Summary
In Morton we imposed a sanction of one-year suspension where the misconduct represented "an isolated incident of mismanagement."
Summary of this case from Cincinnati Bar Assn. v. EdwardsOpinion
D.D. No. 83-10
Decided June 22, 1983.
Attorneys at law — Misconduct — One-year suspension — Misuse of client's deposit in trust account — Isolated incident of mismanagement of trust account — Range of possible sanctions.
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline.
The Office of Disciplinary Counsel, relator, instituted this disciplinary proceeding against Norman R. Morton, respondent, by filing a complaint charging respondent with violations of DR 1-102(A)(3), (4) and (6), DR 6-101(A)(3), DR 7-101(A) and DR 9-102 of the Code of Professional Responsibity. Respondent duly answered and denied the charges. A hearing was held before a three-member panel of the Board of Commissioners on Grievances and Discipline ("board") on January 21, 1983.
The record developed at that hearing reveals that in 1979 respondent filed a civil action in the Court of Common Pleas of Crawford County on behalf of his client, Robert E. Clendenen. The suit sought damages against Henry Howes Chrysler-Plymouth, Inc. ("Howes") and the Chrysler Corporation for breach of warranty. Clendened maintained in the suit filed by respondent that the 1978 Chrysler automobile purchased from Howes was defective.
Sometime prior to June 2, 1981, a settlement was reached in the case between Clendenen and Howes. Howes agreed to release its lien on Clendenen's automobile upon Clendenen's payment to Howes of $1,000 and dismissal of the portion of the lawsuit against Howes. This settlement was negotiated by respondent and J.B. Collier, attorney for Howes.
On June 3, 1981, respondent wrote to Clendenen explaining the terms of the settlement. Respondent directed Clendenen to obtain a new title for the subject automobile free of Howes' lien and pay $1,000 into respondent's trust account. Respondent stated that he would then dismiss the suit against Howes and that a $500 legal fee would be "due upon dismissal." Clendenen proceeded to obtain a clear title and delivered to respondent a check for $1,000 dated June 8, 1981 with the notation "'78 Chrysler-Henry Howes Acct." This check was deposited into respondent's trust account on June 10, 1981.
The record next discloses that on seven separate occasions, by letters dated June 17, 1981, July 6, 1981, August 3, 1981, August 19, 1981, September 1, 1981, September 21, 1981, and October 15, 1981, Collier requested that respondent forward the $1,000 to Howes to complete the terms of the settlement. By letter dated October 28, 1981, Collier notified relator of respondent's failure to deliver the $1,000 due Howes. On November 6, 1981, after relator had begun its investigation into the matter, respondent forwarded $1,000 to Collier to complete the settlement.
Upon examination of the bank statements relating to respondent's trust account, it was shown that, between the time Clendenen's check was deposited and the $1,000 paid to Collier, the balance of this account often fell below $1,000. Further, while the lowest ending monthly balance shown on the bank statement for the period was $109.71, analysis of the trust account reveals a negative running balance on several occasions. In addition, shortly after the deposit of Clendenen's check, respondent drew a $500 check on the account which was made payable to a used car lot for the purpose of making a down payment on the purchase of an automobile, thus reducing the account's balance to $717.43.
The board found that respondent's misuse of his client's deposit in respondent's trust account and his delay and failure to remit such deposit constituted violations of DR 1-102(A)(4) and (6). The board also found that respondent's actions amounted to a violation of DR 6-101(A)(3) in that respondent had neglected a legal matter entrusted to him. Finally, for failing to preserve the identity of the funds of a client, using funds of a client for personal purposes, and failing to maintain complete records of all funds of a client, the board determined that respondent violated DR 9-102. The board recommended that the respondent be suspended from the practice of law for a period of one year.
DR 1-102 provides:
"(A) A lawyer shall not:
"* * *
"(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.
"* * *
"(6) Engage in any other conduct that adversely reflects on his fitness topractice law."
DR 6-101 states:
"(A) A lawyer shall not:
"* * *
"(3) Neglect a legal matter entrusted to him."
DR 9-102 reads as follows:
"(A) All funds of clients paid to a lawyer or law firm, other than advances for costs and expenses, shall be deposited in one or more identifiable bank accounts maintained in the state in which the law office is situated and no funds belonging to the lawyer or law firm shall be deposited therein except as follows:
"(1) Funds reasonably sufficient to pay bank charges may be deposited therein.
"(2) Funds belonging in part to a client and in part presently or potentially to the lawyer or law firm must be deposited therein, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client, in which event the disputed portion shall not be withdrawn until the dispute is finally resolved.
"(B) A lawyer shall:
"(1) Promptly notify a client of the receipt of his funds, securities or other properties.
"(2) Identify and label securities and properties of a client promptly upon receipt and place them in a safe deposit box or other place of safekeeping as soon as practicable.
"(3) Maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his client regarding them.
"(4) Promptly pay or deliver to the client as requested by a client the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive."
The matter is now before the court for consideration of the board's report and recommendation and respondents' objections thereto.
Mr. Angelo J. Gagliardo, disciplinary counsel, and Mr. Charles W. Kettlewell, for relator.
Mr. Robert R. Disbro and Mr. Rees Davis, for respondent.
The court has reviewed the evidence presented to the board and concurs in the board's finding that respondent violated DR 1-102(A)(4) and (6), DR 6-101(A)(3) and DR 9-102.
Respondent objects to the board's report mainly on the ground that $500 of the $1,000 deposited into his trust account by Clendenen represented respondent's fee for the legal services rendered to his client. The undisputed record evidence is otherwise. Respondent's letter to Clendenen on June 3, 1981 indicates that a $500 fee would be due upon dismissal of the lawsuit. However, the lawsuit was not dismissed until some time after respondent had used a portion of Clendenen's deposit for his own personal use. Moreover, after respondent used a portion of Clendenen's deposit claimed by respondent to be legal fees, respondent billed Clendenen for $500 in legal fees. In fact, it appears as though respondent and Clendenen became embroiled in a fee dispute which culminated with Clendenen paying $562.50 to respondent on January 4, 1982. The foregoing clearly belies any notion that a portion of the amount deposited by Clendenen into respondent's trust account on June 10, 1981 represented legal fees.
Respondent also objects to the degree of punishment recommended by the board. Respondent suggests that a public reprimand would be appropriate while relator urges that respondent be indefinitely suspended or, at a minimum, that respondent be suspended for one year. There are few ethical breaches which impact more negatively on the integrity of the legal profession than the misuse of a client's funds. As a consequence, we must reject respondent's plea for a less severe penalty. Past disciplinary proceedings would appear to indicate that the penalty for a violation of the kind committed by respondent may range from a one-year suspension to an indefinite suspension. For instance, indefinite suspensions were awarded in Butler Cty. Bar Assn. v. Green (1982), 1 Ohio St.3d 48; Columbus Bar Assn. v. Pfefferle (1981), 65 Ohio St.2d 4 [19 O.O.3d 121]; Bar Assn. v. Canales (1980), 62 Ohio St.2d 207 [16 O.O.3d 243]; Akron Bar Assn. v. Hughes (1976), 46 Ohio St.2d 369 [75 O.O.2d 446]; and Columbus Bar Assn. v. Tuttle (1975), 41 Ohio St.2d 183 [70 O.O.2d 341]. On the other hand, the attorneys in Akron Bar Assn. v. Jaynes (1982), 70 Ohio St.2d 276 [24 O.O.3d 363], and Akron Bar Assn. v. Goodlet (1982), 70 Ohio St.2d 140 [24 O.O.3d 243], were given one-year suspensions for their professional misconduct.
In this court's judgment, in view of the particular circumstances surrounding this case, the appropriate sanction for respondent's professional misconduct is a one-year suspension. We are satisfied that respondent's misconduct represented an isolated incident of mismanagement of his trust account. However, that does not lessen the gravity of respondent's professional misconduct.
Accordingly, respondent's objections to the report and recommendation of the board are overruled, the findings of the board are adopted, and respondent is hereby suspended from the practice of law for a period of one year, under the provisions of the rule.
Relator's complaint also alleged that respondent violated his ethical obligations when a check for legal fees drawn by respondent on his trust account and made payable to co-counsel was returned for insufficient funds after the client's award had been deposited in the account. The board made no specific finding as to that charge. We must presume from their silence that the board did not feel that respondent's conduct was a violation of the Code of Professional Responsibility. We are also constrained to concur in the board's finding in that regard.
Judgment accordingly.
CELEBREZZE, C.J., W. BROWN, SWEENEY, LOCHER, HOLMES, C. BROWN and J.P. CELEBREZZE, JJ., concur.