Title: Disciplinary Counsel v. McNamee

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as Disciplinary Counsel v. McNamee, 119 Ohio St.3d 269, 2008-Ohio-3883.] 
 
 
DISCIPLINARY COUNSEL v. MCNAMEE. 
[Cite as Disciplinary Counsel v. McNamee,  
119 Ohio St.3d 269, 2008-Ohio-3883.] 
Attorneys – Misconduct – Multiple disciplinary violations – Representing clients 
with competing interests without full disclosure and without clients’ 
waiver of conflict – Accepting employment despite probability that 
professional judgment will be affected by lawyer’s own interests – 
Continuing to represent client in pending litigation despite probability 
that lawyer will be called as witness – One-year suspension, stayed on 
condition. 
(No. 2008-0400 – Submitted March 12, 2008 – Decided August 7, 2008.) 
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and 
Discipline of the Supreme Court, No.  07-081. 
_______________________ 
Per Curiam. 
{¶ 1} Respondent, Michael Patrick McNamee of Beavercreek, Ohio, 
Attorney Registration No. 0043861, was admitted to the practice of law in Ohio in 
1990.  The Board of Commissioners on Grievances and Discipline has 
recommended that we suspend respondent’s license to practice for one year, 
conditionally staying the suspension, based on findings that he entered into 
business transactions with clients and represented their competing interests in 
those transactions, creating conflicts of interest in violation of the Code of 
Professional Responsibility.  We agree that respondent committed professional 
misconduct as found by the board and that a one-year suspension, all stayed, is 
appropriate. 
SUPREME COURT OF OHIO 
2 
{¶ 2} Relator, Disciplinary Counsel, charged respondent in a two-count 
complaint with various violations of the Disciplinary Rules.  A panel of three 
board members considered the case on the parties’ consent-to-discipline 
agreement.  See Section 11 of the Rules and Regulations Governing Procedure on 
Complaints and Hearings Before the Board of Commissioners on Grievances and 
Discipline (“BCGD Proc.Reg.”).  Accepting the agreement, the panel found the 
misconduct to which the parties stipulated and recommended the one-year 
suspension, all stayed on the condition that respondent commit no further 
disciplinary violations.  The board adopted the findings of misconduct and 
recommended sanction. 
Misconduct 
{¶ 3} Both counts of the complaint arose from a real-estate development 
project in which respondent represented three investors and also had a personal 
financial interest. 
Count One 
{¶ 4} In 1992, respondent and his siblings owned approximately 80 acres 
in Xenia Township, Ohio.  Respondent, then an associate with the law firm of 
Pickrel, Shaeffer & Ebeling (“PS&E”), agreed to develop the McNamee property 
in a joint venture with Robert S. Arnold, a local builder and long-time client of 
the PS&E law firm. 
The Arnold-McNamee Joint Venture 
{¶ 5} In January 1993, respondent transferred the McNamee property to 
the Arnold-McNamee Joint Venture (“Arnold-McNamee”) with plans to develop 
Summer Brooke, a series of single-family housing units, and to share in profits 
from the sale of those properties.  Arnold-McNamee valued the development land 
at $250,000, or $3,125 per acre.  According to the Arnold-McNamee agreement, 
respondent agreed to “manage all of the legal affairs of [Arnold-McNamee], 
January Term, 2008 
3 
review all contracts awarded for development of the Premises, and assist Arnold 
as required with the operation of [Arnold-McNamee].” 
{¶ 6} Acting on behalf of Arnold-McNamee, respondent succeeded in 
having the McNamee property rezoned and annexed to the city of Xenia.  Under 
the new zoning, however, restrictions limited the development to 100 lots unless 
the developers constructed a second point of access to a main thoroughfare.  To 
obtain a site for the second entrance, respondent contacted neighbors John and 
Damaine Vonada, who owned approximately 40 acres contiguous to the 
McNamee property, about becoming involved in the Summer Brooke 
development project. 
{¶ 7} Respondent explained to the Vonadas that he was an attorney and 
had joined Arnold in a venture to develop more than 100 new housing units on the 
McNamee plat.  He then explained zoning restrictions and Arnold-McNamee’s 
need for a second entrance off the main road bordering the couple’s land.  The 
Vonadas did not immediately commit to the Summer Brooke project, but 
respondent prevailed upon them.  When they did commit, the couple inquired 
about possibly buying some Summer Brooke lots to develop themselves. 
The Arnold-Vonada Joint Venture 
{¶ 8} During their negotiations, respondent urged the Vonadas to enter 
into a joint venture with Arnold.  The Vonadas’ accountant advised against that 
arrangement, recommending instead that the couple protect their personal assets 
by forming an S corporation.  The Vonadas disregarded the accountant’s advice, 
relying instead on respondent’s assurances that they needed no corporate shield 
and that any lawsuits against the venture would target only Arnold, because of his 
“vast wealth” and “deep pockets.” 
{¶ 9} In April 1993, respondent prepared the Arnold-Vonada Joint 
Venture (“Arnold-Vonada”) agreement, which generally tracked the terms of the 
Arnold-McNamee agreement, including valuation of the properties.  Respondent 
SUPREME COURT OF OHIO 
4 
knew that the Vonadas had purchased their property in 1989 for $47,765.31, or 
$1,194.13 per acre, but did not advise the Vonadas to get an appraisal.  Instead he 
priced the Vonada property at $3,125 per acre — the same as the McNamee 
property — for a total of $125,000. 
{¶ 10} The Arnold-Vonada agreement also provided some terms that were 
not in the Arnold-McNamee agreement, including an option allowing the 
Vonadas to buy three lots on which to build homes.  The Arnold-Vonada 
agreement also provided (1) that the Vonadas were aware that Arnold had 
“entered into a similar joint venture agreement with contiguous property owners, 
to wit, the McNamees,” (2) that the McNamee property would be developed first, 
but (3) that Arnold would “begin development of the [Vonada property] on or 
before the sale of the first seventy-five (75) residential lots of the McNamee 
property.” 
{¶ 11} In 
preparing 
the 
Arnold-Vonada 
agreement, 
respondent 
recommended that he perform the legal work necessary to annex the Vonada land 
to the city as part of the Summer Brooke development.  In late April 1993, he sent 
the Vonadas an engagement letter quoting a $4,500 flat fee for his services in the 
anticipated annexation and rezoning process.  The Vonadas paid the fee.  They 
also paid $900 that respondent charged for negotiating the formation of Arnold-
Vonada. 
{¶ 12} Except as permitted under the DR 2-101 standards for advertising, 
DR 2-103(A) prohibits a lawyer from recommending his or her employment, as a 
private practitioner, to a nonlawyer who has not sought the lawyer’s advice 
regarding employment of counsel.  Respondent conceded that he had violated this 
rule by recommending himself as the Vonadas’ legal representative for the 
Summer Brook development project.  We find him in violation of DR 2-103(A). 
{¶ 13} DR 5-10l(A)(1) prohibits a lawyer, except with the client’s consent 
after full disclosure of attendant risks, from accepting employment if the lawyer’s 
January Term, 2008 
5 
professional judgment will or reasonably may be affected by the lawyer’s own 
interests.  DR 5-104(A) prohibits a lawyer, except with the client’s consent after 
full disclosure of attendant risks, from transacting business with a client if they 
have differing interests, and the client expects the lawyer to exercise his 
professional judgment for the client’s independent interests.  Respondent 
stipulated that he had violated these rules by never alerting the Vonadas to the 
potential conflicts in his representing all sides to the Summer Brooke 
development project or advising them to obtain independent counsel.  We find 
him in violation DR 5-10l(A)(1) and 5-104(A). 
Count Two 
{¶ 14} Beginning in January 1994, respondent represented both Arnold-
McNamee and Arnold-Vonada in a series of transactions, usually acting in his or 
Arnold’s interests and always without providing the disclosures necessary when 
attorney-client interests diverge.  The parties stipulated to these transactions and 
conflicts, including: 
{¶ 15} 1. In 1994 and 1995, respondent sold the Vonadas three Summer 
Brooke lots belonging to Arnold-McNamee, all at a profit.  Respondent also 
charged the Vonadas for finalizing one of these sales and for preparing a purchase 
agreement for the sale of their first new construction. 
{¶ 16} 2.  In August 1994, after annexation, respondent filed papers for 
the incorporation of the Vonadas’ construction company, Classic Custom Homes, 
Inc.  He listed himself as statutory agent and afterward represented the company. 
{¶ 17} 3. In 1996, respondent and his sister conveyed approximately 52.3 
acres of undeveloped McNamee land to Arnold for a total purchase price of 
$370,000, or $7,000 an acre.  In exchange for his $250,000 share of the 
conveyance, respondent accepted title to a house that Arnold owned.  The 
Vonadas knew nothing of these transfers. 
SUPREME COURT OF OHIO 
6 
{¶ 18} 4.  In 1997, after the sale of three lots belonging to Arnold-
Vonada, the Vonadas anticipated payment of $13,493.19 under the terms of the 
joint venture agreement.  When the Vonadas sought payment, respondent 
contacted them to discuss the distribution, informing them that he had been asked 
to talk with them on Arnold’s behalf. 
{¶ 19} It was during this conversation that the Vonadas learned for the 
first time that respondent had been representing Arnold and the Vonadas 
simultaneously.  Obviously advocating on Arnold’s behalf, respondent related 
that he had “worked with Bob Arnold since 1989 and had been through thick and 
thin with him,” that Arnold needed “some latitude and compromise on the 
distributions of the cash proceeds from the sale of the lots,” and that Arnold 
“wanted to use the lot revenues to pay back Arnold’s capital account in the 
Summer Brooke development rather than paying the Vonadas.”  Further 
demonstrating his divided loyalties, respondent warned the Vonadas that if they 
fought Arnold, “they could find themselves getting ‘dog’ lots, rather than 
‘premium lots’ ” on which to build their Classic Custom homes and admonished 
that they “should be grateful that Arnold was giving them the opportunity to turn 
the ‘dirt’ they owned into a ‘damn good investment.’ ” 
{¶ 20} The Vonadas at this point questioned respondent about the 
conflicting interests at stake between the principals in the Summer Brooke 
development project.  Respondent replied that he saw no conflict but would 
withdraw if one arose unless the Vonadas and Arnold agreed to his representation 
and signed waivers.  Respondent never presented waivers to his clients. 
{¶ 21} 5. Continuing to represent all sides of the Summer Brooke 
development project, respondent prepared in February 1998 a limited-liability 
partnership agreement between the Vonadas and Arnold Development, Inc.  
Without advising the Vonadas, respondent named Arnold the authorized partner 
January Term, 2008 
7 
and himself the statutory agent.  He also registered the partnership with the 
secretary of state before the Vonadas signed the filing. 
The Vonadas Retain Independent Counsel 
{¶ 22} The Vonadas finally retained independent counsel.  In January 
2001, attorney Robert Miller expressed his grave concerns to respondent about the 
Vonadas’ representation in the Summer Brooke development.  In an attempt to 
rationalize his competing roles, respondent wrote back: 
{¶ 23} “I represent Arnold Enterprises and various entities owned or 
controlled by Robert S. Arnold.  I’ve also represented both Arnold and [the] 
Vonada[s] (with full disclosure and waiver of conflicts) during the negotiation of 
their joint venture agreements.  The Vonada joint venture agreement was based 
almost exactly on the joint venture agreement between myself and Arnold 
property that I formerly owned contiguous to the Vonadas’ property. I indicated 
that I would serve as a conduit for information in this matter and will withdraw 
should the parties not be able to resolve their misunderstandings.” 
{¶ 24} But respondent did not withdraw.  He continued to represent 
Arnold despite accusations of wrongdoing and conflicts of interest from Miller 
and the Vonadas’ accountant.  Respondent persisted even after the parties met in 
July 2001 to discuss resolving their differences, at which point Damaine Vonada 
admonished respondent that he should have withdrawn back in September 1997.  
Respondent abruptly ended that meeting but then still tried to broker a settlement 
over the next six months, yet again advocating on Arnold’s behalf. 
{¶ 25} In February 2002, respondent sent the Vonadas a $79,903.69 check 
drawn from funds that Arnold had provided, representing proceeds from lot sales.  
Respondent demanded that the Vonadas “convey title to their property into the 
name of the joint venture as required by the joint venture agreement.”  
Respondent made this demand notwithstanding that he had continued to serve as 
SUPREME COURT OF OHIO 
8 
legal representative and statutory agent for the Arnold and Vonada partnership 
and for Classic Custom Homes, Inc. 
{¶ 26} Respondent finally withdrew as counsel for Custom Homes in 
April 2002.  He continued, however, to act on behalf of the Arnold and Vonada 
partnership, sending annual reports to the principals for 1998 through 2002.  
Miller advised the Vonadas to return the reports unsigned.  In May 2003, after the 
secretary of state canceled the Arnold and Vonada partnership for failure to file 
annual reports, respondent filed the reports without the Vonadas’ consent. 
The Vonadas Obtain Successor Counsel 
{¶ 27} Miller died in July 2003, and the Vonadas’ problems with 
respondent and Arnold persisted.  In September 2003, the Vonadas discovered 
that Arnold had committed to sell four parcels, located in part on Vonada 
property, to third parties.  No one had obtained the couple’s consent to the sales as 
required under Arnold-Vonada and their partnership.  In one instance, an Arnold-
owned enterprise executed a contract to sell a lot for which the Vonadas held title 
and immediately began constructing the buyer’s home.  In October 2003, 
respondent tried to convince the Vonadas to convey title to that parcel by 
threatening litigation.  Respondent then served the Vonadas with a demand for 
arbitration, in effect suing to enforce agreements that he had urged them to enter 
and had prepared for them.  The Vonadas hired attorneys David Greer and 
Jennifer Hill, who responded to the arbitration demand and, in December 2003, 
called for respondent’s withdrawal.  Hill wrote: 
{¶ 28} “Finally, Mr. and Mrs. Vonada have concerns with your 
representation of any party in this matter. As you previously represented Mr. and 
Mrs. Vonada, a conflict of interest exists with your representation of Arnold 
Development, Robert S. Arnold and/or Robert M. Arnold in this arbitration 
proceeding.  We also understand that you have represented both Vonada-Arnold 
Enterprises and Vonada-Arnold Enterprises PLL, which raises additional conflict 
January Term, 2008 
9 
issues, as the Vonadas are parties to both those entities.  The Vonadas are not 
willing to waive the existing conflicts.  As a result, we request that you 
discontinue representation of Arnold Development, Robert S. Arnold, and Robert 
M. Arnold in this matter and refer those parties to new counsel.” 
{¶ 29} Respondent still refused to withdraw, and Greer moved to 
disqualify him.  Respondent deposed Damaine Vonada in anticipation of a 
hearing on the motion, and Hill deposed him.  Respondent repeatedly refused to 
answer questions about representing the Vonadas, insisting that the Vonadas had 
not sufficiently waived the attorney-client privilege. 
{¶ 30} The arbitration panel eventually disqualified respondent because 
he would likely be a witness in the proceedings, but not before the Vonadas had 
incurred significant expense.  The parties ultimately resolved the dispute over the 
Summer Brooke development, with Arnold agreeing to purchase the Vonada 
property.  The arbitration panel then conducted a hearing solely to determine the 
property value. 
{¶ 31} DR l-102(A)(5) prohibits a lawyer from engaging in conduct 
prejudicial to the administration of justice.  DR 5-101(A)(1) prohibits a lawyer 
from accepting employment if the exercise of professional judgment will or 
reasonably may be affected by the lawyer’s own interests.  Except in 
circumstances not relevant here, DR 5-101(B) precludes a lawyer from 
representing a client in contemplated or pending litigation if the lawyer knows or 
should know that he or she ought to be called as a witness.  DR 5-104(A), as 
discussed, precludes a lawyer from transacting business with a client where their 
interests compete and the client has not waived the conflict.  Finally, DR 5-
105(B) prohibits a lawyer from continuing to represent two or more clients who 
have conflicting interests, unless the clients consent after full disclosure of 
attendant risks. 
SUPREME COURT OF OHIO 
10 
{¶ 32} Respondent continued to represent all sides to the Summer Brooke 
development despite obvious conflicts of interest which he never disclosed to his 
clients and which they never waived, despite repeated calls for his 
disqualification, and despite the likelihood that he would be called as a witness.  
Respondent stipulated that he had thereby violated DR 1-102(A)(5), 5-101(A)(1), 
5-101(B), 5-104(A), and 5-105(B).  We find respondent in violation of these 
rules. 
Sanction 
{¶ 33} Respondent represented multiple parties to a business venture in 
which he also had a significant financial interest without proper disclosures and 
then exacerbated the situation by continuing in these roles after the alliance had 
begun to unravel.  We saw the same misconduct in Columbus Bar Assn. v. Mills, 
109 Ohio St.3d 245, 2006-Ohio-2290, 846 N.E.2d 1253, in which a lawyer 
represented two married couples in structuring limited-liability and corporate 
enterprises.  That lawyer negotiated a buyout on behalf of all parties when 
relations soured and then continued to represent some of the parties even after a 
lawsuit ensued.  For placing her clients’ interests and confidences at risk, we 
suspended the lawyer’s license to practice for one year, but stayed the suspension 
with conditions, including no further misconduct. 
{¶ 34} Mitigating evidence in Mills showed the lawyer’s lack of a prior 
disciplinary record, cooperation in the disciplinary proceedings, and her good 
character and reputation apart from the misconduct.  109 Ohio St.3d 245, 2006-
Ohio-2290, 846 N.E.2d 1253, ¶ 18.  See BCGD Proc.Reg. 10(B)(2)(a), (d), and 
(e).  The parties stipulated to the presence of these factors here, and respondent 
acknowledges his wrongdoing.  The sanction imposed in Mills is therefore also 
appropriate in this case. 
{¶ 35} We suspend respondent from the practice of law in Ohio for one 
year but stay the suspension on the condition that he commit no further 
January Term, 2008 
11 
misconduct.  If respondent violates the condition of the stay, the stay will be 
lifted, and respondent will serve the entire one-year suspension.  Costs taxed to 
respondent. 
Judgment accordingly. 
 
PFEIFER, O’CONNOR, O’DONNELL, LANZINGER, and CUPP, JJ., concur. 
 
MOYER, C.J., and LUNDBERG STRATTON, J., dissent. 
__________________ 
 
MOYER, C.J., dissenting. 
{¶ 36} In view of the respondent’s conduct, I would reject the 
recommended sanction and, pursuant to Gov.Bar R. V(8)(D), remand this cause to 
the Board of Commissioners on Grievances and Discipline for further 
proceedings.  I would further order that these proceedings include consideration 
of an increased degree of discipline.  For the foregoing reason, I respectfully 
dissent. 
 
LUNDBERG STRATTON, J., concurs in the foregoing opinion. 
_________________________ 
Jonathan E. Coughlan, Disciplinary Counsel, and Joseph M. Caligiuri, 
Assistant Disciplinary Counsel, for relator. 
Bradley N. Frick, for respondent. 
_________________________