsBank, N.A. Pursuant to an order issued by the Circuit Court for Baltimore County, NationsBank satisfied the garnishment with a payment of funds held in Gambo’s bank account in the amount $1,172.05. Payment was received by the Comptroller on March 22, 1996 and was applied to Gambo’s delinquent withholding tax account.
“9. On September 10, 1996, the Comptroller filed a third Notice of Lien of Judgment for Unpaid Tax against Gambo in the Circuit Court for Baltimore County. The Comptroller claimed a lien for delinquent and unpaid tax in the amount of $790.86, plus interest of $91.86 and a penalty of $137.57, for a total of $1,020.29.
“10. On October 16, 1996, Gambo’s withholding tax account was assigned to the Comptroller’s Estimated Assessment Unit for failure to file quarterly withholding tax returns for five of the six quarters ending March 1995 through June 1996. After the Comptroller issued a Notice of Intent to Assess for those quarters. Gambo sent a letter disagreeing with the Comptroller’s figures and supplying the actual figures, which were accepted as correct by the Comptroller.
“11. The figures supplied by Gambo were posted on May 22, 1997 but Gambo still did not make payments toward her withholding tax liability.
“12. On June 12, 1997, the Comptroller filed a fourth Notice of Lien of Judgment for Unpaid Tax against Gambo in the Circuit Court for Baltimore County. The comptroller claimed a lien for delinquent and unpaid tax in the amount of $3,327.79, plus interest of $736.04 and a penalty of $518.13, for a total of $4,581.96.
“13. On March 26, 1997, a representative of the Comptroller forwarded a complaint against Gambo to Bar Counsel. Gambo was notified of the complaint by letter dated April 22, 1997.
“14. Gambo responded to Bar Counsel and admitted that she `did not file all of the quarterly returns for Maryland State Withholding Taxes from the fourth quarter of 1992 through the fourth quarter of 1996′ and that she `did not make all payments for amounts due for the same time period,’ although she disputed some of the Comptroller’s figures.
“15. From the last quarter of 1992 through the last quarter of 1996, Gambo frequently filed her quarterly withholding tax returns in an untimely manner or not at all. She also failed to make tax payments due to the State of Maryland for amounts that should have been withheld from her employee’s wages and maintained in trust for the State.
“And as mitigation, the court finds the following as facts:
“1. Gambo knew she had the obligation to pay the Comptroller and she maintained records of the amount owed and at all times intended to pay in full. Therefore, Gambo did not intend to defraud the Comptroller, but had an inability to make current and timely payments.
“2. Gambo experienced great difficulty in 1993-1996 collecting some attorney fees from her clients, which led to cash flow problems in her account.
“3. Gambo’s ability to represent her clients was not impaired by her non-filing and non-payment of these taxes.
“4. Beginning in 1997, Gambo began a voluntary repayment plan by paying $200.00 per month on her arrearage and began timely filing withholding returns and timely paying the amount owed.
“CONCLUSIONS OF LAW
“1. Gambo is in violation of Maryland Code, Tax-General § 10-817 for her failure to file timely income tax withholding returns.
“2. Gambo is in violation of Maryland Code, Tax-General § 10-906 (a) for her failure to withhold her employees’ State income tax and for her failure to pay the appropriate tax to the Comptroller in a timely manner.
“3. Gambo is in violation of Maryland Code, Tax-General Article § 19-906 (b) for her failure to withhold and maintain her employees’ income tax in trust for the State of Maryland.
“4. Gambo is in violation of Maryland Code, Tax-General Article § 10-906 (c) for her failure to maintain a separate ledger account that clearly indicated that the amount of income tax withheld was the property of the State.
“5. Because of the above violations, Gambo engaged in conduct that is prejudicial to the administration of justice and is therefore in Violation of Rule 8.4 (d) of the Maryland Rules of Professional Conduct.”
Neither the petitioner nor the respondent filed exceptions. That leaves for determination the appropriate sanction to be imposed.
The petitioner filed Petitioner’s Recommendation for Sanction. Acknowledging that the hearing court found that the respondent “did not intend to defraud the Comptroller,” and analogizing this case to Attorney Griev. Comm’n v. Post, 350 Md. 85, 710 A.2d 935
(1998), our most recent case addressing the issue of the statutory withholding tax requirements, the petitioner’s recommendation is for an indefinite suspension with the right to apply for reinstatement after thirty (30) days. The respondent did not file a written recommendation; however, at argument, she urged the Court to issue a reprimand rather than a period of suspension.
The petitioner is correct; Post is the precedent we will use to determine the respondent’s sanction. Like Post, see350 Md. at 88-91, 710 A.2d at 936-37, the respondent failed, after 1992, on a consistent basis to file the required withholding tax return or pay the required withholding taxes on a timely basis, when due. Unlike Post, who also failed to comply with voluntary payment plans he made with the Comptroller, filing returns and making payments late or not at all id at 89-90, 710 A.2d at 936-37, beginning in 1997, the respondent entered into a voluntary repayment plan with the Comptroller, with which she has complied, while at the same time timely filing withholding returns and timely paying the taxes due.[3] At the time of the hearing in this Court, the respondent’s delinquency was close to being satisfied.
Under the circumstances, given the difference between the compliance with the payment plan in this case and in Post, we are satisfied that the appropriate sanction is a reprimand.
IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BYTHE CLERK OF THIS COURT. INCLUDING COSTS OF ALL TRANSCRIPTS,PURSUANT TO MARYLAND RULE 16-715, FOR WHICH SUM JUDGMENT ISENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMMISSION AGAINSTFRANCES C. GAMBO.
“It is professional misconduct for a lawyer to:
* * * *
“(d) engage in conduct that is prejudicial to the administration of justice”
“Rule 16-711. Disposition of Charges.
a. Findings. A written statement of the findings of fact and conclusions of law shall be filed in the record of the proceedings and copies sent to all parties.”