[Cite as Columbus Bar Assn. v. Thomas, 124 Ohio St.3d 498, 2010-Ohio-604.]

C OLUMBUS B AR A SSOCIATION v . T HOMAS

.

[Cite as Columbus Bar Assn. v. Thomas,

124 Ohio St.3d 498, 2010-Ohio-604.] Attorneys at law — Misconduct — Misappropriation of entrusted client funds — Indefinite license suspension. (No. 2009-1540

⎯ Submitted October 20, 2009

⎯ Decided February 25, 2010.)
O N C ERTIFIED R EPORT by the Board of Commissioners on Grievances and Discipline of the Supreme Court, No. 09-034.

__________________ Per Curiam

. {¶ 1} Respondent, James D. Thomas of Columbus, Ohio, Attorney Registration No. 0040464, was admitted to th e practice of law in Ohio in 1988. The Board of Commissioners on Grievances and Discipline recommends that we indefinitely suspend respondent’s license to practice, based on findings that he misappropriated from a client at least $32,600 in entrusted funds. We accept the findings that respondent engaged in th is professional misconduct and that an indefinite suspension of hi s license is appropriate. {¶ 2} Relator, Columbus Bar Associa tion, charged respondent in three counts of violating the Disciplinary Rules of the Code of Professional Responsibility and the Rule s of Professional Conduct. 1 A panel of the board heard the case, including the parties’ stipulations that respondent breached multiple ethical responsibilities incumbent on Ohio lawyers. Dismissing the third

1. Relator charged respondent with misconduct under applicable rules for acts occurring before and after February 1, 2007, the effective date of the Rules of Professional Conduct, which supersede the Disciplinary Rules of the Code of Professional Responsibility. Although both the former and current rules are cited for the same acts, the allegations comprise a single continuing ethical violation. Disciplinary Counsel v. Freeman , 119 Ohio St.3d 330, 2008-Ohio-3836, 894 N.E.2d 31, ¶ 1, fn. 1.S UPREME C OURT OF O HIO

2 count, the panel made findings of fact, conclusions of law, and a recommendation for the indefinite suspension of respond ent’s license. The board adopted the panel’s findings of mis conduct and recommendation. {¶ 3} The parties do not object to the board’s report.
Misconduct {¶ 4} Respondent has practiced almost exclusively in the field of creditors’ rights and debt collection. Af ter working for 12 years as a salaried employee for various law firms and co mpanies, respondent opened his own law practice in 2000. {¶ 5} In 2003, respondent contracted with Winona Holdings, Inc., a check-cashing company doing business as Checkcare Systems, to provide legal services related to processing debt-coll ection claims. Checkcare paid respondent $200 per week to review and sign pr epared collection notices and legal complaints. He also represented Checkcare in litigation to resolve contested claims, receiving a 30 percent contingent fee of the amounts collected. As part of his duties, respondent deposited money co llected on Checkcare’s behalf in his client trust account, disbursed proceeds to his client on a weekly basis, and was to periodically report to his client depos its and disbursements from the account. {¶ 6} In October 2004, however, respondent began experiencing cashflow problems resulting from a large California client’s delay in paying his $7,500 monthly salary for collection work th at he performed for the company in Ohio. To cover the shortfall that this delay caused in his family’s budget, respondent wrote himself a check from th e Checkcare funds held in his trust
account. When the California client di d pay him, respondent did not reimburse
the account. {¶ 7} The California client continued to delay payments to respondent, and respondent continued to write checks against the Checkcare proceeds in his trust account without repayment. Beginni ng in October 2004 and ending in mid-January Term, 2010

3 June 2006, respondent made 38 such illegal disbursement s of varying amounts. In the end, he had misa ppropriated at least $32,600 in funds belonging to
Checkcare. {¶ 8} Respondent concealed his theft initia lly by misleading his client as to amounts he had actually collected. Chec kcare eventually suspected the theft, however, and sued for an accounting. Re spondent and his client resolved the dispute by having respondent execute a cognovit note for $44,000 and by also agreeing to add to the value of the note misappropriated su ms discovered after execution of the note. Respondent also agreed to buy a life insurance policy and name Checkcare the beneficiary. {¶ 9} Respondent paid a few installment s toward the cognovit note but then defaulted. In November 2007, Check care obtained a judgment on the note against respondent for $57,599. Respondent has not paid the judgment and has not purchased the life insurance policy he agreed to buy. {¶ 10} Respondent admitted that by misa ppropriating Checkcare’s funds and failing to appropriately account to his client for t hose funds, he violated the following ethical standards: {¶ 11} 1. DR 1-102(A)(4) and Prof.Cond.R. 8.4(c) (prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation). {¶ 12} 2. DR 1-102(A)(6) and Prof.Cond.R . 8.4(h) (prohibiting a lawyer from engaging in conduct that adversely reflects on the lawyer’s fitness to practice law). {¶ 13} 3. DR 7-101(A)(3) (prohibiting a lawyer from intentionally causing a client prejudice or damage during representation).S UPREME C OURT OF O HIO

4 {¶ 14} 4. DR 9-102(B)(3) and Prof.Cond.R. 1.15(a) 2 (requiring a lawyer
to maintain records and a ccount for client funds). {¶ 15} 5. Prof.Cond.R. 1.15(d) (requiring a lawyer to promptly pay funds
to which a client is entitled and afterward render a full accounting). {¶ 16} The board accepted these admissions, and we confirm the board’s findings.
Sanction {¶ 17} In recommending a sanction, the board weighed the following aggravating factors pursuant to Sec tion 10 of the Rules and Regulations Governing Procedure on Complaints and Hearings of the Board of
Commissioners on Grievances and Discipline (“BCGD Proc.Reg.): {¶ 18} “a. Though motivated by financial hardship, Respondent clearly
had a dishonest and selfish motive for hi s actions. BCGD Proc.Reg. 10(B)(1)(b). {¶ 19} “b. There is a pattern of misconduct in that not only did Respondent fail to remit his c lient’s funds to the client , he procrastinated in providing an accounting to buy time and hide his pilfering of the money. BCGD Proc.Reg. 10(B)(1)(c). {¶ 20} “c. There are multiple offenses that span a period of eighteen months. BCGD Proc. Reg.10(B)(1)(d). {¶ 21} “d. Though not charged in the complaint filed by Relator, Respondent admitted during the hearing th at he did not have malpractice insurance [as required by Prof.Cond.R 1.4(c) under his contract with Winona] and that he did not provide the re quired notice to his clients. {¶ 22} “e. Though the client was a cor poration, it was in a vulnerable position since Respondent was acting in a fiduciary capacity for Checkcare. BCGD Proc.Reg. 10(B)(1)(h).

2. The parties do not dispute that the stipulations miscited Prof.Cond.R. 1.15(a) and (d) as Prof.Cond.R. 1.5 (relating to fees and expenses).January Term, 2010

5 {¶ 23} “f. Respondent has made only a neg ligible amount of restitution in the approximate amount of $800. BCDG Proc.Reg. 10(B)(1)(i).” {¶ 24} Against these aggravating factors, the board weighed the following mitigating factors: {¶ 25} “a. Respondent has no prior disciplinary violations. BCGD Proc.Reg. 10(B)(2)(a). {¶ 26} “b. There has been full and free disclosure together with complete cooperation with Relator’s investigation and prosecution. Indeed, counsel for Relator remarked to the Panel that in all of his years of work in this area, he has never encountered a more coopera tive Respondent. BCGD Proc.Reg. 10(B)(2)(d). {¶ 27} “The Panel was not presented with any evidence of Respondent’s good character and reputation, and Responde nt has not been subjected to other penalties and sanctions.” {¶ 28} In adopting the panel’s report and concluding that an indefinite suspension rather than disbarment was appropriate, the board reasoned: {¶ 29} “The presumptive penalty for vi olation of DR 1-102(A)(4) and, presumably Prof.Cond.R. 8.4(c), is disbar ment when theft of client funds is
involved. Disciplinary Counsel v. McCauley, 114 Ohio St.3d 461, 2007-Ohio4259 [873 N.E.2d 269], at ¶ 22. However, significant mitigating circumstances can justify the lesser penalty of an indefinite suspension. Cincinnati Bar Assn. v. Rothermel, 104 Ohio St.3d 413, 2004-Ohio-6559 [819 N.E.2d 1099]. {¶ 30} “ * * * Relator recommended a two year suspension with one year stayed. It was Relator’s position that Re spondent intended all along to repay the money, but circumstances simply kept that from happening. Respondent did not take issue with this recommendation, but s uggested to the Panel that he would be in a better position to repay the amounts owed if he could continue practicing law. This comment by Respondent is fairly indicative of the naiveté with which he hasS UPREME C OURT OF O HIO

6 viewed these proceedings and the ra mifications of his conduct. While Respondent was clearly remorseful and hu miliated by what he did to his client and, indeed, his family, it is doubtful that he fully appreciates the gravity of the legal proceedings in which he is immersed. {¶ 31} “* * * Respondent did convince the Panel that his theft of the
funds was born more of financial necessi ty than greed. His law practice was only marginally successful and he clearly wrote the checks to alleviate cash flow problems that were not of his making. His family, which at the time consisted of a wife and four minor children, had mortga ge and other payments to be made.
With a business income that was limited to begin with, nonpayment by his client apparently put a lot of pressure on Respondent to make up the deficit. {¶ 32} “* * * For these reasons, the Panel declines to recommend
disbarment but instead would recommend th e lesser punishment of an indefinite suspension with reinstatement conditione d on his making restitution to Winona Holdings, Inc. This sanction is consistent with a number of similar cases that have been decided by the S upreme Court of Ohio. In Disciplinary Counsel v. McCauley, 114 Ohio St.3d 461, 2007-Ohio-4259 [873 N.E.2d 269], the respondent was given an indefinite susp ension for multiple acts of misconduct. He commingled personal funds and client funds in his trust account, and paid personal and business expenses through that account. More significantly, the respondent misappropriated almost $200,000 from a client for whom he was doing contingent fee collection work. Finally, Mr. McCauley spent over $50,000
that his bank had mistakenl y deposited into his account knowing that the money did not belong to him. See also Cuyahoga Cty. Bar Assn. v Maybaum, 112 Ohio St.3d 93, 2006-Ohio-6507 [858 N.E.2d 359] (Tak ing client funds being held to pay medical bills). {¶ 33} “* * * In Cincinnati Bar Assn. v. Rothermel, 104 Ohio St.3d 413, 2004-Ohio-6559 [819 N.E.2d 1099], the Supreme Court rejected theJanuary Term, 2010

7 recommendation of the Board that the res pondent be disbarred for taking client funds, and indefinitely suspended him. In Rothermel, the respondent used $12,980 of his client’s funds that were on deposit in his trust account for personal and business expenses. Notwithsta nding his cooperation, contrition and restitution, the Board felt that his prior disciplinary offense for the same conduct together with the selfishness of his c onduct justified the u ltimate sanction of disbarment. The Supreme Court rejected the Board’s recommended sanction noting that the respondent had admitted hi s misconduct and that he had made a forthright and conciliatory oral argument to the Court for leniency, all of which persuaded the Court to conclude that the respondent would be able to eventually return to the ethical practice of law in the future. Rothermel, at ¶ 21

. {¶ 34} “* * * Admittedly, McCauley and Rothermel can be distinguished from Respondent’s case here, based on the f act that the respondents in these cases made full restitution. However, the Pa nel does not believe that Respondent’s
destitute financial situati on should result in a more severe punishment. This is Respondent’s first offense; he was full y cooperative with the investigation and prosecution of his case; and Respondent c onvinced the Panel that he was truly sorry for his conduct. His will be a difficu lt journey back to reinstatement. Not only will he have to support his family of six * * * without a law license, but he will have to also garner sufficient funds to repay his client a rather substantial amount of money plus accumulated interest. {¶ 35} “* * * It is, therefore, the Panel’s recommendation that Respondent be suspended from the practice of law for an indefinite period of time, that as a condition of reinstatem ent he make full restitution to Winona Holdings, Inc., and that he pay the costs of these proceedings.” {¶ 36} We accept the recommendation as to sanction. Respondent is therefore suspended indefinitely from the practice of law in Ohio. Pursuant to Gov.Bar R. V(10)(B), he may not petition for readmission until two years fromS UPREME C OURT OF O HIO

8 the date of our order. Moreover, consis tent with the readmission requirement in Gov.Bar R. V(10)(E)(1), respondent sh all make full restitution to Winona Holdings, Inc. Costs are taxed to respondent. Judgment accordingly.
M OYER , C.J., and P FEIFER , L UNDBERG S TRATTON , O’C ONNOR , O’D ONNELL , L ANZINGER , and C UPP , JJ., concur.

__________________ Wiles, Boyle, Burkholder & Bringardner Co., L.P.A., and Michael L. Close; and Bruce A. Campbell, Bar Couns el, and A. Alysha Clous, Assistant Bar Counsel, for relator. James D. Thomas, pro se.

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