disciplinary handbook: volume v - Supreme Court - State of Ohio

Shaw, Disciplinary Counsel v.
126 Ohio St.3d 494, 2010-Ohio-4412. Decided 9/23/2010.
Case Summaries- 303
Respondent named his children as beneficiaries to a client‘s trust, borrowed money from the same client
without advising her of the conflict of interest and failed to repay the loan, and accepted attorney‘s fees in
a guardianship matter involving an elderly woman without the appropriate court approval. In Count I,
respondent‘s elderly client asked him to draft a power of attorney and revocable trust which he prepared
naming himself as attorney-in-fact, co-trustee, and first successor trustee to the trust. Purportedly at the
client‘s behest, respondent named his five children as beneficiaries of the trust, each to receive $5,000.
He admitted he did not inform the client of the inherent conflict of interest and never suggested she get
advice from a disinterested person or have another attorney prepare the documents. The board adopted
the panel‘s findings of violations of DR 1-102(A)(5), 1-102(A)(6), 5-101(A)(1), and 5-101(A)(2). In
Count II, respondent in 2000 borrowed $13,000 from the same client in Count I; he was to repay the
loan in six months at 6% interest. Respondent failed to pay the loan as agreed; he later agreed to repay
the loan in $250 monthly installments, for which he made only three payments. In 2002, the client sued
respondent and got a default judgment for $13,000 plus interest. Respondent admitted to not advising the
client to get outside counsel, not explaining to her the risks of making an unsecured loan, and not
discussing the inherent conflict of interest. The board adopted the panel‘s findings of violations of DR
1-102(A)(5), 1-102(A)(6), 5-101(A)(1), and 5-104(A). The court agreed with these violations. But, the
court noted that there was no evidence in the record to support the board‘s finding that the debt was
discharged in a bankruptcy proceeding. The court rejected the finding that the debt was discharged in
bankruptcy. The court noted the probate court concluded that pursuant to Section 523(a)(4), Title 11,
U.S.Code, the debt was nondischargeable because ―it arose from the debtor‘s defalcation while acting in a
fiduciary capacity.‖ The probate court ordered respondent to pay $12,240 to the trust. Miller v Lagos
(Feb. 8, 2008), Trumbull C.P. No. 2007 CVA 0045. The court of appeals affirmed the probate court‘s
judgment against respondent. Miller v. Lagos, Trumbull App. No. 2008-T-0014, 2008-Ohio-5863. In
Count III, respondent failed to respond to two letters of inquiry, but later responded to relator, appeared
for deposition, and fully cooperated. The panel recommended dismissal of Count III which charged
violations of Prof.Cond.R. 8.4(h) and Gov.Bar R. V(4)(G). The board did not expressly dismiss Count
III, but did adopt the panel‘s findings of fact and conclusions. Because the Court also adopted the
findings of fact it dismissed Count III. In Count IV, two clients sought guardianship of their grandmother
in January 2007. She died in May 2007, just days after the guardianship was obtained. In May 2007,
respondent accepted $800 for ―attorney fees‖ and another $1,200 for ―legal fees: expenses‖ without prior
probate court approval. In October 2007, respondent filed an application for attorney‘s fees in probate
court, seeking $4,668, in addition to the $2,000 the clients had already paid. The court found
respondent ―guilty of concealment of assets‖ for receiving the $800 and $1,200. The court approved only
$800 of the attorney-fee request and ordered respond to reimburse $1,200 to the ward‘s estate. Smith v.
Thornton (Dec. 8, 2008), Trumbull P.C. No. 2008-CVA-38, at 2. Respondent admitted at the
disciplinary hearing that he had not complied with the court‘s order. The board adopted the panel‘s
findings of violations of Prof.Cond.R. 3.4(c), 8.4(d), and 8.4(h). The court agreed. In mitigation,
respondent had no prior discipline in 30 years. BCGD Proc.Reg. 10(B)(2)(a). In aggravation,
respondent: engaged in multiple offenses and a pattern of misconduct, harmed a vulnerable client, and
failed to make restitution. BCGD Proc.Reg. 10(B)(1)(c), (d), (h), and (i). He attempted to minimize the
misconduct by claiming to have a ―close personal relationship.‖ He claimed the client was ―very sharp
mentally‖ and he was not trying to take advantage of her, but he also acknowledged the client was
vulnerable and that he was trying to protect her from others who were trying to take advantage of her.
The panel recommended a two-year suspension with one year stayed on condition of restitution to the
client in Count IV, but expressly refused to recommend restitution to the first client because of the
bankruptcy discharge and refused to recommend he complete his OLAP contract because it was unclear
which issues that contract was intended to address. The board recommended a two-year suspension with
no stay and reinstatement conditioned on restitution to the client in Count IV. Respondent, who now has
obtained counsel, requested a remand to present evidence of character and reputation, community