TOLEDO BAR ASSN. v. JAMES, 28 Ohio St.3d 148 (1986)

502 N.E.2d 1023

TOLEDO BAR ASSOCIATION v. JAMES.

No. 86-24Supreme Court of Ohio.
Decided December 24, 1986.

Attorneys at law — Misconduct — One-year suspension — Failure to maintain client funds in identifiable bank account — Deceiving client concerning processing of claim.

ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline of the Bar.

A private hearing in this disciplinary action took place in Columbus, Ohio, before the board of commissioners, at which time the respondent, Arthur F. James, proceeded pro se. Two counts of misconduct, arising out of separate situations, comprised the charges against James. Between 1975 and 1979, James’ trust account set up to hold monies belonging to his clients was, by his own admission, a “disaster.” This was at least partly due to a series of withdrawals of clients’ funds for his personal use. The

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record is replete with examples of deposits and subsequent withdrawals for personal use of the monies set aside for James’ clients.

On or about October 4, 1979, James deposited $40,000 in his client trust account and made all parties whole. James then closed out this trust account and opened a new trust account which he has maintained correctly since that time.

The funds that James deposited in his trust account in October 1979 were borrowed from William P. Scott, a “gambler,” who was contacted on James’ behalf by a third party. The Scott loan was made on a commercial basis at a reasonable rate and with appropriate security. There was apparently nothing improper about the loan from Scott to James.

Scott, however, was eventually the subject of an investigation by the United States Attorney’s office for his gambling activities. Scott was convicted and sentenced to a jail term. During Scott’s debriefing by the United States Department of Justice Strike Force Team, information developed from Scott about the $40,000 loan to James. The information was turned over to the Toledo Bar Association, relator herein, in April 1985 for an investigation.

When relator contacted the respondent concerning the loan, James delivered to it all the records from his former client trust account. An auditing of the records by relator produced the evidence that gave rise to the complaint based upon respondent’s activities with regard to the estate of Richard B. Hilfinger and the Jamima G. Muhl guardianship, as well as a pattern of conduct involving irregularities in the trust account.

The second count arises out of an unrelated set of facts. James represented a student pilot who was injured in a private airplane crash. An important witness for the student’s interest was the airplane pilot instructor. James had difficulty in locating the instructor, but eventually developed a lead that the witness was in Europe. James communicated with the instructor-witness, Serge Fournier. In the course of this communication, Fournier mentioned that he had a claim against an insurance company that discontinued payments under his disability insurance policy.

James suggested that he would help Fournier with his insurance claim and proceeded to blend his efforts on behalf of Fournier with his efforts on behalf of the injured airplane crash victim in such a way as to develop Fournier’s availability as a witness.

In order to maintain some control over Fournier and to assure his appearance, James deceived him into thinking that he had filed a complaint against the disability insurance carrier, when, in fact, he had not filed such a complaint. James deceived Fournier for almost four years between 1980 and 1984. Fournier then became dissatisfied with James’ representations and employed new counsel to represent him in connection with his claim for continued disability insurance benefits. New counsel discovered that respondent had not taken any action on behalf of Fournier. Respondent then filed an action on behalf of Fournier in state court,

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and the new counsel ultimately assumed responsibility for the action originally undertaken by James. While the insurance company alleged that Fournier’s action was barred by the statute of limitations as contained in the disability insurance policy, the action was ultimately settled.

As to the aforementioned charges, the board of commissioners found that James’ conduct violated DR 9-102(A) in that he failed to maintain client funds in an identifiable bank account, particularly with regard to the Hilfinger estate and the Muhl guardianship, and in other instances not specifically enumerated but which represented a pattern of conduct of irregularities in James’ client trust account.

The board further found that James violated DR 1-102(A)(4), in that he deceived Serge Fournier concerning the processing of Fournier’s claim for benefits under the terms of his disability insurance policy.

Upon such evidence and conclusions, the board of commissioners unanimously recommended a one-year suspension. In part, the board relied upon Bar Assn. of Greater Cleveland v. Sanders (1986), 24 Ohio St.3d 5. The board noted that James cooperated fully with relator and its counsel in marshalling the facts that gave rise to these proceedings and displayed professional candor in attempting to have this matter fully and fairly resolved. James demonstrated remorse and took action which clearly established his sincere intention to avoid repeating his past errors. No trust funds were lost and the corrective action was taken by James six years before discovery of the irregularities and the filing of a formal complaint.

Although it is true that James deceived Fournier, his motive in practicing the deception was to assure Fournier’s availability as a witness on behalf of the injured student pilot. While the board in no way condoned deception, the board stated that it “cannot help but recognize that the deception was practiced in order to maintain the availability of a crucial witness who was difficult to locate and obviously beyond counsel’s ability to summons to a court proceeding.”

Richard M. Kerger, Craig F. Frederickson and Edward J. McCormick, Jr., for relator.

Arthur F. James, pro se.

Per Curiam.

Upon a full review of this matter, this court finds that the respondent has violated DR 9-102(A) and 1-102(A)(4). This court accepts the recommendation of the board of commissioners and hereby orders that the respondent be suspended from the practice of law in the state of Ohio for a period of one year.

It is further ordered that the costs of these proceedings be taxed to the respondent.

Judgment accordingly.

CELEBREZZE, C.J., SWEENEY, LOCHER, HOLMES, C. BROWN, DOUGLAS and WRIGHT, JJ., concur.

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