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

Cook, Cuyahoga Cty. Bar Assn. v.
121 Ohio St.3d 9, 2009-Ohio-259. Decided 1/29/2009.
Case Summaries- 54
Respondent charged a client an excessive fee through a nonrefundable retainer and a contingent fee,
failed to deposit those fees into a client trust account, and failed to maintain complete records of the
client‘s funds and to render appropriate accounts. Relator charged respondent with three counts of
professional misconduct involving a single client, but the panel of the board found violations in only one
count. In Count III, Pauletta Buchanan retained respondent in August 2004 when she was facing a
foreclosure action. In their fee agreement, respondent promised to represent Buchanan on various
legal matters involving her mortgage lender and others. The terms of the agreements were that
Buchanan would pay respondent a ―flat rate retainer‖ of $4,500 and that respondent would receive 20
percent of any recovery from a counterclaim alleging predatory lending. The parties stipulated that
Buchanan paid respondent $2,800 toward the flat fee, but documents at the hearing were inconsistent
with each other and contradicted the stipulation. The parties stipulated that respondent did not deposit the
funds into a client trust account. Respondent suggested he was entitled to his standard fee of $4,500 in
foreclosure cases, because the funds were earned upon receipt. He estimated having devoted 12 to 15
hours, but conceded he had not kept careful track of his time. Citing Okocha (1998), the supreme
court stated it ―generally disapproved of nonrefundable, earned-upon-receipt legal fees, absent a true
‗general‘ retainer agreement, one that secures the services of a particular attorney for any contingency and
requires the attorney to forgo employment by a competitor of the client.‖ Citing Halliburton-Cohen
(2006), Watterson (2004), and Schram (2003), the court noted it had cautioned against charging
nonrefundable retainers because DR 2-110(A)(3) and successor Rule 1.16(e) ―require in all but narrow
circumstances that upon withdrawal from representation, a lawyer must return fees that the client has paid
in advance and that the lawyer has not earned.‖ The supreme court adopted the board findings of
violations of DR 2-106(A) by charging a flat earned-upon-receipt plus a 20 percent contingent fee, DR 9-
102(A) by failing to deposit unearned fees in a client trust account, and DR 9-102(B)(3) by failing to
maintain records and account for client funds in his possession. In aggravation, respondent has a prior
disciplinary record. BCGD Proc.Reg. 10(B)(1)(a). He was convicted of a felony for assisting his client
in transactions funded by the client‘s illicit drug sales, where respondent acted with ―reckless disregard‖
for the truth as to the source of the funds. In February 1999 he received an interim felony suspension and
in Disciplinary Counsel v. Cook, (2000), 89 Ohio St.3d 80 he received a six-month suspension with credit
for the year his license was under suspension. In mitigation, respondent cooperated in the disciplinary
process. BCGD Proc.Reg. 10(B)(2)(d). The board recommended a six-month suspension, stayed on the
condition that within the six- month period, respondent pay $1,000 in restitution, complete six hours
of continuing legal education in law office management, and commit no further misconduct. The
Supreme Court agreed with the recommended sanction and so ordered, with the $1,000 restitution to
include interest at the judgment rate.
Rules Violated: DR 2-106(A), 9-102(A), 9-102(B)(3)
Aggravation: (a)
Mitigation: (d)
Prior Discipline: YES Procedure/ Process Issues: NO Criminal Conduct: NO
Public Official: NO Sanction: Six-month suspension, stayed