Title: Cuyahoga Cty. Bar Assn. v. Okocha

State: ohio

Issuer: Ohio Supreme Court

Document:

CUYAHOGA COUNTY BAR ASSOCIATION v. OKOCHA. 
[Cite as Cuyahoga Cty. Bar Assn. v. Okocha (1998), ___ Ohio St.3d ___.] 
Attorneys at law — Misconduct — Disbarment — Charging fees that are clearly 
excessive — Overstating expenses and charging clients for expenses not 
incurred. 
(No. 97-2648 — Submitted May 12, 1998 — Decided August 12, 1998.) 
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and 
Discipline of the Supreme Court, No. 96-111. 
 
Respondent, Nwabueze V. Okocha of Cleveland, Ohio, Attorney 
Registration No. 0025024, was indefinitely suspended from the practice of law on 
June 8, 1994 for charging a clearly excessive fee, for conduct involving  
dishonesty, fraud, deceit, or misrepresentation, and for failing to preserve the 
identity of a client’s funds or property.  Cuyahoga Cty. Bar Assn. v. Okocha 
(1994), 69 Ohio St.3d 398, 632 N.E.2d 1284. 
 
On March 4, 1997, relator, Cuyahoga County Bar Association, filed an 
amended  complaint charging that respondent had committed various violations of 
the Code of Professional Responsibility during the period 1989 through early 
1995.  Respondent filed his answer, and on May 22, 1997, he filed a motion to 
dismiss Counts II, III, and IV of the amended complaint, which was denied.  On 
May 27, 1997, respondent filed a complaint in mandamus and prohibition in this 
court, which we later dismissed sua sponte.  State ex rel. Okocha v. Cuyahoga Cty. 
Bar Assn. (1997), 79 Ohio St.3d 1412, 679 N.E.2d 1138.  A panel of the Board of 
Commissioners on Grievances and Discipline (“board’) heard the matter on May 
28, 1997.  After closing briefs were filed, the relator filed a motion for leave to file 
a second amended complaint on July 18, 1997, which was accepted by the panel. 
 
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The panel found with respect to Count I of the second amended complaint 
that in 1989 respondent agreed to represent Carol Hagins in a case in common 
pleas court involving assault and battery, and in an employment discrimination 
case in federal court.  Hagins agreed to pay respondent a nonrefundable retainer of 
$6,000 and, in addition, forty percent of any money she received as well as the 
expenses of the cases.  The common pleas trial resulted in a judgment in favor of 
Hagins for $10. 
 
In October 1992, Hagins asked for a breakdown of the expenses incurred by 
respondent.  In May 1993, respondent provided Hagins with an itemization stating 
that the expenses he incurred on her behalf were $47,212.35.  The itemization 
included amounts paid to Carla Elliott, a law student, and Mary Oluonye, a 
paralegal, both of whom worked for respondent.  The expense itemization also 
included $11,100 for the employment of four economists as experts.  When 
challenged by Hagins, respondent waived the fee for three of the economists 
because their services were not used.  The one expert who was used, Dr. John 
Burke, provided a written analysis of Hagins’s earning potential, and respondent’s 
itemization indicated that Burke’s fee was $4,600.  Burke, however, testified that 
his charge for preparing the Hagins analysis was $2,000 and that it was never paid.  
Evidence indicated that respondent received a check from Hagins for $2,600 and 
paid this amount to Burke for work Burke had done in previous cases because 
Burke would not go forward with the Hagins report until respondent had paid him 
for his prior reports. 
 
In addition, respondent’s expense itemization included the amount of 
$11,852.75 for court reporting services.  However, the invoices presented to 
Hagins by respondent to support that amount totaled only $1,707.50. 
 
3
 
Respondent’s itemization of expenses did not reflect Hagins’s payment of 
the $6,000 retainer, her payment for the expert witnesses, or other small amounts 
Hagins paid to respondent.  After the common pleas case, Hagins was awarded 
$4,100 in reimbursement of appeal costs.  Hagins never received the $4,100. 
 
The panel concluded that the actions of respondent with respect to his 
client, Hagins, violated  DR 1-102(A)(3) (engaging in illegal conduct involving 
moral turpitude), (4) (engaging in conduct involving dishonesty, fraud, deceit, or 
misrepresentation), and (6) (engaging in conduct that reflects upon the fitness to 
practice law). 
 
With respect to Count II, the panel found that in October 1989 Roger 
Wilkerson retained respondent to represent him in a wrongful discharge case.  
After his discharge, Wilkerson received severance pay for three months from his 
employer and was hired by another company at a $1,500 increase in annual pay.  
Despite the fact that Wilkerson had no out-of-pocket damages, respondent led 
Wilkerson to believe that he had a strong case worth several hundred thousand 
dollars.  Respondent and Wilkerson entered into an agreement providing that 
Wilkerson was to pay respondent an $11,000 nonrefundable retainer, that 
respondent would receive forty percent of “the amount of money [Wilkerson] 
received,” and that Wilkerson would be responsible for all expenses.  Wilkerson 
paid respondent an $11,000 retainer and $2,500 for the services of a financial 
expert.  No financial expert was ever hired by respondent.  After we suspended 
respondent indefinitely from the practice of law, Wilkerson hired another attorney 
who settled the federal case for $20,000.  On the basis of these facts, the panel 
concluded that respondent violated DR 2-106(A) (charging a fee that is clearly 
excessive). 
 
4
 
Count III was withdrawn by relator.  With respect to Count IV, the panel 
found that in October 1992, Ruby Randolph hired respondent to represent her in a 
discrimination case.  Their contract stated that respondent is “willing to invest our 
time and services * * * for a percentage of the amount of money received and our 
retainer.  The percentage is 40.00.  The retainer is $12,000.00.  The retainer is only 
for accepting your case and making our services available to you.  The 
$12,000[.00]  retainer fee will not be refunded to you.”  The contract also provided 
that “in addition to these fees, out-of-pocket expenses directly attributable to your 
case are to be paid by you.”  Randolph paid not only the retainer, but also over 
$2,000 for transcripts.  After respondent was suspended, Randolph retained 
another attorney who settled her case for $15,000.  Randolph asked for a refund 
from respondent but did not receive it.  The panel concluded that respondent’s 
actions violated DR 1-102(A)(3), (4), and (6), and 2-106(A).  The panel 
recommended that respondent be disbarred from the practice of law in Ohio.  The 
board adopted the findings, conclusions, and recommendation of the panel. 
__________________ 
 
Howard A. Schulman and Michael E. Murman, for relator. 
 
Nwabueze V. Okocha, pro se. 
__________________ 
 
Per Curiam.  Respondent has suggested that because he recently filed for 
bankruptcy in the United States Bankruptcy Court in the Northern District of 
Ohio, Section 362 of the Bankruptcy Code (Section 362, Title 11, U.S.Code) 
operates automatically to stay this disciplinary proceeding.  This proposition fails.  
Section 362(b)(4), Title 11, U.S.Code specifically exempts from the bankruptcy 
stay “an action or proceeding by a governmental unit to enforce such 
governmental unit’s police or regulatory power.”  This court is a governmental 
 
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unit; our actions to regulate the bar are an exercise of our regulatory power. Cf. 
Wade v. State Bar of Arizona (C.A.9, 1991), 948 F.2d 1122 (holding that a 
bankruptcy filing does not stay disciplinary proceedings). 
 
We adopt the findings of fact and the conclusions of the board.  In each of 
the three disciplinary matters considered by the board, respondent entered into a 
contract that provided he receive a fee of forty percent of any money realized and 
a nonrefundable retainer.  In addition, each contract indicated that the client would 
be responsible for the expenses of  the case.  It is clear from the contracts and from 
respondent’s dealings with his clients that respondent regarded the nonrefundable 
retainer as earned upon receipt and that it was not held by respondent as security 
for fees or for an advance on expenses. 
 
Recently in Columbus Bar Assn. v. Klos (1998), 81 Ohio St.3d 486, 692 
N.E.2d 565, and earlier in Cincinnati Bar Assn. v. Schultz (1994), 71 Ohio St.3d 
383, 643 N.E.2d 1139, we criticized earned-upon-receipt retainers.  We found 
such retainers to be appropriate only in very limited circumstances, such as an 
engagement to remain available and forgo employment by a competitor of the 
client.  Where not made within this narrow limit, an advance payment still may be 
appropriate to serve as security for the attorney who provides services for a new or 
financially unstable client. 
 
In these cases, however, respondent met none of these tests.  There was no 
likelihood that the employers would engage respondent to defend against the 
claims of Hagins, Wilkerson, and Randolph.  Because respondent was not required 
to turn down work from employers that would conflict with his engagement by 
these clients, the retainers he requested would be appropriate only if they served as 
advance payments to provide security for respondent.  But respondent did not 
apply the retainers to reduce either his fees or the expenses he incurred.  In short, 
 
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respondent’s earned-upon-receipt retainer in each of these cases was unrelated to 
any legal services he might perform or be precluded from performing.  They 
therefore constituted excessive fees. 
 
Additionally, respondent overstated his expenses and charged clients for 
expenses that he had not incurred. 
 
As we said in Toledo Bar Assn. v. Batt (1997), 78 Ohio St.3d 189, 677 
N.E.2d 349, obtaining fees by padding client bills with hours not worked (and in 
this case by charging for expenses not incurred) is equivalent to misappropriation 
of the funds of a client and warrants disbarment.  Considering this case and 
respondent’s prior discipline, we adopt the recommendation of the board.  
Respondent is disbarred from the practice of law in Ohio.  Costs taxed to 
respondent. 
Judgment accordingly. 
 
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and 
LUNDBERG STRATTON, JJ., concur.