Opinion
D.D. No. 74-13
Decided March 12, 1975.
Attorneys at law — Misconduct — Suspension from practice for indefinite period — Acts warranting — Commingling of funds.
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline.
The relator, The Columbus Bar Association, instituted this proceeding before the Board of Commissioners on Grievances and Discipline. The complaint alleged that respondent commingled client's funds held by him in a fiduciary capacity, using those funds for his own purposes, thereby violating DR 1-102(A) (1), (3) and (4) and DR 9-102(A) of the Code of Professional Responsibility.
A hearing on these allegations was held on August 22, 1974, before a panel of the board. After the hearing, the board found respondent guilty of violating DR 1-102(A) (1), (3) and (4) and DR 9-102(A) of the Code of Professional Responsibility, constituting misconduct, and recommended that he be given a public reprimand, pursuant to Gov. R. V(6) (c).
The case was presented upon an agreed stipulation of the relevant facts pertinent to the charges made, and there is no disagreement that the following occurred.
In November 1970, respondent withdrew $5,000 from a savings account in the name of Edwin M. Tuttle, Executor of the Estate of Anna M. Koch, which he used to reimburse himself for prior loans made by him to Par Chemical Company. At that time, a note, payable on demand, bearing 7% interest, and personally guaranteed by Tuttle, was issued by Par Chemical to "Edwin M. Tuttle exctr. of the estate of Anna Koch."
In July 1971, respondent withdrew $2,000 from the same account and arranged an identical transaction with Par Chemical.
"* * * On or about November 5, 1970, there was at least $2,892.24 less in funds held by respondent in trust accounts than was required to be held by him in trust relative to the sale of Marion's Grill to his client, 919 Sullivant Inc."
"* * * On or about October 18, 1971 there was $1,948.67 less in funds held by respondent in trust accounts than was required to be held by him in trust for the account of his client, Dix, Inc., or Jerri Dixon."
The panel concluded that the facts as stipulated show that respondent was "guilty of the commingling of funds and the resultant use of his client's funds for his own purposes and that the same does constitute a violation of DR 1-102(A) (1), (3) and (4) and DR 9-102(A) of the Code of Professional Responsibility and a violation of Edwin M. Tuttle's oath of office as an attorney."
However, the panel concluded that the stipulations also contained mitigating circumstances, and therefore recommended that a public reprimand be imposed.
In extenuation, respondent is 67 years of age, claims ill health, and has retired from the practice of law. Respondent acted in good faith in making the loans from the Koch estate, believing that the will gave him the power to loan estate funds, although it did not. The trust shortages were the result of improper bookkeeping practices, and no party suffered any loss in any of the transactions.
Finally, in 43 years of practice, respondent had never been the subject of any disciplinary action.
Mr. Richard L. Loveland, Mr. Richard V. Patchen and Mr. Daniel F. Carmack, for relator.
Mr. William W. Johnson and Mr. Charles E. Brown, for respondent.
As the Supreme Court of California so cogently stated: "The rule against commingling `was adopted to provide against the probability in some cases, the possibility in many cases, and the danger in all cases that such commingling will result in the loss of clients' money.'" Clark v. State Bar (1952), 39 Cal.2d 161, 168, 246 P.2d 1.
It has been the consistent practice of this court in recent years to impose a penalty of indefinite suspension or of disbarment in cases involving commingling of funds.
Dayton Bar Assn. v. Weiner (1974), 40 Ohio St.2d 7; Ohio State Bar Assn. v. Kahn (1974), 40 Ohio St.2d 15; Toledo Bar Assn. v. Ishler (1974), 39 Ohio St.2d 33; Toledo Bar Assn. v. Cone (1970), 24 Ohio St.2d 96; 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; Ohio State Bar Assn. v. Rekeweg (1966), 6 Ohio St.2d 128; Ohio State Bar Assn. v. Gray (1965), 1 Ohio St.2d 97.
Such 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 standard.
For those reasons, the recommendation of the board is modified, and respondent is hereby suspended from the practice of law for an indefinite period under Gov. R. V(6) (b) of this court.
Judgment accordingly.
O'NEILL, C.J., STEPHENSON, CORRIGAN, STERN, CELEBREZZE and W. BROWN, JJ., concur.
P. BROWN, J., dissents.
STEPHENSON, J., of the Fourth Appellate District, sitting for HERBERT, J.
The majority recites that a hearing on the allegations of the complaint was held on August 22, 1974, before a panel of the Board of Commissioners on Grievances and Discipline.
It must be clearly noted that no evidence was introduced at that hearing other than the stipulation to which reference is made. All the evidence bearing upon the conclusions of the panel, that the respondent was guilty of commingling funds and of a resultant use of his client's funds for his own purposes, must be garnered from the four corners of that stipulation.
In so doing, we note that the facts stated as being in extenuation or mitigation were included, not for that purpose but as factual, agreed determinations that the respondent acted in good faith in making loans from the Koch estate believing he had power to do so under the will and that the "trust shortages were the result of improper bookkeeping practices." It was clearly asserted in the stipulation by agreement of all concerned that "there was no evidence of any intention to defraud."
The stipulated explanations of the recited conduct, in my opinion, exclude all possibility of a valid conclusion that respondent violated either the Code of Professional Responsibility or his oath of office as an attorney. I can not agree that designating part of the evidence as being "in extenuation" can render the balance of the stipulated evidence conclusive upon the question of whether the respondent was guilty of commingling funds and violating his oath of office. There is no fact in the stipulation from which it can be concluded that the purpose of Mr. Tuttle, in making the investment for the estate, was nefarious.
I can not believe that this court, in safeguarding the public interest, must impose so severe a penalty upon an attorney-executor under these circumstances. The notes were listed in an account and disallowed as authorized investments. There was no concealment; there was no loss. There was no scheme or plan shown to benefit from the manipulation of trust funds.
The Board of Commissioners on Grievances and Discipline is as interested in maintaining the highest standards of professional integrity as are the members of this court. They properly decided that the investigation of respondent's actions in the two instances which were brought to its attention did not demonstrate conduct which required more than a public reprimand.