Title: Stark Cty. Bar Assn. v. Buttacavoli

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as Stark Cty. Bar Assn. v. Buttacavoli, 96 Ohio St.3d 424, 2002-Ohio-4743.] 
 
 
STARK COUNTY BAR ASSOCIATION v. BUTTACAVOLI. 
[Cite as Stark Cty. Bar Assn. v. Buttacavoli, 96 Ohio St.3d 424, 2002-Ohio-
4743.] 
Attorneys at law — Misconduct — Six-month suspension with suspension stayed 
on condition — Providing both legal and financial planning to clients 
without fully disclosing financial interest in advice provided. 
(No. 2002-0349 — Submitted June 26, 2002 — Decided September 25, 2002.) 
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and 
Discipline of the Supreme Court, No. 01-50. 
__________________ 
FRANCIS E. SWEENEY, SR., J. 
{¶1} 
In an amended complaint filed on November 8, 2001, relator, Stark 
County Bar Association, charged respondent, Glen F. Buttacavoli of Massillon, 
Ohio, Attorney Registration No. 0024132, with violations of  DR 5-101(A)(1) 
(absent full disclosure and consent, employment shall not be accepted if the 
exercise of professional judgment will be or reasonably may be affected by the 
lawyer’s financial, business, property, or personal interest), 5-104(A) (absent full 
disclosure and consent, a lawyer shall not enter into a business transaction with a 
client if they have differing interests therein and the client expects the lawyer to 
exercise his professional judgment for the protection of the client) and 5-
107(A)(1) (accepting compensation for legal services from one other than his 
client without full disclosure and consent) and (2) (accepting anything of value 
from another related to the representation or employment without full disclosure 
and consent).  After the amended complaint was answered, the matter proceeded 
to a hearing before a panel of the Board of Commissioners on Grievances and 
Discipline of the Supreme Court. 
SUPREME COURT OF OHIO 
2 
{¶2} 
The evidence submitted by the parties established that respondent 
held himself out to the public as both a practicing attorney and a financial planner 
and consultant.  At the times these claims arose, respondent was a registered 
representative of Allmerica Financial Group. 
{¶3} 
In August 1999, Donald Bissell, a 65-year-old man with health 
concerns, scheduled an appointment with respondent to discuss his will and seek 
financial planning and investment advice.  According to Bissell’s requests, 
respondent prepared a will leaving Bissell’s estate to the National Rifle 
Association (“NRA”) and agreed to serve as Bissell’s executor of the estate.  
Additionally, respondent drafted a power of attorney listing himself as the 
attorney in fact for Bissell.  For these services, respondent billed Bissell 
approximately $200 to $250. 
{¶4} 
Respondent advised Bissell to surrender a certificate of deposit, 
worth approximately $86,000, with a maturity date of 2003 and invest the funds 
in a variable annuity.  Bissell was informed that the early surrender of the 
certificate of deposit would result in a penalty of $4,300.  Bissell took 
respondent’s recommendation and deposited approximately $82,000 to purchase 
the annuity.  The estate, not the NRA, was named as beneficiary of the annuity.  
At the time, Bissell asked about respondent’s commission and was told that the 
annuity company determined whether he would receive a commission.  Although 
respondent received a $3,491.71 sales commission, respondent did not fully 
disclose to Bissell his own financial interest in the advice he gave.  This conduct 
led to Count One of relator’s complaint. 
{¶5} 
Regarding Count Two, respondent was approached by Margaret 
Riffle, acting as the representative agent for her 101-year-old mother, Opal 
Lanham, now deceased.  On Lanham’s behalf, Riffle requested a living will and 
power of attorney.  In addition, Riffle sought assistance for nursing home 
financial planning for Lanham, who had recently been admitted to a nursing 
January Term, 2002 
3 
home.  Respondent prepared the legal documents and charged Riffle $100 for his 
work. 
{¶6} 
At a second appointment, respondent met with Riffle and 
Lanham’s other daughter, Shirley Flad, to further discuss Lanham’s financial 
options.  Respondent learned that Lanham had approximately $90,000 in an 
interest-bearing credit union account that was being used to pay for nursing home 
expenses.  Respondent recommended that these funds be invested in an equity 
fund, the Oppenheimer Total Return Fund.  Although respondent claimed that he 
had informed the women that this fund carried the risk of loss of principal, Riffle 
testified she had never been informed of this fact. 
{¶7} 
Riffle and Flad, acting as Lanham’s agents, invested approximately 
$80,000 in the Fund’s Class A shares pursuant to respondent’s advice.  As 
required by securities laws, respondent provided a fund prospectus that defined all 
of the fees and charges paid by the customer.  However, respondent did not 
separately inform Riffle or Flad that he would receive a commission on the sale of 
the investment vehicle.  Despite the prospectus language, Riffle testified that she 
believed that the fund was a “front-load” fund with no commission charge.  
Respondent received approximately $3,000 in commissions. 
{¶8} 
When Riffle received her first statement from Oppenheimer, she 
discovered that the initial investment of $80,000 was diminished by 
approximately $5,219.70 due to commissions and loss of principal.  Riffle 
immediately contacted Oppenheimer and respondent to register her complaints 
and, as a result, the investment was reversed. Rear-loaded Class B shares in the 
fund were purchased.  Again, according to Riffle, respondent failed to inform her 
that he would make a commission every time money was withdrawn from the 
fund.  After several months, the value of the fund dropped from its original 
purchase price to $66,000. 
SUPREME COURT OF OHIO 
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{¶9} 
At the conclusion of relator’s case, the panel dismissed the claims 
that respondent had violated DR 5-107(A)(1) and (2).  However, at the close of all 
the evidence, the panel concluded that respondent had violated DR 5-101(A)(1) 
and 5-104(A).  Specifically, the panel determined that the legal and financial 
advice was part of an integrated transaction requiring full disclosure of 
respondent’s financial interest in the investment transactions and informed 
consent by the clients based upon such full disclosure.  Moreover, the panel found 
that in respondent’s role as attorney, his legal advice could reasonably be affected 
by his financial interest in the investment advice he offered.  The panel also 
believed that respondent’s interest in selling the investment vehicles offered to his 
clients differed from their interests in securing the most financially favorable use 
of their funds, and his clients clearly expected the respondent to exercise his 
professional judgment for their protection. 
{¶10} In mitigation, the panel considered the absence of any prior 
disciplinary action against respondent, respondent’s cooperation in the 
disciplinary process, testimony of several character witnesses demonstrating 
respondent’s good reputation in the community, and favorable accounts of 
respondent’s competence and integrity.  The panel also noted respondent’s active 
participation in various groups and organizations, particularly the volunteer 
services he provides to the elderly and his involvement in elder-law activities.  
The panel found no evidence of chemical dependency or of dishonest or selfish 
motives in the advice he gave to his clients.  The panel also considered that the 
clients had been fully compensated for their initial loss of investment and were 
placed in the financial positions they would have been in had they not made the 
recommended investments. 
{¶11} In recommending a sanction for this misconduct, the panel 
considered Toledo Bar Assn. v. Miller (1970), 22 Ohio St.2d 7, 51 O.O.2d 4, 257 
N.E.2d 376; Bar Assn. of Greater Cleveland v. Nesbitt (1982), 69 Ohio St.2d 108, 
January Term, 2002 
5 
23 O.O.3d 157, 431 N.E.2d 323; Dayton Bar Assn. v. Evans (1985), 18 Ohio 
St.3d 300, 18 OBR 348, 480 N.E.2d 1118; and Miami Cty. Bar Assn. v. Thompson 
(1997), 78 Ohio St.3d 103, 676 N.E.2d 879. 
{¶12} The panel recommended a six-month suspension, with all six 
months stayed on the condition of no additional disciplinary violations.  The 
board adopted the findings of fact and conclusions of law.  However, based upon 
its finding that respondent abdicated his ethical responsibilities as a lawyer and 
the vulnerability of his victims, the board recommended that respondent be 
suspended for eighteen months with twelve months stayed. 
{¶13} We adopt the board’s findings and conclusions that respondent 
violated DR 5-101(A)(1) and 5-104(A).  However, after thoroughly considering 
the evidence in the case, we adopt the panel’s recommended sanction. 
{¶14} Although our Disciplinary Rules do not prohibit an attorney from 
engaging in the dual professions of law and financial planning, the rules do 
require that an attorney providing both legal and financial advice must carefully 
separate these services and provide full disclosure as to his financial interest in the 
investment advice he provides.  Informed consent by the clients must be obtained 
after full disclosure.  Clearly, respondent failed to provide full disclosure to his 
clients concerning his financial interest in the investment recommendations. 
{¶15} Here, both clients readily admitted that they had sought 
respondent’s services as both an attorney and financial planner.  The problem 
arose, however, because while respondent clearly billed these clients for his legal 
services, his additional compensation for selling the investments was not clearly 
explained to them.  In fact, Riffle testified that respondent led her to believe that 
because her mother had attended the same church as respondent, respondent 
would not charge additional fees for the investment.  Respondent admitted that he 
made a representation that he would not charge additional fees because of the 
church association.  However, respondent testified that he meant that he would 
SUPREME COURT OF OHIO 
6 
not charge for any general questions she may have had regarding the legal work 
performed or the investment made.  Regarding Bissell, we find that the 
communication concerning respondent’s commission on the annuity sold was 
misleading at best.  When Bissell asked about respondent’s fee, Bissell received a 
vague answer that compensation would come from the annuity issuer.  Therefore, 
we find that ample evidence was submitted to find violations of DR 5-101(A)(1) 
and 5-104(A). 
{¶16} We now turn to the question of the appropriate sanction for this 
misconduct.  When imposing a sanction, several factors are considered.  We 
consider the duties violated, the actual injury caused, the attorney’s mental state, 
the existence of aggravating or mitigating circumstances, and sanctions imposed 
in similar cases.  See Disciplinary Counsel v. Evans (2000), 89 Ohio St.3d 497, 
501, 733 N.E.2d 609. 
{¶17} Respondent testified that he truly believed that he acted in his 
clients’ best interests.  He was not dishonest or selfish.  He has been an attorney 
since 1984 and has not been involved in prior disciplinary actions.  He offered 
much mitigation evidence regarding his reputation and philanthropic nature.  
Moreover, there is no evidence of any aggravating circumstances that would 
cause us to increase the sanction to be imposed against respondent. 
{¶18} Finally, we consider the cases relied upon by the panel.  In Toledo 
Bar Assn. v. Miller, supra, 22 Ohio St.2d 7, 51 O.O.2d 4, 257 N.E.2d 376, the 
attorney was indefinitely suspended for misrepresenting his interest in an 
investment he recommended to his client and failing to disclose certain critical 
details.  In Bar Assn. of Greater Cleveland v. Nesbitt, supra, 69 Ohio St.2d 108, 
23 O.O.3d 157, 431 N.E.2d 323, the attorney received a one-year suspension for 
failing to disclose a finder’s fee he received when he arranged for his client to 
lend money to a third party.  In Dayton Bar Assn. v. Evans, supra, 18 Ohio St.3d 
300, 18 OBR 348, 480 N.E.2d 1118, the attorney was indefinitely suspended for 
January Term, 2002 
7 
failing to disclose to the client his commissions in the purchase of privately traded 
stock and for other misconduct.  In Miami Cty. Bar Assn. v. Thompson, supra, 78 
Ohio St.3d 103, 676 N.E.2d 879, the attorney was suspended for one year for 
failing to disclose finder’s fees he received when he referred his client to a small 
business investment.  In all of these cases the attorneys’ conduct was closer to 
active deceit and misrepresentation, thus justifying a more severe sanction.  In 
contrast, here, the clients were well aware that respondent was engaged in the 
dual professions of law and financial planning.  Indeed, they sought his services 
in both capacities.  Moreover, common sense dictates that compensation will be 
received on both services.  However, because these professions are so closely 
connected, the clients could logically believe that their legal bill was the bill for 
all services. 
{¶19} After reviewing these cases and the evidence, the panel determined 
that the appropriate sanction for respondent would be a six-month suspension, 
stayed with the condition of no more disciplinary violations.  We agree with this 
recommendation. 
{¶20} Accordingly, respondent is hereby suspended from the practice of 
law for a period of six months, with the suspension stayed on the condition that 
there be no additional disciplinary violations.  Costs are taxed to respondent. 
Judgment accordingly. 
 
DOUGLAS, RESNICK, PFEIFER and LUNDBERG STRATTON, JJ., concur. 
 
COOK, J., concurs in judgment. 
 
MOYER, C.J., dissents. 
__________________ 
David L. Dingwell and Richard S. Milligan, for relator. 
Charles W. Kettlewell, for respondent. 
__________________