Case Title: Stark Cty. Bar Assn. v. Marosan

Citation: 2008-Ohio-3882

Docket Number: 20080399

State: ohio

Court: Ohio Supreme Court

Date: 2008-08-07T00:00:00Z

Document:
[Cite as Stark Cty. Bar Assn. v. Marosan, 119 Ohio St.3d 113, 2008-Ohio-3882.] 
 
 
STARK COUNTY BAR ASSOCIATION v. MAROSAN. 
[Cite as Stark Cty. Bar Assn. v. Marosan,  
119 Ohio St.3d 113, 2008-Ohio-3882.] 
Attorneys at law — Misconduct— Entering into a business transaction with a 
client having differing interests where the client expects the attorney to 
exercise his professional judgment for the protection of the client without 
client consent after full disclosure — Failure to cooperate in a 
disciplinary investigation — Permanent disbarment. 
(No. 2008-0399 – Submitted April 9, 2008 – Decided August 7, 2008.) 
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and 
Discipline of the Supreme Court, No. 07-082. 
____________ 
 
Per Curiam. 
{¶ 1} Respondent, Joseph E. Marosan of North Royalton, Ohio, Attorney 
Registration No. 0025849, was admitted to the Ohio bar in 1984.  On October 26, 
2005, we suspended respondent from the practice of law for two years, with 18 
months stayed, for neglecting clients’ legal matters, failing to maintain a client 
trust account, and failing to cooperate in the ensuing disciplinary investigation.  
Stark Cty. Bar Assn. v. Marosan, 106 Ohio St.3d 430, 2005-Ohio-5412, 835 
N.E.2d 718.  Respondent, however, failed to comply with our order of suspension, 
and on March 7, 2006, we revoked the previously imposed stay and ordered 
respondent to serve the entire two-year suspension.  Stark Cty. Bar Assn. v. 
Marosan, 108 Ohio St.3d 1220, 2006-Ohio-1505, 844 N.E.2d 846. 
{¶ 2} On June 21, 2006, we disciplined respondent yet again for 
misconduct that included neglect of a legal matter, failure to seek a client’s lawful 
objectives, failure to carry out an employment contract, failure to maintain client 
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funds in separate accounts, failure to promptly pay client funds, failure to notify a 
client of insufficient professional liability insurance, and failure to cooperate in 
the disciplinary investigation.  Accordingly, we suspended respondent for six 
months, the suspension to be served consecutively to the previously imposed two-
year suspension.  Cuyahoga Cty. Bar Assn. v. Marosan, 109 Ohio St.3d 439, 
2006-Ohio-2816, 848 N.E.2d 837. 
{¶ 3} In October 2007, relator, Stark County Bar Association, filed a 
complaint charging respondent with additional violations of the Code of 
Professional Responsibility and the Rules of Professional Conduct.  Respondent 
failed to answer the complaint, and pursuant to Gov.Bar R. V(6)(F), relator 
moved for default.  The motion was referred to a master commissioner, who made 
findings of fact and conclusions of law and a recommendation.  The Board of 
Commissioners on Grievances and Discipline adopted the master commissioner’s 
findings.  The board rejected the master commissioner’s recommended sanction 
of an indefinite suspension and instead recommended that respondent be 
permanently disbarred. 
{¶ 4} We adopt the board’s findings of misconduct, and we agree with 
the board that respondent should be permanently disbarred.  
Misconduct 
3M Land Trust 
{¶ 5} Beginning in February 2003, respondent represented Vernon R. 
Martin II and his wholly owned companies, Vern Martin Consulting, Inc., and 
Old Monarch, L.L.C.  In the summer of 2003, respondent encouraged Martin to 
join a real estate trust that respondent was creating.  In September 2003, 
respondent formed a real estate trust that had three partners or “beneficiaries”: 
respondent, Martin, and another of respondent’s clients, Paul Miller.  Respondent 
named himself the trustee and was also the attorney representing the trust.  During 
this time, respondent continued to act as Martin’s attorney.  At no time did 
January Term, 2008 
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respondent advise Martin of the risks attendant to this dual representation or 
suggest that Martin seek separate counsel regarding the trust. 
{¶ 6} The real estate trust was called the “3M Land Trust,” and the 
purpose of the trust was to purchase and rehabilitate property and resell it at a 
profit, with the profits to be shared equally among the three partners.  Martin was 
expected to provide the capital for the purchase of the properties, respondent was 
to do the legal work, and Miller was to contribute property-management and 
building expertise. 
{¶ 7} In January 2004, Martin transferred more than $114,000 to 
respondent to buy property in Pennsylvania on behalf of the 3M Land Trust.  In 
August 2004, one of the three parcels of the Pennsylvania property was sold for 
approximately $90,000.  Half of those proceeds was applied to debt repayment, 
while the remainder was divided equally among respondent, Martin, and Miller, 
with each receiving $16,000.  Martin applied his share toward the remaining debt 
on the property.  The payment of $16,000 each to respondent and Miller – neither 
of whom had contributed any capital to the purchase – was characterized by 
respondent as an advance on future expected profits. 
{¶ 8} In December 2004, an auction was held on the remaining two 
parcels, but the offer received was not enough to retire the remaining debt on the 
property.  Because Martin was the only person making debt payments, he wanted 
to accept the auction offer to reduce the debt by any extent possible.  Respondent 
and Miller, however, did not want to accept the proceeds of the auction, so Martin 
reluctantly agreed that the trust would retain the property. 
{¶ 9} In October 2006, the remaining two parcels were sold.  During the 
life of the investment, Martin paid interest on the money he had borrowed to 
make the original investment in the Pennsylvania property and also paid 
additional accounting and insurance costs that the 3M Land Trust had incurred.  
The sale of all three parcels resulted in a $15,000 profit over Martin’s initial 
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investment and advanced expenses.  According to the terms of the 3M Land Trust 
agreement, each of the three beneficiaries should have been obligated to return 
$11,000 of the $16,000 received from the sale of the first parcel.  However, 
neither respondent nor Miller reimbursed Martin for the excess distributions that 
they had taken.  Instead of receiving one-third of the profits, Martin was the only 
one of the three beneficiaries of the 3M Land Trust who lost money on the 
Pennsylvania property. 
{¶ 10} With respect to the above misconduct that allowed respondent to 
profit at the expense of Martin, the board found that respondent had violated DR 
5-104(A) (prohibiting a lawyer from entering into a business transaction with a 
client if they have differing interests and if the client expects the lawyer to 
exercise his professional judgment for protection of the client, unless the client 
has consented after full disclosure). 
Failure to Cooperate in Disciplinary Investigation 
{¶ 11} On December 29, 2006, relator notified respondent by letter that 
Martin had filed a grievance and requested a response within 21 days.  Relator’s 
investigator sent another letter to respondent on January 2, 2007, regarding the 
Martin grievance.  No response was received from either letter, so relator sent a 
certified letter on January 18, 2007, requesting that respondent contact the 
investigator.  Respondent signed the return receipt, but he failed to respond or 
otherwise cooperate in the investigation of the Martin grievance. 
{¶ 12} On August 31, 2007, relator sent respondent a copy of a proposed 
complaint by certified mail.  Respondent signed the certified return receipt but 
failed to respond.  Respondent was also served with the formal complaint on 
October 11, 2007, but he did not file an answer. 
{¶ 13} By ignoring relator’s investigative inquiries and failing to file an 
answer to the complaint, the board found that respondent had violated Gov.Bar R. 
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V(4)(G) and Prof.Cond.R. 8.1(b) (both requiring a lawyer to cooperate in a 
disciplinary investigation).1 
Recommended Sanction 
{¶ 14} In recommending a sanction, the board considered the following 
aggravating factors listed in Section 10 of the Rules and Regulations Governing 
Procedure on Complaints and Hearings Before the Board of Commissioners on 
Grievances and Discipline (“BCGD Proc.Reg.”).  The board noted that 
respondent had previously been disciplined on two separate occasions and is 
currently under suspension.  BCGD Proc.Reg. 10(B)(1)(a).  The board also found 
that respondent had acted with a dishonest or selfish motive and had failed to 
cooperate in the disciplinary process.  BCGD Proc.Reg. 10(B)(1)(b) and (e).  The 
board further noted the vulnerability and resulting harm to the victim of 
respondent’s misconduct and respondent’s failure to make restitution.  BCGD 
Proc.Reg. 10(B)(1)(h) and (i).  No mitigating factors were found.  See BCGD 
Proc.Reg. 10(B)(2). 
{¶ 15} Relator recommended that respondent be permanently disbarred.  
The master commissioner recommended that respondent be indefinitely 
suspended from the practice of law.  The board recommended permanent 
disbarment. 
Review 
{¶ 16} Respondent does not challenge the board’s findings of misconduct 
or the recommended sanction.  We have reviewed the board’s record and its 
report, and we agree that respondent violated DR 5-104(A), Gov.Bar R. V(4)(G), 
and Prof.Cond.R. 8.1(b). 
                                                 
1. Because respondent’s failure to cooperate occurred prior to and after the adoption of the Rules 
of Professional Conduct on February 1, 2007, he was charged under the applicable rule of both the 
former Code of Professional Responsibility and the current rule. 
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{¶ 17} We also accept the board’s recommendation that respondent be 
permanently disbarred.  Our primary purpose in imposing disciplinary sanctions is 
not to punish the offender, but to protect the public.  Disciplinary Counsel v. 
O’Neill, 103 Ohio St.3d 204, 2004-Ohio-4704, 815 N.E.2d 286, ¶ 53, citing Ohio 
State Bar Assn. v. Weaver (1975), 41 Ohio St.2d 97, 100, 70 O.O.2d 175, 322 
N.E.2d 665.  Respondent engaged in self-dealing and profited at the expense of a 
client whose interests he had a professional duty to protect.  Respondent also 
knowingly violated his duties to the legal profession and the public by refusing to 
cooperate in the disciplinary process.  And respondent has offered no mitigating 
evidence that would warrant a lesser sanction.  Moreover, we have already 
sanctioned respondent twice for violating his professional and ethical duties.  
Respondent’s conduct in this matter – and in his previous disciplinary cases – 
demonstrates that he is not fit to practice law. 
{¶ 18} Accordingly, respondent is permanently disbarred from the 
practice of law in Ohio.  Costs are taxed to respondent. 
Judgment accordingly. 
 
MOYER, 
C.J., 
and 
PFEIFER, 
LUNDBERG 
STRATTON, 
O’CONNOR, 
O’DONNELL, LANZINGER, and CUPP, JJ., concur. 
____________ 
 
Richard S. Milligan and G. Ian Crawford, for relator. 
____________