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

Squire, Disciplinary Counsel v.130 Ohio St.3d 368, 2011-Ohio-5578. Decided 11/3/2011.Case Summaries- 319Respondent misappropriated and mishandled client funds, failed to maintain adequate financial records,and engaged in business relationships with clients. In Count One, respondent received money to workon a case, did not deposit it in his IOLTA account, and instead spent it on personal matters.Respondent then was late repaying the money and issued a bad check as repayment. The money waseventually repaid. This conduct violated Prof.Cond.R. 1.15(a) (holding property separate), 1.15(c)(depositing unearned fees into a trust account), 1.16(e) (prompt refund of unearned fees), 8.4(h) (conductadverse to fitness to practice law). The board recommended dismissal of Prof.Cond.R. 1.7(a)(2),1.7(b)(2), 1.8(a), and 8.4(c). In Count Two, respondent and his client engaged in business dealings for15 years. He borrowed money from the client, and did not advise the client to seek outside counsel.During the investigation, respondent stated the terms of the loan incorrectly and failed to initiallyacknowledge the presence of a promissory note. This conduct violated Prof.Cond.R. 1.8(a) (failing toadvise client to seek outside counsel in a business transaction with attorney). The board recommendeddismissal of Prof.Cond.R. 8.4(h). In Count Three, respondent borrowed money and gave that person asecurity interest in his client accounts containing confidential information. Respondent placed all ofthe money in his client trust account. During the investigation, respondent was evasive about how muchmoney he borrowed and the nature of the money he received. Respondent has not repaid the moneyowed. This conduct violated Prof.Cond.R. 1.15(a), 1.15(c), 8.4(c) (dishonest, fraud, deceit, ormisrepresentation), and 8.4(h). The board recommended dismissal of Prof.Cond.R. 1.6(a), 1.7(a), and1.7(b), to which the Court agreed with the qualification that it does so solely based on the board‘srecommendation and inadequate briefing on the issue of whether a lawyer may use his accountsreceivable in a security agreement. Respondent also served as trustee of a client‘s defense fund. Hewrote several checks to cover his own personal expenses, failed to keep adequate records of the fund orthe payments made out of it, and comingled defense funds, other client‘s funds, and his own funds. Thisconduct violated 1.5(b) (communicating the nature and scope of fees), 1.15(a), 1.15(c), 8.4(c), and 8.4(h).Relator objected to the board‘s not finding that respondent converted funds. The Court analyzed therecord and found that respondent did convert insurance proceeds but did not convert defense fundmoney, and thus found an additional violation of Prof.Cond.R. 8.4(c). The Court did find thatrespondent‘s conduct could have violated Prof.Cond.R. 1.8, but that was not charged. In Count Four,respondent work with attorneys from other firms on a probate matter. He failed to apply for acontingent fee as required by local rule and changed his story during the disciplinary process aboutwhether the fee was contingent or flat. Respondent was found to have violated Prof.Cond.R. 8.4(c); theboard dismissed violations of Prof.Cond.R. 1.5(a), 1.5(e), and 8.4(c). The Court noted that the board‘sfinding that the client knew about the use of attorneys from other firms has no bearing on Prof.Cond.R.1.5(e). In Count Five, respondent borrowed money from a company while representing the company‘sCEO. However, since there was insufficient evidence as to how the client and the company are aligned,the board found no violation of Prof.Cond.R. 1.8(a) or 8.4(h). The Court agreed with the abovefindings. In aggravation, respondent acted with dishonest or selfish motive, engaged in a pattern ofmisconduct involving multiple offenses, submitted false statements and evidence during the disciplinaryproceeding, failed to acknowledge the wrongful nature of his conduct or make restitution, and harmedvulnerable clients. BCGD Proc.Reg. 10(B)(1)(b), (c), (d), (f), (g), (h), (i). In mitigation, respondentlacked a prior disciplinary record and presented evidence of good character. BCGD Proc.Reg.10(B)(2)(a), (e). The board did not find that respondent converted funds, and thus recommended a twoyearsuspension with 12 months stayed on conditions that respondent account to his client for any funds,pay restitution, and serve probation during the stayed part of the suspension. Relator objected andrequested an indefinite suspension. The Court noted that the presumptive sanction for misappropriationis disbarment. However, citing Smithern (2010), Harris (2002), Brown (1996), Gerren (2004), Smith(2003), Brown (1996), Claflin (2005), Blair (2011), and Hunter (2005), as well as respondent‘s lack ofevidence of recent good character, the Court sustained relator‘s objection and indefinitely suspendedthe respondent, with the added condition of a full accounting to his client and restitution. Justice