Cincinnati Bar Assn. v. White - Ohio Supreme Court Opinion - Ohio Supreme Court Decision

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CINCINNATI BAR ASSOCIATION v. WHITE.
[Cite as Cincinnati Bar Assn. v. White (1997), 79 Ohio St.3d 491.]
Attorneys at law -- Misconduct -- Indefinite suspension -- Improper solicitation
of clients -- Commingling client funds with personal funds and funds used
to operate law office.
(No. 97-808 -- Submitted July 7, 1997 -- Decided October 1, 1997.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 96-13.

On February 5, 1996, relator, Cincinnati Bar Association, filed a complaint
charging that respondent, Andrew G. White III of Cincinnati, Ohio, Attorney
Registration No. 0010310, violated several Disciplinary Rules by using an
attorney referral service that was not sponsored or approved by any bar
association, and by commingling his clients' funds with his own. After respondent
filed his answer and the parties submitted stipulations and exhibits, a panel of the
Board of Commissioners on Grievances and Discipline of the Supreme Court
("board") found the following facts.

Respondent was the sole shareholder, director, and officer of Raw Data
Corporation ("Raw Data"), whose only purpose was to recommend and promote
the use of respondent's services as a lawyer to auto accident victims. Raw Data
employed Pat Harris and Karla Horn to inspect auto collision reports filed by
police agencies and collect the names of persons identified as not being "at fault."
Harris and Horn would then telephone those persons, ostensibly to help them to
find a lawyer, but in fact simply to refer them to respondent. Harris was paid for
each referral to respondent; Horn was paid a weekly salary. Raw Data, which was
not approved by the Cincinnati Bar Association, did not fit the definition of a legal

aid office or other legal entity entitled to recommend professional employment.
Raw Data referred at least thirty clients to respondent.

In addition, respondent agreed with Charles Mayabb, a chiropractor, to refer
his personal injury clients to Mayabb for treatment in exchange for medical reports
that Mayabb would provide to respondent for use in settling or litigating claims.
Respondent further agreed to pay Mayabb's fees when a personal injury claim was
resolved for one of his clients. Respondent also leased office space to Mayabb in
the building where respondent maintained his own office.

When respondent obtained funds pursuant to settlement agreements for
several of his clients whom he had solicited through Raw Data, he placed the
funds in various bank accounts, where they were commingled with his personal
and law office monies. He also delivered settlement statements to his clients
indicating that a portion of their settlements would be withheld by him and paid to
Mayabb to satisfy their debts for chiropractic services. The settlement statements
also purported to constitute mutual releases between respondent and each client
with respect to all matters relating to respondent's representation.

However, respondent failed to pay the withheld amounts to Mayabb.
Instead, respondent converted the monies to his own use by taking a "set-off"
against amounts that he claimed were owed to him by Mayabb under their lease
agreement. Because respondent did not pay Mayabb, Mayabb threatened legal
action against respondent's clients.

The panel concluded that respondent's conduct violated DR 1-102(A)(2)
(circumventing a Disciplinary Rule through the actions of another), 1-102(A)(3)
(engaging in conduct involving moral turpitude), 1-102(A)(4) (engaging in
conduct involving dishonesty, fraud, deceit, or misrepresentation), 2-103(B)
(compensating a person to recommend his employment), 2-103(C) (requesting a

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person to recommend or promote his services), 7-101(A)(3) (prejudicing a client
during the course of the professional relationship), and 9-102(A) and (B)(4)
(failing to promptly pay to the client upon request funds in the possession of the
lawyer which the client is entitled to receive). Despite favorable mitigation
evidence indicating respondent's good character, the panel recommended that
respondent be suspended from the practice of law for two years with the final year
stayed and that he be placed on probation for one year.

The board adopted the findings and conclusions of the panel, but
recommended that the respondent be suspended indefinitely from the practice of
law.
__________________

E. Hanlin Bavely and Adam P. Hall, for relator.

John H. Berlew, for respondent.
__________________

Per Curiam. DR 2-103(B) provides that "[a] lawyer shall not compensate
or give anything of value to a person or organization to recommend or secure the
lawyer's employment by a client * * *." The only organizations excepted from
this rule are those that can qualify under DR 2-103(D). Such excepted
organizations are a legal aid society or a public defender office, a military legal
assistance office, a qualified legal referral service, or a bona-fide organization
offering a legal services plan that complies with certain conditions. The purpose of
DR 2-103 is to ensure that individual lawyers do not avoid the advertising and
solicitation restrictions of the Code of Professional Responsibility.

In this case respondent formed his own corporation whose sole purpose was
to find potential clients and direct them to respondent. Respondent paid the

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employees of that corporation, which did not qualify under DR 2-103(D). Thus,
respondent clearly violated DR 2-103(B) as found by the board. In a similar case,
Disciplinary Counsel v. Heard (1985), 16 Ohio St.3d 18, 16 OBR 369, 475 N.E.2d
784, where an attorney created an unincorporated association to solicit individuals
whose property was subject to foreclosure, we imposed a one-year suspension.

In addition, respondent commingled client funds with his own personal
funds and the funds used to operate his law office. DR 9-102(A) requires that
client funds be deposited in one or more identifiable bank accounts in which no
funds of the lawyer or law firm are deposited. As the board found, by depositing
client funds in accounts which contained his own personal and business funds,
respondent violated DR 9-102(A).

Moreover, respondent, having received settlement funds for clients, was
required to hold such funds as a fiduciary for those clients. It is axiomatic that for
respondent to be able to take a setoff , he must hold the debits and credits in the
same capacity. Here, respondent used settlement funds of his clients that he held
as a fiduciary to set off against his personal claim against Mayabb for rent.
Respondent was not entitled to set off fiduciary funds against personal debts owed
to him. His use of client funds in this manner was tantamount to conversion of his
clients' monies. Funds may not be withdrawn from a client's account for a
lawyer's own purposes whether for personal or private business use. Columbus
Bar Assn. v. Robinson (1979), 59 Ohio St.2d 62, 13 O.O.3d 56, 391 N.E.2d 1019;
Columbus Bar Assn. v. Thompson (1982), 69 Ohio St.2d 667, 23 O.O.3d 541, 433
N.E.2d 602.

In view of respondent's violation both of his duty to the profession to avoid
improper solicitation and his duty to his clients not to commingle or convert their
funds, we agree with the board that a more stringent sanction than that

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recommended by the panel is appropriate. Respondent is hereby indefinitely
suspended from the practice of law in Ohio. Costs taxed to respondent.
Judgment accordingly.

MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and
LUNDBERG STRATTON, JJ., concur.

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