Opinion
No. 90-828
Submitted October 3, 1990 —
Decided February 20, 1991
Attorneys at law — Misconduct — Indefinite suspension — Conduct involving dishonesty, fraud, deceit, or misrepresentation — Charging an excessive fee — Commingling money subject to dispute — Failing to promptly pay or deliver funds to clients — Conduct prejudicial to the administration of justice — Conduct adversely reflecting on one's fitness to practice law — Knowingly making false statements of law or fact — Creation or preservation of false evidence — Aggregate settlement of claims without clients' consent — Prejudice or damage to client.
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline of the Supreme Court, No. 89-33.
In January 1982, John A. Black, Jr., and Marie M. Miley retained respondent, Lawrence M. Kaigler, on a contingent fee basis, to represent them in a personal injury action arising from a common car accident. The case proceeded to trial, and in November 1983 respondent won a judgment in the amount of $30,000 for plaintiff Black and $87,200 for plaintiff Miley. In early 1984, the defendant's insurer mailed checks to respondent in the amount of $31,191.76 for Black and $53,464.05 for Miley, to stop the running of interest while the trial court's award of prejudgment interest was appealed. The low amount of Miley's check was due to the insurer's maximum liability of $50,000 per person injured. Respondent was aware of the $50,000 ceiling before taking the case to trial. Respondent returned the checks to the insurer.
Defendant appealed the prejudgment interest awarded to plaintiffs based on R.C. 1343.03(C), which allows interest to run from the date the cause of action accrued if the prevailing party did and the losing party did not make a good faith effort to settle the case. On February 9, 1984, before the appeal was decided, plaintiff Miley wrote to respondent for a clarification of her contingent fee contract with respondent. Miley specifically asked respondent to inform her if there would be an additional charge for the appeal. By letter dated February 15, 1984, respondent assured Miley that no additional charge would be made. On November 13, 1984, the court of appeals reversed the trial court's award of prejudgment interest, stating that respondent's insistence on a joint settlement for his clients had obstructed good faith settlement negotiation. The court cited DR 5-105(B) and DR 5-106(A).
Subsequently, on December 27, 1984, the insurer reissued the checks in satisfaction of the judgments. Respondent notified Black and Miley of the reissued checks and called them to his office to discuss his fees and expenses. Respondent charged both clients a $750 fee for the appeal, charged Miley $14,260 for attorneys' fees relating to the uncollected portion of her award, and additionally made other charges to which Miley and Black objected.
Black and Miley contacted another attorney to assist them in retrieving the contested amounts and ultimately sought help from the Cleveland Bar Association, where Miley and Black submitted their fee dispute with respondent to arbitration. Respondent refused to be bound by the arbitration results.
Subsequently, Miley and Black brought suit against respondent for amounts due. Respondent entered into settlement agreements on July 21, 1987, with Black for $1,521.37, and with Miley for $16,898, plus interest on both amounts, to be paid on or before January 21, 1988. By January 29, 1988, respondent had fulfilled his agreement with Black, but still owed $16,740 to Miley.
Miley ultimately filed a complaint for fraudulent conveyance against respondent, alleging that respondent had transferred his ownership of certain property to his mother five days prior to the July 21, 1987 settlement agreement, for the purpose of avoiding his debt to Miley. The trial court granted Miley's motion for summary judgment, and respondent appealed. During the process of appeal, respondent finally paid Miley the sums owed her and the parties consented to vacate the summary judgment order.
On June 20, 1989, relator, Cleveland Bar Association, filed a complaint against respondent, charging respondent with eighteen violations of the Code of Professional Responsibility and the Supreme Court Rules for the Government of the Bar in five counts. Respondent asked for and received an extension of time to respond. Respondent subsequently filed a motion to dismiss the complaint, which was denied. Respondent did not respond to most of the allegations in the complaint, and these allegations were deemed to be denied.
A hearing was scheduled before a panel of the Board of Commissioners on Grievances and Discipline of the Supreme Court on October 23, 1989. Respondent repeatedly invoked his Fifth Amendment right against self-incrimination and refused to answer most questions asked him. The hearing panel found respondent in contempt.
Count I of the complaint charged respondent with violating DR 1-102 (A)(4) (conduct involving dishonesty, fraud, deceit, or misrepresentation); 2-106(A) (charging or collecting a clearly excessive fee); 9-102(A) (commingling money subject to dispute); and 9-102(B)(4) (failing to promptly pay or deliver funds to clients). These charges arose from respondent's conduct regarding Miley's and Black's concerns about respondent's fees and expenses, respondent's handling of the insurance checks, and the actual amount of deductions for fees and expenses respondent made.
Count II charged respondent with violating DR 1-102(A)(4); DR 1-102(A)(5) (conduct prejudicial to the administration of justice); 1-102(A)(6) (conduct adversely reflecting on one's fitness to practice law); 7-102(A)(5) (knowingly making false statements of law or fact); and 7-102(A)(6) (creation or preservation of false evidence), regarding respondent's transfer of the property to his mother to prevent Miley from collecting her settlement.
Count III charged respondent with violating DR 5-105(B) (continuing multiple employment despite possibly adversely affecting another client); 5-106(A) (aggregate settlement of claims without clients' consent); and 7-101(A)(3) (prejudice or damage to client), regarding respondent's insistence on negotiating a joint settlement.
Count IV charged respondent with violating DR 1-102(A)(4); 1-102(A)(5); 1-102(A)(6); 7-102(A)(5); and 7-102(A)(6), regarding misrepresentations made to Miley, Black, the Court of Common Pleas of Cuyahoga County, and others regarding the circumstances of respondent's expenses and finances.
Count V charged respondent with violating Gov. Bar R. VI for failing to register as an attorney for the 1987-1989 period.
The panel found that respondent was overwhelmingly guilty of all charges against him except failure to register and recommended a two-year suspension from the practice of law. The board, noting that respondent exhibited a lack of respect for the disciplinary process and a disregard of the well-being of his clients and the serious nature of his misconduct, recommended that respondent be indefinitely suspended from the practice of law and that the costs of these proceedings be taxed to respondent. The panel and board declined to make recommendations to the court on relator's contention that respondent's invoking of the Fifth Amendment privilege against self-incrimination required them to draw adverse inferences against respondent. Instead, they held that other evidence was sufficient to prove violations and refused to draw the adverse inferences.
Robert C. Weber, Robert J. Fogarty and Michael E. Murman, for relator.
Lawrence M. Kaigler, pro se.
After reviewing the extensive amount of evidence from the disciplinary and related court proceedings, we agree with the findings and recommendations of the board. Respondent is hereby indefinitely suspended from the practice of law. Costs taxed to respondent.
Judgment accordingly.
MOYER, C.J., SWEENEY, HOLMES, DOUGLAS, WRIGHT, H. BROWN and RESNICK, JJ., concur.