Case Title: Disciplinary Counsel v. Zumstein

Citation: 2001-Ohio-1619

Docket Number: 20010750

State: ohio

Court: Ohio Supreme Court

Date: 2001-11-14T00:00:00Z

Document:
[Cite as Disciplinary Counsel v. Zumstein, 93 Ohio St.3d 544, 2001-Ohio-1619] 
 
 
OFFICE OF DISCIPLINARY COUNSEL v. ZUMSTEIN. 
[Cite as Disciplinary Counsel v. Zumstein (2001), 93 Ohio St.3d 544.] 
Attorneys at law — Misconduct — Permanent disbarment — Engaging in illegal 
conduct involving moral turpitude — Engaging in conduct involving 
dishonesty, fraud, deceit, or misrepresentation — Engaging in conduct 
prejudicial to the administration of justice — Engaging in conduct 
adversely reflecting on fitness to practice law — Failing to carry out 
contract for professional employment — Prejudicing or damaging client 
during course of professional relationship — Commingling client funds 
with personal funds — Failing to promptly deliver to client funds to 
which the client is entitled. 
(No. 01-750 — Submitted June 20, 2001 — Decided October 31, 2001.) 
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and 
Discipline of the Supreme Court, No. 00-80. 
__________________ 
 
Per Curiam.  In 1998, First American Title Insurance Company (“First 
American”) began an audit of Capital Title Agency, Inc. (“Capital Title”), an 
Ohio corporation that operated as a title insurance agent for First American and 
whose president was respondent, R. William Zumstein of Columbus, Ohio, 
Attorney Registration No. 0020944. 
 
In March 1999, Tracy L. Daugherty obtained a mortgage loan from City 
Mortgage Company/Washtenaw Mortgage Company to pay off his existing 
mortgage with Atlantic Mortgage and Investment Corporation (“Atlantic 
Mortgage”) of Jacksonville, Florida, pay off some credit card debts, and provide 
funds for new windows for his house.  The loan was to close at Capital Title, and 
Daugherty engaged respondent to represent him during the closing.  Respondent 
SUPREME COURT OF OHIO 
2 
assured Daugherty that following the closing his existing mortgage would be paid 
off by Capital Title.  Although the new mortgagee transferred sufficient funds into 
the escrow controlled by Capital Title, the check respondent drew on the escrow 
account that was payable to Atlantic Mortgage was dishonored for insufficient 
funds. 
 
Atlantic Mortgage then indicated that it was contemplating beginning 
foreclosure proceedings against Daugherty, who then sued Capital Title and First 
American.  The suit was settled, and as part of the settlement respondent was 
personally to pay $8,000 in damages to Daugherty in two $4,000 installments.  
Against the express instructions of First American’s Vice-President and Ohio 
manager, respondent withdrew the funds for these two checks from Capital Title’s 
escrow accounts. 
 
In April, July, and August 1999, respondent caused checks from Capital 
Title’s newly opened escrow account to be issued to Kim Anderson in the 
amounts of $800, $1,870, and $2,000.  These checks were unrelated to any real 
estate transactions in which Capital Title was involved.  In December 1999, 
respondent wrote a check for $15,000 to Nawal K. Pandey from Capital Title’s 
new escrow account unrelated to any real estate transaction in which Capital Title 
was involved.  In April 1999, respondent also made cash withdrawals of  $6,000, 
$706, and $1,294 from the new escrow account for his own benefit.  He also 
withdrew $4,000 from the new escrow account for his own benefit in October 
1999.  During the period in question, respondent’s misuse of the Capital Title 
escrow accounts resulted in more than fifty overdraft situations. 
 
The “Good Funds Law,” R.C. 1349.21(B)(5), provides that, in certain 
situations applicable here, no escrow or closing agent shall accept a personal 
check in excess of  $1,000.  Nevertheless, on March 28, 2000, respondent 
accepted four separate personal checks from Carlysle W. Coleman in the amounts 
of $15,411.56, $16,339.45, $14,796.57, and $16,957.38 for deposit in the Capital 
January Term, 2001 
3 
Title escrow account in connection with a real estate purchase by Coleman.  All  
four of the checks were dishonored for insufficient funds. 
 
In June 1998, respondent made a $14,500 loan to Sonny Yinger.  The 
Vice-President for First American discovered the note for this loan in Capital 
Title’s records.  When asked at his deposition whether he had ever loaned money 
out of the Capital Title escrow account, respondent said that he had not. 
 
In February 2000, respondent prepared a deed transferring real estate from 
“A-Corp., an Ohio Corporation,” to Fred M. Slade for $66,000.  “A-Corp.” is not 
and was not ever an Ohio corporation.  Capital Title then issued checks in the 
amount of $7,000 and $10,716.49 payable to “A-Corp. or Kim Anderson,” which 
Kim Anderson cashed. 
 
In April 2000, respondent prepared a deed transferring real estate from  
“PSI Group, Inc., a corporation organized and existing under the laws of the state 
of Ohio,” to Fred Slade.  The deed was executed for PSI Group by “Kim 
Anderson, its President,” although PSI was not an Ohio corporation and Kim 
Anderson was not its president.  Earlier, in October 1999, respondent prepared a 
deed transferring real estate from “PSI Group, Inc., an Ohio Corporation,” to Kim 
Anderson.  The deed indicated that it was executed for PSI Group by “Kim 
Anderson, President.” 
 
Based on a grievance filed against respondent, Office of Disciplinary 
Counsel (“relator”) began an investigation of respondent’s activities in connection 
with Capital Title, which included taking respondent’s deposition.  On August 14, 
2000, relator filed a complaint charging the respondent with the activities outlined 
above and alleged that they constituted violations of the Code of Professional 
Responsibility.  Respondent failed to answer, and the matter was submitted by the 
Board of Commissioners on Grievances and Discipline of the Supreme Court 
(“board”) to Master Commissioner Harry W. White for ruling on relator’s motion 
for default, pursuant to Gov.Bar R. V(6)(F)(2). 
SUPREME COURT OF OHIO 
4 
 
The Master Commissioner found the facts as stated and concluded that 
respondent violated DR 1-102(A)(3) (engaging in illegal conduct involving moral 
turpitude), 1-102(A)(4) (a lawyer shall not engage in conduct involving 
dishonesty, fraud, deceit, or misrepresentation), 1-102(A)(5) (a lawyer shall not 
engage in conduct prejudicial to the administration of justice), 1-102(A)(6) (a 
lawyer shall not engage in conduct adversely reflecting on the lawyer’s fitness to 
practice law), 7-101(A)(2) (a lawyer shall not fail to carry out a contract for 
professional employment), 7-101(A)(3) (a lawyer shall not prejudice or damage 
his client during course of professional relationship), 9-102(A) (a lawyer shall not 
commingle funds of  a client with personal funds), and  9-102(B)(4) (a lawyer 
shall promptly deliver to the client funds or property to which the client is 
entitled).  The Master Commissioner recommended that respondent be 
permanently disbarred from the practice of law in Ohio.  The board adopted the 
findings, conclusions, and recommendation of the Master Commissioner. 
 
We have reviewed the record and adopt the findings, conclusions, and 
recommendation of the board.  As we noted in Cleveland Bar Assn. v. Belock 
(1998), 82 Ohio St.3d 98, 100, 694 N.E.2d 897, 899, “The continuing public 
confidence in the judicial system and the bar requires that the strictest discipline 
be imposed in misappropriation cases.”  Accordingly, respondent is hereby 
permanently disbarred from the practice of law in Ohio.  Costs are taxed to 
respondent. 
Judgment accordingly. 
 
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and 
LUNDBERG STRATTON, JJ., concur. 
__________________ 
 
Jonathan E. Coughlan, Disciplinary Counsel, and Lori J. Brown, First 
Assistant Disciplinary Counsel, for relator. 
__________________