541 N.E.2d 70
No. 89-354Supreme Court of Ohio.Submitted April 11, 1989 —
Decided July 12, 1989.
Attorneys at law — Misconduct — Permanent disbarment — Commingling funds — Illegal conduct involving moral turpitude and dishonesty — Writing check knowing that it would be dishonored — Convictions of theft and assault.
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline of the Supreme Court, No. 88-35.
On July 8, 1988, relator, Disciplinary Counsel, filed a complaint against respondent, Stephen P. Allison, charging him with twenty-one violations of the Code of Professional Responsibility and a violation of the Supreme Court Rules for the Government of the Bar, in six separate counts. A panel of the Board of Commissioners on Grievances and Discipline of the Supreme Court conducted a hearing on these matters on September 16 and 19, 1998, and on November 18, 1988. The panel heard the testimony of seven witnesses, including that of respondent. Respondent did not file a formal answer, but the Board of Commissioners on Grievances and Discipline of the Supreme Court (“board”) treated as an answer a July 27, 1988 letter from respondent, referring to the board’s case number and inquiring about the complaint.
Respondent was admitted to the Ohio Bar in 1973, but has not been actively engaged in the practice of law since 1980. Respondent testified that he is a business counselor. Currently, he does not reside in Ohio.
Count I
The allegations in this count pertain to funds which respondent’s aunt entrusted to him to manage. In a two-year period, Mrs. Lee Schwebel, respondent’s aunt, placed respondent in control of over $300,000. Schwebel testified that she believed the funds were to be placed in a Merrill Lynch Ready Assets Trust account with respondent as trustee for her benefit. Schwebel testified that she did not sign any document creating this trust.
Respondent deposited the funds in his existing Merrill Lynch account in Columbus, Ohio. He claimed that he was creating a Clifford Trust to benefit Schwebel’s grandchild or eventual
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grandchildren. Respondent asserted that the trust was reduced to writing and that it was signed by Schwebel. The board, however, found that the trust document was questionable because Schwebel’s signature appeared to have been manufactured by the use of a copying machine and because the typing appeared to be different on two pages.
Nonetheless, respondent withdrew $25,403 from the account to make a down payment on a house purchase in Solon, Ohio. He described it as a loan to his wife. The “loan” was repaid when respondent deposited $47,540.93 into the account. These funds were the proceeds from the sale of respondent’s home in Columbus, Ohio. Respondent did not explain why the loan repayment far exceeded the loan amount.
The evidence disclosed that respondent paid several personal obligations from the account. Respondent testified that these payments were made from assets of other investors which he was holding in the trust account and not from Schwebel’s funds. However, respondent failed to reveal any other investor except his father, nor did he document this claim.
In February or March 1985, respondent moved to Colorado. Thereafter he closed the Merrill Lynch account in Columbus and opened a new Merrill Lynch account in Colorado. Schwebel’s funds were deposited into this account. Respondent did not notify Schwebel of this action.
Subsequently, respondent transferred the funds to an account with Fidelity Investments in Colorado. Respondent conceded that some of the transferred funds were Schwebel’s. Again, respondent failed to notify Schwebel.
In April 1986, or shortly thereafter, respondent opened two new Fidelity accounts with transfers from the original Fidelity account. Respondent opened one of these accounts by transferring $300,000 from the original account. In this account, he listed the mother of respondent’s three children as trustee, and “AHM,” which are the first initials of respondent’s children, as beneficiaries. This occurred after Schwebel asked for her funds. However, respondent testified that this was done to place the funds out of the legal reach of his ex-wife, and that using the initials of his children was to identify the account. After this transfer, $30,369 remained in the original Fidelity account. Respondent did not notify Schwebel of this transfer.
On or about August 1985, respondent wrote a check to Schwebel for $20,000 on the then closed Columbus Merrill Lynch account. The check was placed in an envelope with a notation, “Lee Schwabel [sic][.] Open if you need cash immediately[,]” and given to Schwebel’s daughter for delivery to Schwebel. When Schwebel attempted to cash the check in November 1985, she learned that the account had been closed.
Schwebel then wrote letters to respondent, apparently requesting that her money be returned and that he terminate the trust. Being unable to obtain a return of the funds, Schwebel hired an attorney to seek their return. When correspondence between respondent and Schwebel’s attorney failed to result in a return of the funds, Schwebel filed suit in the District Court of Arapahoe County, Colorado, and restrained all of respondent’s funds. This action was filed in August 1986, and Schwebel received $125,000 in the fall of 1986. The parties reached agreement in January 1988, and Schwebel received a $50,000 certificate of deposit with accumulated interest and, finally, $215,000 in March
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1988. However, she paid approximately $80,000 in legal fees and approximately $40,000 in federal income tax. (Respondent failed to file income tax returns or submit sufficient information to Schwebel for her to file returns.)
The panel found that respondent violated DR 9-102(A)(2) (commingling funds), 9-102(B)(4) (failure to return a client’s funds upon request), and 1-102(A)(1), (3), (4), (5), and (6) (illegal conduct, conduct involving moral turpitude and dishonesty, conduct prejudicial to the administration of justice, and conduct reflecting adversely on fitness to practice law). The panel observed that respondent treated Schwebel’s trust fund as his own because, without authorization, respondent paid personal obligations from it, borrowed monies for a house down payment from it, drew a check to Schwebel on a closed account, transferred an account from Ohio to Colorado without Schwebel’s knowledge, and failed to properly account to Schwebel after persistent requests by her. The board agreed with these findings.
Count II
In this count, relator charges that respondent wrote a check knowing that it would be dishonored. The complaint alleges that this action violated DR 1-102(A)(3), (4), and (6).
Respondent wrote a check for $1,038.18 to the B B Appliance Co. of Euclid, Ohio, to pay for some purchases he had made. The account on which the check was written, however, had been closed. After an attempt to correspond with respondent failed, B B filed a complaint with the Euclid Municipal Court alleging a violation of R.C. 2913.11(A). By letter dated June 6, 1986, respondent inquired of B B about the criminal charge. On November 5, 1986, respondent’s brother sent a check in the amount of the defaulted check to B B. It appears that when the check cleared, the felony charge was dismissed.
The board, agreeing with the panel, found that respondent had violated DR 1-102(A)(3), (4), and (6).
Count III
The third count involves respondent’s leasing his home to Reginald and Helaine Bates. Relator charges respondent with violating DR 1-102(A)(3), (4), and (6).
According to the testimony, Cheryl Allison, now Cheryl Adell, respondent’s then wife, owned their home in Solon, Ohio. Adell filed a divorce action on November 26, 1984. During the pendency of the divorce, the parties signed a separation agreement which would have transferred the property to respondent. This transfer was contingent upon respondent complying with other provisions of the agreement. Since respondent failed to comply, the domestic relations court entered a decree that ordered that the entire interest be given to Adell. A divorce was granted on April 15, 1985, and respondent knew by April 19, 1985 that the house had been awarded to Adell. On December 9, 1983, moreover, the mortgagee had filed a foreclosure action against the house.
The Bateses answered a March 3, 1985 newspaper ad offering respondent’s home for lease. Respondent apparently placed this ad. After inspecting the house, the Bateses decided to lease it. On April 21, 1985, Helaine Bates gave a check for $650 to respondent. Respondent cashed the check. Later, Reginald Bates, on request of respondent, sent respondent another check for $1,300. Respondent cashed this check. Respondent, who then lived in Colorado, sent a lease document to
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the Bateses, which he had signed on April 27, 1985. The Bateses signed it on May 10, 1985, but sent it to respondent on or about May 20, 1985. The Bateses were unable to move in. Adell, who did not authorize respondent to lease the house, sold it on May 22, 1985.
After the Bateses were unable to contact respondent, Helaine Bates filed a fourth degree grand theft felony charge (R.C. 2913.02) against him in August 1985. Respondent was indicted on February 7, 1986, and was arrested on April 19, 1988 in Colorado. On May 16, 1988, respondent initially pleaded not guilty. However, on September 9, 1988, the grand theft charge was reduced to theft, a first degree misdemeanor, and respondent pleaded guilty to the reduced charge. He made restitution to the Bateses and, apparently, received a suspended thirty-day jail sentence.
The panel found that respondent leased real estate that was not titled in his name and that he has violated DR 1-102(A)(3), (4), and (6). The board agreed.
Count IV
In this count, relator alleges that respondent violated DR 1-102(A)(3), (5), and (6).
While receiving a parking ticket at Randall Mall in North Randall, Ohio, respondent attempted to strike a security guard with his car, and thereafter fled. He was charged with aggravated assault, fleeing and eluding a police officer, and assault. The fleeing and eluding and the aggravated assault charges were dismissed, and respondent pleaded no contest to the assault charge. He was found guilty and was sentenced to ten days in jail and fined $500 and costs. The jail sentence was suspended.
The board agreed with the panel’s findings that respondent had violated DR 1-102(A)(3), (5), and (6). The board found that assaulting the security guard was misconduct involving moral turpitude, and fleeing thereafter was conduct prejudicial to the administration of justice. Respondent’s total conduct was found to reflect adversely on his fitness to practice law.
Count V
Under Count V, relator charges that respondent deposited a check payable to his then wife into a trust account of which he was the trustee. Relator further charges that respondent withheld these funds from his wife. According to the complaint, respondent violated DR 1-102(A)(4) and (6), 9-102(A)(2) (preserving the identity of funds and property of a client), and 9-102(B)(4).
As noted in Count I, when respondent and his wife sold their home in Columbus, a check for $47,540.93 was issued to respondent’s wife because she was the titled owner. Respondent’s wife, who was not at the closing, testified that respondent told her that the check was in the amount of $30,000 and was made out in both their names. Respondent’s wife further testified that she directed respondent’s sister to bring the check to Cleveland, where the Allisons then lived. She insisted that she gave no one authority to endorse the check and cash it. Respondent, on the other hand, testified that his wife had given his sister authority to endorse the check. Nevertheless, respondent’s sister endorsed the check and deposited it in the same account that contained the Schwebel trust funds. Respondent’s wife later recovered her share of the funds in a lawsuit.
The board, agreeing with the panel, concluded that respondent did not have a lawyer-client relationship
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with his wife and that their respective actions were tainted by their bitter divorce action. Therefore, the board found that respondent had not violated DR 1-102(A)(4) and (6), and 9-102(B)(4), but that he had violated DR 9-102(A)(2) because he had not preserved the identity of the check proceeds from the property of his client, Lee Schwebel.
Count VI
In this count, respondent is charged with failure to file his certificate of registration and to pay his registration fees under Gov. Bar R. VI. Respondent admitted he failed to pay the fees, but stated that he had contacted the Supreme Court about an inactive status. Respondent has not registered or applied for an inactive status.
The panel found that respondent violated Gov. Bar R. VI, and the board agreed.
Acting on relator’s recommendation that respondent be disbarred, the board adopted the findings of fact and conclusions of law and recommendation of the panel. The panel had concluded that respondent’s actions constituted a pattern of dishonesty and evasion of responsibility which reflects adversely on his fitness to practice law. The board then recommended that respondent be permanently disbarred from the practice of law in the state of Ohio.
J. Warren Bettis, disciplinary counsel, and Charles T. Brown, for relator.
Stephen P. Allison, pro se.
Per Curiam.
This court finds that respondent violated DR 1-102(A)(1) and (3) (four violations), (4) (three violations), (5) (two violations), and (6) (four violations), 9-102(A)(2) (two violations), 9-102(B)(4), and Gov. Bar R. VI. Furthermore, we agree with the recommendation of the board and hereby permanently disbar respondent from the practice of law in Ohio. Costs taxed to respondent.
Judgment accordingly.
MOYER, C.J., SWEENEY, HOLMES, DOUGLAS, WRIGHT, H. BROWN and RESNICK, JJ., concur.