Case Title: Ohio State Bar Assn. v. Dalton

Citation: 2010-Ohio-619

Docket Number: 20091643

State: ohio

Court: Ohio Supreme Court

Date: 2010-03-02T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Ohio State Bar Assn. v. Dalton, Slip Opinion No. 2010-Ohio-619.] 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2010-OHIO-619 
OHIO STATE BAR ASSOCIATION v. DALTON ET AL. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Ohio State Bar Assn. v. Dalton,  
Slip Opinion No. 2010-Ohio-619.] 
Unauthorized practice of law — Drafting of deeds — Injunction and civil penalty 
— Bankruptcy — Penalties for unauthorized practice of law not 
discharged — Proceedings to prevent unauthorized practice of law not 
subject to automatic stay. 
(No. 2009-1643 — Submitted November 4, 2009 — Decided March 2, 2010.) 
ON FINAL REPORT by the Board on the Unauthorized Practice of Law of the 
Supreme Court, No. UPL 07-06. 
__________________ 
Per Curiam. 
{¶ 1} Relator, Ohio State Bar Association, alleged that respondents, 
Kimberly A. Dalton and Precision Land Title Agency, Inc. (“Precision Title”), 
had engaged in the unauthorized practice of law by preparing and completing two 
real estate general warranty deeds and by forging an attorney’s signature on one 
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of them.  The Board on the Unauthorized Practice of Law agreed, concluding that 
the respondents had practiced law in violation of Ohio attorney licensure 
requirements, and recommends that we enjoin respondents from engaging in the 
practice of law, require respondents to disclose their clients to the relator and 
board and notify their clients of their conduct, and require respondents to pay a 
civil penalty.  We agree that respondents engaged in the unauthorized practice of 
law, and we therefore impose the sanctions the board recommends. 
Unauthorized Practice of Law 
{¶ 2} This court has original jurisdiction over the “[a]dmission to the 
practice of law, the discipline of persons so admitted, and all other matters 
relating to the practice of law,” Section 2(B)(1)(g), Article IV, Ohio Constitution, 
which includes regulating the unauthorized practice of law for the purpose of 
protecting the public from persons and entities purporting to provide legal 
assistance to others but “who have not been qualified to practice law and who are 
not amenable to the general discipline of the court.” Union Sav. Assn. v. Home 
Owners Aid, Inc. (1970), 23 Ohio St.2d 60, 64, 52 O.O.2d 329, 262 N.E.2d 558. 
{¶ 3} “The unauthorized practice of law is the rendering of legal services 
for another by any person not admitted to practice in Ohio under Rule I and not 
granted active status under Rule VI, or certified under Rule II, Rule IX, or Rule 
XI of the Supreme Court Rules for the Government of the Bar of Ohio.” Gov.Bar 
R. VII(2)(A).  “In Land Title Abstract & Trust Co. v. Dworken (1934), 129 Ohio 
St. 23, 1 O.O. 313, 193 N.E. 650, we made clear that the practice of law embraces 
the preparation of legal documents on another's behalf, including deeds which 
convey real property.”  Disciplinary Counsel v. Doan (1997), 77 Ohio St.3d 236, 
237, 673 N.E.2d 1272. 
Bankruptcy 
The Automatic Stay Is Not Applicable to Governmental Proceedings  
to Prevent the Unauthorized Practice of Law 
January Term, 2010 
3 
 
{¶ 4} Before the board issued its final report, Precision Title was 
dissolved, and Dalton filed for Chapter 7 bankruptcy. 
{¶ 5} The general rule is that filing for bankruptcy automatically stays 
the commencement or continuation of judicial and administrative actions against a 
debtor that were or could have been initiated prior to the bankruptcy filing to 
recover on a claim that arose before the filing.  11 U.S.C. 362(a).  However, under 
11 U.S.C. 362(b)(4), bankruptcy does not stay commencement or continuation of 
an action or proceeding by a governmental unit to enforce its police or regulatory 
powers.  Chao v. BDK Industries (C.D.Ill.2003), L.L.C., 296 B.R. 165, 167; In re 
Baillie (Bankr.W.D.Pa.2007), 368 B.R. 458, 466.  “ ‘[G]overnmental unit’ 
includes a ‘department, agency or instrumentality’ of a state” that carries out a 
government function.”  11 U.S.C. 101(27); In re Wade (C.A.9, 1991), 948 F.2d 
1122, 1123. 
{¶ 6} The board is an instrumentality of this court charged with the 
obligation to investigate and prosecute the unauthorized practice of law. Gov.Bar 
R. VII.  We have recognized that “along with [our] broad regulatory power over 
the practice of law comes ‘the concomitant responsibility to protect the public by 
preventing the unauthorized practice of law.’ ” Cleveland Bar Assn. v. 
CompManagement, Inc., 104 Ohio St.3d 168, 2004-Ohio-6506, 818 N.E.2d 1181, 
¶ 48, quoting Henize v. Giles (1986), 22 Ohio St.3d 213, 217, 22 OBR 364, 490 
N.E.2d 585.  The board is an instrumentality of the state that is charged with 
protecting the public from the unauthorized practice of law.  Consequently, we 
hold that pursuant to 11 U.S.C. 362(b)(4), Dalton’s bankruptcy does not stay these 
proceedings arising from the unauthorized practice of law. 
Bankruptcy Does Not Discharge the Civil Penalty 
{¶ 7} Under 11 U.S.C. 523(a)(7), bankruptcy will not discharge an 
individual from a debt “to the extent such debt is for a fine, penalty, or forfeiture 
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payable to and for the benefit of a governmental unit, and is not compensation for 
actual pecuniary loss, other than a tax penalty.” 
{¶ 8} We can find no case that addresses whether a civil penalty imposed 
for engaging in the unauthorized practice of law is a penalty or fine within 11 
U.S.C. 523(a)(7).  However, following the reasoning that monetary sanctions 
imposed in an attorney discipline case are penal, courts have reasoned that such 
sanctions constitute a fine, penalty, or forfeiture within the meaning of 11 U.S.C. 
523(a)(7) and therefore are not discharged in bankruptcy.  In re Logal 
(Bankr.N.D.Ind.2007), 381 B.R. 706, 713; In re Bertsche (Bankr.S.D.Ohio 2000), 
261 B.R. 436.  We find this reasoning applicable herein even though this case 
involves the unauthorized practice of law. 
{¶ 9} There is no evidence that the board imposed the civil penalty to 
recover a pecuniary loss.  Further, the board recommends a $20,000 civil penalty 
because of relators’ “egregious and fraudulent conduct.”  Therefore, we find that 
the civil penalty herein is a fine or penalty within 11 U.S.C. 523(a)(7). 
Consequently, 
Dalton’s 
bankruptcy 
would 
not 
discharge 
the 
board’s 
recommended $20,000 civil penalty. 
Respondents Engaged in the Unauthorized Practice of Law 
{¶ 10} In 1993, David B. Bennett, who is an attorney licensed to practice 
in Ohio, founded Precision Title, a title insurance company.  Bennett was the sole 
shareholder of Precision Title.  Precision Title hired Dalton as an office manager 
and vice president.  Dalton was licensed by the Ohio Department of Insurance as 
a resident title agent, but she was not an attorney. 
{¶ 11} In 2000, Bennett sold Precision Title to Dalton.  Several years 
later, Bennett was informed by title insurance companies that there were problems 
with two deeds, identified as the Larison and Cargle deeds, that purported to have 
been prepared by Bennett.  The Cargle deed had been prepared in 2004, and the 
Larison deed in 2005.  The Cargle deed had the printed notation “Certified True 
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5 
 
Copy Precision Land Title Agency Inc.”; the Larison deed had the handwritten 
notation “March 2000 sold Precision.”  The Larison deed also contained what 
purported to be Bennett’s signature. 
{¶ 12} However, Bennett asserted that he had had no contact with either 
Precision Title or Dalton after he sold Precision Title to Dalton in 2000.  
Consequently, Bennett asserted that he had not prepared either deed.  He also 
asserted that he had not signed the Larison deed or given anyone permission to 
sign it on his behalf.  Finally, Bennett asserted that in his opinion, the Cargle deed 
was defective. 
{¶ 13} From October 1, 2007, to February 5, 2008, relator unsuccessfully 
attempted to serve a complaint on respondents alleging that they had engaged in 
the unauthorized practice of law.  Meanwhile, however, relator did reach Dalton 
by e-mail.  And on April 6, 2007, Dalton sent an e-mail to relator’s counsel, 
which stated: “I can assure you that that I would not have authorized [the Cargle] 
deed nor would anyone who was employed by Precision at that time have 
prepared a deed with Mr. Bennett’s name on it deliberately.” 
{¶ 14} Almost a month later, Dalton sent a letter to relator’s counsel in 
which she offered to “conclude this matter” by paying attorney Bennett for 
preparation of the Cargle deed. 
{¶ 15} On April 28, 2008, relator served the complaint on respondents. 
Because respondents failed to file a responsive pleading, relator moved the board 
for default judgment.  A panel of the board granted relator’s motion for default 
judgment and ordered that the matter proceed pursuant to Gov.Bar R. VII(7)(E).  
On September 14, 2009, the board issued its final report, which concluded that 
respondents had engaged in the unauthorized practice of law.  We agree. 
{¶ 16} The copies of the Larison and Cargle deeds in evidence have 
notations on them referring to “Precision” or “Precision Title Agency Inc.,” and 
both indicate that they were prepared by attorney Bennett.  However, Bennett had 
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no affiliation with Precision Title after 2000; consequently he did not prepare or 
sign either deed. We find that this evidence demonstrates that respondents 
prepared and filed both deeds and that respondents forged Bennett’s signature on 
the Larison deed.  Thus, we agree with the board that respondents engaged in the 
unauthorized practice of law because Dalton was not an attorney and Precision, as 
a corporation, cannot practice law.  Cincinnati Bar Assn. v. Mid-South Estate 
Planning, L.L.C., 121 Ohio St.3d 214, 217, 2009-Ohio-747, 903 N.E.2d 295, 
quoting the board report and citing Judd v. City Trust & Sav. Bank (1937), 133 
Ohio St. 81, 10 O.O. 95, 12 N.E.2d 288 (“ ‘With limited exception, a corporation 
may not give legal advice, directly or indirectly, through its employees or attorney 
employees’ ”). 
{¶ 17} Dalton’s e-mail claims that the appearance of Bennett’s name on 
the Cargle deed must have been a mistake.  However, Dalton’s claim lacks 
credibility because 19 months after preparing the Cargle deed under Bennett’s 
name, respondents prepared the Larison deed again under Bennett’s name and this 
time forged his signature to the deed as well.  Thus, we find that this suggests that 
respondents’ actions regarding both deeds were intentional. 
{¶ 18} Accordingly, we find that respondents engaged in the unauthorized 
practice of law by preparing and filing the Larison and Cargle deeds and by 
forging Bennett’s signature on the Larison deed. 
Sanctions 
{¶ 19} Having found that respondents engaged in the unauthorized 
practice of law, we now examine the sanctions recommended by the board. 
{¶ 20} The board recommends that we enjoin the respondents from 
engaging in the unauthorized practice of law and that we order respondents to 
disclose their clients to the relator and board and notify them of respondents’ 
unauthorized practice of law.  Pursuant to Gov.Bar R. VII(8)(B), the board also 
recommends that we assess a civil penalty against respondents.  In recommending 
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a civil penalty, the board adopted the panel’s weighing of the civil-penalty factors 
in Gov.Bar R. VII(8) and UPL Reg. 400.  However, due to respondents’ 
“egregious and fraudulent conduct in the use of Attorney Bennett’s name and 
signature on the deeds in question, Dalton’s offer of payment to ‘conclude the 
matter,’ Respondents’ disregard for the Board’s proceedings, and their refusal to 
cooperate with Relator, which has prevented Relator from identifying any other 
deeds Respondents may have prepared,” the board recommends a civil penalty of 
$20,000. 
{¶ 21} We adopt the board’s recommended sanctions.  Accordingly, we 
enjoin respondents and their officers, agents, employees, successors, and assigns 
from drafting deeds or otherwise engaging in the unauthorized practice of law in 
the future.  We also order respondents to disclose to the board and the relator, 
within 30 days of the court’s order, the names and addresses of all of respondents’ 
clients named as grantor or grantee in any deed or other legal instrument prepared 
by respondents, and the names and addresses of any lenders or title insurance 
companies involved in the transaction.  Finally, we order respondents, within 60 
days of the court’s order, to notify in writing each of respondents’ clients named 
as grantor or grantee in any deed or other legal instrument respondents prepared, 
and any lender or title insurance company involved in the transaction.  Each 
notice should indicate that respondents engaged in the unauthorized practice of 
law by preparing deeds purporting to convey real estate and should include copies 
of the board’s final report and the court’s opinion.  Finally, we impose a civil 
penalty of $20,000 ($10,000 for each deed prepared by respondents) against 
respondents, jointly and severally.  Costs are taxed to respondents. 
Judgment accordingly. 
 
MOYER, 
C.J., 
and 
PFEIFER, 
LUNDBERG 
STRATTON, 
O’CONNOR, 
O’DONNELL, LANZINGER, and CUPP, JJ., concur. 
__________________ 
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Fitch, Kendall, Cecil, Robinson & Barry Co., L.P.A., and Ian Robinson; 
and Eugene P. Whetzel, General Counsel, for relator. 
______________________