In the Matter of Kathy Dianne Bailey, an attorney and counselor-at-law. Attorney Registration No. 2262194
Maxfield Kearse, Brooklyn, NY (Sasha N. Holguin of counsel),
RANDALL T. ENG, P.J. REINALDO E. RIVERA MARK C. DILLON RUTH
C. BALKIN HECTOR D. LASALLE, JJ.
respondent was admitted to the District of Columbia Bar on
June 3, 1996.
17, 2016, a hearing was held before the District of Columbia
Court of Appeals Board on Professional Responsibility Hearing
Committee Number Five (hereinafter the Committee) on an
Amended Petition for Negotiated Discipline (hereinafter the
petition). The Committee filed a report dated August 3, 2016
(hereinafter the Committee report), in which it recommended
that the negotiated discipline be approved, and that the
District of Columbia Court of Appeals impose a two-year
suspension with the requirement that the respondent establish
her fitness to practice law before reinstatement.
underlying facts, as revealed in the Committee report,
briefly summarized, are as follows: The respondent is the
founder and managing partner at Bailey Law P.C., which was
established in 1998. The respondent employed experienced
attorneys and a clerical staff at her firm. The respondent
was the managing partner for the firm, and was responsible
for, among other things, the firm's bank and bookkeeping
practices and bank accounts. At all relevant times, the
respondent maintained both an operating account and two trust
accounts, and she was the sole signatory on all accounts.
November 2011 through February 2012, the respondent received
retainers for three separate client matters totaling $83,
000, which were wired into her operating account. In all
three matters, the respondent admitted that she was required
to transfer the retainer funds into her trust account, but
failed to do so. By leaving client funds in the operating
account, the respondent engaged in commingling. While the
respondent was entrusted with client funds, the balance in
the respondent's operating account fell below the amount
she was required to hold in trust for each client.
Additionally, the respondent failed to maintain a check
register and client ledgers that accurately reflected the
transactions in one of her trust accounts, inasmuch as those
records neither reflected payments received from clients, nor
contained sufficient information to identify the nature or
purpose of the funds transferred into or from the account.
Committee considered, as aggravating factors, the
respondent's violation of multiple ethical rules and that
her misconduct involved several clients. As to mitigation,
the Committee noted that the misconduct occurred during a
discrete six-month period, the respondent cooperated with
Disciplinary Counsel, and she has no prior disciplinary
history and took full responsibility, and the Committee
agreed that the aggravating factors supported the imposition
of a fitness requirement.
recommending that the negotiated discipline be approved, the
Committee found that the respondent knowingly and voluntarily
acknowledged the facts and misconduct reflected in the
petition, and agreed to the negotiated sanction; that the
facts set forth in the petition, as amplified by the hearing,
support her admission of misconduct and the negotiated
sanction; and that the sanction is justified.
reflected in the order of the District of Columbia Court of
Appeals filed September 15, 2016, the violations of
professional misconduct stem from the respondent's
"negligent misappropriation of funds belonging to three
clients, failure to supervise staff, and failure to maintain
adequate records of client funds" (In Re
Bailey, 146 A.3d 384, 384 [DC]). Specifically, the
respondent acknowledged the following professional
"that she (1) negligently misappropriated funds
belonging to her firm's clients; (2) failed to hold
client funds and third-party funds separate from the
firm's funds; (3) failed to maintain adequate records of
client funds; (4) failed to make reasonable efforts to ensure
her firm had in effect measures giving reasonable assurance
that all lawyers in the firm conformed to the District of
Columbia Rules of Professional Conduct ("the
Rules"); (5) was responsible for another lawyer's
violation of the Rules; (6) failed to make reasonable efforts
to ensure her firm had in effect measures giving reasonable
assurance that the conduct of all nonlawyers in the firm was
compatible with the professional obligations of a lawyer; and
(7) supervised a nonlawyer but failed to make reasonable
efforts to ensure that the person's conduct was
compatible with the professional obligations of a lawyer,
thereby violating Rules 1.15 (a), 5.1 (a) & (c), and 5.3
(a) & (b) of the Rules, and D.C. Bar Rule XI, § 19
(f)" (id. at 384-385).
thereof, and upon the record, the District of Columbia Court
of Appeals determined that the negotiated discipline was
appropriate, accepted the Committee's recommendation, and
imposed a two-year suspension from the practice of law, with
reinstatement being conditioned upon the respondent
demonstrating her fitness to practice law.
the respondent was duly served with this Court's order to
show cause dated November 28, 2016, she has neither
interposed any response thereto, nor requested additional
time to respond. Accordingly, there is no impediment to the
imposition of reciprocal discipline.
upon the misconduct underlying the order of the District of
Columbia Court of Appeals filed September 15, 2016, we find
that the respondent's conduct warrants her ...