Opinion
D.D. No. 76-1
Decided June 16, 1976.
Attorneys at law — Misconduct — Acts warranting indefinite suspension — Commingling funds.
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline.
On June 13, 1975, the relator, the Akron Bar Association, commenced this proceeding against the respondent, Stephen E. Hughes, by filing a complaint with the Board of Commissioners on Grievances and Discipline. Relator's complaint alleges that the respondent is guilty of the following misconduct:
"COUNT I"1. Prior to February 8, 1973, respondent obtained from Earl B. Petty and Earl B. Petty, Jr., Administrator of the Estate of Nell[e] Petty, Powers of Attorney.
"COUNT II"2. Respondent thereafter came into possession of monies and funds belonging to the individual, Earl B. Petty and to the Estate of Nell[e] Petty. That he commingled these funds and used said funds for his own purposes.
"COUNT III"3. Respondent has failed to account either to the individual, Earl B. Petty or to the Estate of Nell[e] Petty for such funds so commingled."
On July 17, 1975, respondent filed his answer to the complaint in which he admitted the allegations of count one, and denied the allegations of counts two and three of the complaint.
The matter came on for hearing before the Board of Commissioners on Grievances and Discipline on December 16, 1975. At the request of the respondent, the hearing was conducted in private.
The evidence presented to the board consisted of an agreed stipulation of certain facts, the testimony of two witnesses, Earl B. Petty, Sr., and Stephen E. Hughes, respondent herein, and a number of exhibits submitted by the various counsel, and can be summarized as follows:
Shortly after becoming licensed to practice law in Ohio in May, 1972, respondent undertook the representation of Earl B. Petty, Sr., and the Estate of Nelle Petty, deceased, as the first significant legal matter entrusted to him as an attorney. In the course of handling the various matters that arose from time to time during this representation, respondent came into possession of approximately $53,000 of funds belonging to the Pettys. Respondent deposited these funds in numerous saving and checking accounts in and around Akron, Ohio, some of which accounts were designated as "trust accounts," while others were merely personal accounts of respondent. Funds were disbursed from these accounts to pay expenses of the Estate of Nelle Petty, to advance funds to Earl B. Petty, Jr., and to settle items of expense personal to respondent. Respondent's personal expenses paid in such manner included his mortgage obligations, income taxes, unemployment taxes, and office expenses. Funds belonging to other clients of respondent, as well as his fee in some of such other matters, were deposited in one or more of these various bank accounts controlled by respondent. The result of the bookkeeping method chosen by respondent was to render exceedingly difficult, if not impossible, an accurate accounting of the use of the funds entrusted to his safekeeping by Earl B. Petty, Sr., and the Estate of Nelle Petty.
After the hearing the board found that respondent had commingled the funds of Earl B. Petty, Sr., and the Estate of Nelle Petty, had used said funds for his own purposes, and had failed to make adequate and complete accountings to Earl B. Petty, Sr., and to the Estate of Nelle Petty, and had thereby violated DR 1-102(A) (1), (3) and (4) of the Code of Professional Responsibility, and Gov. R. V(5) (a). The board recommended that respondent be suspended from the practice of law for an indefinite period as provided in Gov. R. V(6) (b).
As his objections to the findings and recommendation of the board, respondent contends that:
"1. The board's finding that respondent commingled funds belonging to Earl B. Petty, Sr., and Estate of Nelle L. Petty is not supported by the evidence.
"2. The board's finding that respondent failed to make adequate and complete accountings to Earl B. Petty, Sr., and the Estate of Nelle L. Petty is not supported by the evidence.
"3. The board's recommendation of indefinite suspension is unduly harsh under the facts of this case."
The matter is now before this court for consideration of the report of the board and the objections of the respondent.
Mr. John M. Ulman, Mr. Charles F. Scanlon and Mr. Ernest W. Teodosio, for relator.
Mr. Fred J. Milligan, Jr., for respondent.
We have carefully examined the record of the testimony taken and the evidence adduced at the hearing before the Board of Commissioners on Grievances and Discipline. Our analysis of such evidence reveals that the record amply supports the findings of the board that respondent has violated the provisions of Canon 1, DR 1-102(A) (1), (3) and (4), and, therefore, is guilty of misconduct as defined in Gov. R. V(5) (a).
In upholding the findings of the board, we recognize that respondent, in his brief before this court, argued that the monies he disbursed for his personal expenses from the funds belonging to the Pettys, and reposed within his control, represented fees earned by him as a result of his representation of the Pettys. In this regard, respondent testified that he had made a verbal agreement with Earl B. Petty, Sr., that he would be paid a fee of $15,000 for his services, which he could collect from time to time by siphoning the funds entrusted to him by the Pettys. This testimony is unrefuted. Respondent, however, testified further that he later agreed to reduce his fee first, to $12,000, and then to $10,000. Apparently, respondent's basic contention is that he did not expend any more of his client's funds than he was entitled to as his fee, and, therefore, he is not guilty of commingling.
Examination of the record, however, indicates that respondent's objection in this regard is unsupported. Assuming, arguendo, the accuracy of respondent's assertion as a matter of law, it is clear that respondent did commingle funds, did expend such funds for his own use, and did further appropriate more money than he was entitled to as his fee.
We, therefore, affirm the findings of the board and overrule respondent's objections thereto.
We come now to the recommendation of the board that respondent be suspended from the practice of law for an indefinite period pursuant to Gov. R. V(6) (b). Respondent maintains that the recommendation of the board is unduly harsh under the circumstances of this case, especially in light of the fact that the matter giving rise to the instant disciplinary proceeding was his first case as a lawyer.
We are unable to find facts in mitigation or justification of respondent's actions. At the time that respondent applied to take the bar examination in this state he certified that he "has read and studied the Code of Professional Responsibility adopted by this court." See Gov. R. I(4) (A) (a). He cannot now be heard to complain that he was unfamiliar with the rules of ethics relating to the handling of money belonging to a client.
Moreover, it has been the consistent practice of this court in recent years to impose a penalty of either indefinite suspension or of disbarment in cases involving commingling of funds. As we stated recently in Columbus Bar Assn. v. Tuttle (1975), 41 Ohio St.2d 183, 185, "[s]uch is, in our opinion, necessary, in order to ensure that the interests of the public are protected and to require that lawyers maintain a degree of personal and professional integrity of the highest standards."
See, e.g., Columbus Bar Assn. v. Tuttle (1975), 41 Ohio St.2d 183; Toledo Bar Assn. v. Ishler (1974), 39 Ohio St.2d 33; Columbus Bar Assn. v. Allison (1969), 20 Ohio St.2d 147; Toledo Bar Assn. v. Illman (1969), 18 Ohio St.2d 122; Toledo Bar Assn. v. Jacobs (1968), 13 Ohio St.2d 147; Cleveland Bar Assn. v. O'Malley (1967), 12 Ohio St.2d 35; Cleveland Bar Assn. v. Hamilton (1966), 6 Ohio St.2d 264.
See, e.g., Ohio State Bar Assn. v. Kahn (1974), 40 Ohio St.2d 15; Toledo Bar Assn. v. Cone (1970), 24 Ohio St.2d 96; Ohio State Bar Assn. v. Rekeweg (1966), 6 Ohio St.2d 128; Ohio State Bar Assn. v. Gray (1965), 1 Ohio St.2d 97.
For the foregoing reasons, the recommendation of the board is adopted, and the respondent is suspended from the practice of law for an indefinite period.
Judgment accordingly.
O'NEILL, C.J., HERBERT, CORRIGAN, STERN, CELEBREZZE, W. BROWN and P. BROWN, JJ., concur.