Case Title: Disciplinary Counsel v. Shaw

Citation: 2010-Ohio-4412

Docket Number: 20100316

State: ohio

Court: Ohio Supreme Court

Date: 2010-09-23T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Disciplinary Counsel v. Shaw, Slip Opinion No. 2010-Ohio-4412.] 
 
 
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-4412 
DISCIPLINARY COUNSEL v. SHAW. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Disciplinary Counsel v. Shaw,  
Slip Opinion No. 2010-Ohio-4412.] 
Attorney misconduct — Naming the attorney’s children as beneficiaries of a trust 
he prepared for an elderly client and borrowing money from the elderly 
client without advising the client of the risks of making the unsecured loan 
and then failing to repay the loan — Two-year suspension with one year 
stayed on conditions. 
(No. 2010-0316 — Submitted May 26, 2010 — Decided September 23, 2010.) 
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and 
Discipline of the Supreme Court, No. 08-091. 
__________________ 
Per Curiam. 
{¶ 1} Respondent, Kenneth Norman Shaw of Warren, Ohio, Attorney 
Registration No. 0005525, was admitted to the practice of law in Ohio in 1980.  In 
a four-count amended complaint, relator, Disciplinary Counsel, has charged him 
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with violations of the Code of Professional Responsibility, the Ohio Rules of 
Professional Conduct, and the Rules for the Government of the Bar in Ohio for 
conduct occurring both before and after February 1, 2007.1  A panel of the Board 
of Commissioners on Grievances and discipline conducted a hearing on 
September 29, 2009, but respondent did not appear.  The panel, however, 
reconvened on December 3, 2009, and respondent appeared to present his case, 
pro se.  Based upon findings that respondent named his five children as 
beneficiaries in a trust he prepared for a client, borrowed $13,000 from the same 
client without advising her of the inherent conflict of interest and then failed to 
repay the loan as agreed, and accepted attorney fees for a guardianship without 
obtaining prior approval from the probate court, the panel recommended that 
respondent be suspended from the practice of law for two years with one year 
stayed on the condition that he pay restitution. 
{¶ 2} The board adopted the panel’s findings of fact and misconduct, but 
citing respondent’s “serious acts of fraud and misconduct,” recommends that we 
suspend respondent’s license to practice law in Ohio for two years, with no stay.  
Respondent objects, arguing that the recommended sanction is too harsh.  He asks 
us to remand this case to the board for the presentation of additional mitigating 
evidence.  Alternatively, he urges us to impose a one-year suspension with six 
months stayed on the condition that he remain in compliance with the terms of his 
contract with the Ohio Lawyers Assistance Program (“OLAP”). 
{¶ 3} For the reasons that follow we decline respondent’s request to 
remand this cause to the board, but sustain his objection to the board’s 
recommended sanction. We conclude that a two-year suspension with one year 
stayed upon conditions, as recommended by the panel, is the appropriate sanction 
for his misconduct. 
                                                 
1.  February 1, 2007, is the effective date of the Rules of Professional Conduct.  
 
January Term, 2010 
3 
 
Misconduct 
Count One 
{¶ 4} Counts One, Two, and Three of the complaint arise from 
respondent’s representation of an elderly client.  In September 1999, the client 
asked him to draft a power of attorney and revocable living trust.  Respondent 
prepared those documents, naming himself as the client’s attorney-in-fact, 
cotrustee, and first successor trustee for the trust.  And, purportedly at the client’s 
behest, he included a provision designating each of his five children as a 
beneficiary of the trust, with each child entitled to receive $5,000 upon the 
client’s death.  At the panel hearing, respondent admitted that he had not advised 
his client, who was unrelated to him by blood or marriage, of the inherent conflict 
of interest in naming his children as beneficiaries of a document he had prepared.  
He also admitted that he had never suggested that she obtain advice from a 
disinterested person or have another attorney prepare the trust documents. 
{¶ 5} The panel and board found, and we agree, that respondent’s 
conduct in preparing a trust document that named his own children as 
beneficiaries, violates DR 1-102(A)(5) (prohibiting a lawyer from engaging in 
conduct that is prejudicial to the administration of justice), 1-102(A)(6) 
(prohibiting conduct that adversely reflects upon the lawyer’s fitness to practice 
law), 5-101(A)(1) (prohibiting, except with consent of a client after full 
disclosure, a lawyer from accepting employment if the exercise of the lawyer’s 
professional judgment on behalf the client will be or reasonably may be affected 
by the lawyer’s financial and personal interests), 5-101(A)(2) (prohibiting a 
lawyer from preparing, drafting, or supervising the preparation or execution of a 
will, codicil, or inter vivos trust for a client in which the children of the lawyer are 
named as beneficiaries). 
Count Two 
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{¶ 6} In August 2000, respondent requested and obtained a $13,000 loan 
from his client to be used as a down payment for a building to house his law 
practice.  Pursuant to the terms of the note, respondent was to repay the loan in six 
months, at six percent interest.  He failed to pay the client as agreed.  Although he 
later agreed to make payments of $250 per month, he made only three payments 
before defaulting.  In 2002, the client filed suit and obtained a default judgment 
against respondent for $13,000 plus interest and court costs.  Blackburn v. Shaw 
(Sept. 23, 2003), Warren M.C. No. 2002 CV F 03134. 
{¶ 7} At his disciplinary hearing, respondent admitted that he had not 
advised his client that she should obtain independent advice before making the 
loan, had not advised her of the risks of making the unsecured loan, and had not 
discussed the inherent conflict of interest in the loan arrangement.  Based upon 
these facts, the panel and board found, and we agree, that respondent’s conduct 
with respect to Count Two violates DR 1-102(A)(5), 1-102(A)(6), 5-101(A)(1), 
and 5-104(A) (prohibiting a lawyer from entering into a business transaction with 
a client if they have differing interests therein). 
{¶ 8} Although the board found that respondent’s debt to this client was 
discharged in bankruptcy, we note that there is no evidence in the record to 
support respondent’s testimony regarding the bankruptcy discharge.  On the 
contrary, the record demonstrates that the administrator of the client’s estate filed 
a concealment-of-assets claim and a declaratory-judgment against several parties, 
including respondent.  Miller v. Lagos (Feb. 8, 2008), Trumbull C.P., No.  2007 
CVA 0045.  The probate court found that respondent had “unduly influenced” the 
client to make the loan, that the loan constituted “self-dealing,” and that it was 
“detrimental” to the trust.  Id. at 11.  While noting that respondent had alleged that 
the debt had been discharged in bankruptcy, the probate court concluded that 
pursuant to Section 523(a)(4), Title 11, U.S.Code, the debt was nondischargeable 
because it “arose from the debtor’s defalcation while acting in a fiduciary 
January Term, 2010 
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capacity.”  Id. at 6, 10.  Consequently, that court ordered respondent to pay 
$12,250 to the trust.  Id. at 12. 
{¶ 9} Noting the lack of evidence to demonstrate that the debt had been 
discharged in bankruptcy, the Eleventh District Court of Appeals affirmed the 
probate court’s judgment against respondent.  Miller v. Lagos, Trumbull No.  
2008-T-0014, 2008-Ohio-5863, ¶ 12, 17.  Therefore, based upon the probate 
court’s judgment against respondent and the lack of sufficient documentary 
evidence of the discharge, we reject the board’s finding that the debt was 
discharged in bankruptcy. 
Count Three 
{¶ 10} In Count Three, relator charged respondent with violating 
Prof.Cond.R. 8.4(h) (prohibiting conduct that adversely reflects on a lawyer’s 
fitness to practice law) and Gov.Bar R. V(4)(G) (requiring a lawyer to cooperate 
with a disciplinary investigation) based upon his failure to respond to two separate 
letters of inquiry regarding the allegations in Counts One and Two.  While 
acknowledging respondent’s neglect of the two letters, the panel found that he 
subsequently (1) responded to relator’s request for information, (2) appeared for 
deposition, and (3) fully cooperated with Disciplinary Counsel.  Therefore, the 
panel recommended that the board dismiss Count Three.  Although the board did 
not expressly dismiss this count, we note that it did adopt the panel’s findings of 
fact and conclusions of law and did not make any findings of misconduct with 
respect to Count Three.  Because we accept these findings of fact, we conclude 
that relator did not prove by clear and convincing evidence that respondent’s 
conduct violated Prof.Cond.R. 8.4(h) or Gov.Bar R. V(4)(G).  Accordingly, we 
dismiss Count Three of relator’s amended complaint. 
Count Four 
{¶ 11} The panel and board found that respondent’s conduct with respect 
to Count Four arose out of his representation of two clients who sought 
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guardianship of their grandmother in January 2007.  She died in the latter part of 
May 2007, just days after they had obtained the guardianship.  On May 22, 2007, 
respondent accepted an $800 check for “attorney fees” and a $1,200 check for 
“legal fees: expenses” from his clients without first obtaining the probate court’s 
approval.2   
{¶ 12} On October 29, 2007, respondent filed his first application for 
attorney fees in the probate court, seeking $4,668.75 for legal work, in addition to 
the $2,000 his clients had already paid.  And in December 2008, the probate court 
found respondent “guilty of concealment of assets” of the estate for receiving the 
$800 and $1,200 checks from the guardianship account belonging to the ward.3  
Smith v. Thornton (Dec. 8, 2008), Trumbull P.C. No. 2008-CVA-38 at 2.  
Because the court approved only $800 of respondent’s attorney-fee request, it 
ordered him to reimburse $1,200 to the ward’s estate.  At the December 2009 
disciplinary hearing, respondent admitted that he had not complied with the 
court’s order. 
{¶ 13} Based upon respondent’s failure to obtain probate-court approval 
for his fees before accepting payment, the panel and board found that respondent 
violated Prof.Cond.R. 3.4(c) (prohibiting a lawyer from knowingly disobeying an 
obligation under the rules of a tribunal), 8.4(d) (prohibiting conduct that is 
prejudicial to the administration of justice), and 8.4(h) (prohibiting conduct that 
adversely reflects upon the lawyer’s fitness to practice law).  We accept these 
findings of fact and misconduct. 
                                                 
2.  Trumbull County Probate Court Local Rule 71.3(A) provides: “Counsel fees shall not be paid 
by the fiduciary until a written application has been approved by judgment entry.”   
 
3.  R.C. 2109.50 permits the filing of a complaint in the probate court of the county having 
jurisdiction of the administration of a trust estate “against any person suspected of having 
concealed, embezzled, or conveyed away or of being or having been in the possession of any 
moneys, chattels, or choses in action of such estate,” to aid in the discovery and recovery of assets. 
 
 
January Term, 2010 
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Sanction 
{¶ 14} When imposing sanctions for attorney misconduct, we consider 
relevant factors, including the ethical duties that the lawyer violated and the 
sanctions imposed in similar cases.  Stark Cty. Bar Assn. v. Buttacavoli, 96 Ohio 
St.3d 424, 2002-Ohio-4743, 775 N.E.2d 818, ¶ 16.  In making a final 
determination, we also weigh the evidence of the aggravating and mitigating 
factors listed in Section 10(B) of the Rules and Regulations Governing Procedure 
on Complaints and Hearings Before the Board of Commissioners on Grievances 
and Discipline (“BCGD Proc.Reg.”).  Disciplinary Counsel v. Broeren, 115 Ohio 
St.3d 473, 2007-Ohio-5251, 875 N.E.2d 935, ¶ 21.   
{¶ 15} The board found that four of the nine aggravating factors set forth 
in BCGD Proc.Reg. 10(B)(1) are present, including a pattern of misconduct, 
multiple offenses, vulnerability of and resulting harm to victims of the 
misconduct, and failure to make restitution.  BCGD Proc.Reg. 10(B)(1)(c), (d), 
(h), and (i).  Additionally, the board found that respondent attempted to minimize 
his misconduct by claiming to have had a “close personal relationship” with the 
client.  Although he claimed that she was “very sharp mentally” and that he was 
not trying to take advantage of her, respondent also acknowledged that his client 
was vulnerable and that he was trying to protect her from others who were trying 
to take advantage of her.  In mitigation, the board found only that respondent has 
no prior disciplinary record in his 30 years of practice.  BCGD Proc.Reg. 
10(B)(2)(a). 
{¶ 16} Relator argued that respondent should be suspended from the 
practice of law for two years with one year stayed on conditions, including the 
payment of restitution and the completion of a three-year OLAP contract.  In 
support of its recommended sanction, relator cited our decisions in Toledo Bar 
Assn. v. Cook, 97 Ohio St.3d 225, 2002-Ohio-5787, 778 N.E.2d 40, imposing a 
one-year suspension with six months stayed on an attorney who prepared a will, 
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naming the attorney’s siblings’ corporation as a beneficiary, when the testator was 
not related to the attorney’s siblings, and Disciplinary Counsel v. Kelleher, 102 
Ohio St.3d 105, 2004-Ohio-1802, 807 N.E.2d 310, imposing the same sanction on 
an attorney who prepared an inter vivos trust for an unrelated client, naming the 
attorney’s wife, children, and grandchildren as beneficiaries.  Relator also cited 
our decision in Disciplinary Counsel v. Dettinger, 121 Ohio St.3d 400, 2009-
Ohio-1429, 904 N.E.2d 890, imposing a six-month stayed suspension on an 
attorney who accepted a loan from a client without disclosing the attendant risks 
created by their conflicting interests, and failed to advise the executor of the 
client’s estate of the potential conflict the loan caused before he assumed 
representation of the estate.  Mitigating factors in Dettinger included the 
respondent’s cooperative attitude throughout the disciplinary proceedings and his 
lack of a prior disciplinary record, while the sole aggravating factor was the 
respondent’s commission of multiple offenses.  Id. at ¶ 9. 
{¶ 17} After weighing respondent’s three incidents of misconduct in this 
case, the aggravating and mitigating factors, and our precedent, the panel 
recommended that respondent be suspended from the practice of law for two 
years, with one year stayed on the condition that he pay restitution to the party 
harmed by the misconduct in Count Four.  The panel expressly refused to 
recommend that we impose the conditions that respondent (1) pay restitution to 
the first client, based upon his claimed bankruptcy discharge, or (2) complete his 
OLAP contract, because it was not clear from the record what issues that contract 
was intended to address. 
{¶ 18} The board adopted the panel’s findings of fact and conclusions of 
law, but, citing respondent’s “serious acts of fraud and misconduct,” it 
recommends that we suspend respondent for two years with no stay and that we 
condition his reinstatement upon the payment of restitution to the party harmed by 
his misconduct in Count Four. 
January Term, 2010 
9 
 
Request for Remand 
{¶ 19} Respondent contends that he was not capable of either obtaining 
counsel to represent him or presenting mitigating evidence in this proceeding due 
to his emotional distress, extreme financial difficulties, and inexperience in 
dealing with disciplinary matters.  Now that he has obtained counsel, he seeks 
another opportunity to present evidence of his character and reputation, 
community involvement, payment of restitution with respect to Count Four, and 
recent activities in furtherance of his OLAP contract.  He offers no authority to 
support this request. 
{¶ 20} In a few cases, we have permitted respondents to supplement 
records before this court or have remanded cases to the board for the presentation 
of mitigating evidence.  For example, we remanded a default proceeding after the 
respondent entered an appearance and moved to supplement the record before this 
court.  Butler Cty. Bar Assn. v. Portman, 121 Ohio St.3d 518, 2009-Ohio-1705, 
905 N.E.2d 1203, ¶ 2-5.  Similarly, we remanded a case for the board’s 
consideration of mitigating evidence when the respondent in a default proceeding 
answered our motion to show cause with a motion to supplement or remand, 
proffering “compelling evidence of a mental disability” in explanation for his 
failure to answer the complaint.  Disciplinary Counsel v. McShane, 121 Ohio 
St.3d 169, 2009-Ohio-746, 902 N.E.2d 980, ¶ 2-3.  We have emphasized that 
“attorneys have an obligation to assist in disciplinary matters and that the record 
should be developed in the answers and hearings prior to reaching this court.” 
Dayton Bar Assn. v. Stephan, 108 Ohio St.3d 327, 2006-Ohio-1063, 843 N.E.2d 
771, ¶ 5, citing Cleveland Bar Assn. v. Witt (1999), 85 Ohio St.3d 9, 11, 706 
N.E.2d 763.  Therefore, we have stated that we will consider supplements to the 
record, “only under the most exceptional circumstances.”  Stephan at ¶ 5. 
{¶ 21} In this case, despite having received notice of the date and time of 
the panel hearing, respondent failed to appear.  Nevertheless, the panel opted to 
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delay its ruling on the matter and gave respondent a second chance to present his 
case.  Although an OLAP employee had advised him to obtain counsel in this 
disciplinary matter, respondent appeared pro se.  Because he has had two 
opportunities to present mitigating evidence and has failed to demonstrate any 
exceptional circumstances warranting a remand, we will not grant respondent a 
third opportunity to present evidence in mitigation. 
Severity of Sanction 
{¶ 22} Respondent agrees that Cook, 97 Ohio St.3d 225, 2002-Ohio-5787, 
778 N.E.2d 40, and Kelleher, 102 Ohio St.3d 105, 2004-Ohio-1802, 807 N.E.2d 
310,  set forth an appropriate sanction for violations of DR 5-101(A)(2) (one-year 
suspension with six months stayed), and that Dettinger, 121 Ohio St.3d 400, 
2009-Ohio-1429, 904 N.E.2d 890, sets forth an appropriate sanction for violations 
of DR 5-101(A)(1) and 5-101(A)(4) (a lawyer shall not enter into a business 
transaction with a client without full disclosure of potential conflict of interest) 
(six-month stayed suspension).  He contends, however, that the board’s 
recommended sanction of a two-year suspension with no stay is too harsh for his 
misconduct. 
{¶ 23} First, he contends that the board’s recommended sanction is 
“contrary to precedent.”  In support of this argument, respondent cites Cincinnati 
Bar Assn. v. Hovey (1997), 78 Ohio St.3d 495, 678 N.E.2d 1369; Disciplinary 
Counsel v. Baldwin (1996), 74 Ohio St.3d 592, 660 N.E.2d 1145; and Akron Bar 
Assn. v. Markovich, 117 Ohio St.3d 313, 2008-Ohio-862, 883 N.E.2d 1046. 
{¶ 24} In Hovey, we imposed a six-month stayed suspension on an 
attorney who (1) mortgaged her residence to a client in exchange for a $10,000 
loan without disclosing all of the transaction details to the client, (2) failed to 
record the mortgage, and (3) failed to disclose the existence of the loan on a 
subsequent residential-loan application.  And in Baldwin, we imposed a public 
reprimand on an attorney who purchased a client’s property at the fourth 
January Term, 2010 
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attempted auction of the property.  Id. at 592-593.  The attorneys in Hovey and 
Baldwin, however, did not place their clients in jeopardy of substantial financial 
loss and their cases did not present any other aggravating factors.  Indeed, the 
client in Baldwin ultimately benefitted from the misconduct when the attorney 
deeded the auctioned property back to the client along with the lucrative lease he 
had obtained for the property. Baldwin at 593. 
{¶ 25} In Markovich, we imposed a one-year suspension with six months 
stayed on an attorney who engaged in multiple acts of misconduct including 
neglect of entrusted legal matters, abandonment of a client’s case, disobedience of 
court orders, inappropriate and discourteous behavior in court, and commingling 
of personal and client funds.  Although that attorney committed multiple acts of 
misconduct, we note that several mitigating factors were present, including the 
respondent’s lack of a prior disciplinary record, his payment of restitution, and his 
otherwise good character and reputation. Id. at ¶ 21. 
{¶ 26} In contrast, the aggravating factors here outweigh the sole 
mitigating factor — respondent’s lack of a prior disciplinary record.  Specifically, 
respondent has engaged in a pattern of misconduct involving multiple offenses of 
taking advantage of an elderly and vulnerable client for his own personal gain.  
Although the client successfully amended the trust, revoking the $25,000 
aggregate bequest to respondent’s children before her death, her estate will never 
recover the $12,250 balance of the loan to respondent if, as respondent now 
claims, the debt was discharged in bankruptcy.  Respondent also took fees from 
other clients in a separate case without obtaining the requisite approval from the 
probate court and then failed to pay court-ordered restitution to those clients.  In 
light of these facts, respondent’s conduct is more serious than that of the attorney 
in Markovich. 
{¶ 27} Next, respondent contends that the board erroneously departed 
from the panel’s recommended sanction based upon its finding that he had 
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committed “serious acts of fraud.”  He notes that (1) relator made no allegations 
of fraud in his complaint or his amended complaint, (2) the panel made no 
findings of fact or conclusions of law regarding fraudulent misconduct, and (3) 
the record is devoid of any evidence of fraud. 
{¶ 28} While respondent’s conduct toward each of these clients was 
unethical and his concealment of assets in Count Four was “quasi criminal in 
nature,” see In re Estate of Fife (1956), 164 Ohio St. 449, 58 O.O. 293, 132 
N.E.2d 185, paragraph one of the syllabus, relator has neither alleged nor proven 
that respondent has committed a fraud upon the clients in these counts.  
Therefore, the board’s finding of “serious acts of fraud” is not supported by the 
record and thus cannot support its upward deviation from the panel’s 
recommended sanction. 
{¶ 29} Having examined the respondent’s conduct, reviewed our 
decisions in Cook, Kelleher, and Dettinger, and weighed the aggravating and 
mitigating factors discussed above, we agree with the panel’s conclusion that the 
appropriate sanction for respondent’s multiple acts of misconduct is a two-year 
suspension, with one year stayed on conditions. 
{¶ 30} Accordingly, Kenneth Norman Shaw is suspended from the 
practice of law in the state of Ohio for two years, with one year stayed on the 
conditions that he (1) commit no further acts of misconduct, (2) pay restitution of 
$1,200 to the party harmed by the misconduct in Count Four, and (3) either pay 
restitution of $12,250 to the estate of the client affected by his misconduct in 
Count Two or submit documentary evidence to the court to prove that the 
financial obligation was discharged in bankruptcy.  If respondent fails to meet the 
stated conditions, the stay of his suspension will be lifted, and respondent will 
serve the entire two-year suspension from the practice of law.  Moreover, 
respondent will not be reinstated to the practice of law until he submits 
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documentary evidence to the court to prove that he has made restitution or that his 
debt was discharged in bankruptcy.  Costs are taxed to respondent. 
Judgment accordingly. 
 
BROWN, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL, 
LANZINGER, and CUPP, JJ., concur. 
 
O’CONNOR, J., dissents and would suspend respondent from the practice 
of law in Ohio for two years. 
__________________ 
Jonathan E. Coughlan, Disciplinary Counsel, and Robert R. Berger, Senior 
Assistant Disciplinary Counsel, for relator. 
Koblentz & Penvose, L.L.C., Richard S. Koblentz, and Bryan L. Penvose, 
for respondent. 
______________________