Opinion
D.D. No. 80-10
Decided December 23, 1980.
Attorneys at law — Misconduct — Public reprimand — Acts warranting.
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline.
This cause came on for hearing before the duly appointed hearing panel of the Board of Commissioners on Grievances and Discipline, pursuant to a complaint by the relator, Dayton Bar Association, charging respondent, Gerald E. Gunnoe, with misconduct.
It is undisputed that Nancy C. Nill was the owner of Don's Market, located in a leased building in Harveysburg, Ohio. Nill had retained respondent on a prior legal matter not relevant herein. During the course of meetings with respondent, Nill indicated her desire to sell the business. Respondent indicated that he knew of prospective purchasers. The prospective purchasers were advised by respondent of the availability of the business. The prospective buyers did show some interest, but no agreement was consummated.
Thereafter, respondent advised his acquaintances, Mr. and Mrs. Hetzel, of Nill's desire to sell the business. After viewing the condition of the business, the Hetzels advised Nill that they were interested in purchasing the business for the sum of $35,000, but that they could not put any money down toward the purchase price. Nill told respondent of her concern that the Hetzels could not produce a down payment, and, therefore, she did not consider the Hetzels as prospective purchasers. At this point, respondent assured Nill that he had confidence in the Hetzels' ability to maintain the going concern and that, in order to further assure Nill, respondent stated that he was going to be a principal in the business, which was to be operated by the Hetzels.
Respondent prepared all the papers concerning the sale of the business and then notified Nill to be in his office for an appointment in order to close the deal.
Upon reviewing the paperwork, Nill discovered that the purchasers were not the Hetzels or respondent in their individual capacities, but rather the purchaser was to be Gunzell Investments, Inc., a corporation consisting of Mr. and Mrs. Hetzel and Mr. and Mrs. Gunnoe, with the majority of the stock of the corporation issued in the name of the respondent.
The lack of personal liability on the note by the purchasers and the fact that no down payment was given caused great concern to Nill. Respondent once again verbally assured Nill, and, to further assure her, he stated that he would provide his personal note and mortgage as an additional security for payment.
At numerous times during the negotiations, Nill stated that she was relying on respondent, as her attorney, to represent her interests in this transaction. At no time during the negotiations nor at the closing did respondent advise Nill that his interests might be adverse to hers. The respondent never advised Nill to contact another attorney to review the documents that had been prepared by the respondent.
Respondent failed to execute any type of instrument making himself personally liable, thereby securing Nill's interests.
The transaction was consummated and the Hetzels operated the business — a viable, going concern. Thereafter, the business failed. The Hetzels eventually filed personal bankruptcy, and the respondent refused to accept or acknowledge any personal liability concerning the business that failed.
Nill contacted another attorney in order to obtain some security from respondent. Thereafter, Nill's attorney and respondent's attorney began negotiations, which resulted in respondent's accepting personal liability for the amount owed to Nill in the sum of $38,362.50.
By reason of the foregoing, the board concluded that respondent had violated DR 5-101(A), by failing to disclose his connections with Gunzell Investments, Inc., before accepting employment from Nill concerning the sale of the business; DR 5-104(A), by failing to disclose to Nill that his interests were adverse to hers and, thereby, by failing to obtain her consent to represent her in spite of such conflicting interests; and DR 5-104(B), by having multiple employment interests, which affected his independent professional judgment in representing Nill.
Upon a review of the evidence, stipulations and admissions, the board concluded that respondent's activities breached the Code of Professional Responsibility as charged and recommended that respondent receive a public reprimand for his misconduct.
Mr. Richard H. Hammond, for relator.
Messrs. Young, Pryor, Lynn Jerardi and Mr. James T. Lynn, Jr., for respondent.
After a careful examination and review of the record in this cause, this court concurs with the findings of fact and recommendation of the board of commissioners.
Therefore, respondent, Gerald E. Gunnoe, is publicly reprimanded for his misconduct. It is so ordered.
Judgment accordingly.
CELEBREZZE, C.J., W. BROWN, P. BROWN, SWEENEY, LOCHER, HOLMES and DOWD, JJ., concur.