Catch-22 and the Honor of the Legal Profession


May 25, 1991|By HAL RIEDL

A recent Maryland Court of Appeals decision reminds us what atightly self-protected club the profession of law is. Just because we're paranoid doesn't mean the lawyers aren't out to get us.

Marylanders with long memories of justice delayed will remember Lance Bethea. His mother was murdered in October 1986. The 19-month-old boy was the beneficiary of her two insurance policies, totaling $77,417. Using a forged court order representing the boy's maternal grandmother as his legal guardian, attorney Michael Mitchell hijacked both insurance checks. Mitchell eventually pleaded guilty to the crime. He was sentenced to state prison -- he served only a few months, following a separate federal incarceration -- and a term of probation. As a condition of that probation he was ordered to pay restitution to the child.

Barry Bethea, Lance's father, is an auto worker who has a prepaid legal-services plan. Through Mary Elizabeth Peitersen, the lawyer furnished by the plan, he filed a claim on Lance's behalf with the Clients' Security Trust Fund.

This fund was established by state law in 1966 ''to maintain the integrity and protect the good name of the legal profession by reimbursing, to the extent . . . deemed proper and reasonable by the trustees, losses caused by defalcations of members of the Bar of the State of Maryland.'' Every member of the Maryland bar must pay $20 a year into the fund.

Ms. Peitersen filed the claim in February 1988. Although the trustees have never disputed its merits, they have yet to get up off the money. Instead they have required Ms. Peitersen to exhaust other remedies, on the theory that ''the persons who did the wrong should be the first to pay for it,'' in the words of Victor Laws, the Salisbury lawyer who chairs the trustees.

This was their first act of dishonor. No one in Maryland, least of all a cabal of wary lawyers, has any illusions about the prospect of shaking $77,000 out of a Mitchell.

With Michael Mitchell then in prison, Ms. Peitersen went after the two life-insurance companies for having, however unintentionally, paid the death benefits to the wrong person.

Last May Judge Alfred Brennan in Baltimore County granted summary judgment against Monumental Life in the amount of $24,000. Monumental paid Lance promptly. Monumental then tried to recover its payment to Lance from the Clients' Security Trust Fund. When the fund turned him down, Monumental's vice president and general counsel, James O'C. Gentry, asked the Court of Appeals to have the last word.

The court spoke on April 8. Through an opinion written by Judge John F. McAuliffe, the court said that when a lawyer steals, only the client from whom he steals, or a person for whom he was holding money in trust, can recover from the Fund. Since Monumental never had any such relationship to Michael Mitchell, Monumental's claim against the fund had been properly denied. The court failed to note that if the fund had paid Lance Bethea, Mitchell's principal victim, in the first place, there would have been no occasion for the court to deploy its wisdom.

Thus the court ratified the trustees' second act of dishonor, toward Monumental. So what if an insurance company -- filthy beast -- acting in good faith throughout, has to pay the same life-insurance claim twice? Everyone knows insurance companies have deep pockets.

Ms. Peitersen is pursuing summary judgment against Prudential for the balance of the money stolen from Lance Bethea. If she wins, substantial justice will at last arrive for the little boy, now in kindergarten. Prudential will have to eat its second payment on the same claim, plus the lawyers' fees it is running up trying to avoid playing it.

Meanwhile, who escapes all responsibility for the crime against Lance Bethea? Why, none other than the Clients' Security Trust Fund, that zealous defender of the good name of the legal profession.

''[I]f we were the 'pocket of first resort','' Mr. Laws once wrote to Mr. Gentry, ''the Fund would soon be broke, or assessments would be multipled many times over $20 per year.''

Mr. Gentry feels that if the fund had paid Lance Bethea up front, ''assessments would double or triple'' as similar claims were similarly handled. Somehow it doesn't seem exorbitant that justice for a Lance Bethea should cost every Maryland lawyer $60 a year.

Mr. Gentry suggests that now ''the remedy is in the legislature if the public wants to be protected from crooked lawyers.''

It's time to impose such rules on the trustees of the fund as they will not impose on themselves. The Bethea case points to at least one clearly merited reform. The fund ought to be required to pay the victim of any thieving lawyer who is ordered to make restitution as part of a criminal sentence. Once the victim is paid, the restitution payments can then be made by the lawyer to the fund.

As it is, the fund is more of a fig leaf than a remedy for the misdeeds of the legal profession. The Maryland bar is trashing its own good name.

*Hal Riedl writes from Baltimore.

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