Court Opinion

ID: 2689759
Source: CourtListenerOpinion
Date Created: 2014-08-01 20:22:27.891753+00
Date Added: 2024-06-11T12:17:37.449685
License: Public Domain

COLUMBUS BAR ASSOCIATION v. KOSTELAC.

[Cite as Columbus Bar Assn. v. Kostelac (1997), ___ Ohio St.3d ___.]

Attorneys at law — Misconduct — Two-year suspension with eighteen months of

      sanction stayed — Engaging in conduct involving dishonesty, fraud,

      deceit, or misrepresentation — Failing to maintain complete record of all

      client funds coming into lawyer’s possession.

      (No. 97-1276 — Submitted August 26, 1997 — Decided December 31,

1997.)

      ON CERTIFIED REPORT by the Board of Commissioners on Grievances and

Discipline of the Supreme Court, No. 96-40.

      Respondent, Gregory M. Kostelac of Columbus, Ohio, Attorney

Registration No. 0018124, has been engaged in the practice of law since 1981

primarily in collection work.     For many years respondent maintained two

operating bank accounts for his law practice and an IOLTA (interest on lawyer’s

trust account).   In early 1994, the banks closed respondent’s two operating

accounts because he consistently failed to maintain a sufficient balance in the

accounts to enable them to honor the checks he wrote.            Until mid-1995,

respondent used his IOLTA account as both his operating account and a client

trust account and did not keep an accurate record of deposits to and disbursements

from that account.

      On May 19, 1995, respondent collected $2,680.27 for his client, Steve

Csiszarik, and deposited the entire amount in his IOLTA account. From this

account, respondent issued a check in the amount of $1,768.98 to Csiszarik, and a

check in the amount of $911.29 to Kelly A. Diebel, an attorney associated with

respondent, for services. Csiszarik deposited his check, but it was dishonored for

insufficient funds.   Csiszarik, in the meantime, relying on the validity of
respondent’s check, wrote a number of checks on the account in which he had

deposited respondent’s check. One of Csiszarik’s checks bounced. Ultimately,

Csiszarik was not harmed by respondent’s conduct. However, Diebel, becoming

aware of the situation, filed a grievance with the relator, Columbus Bar

Association.

      In August 1990, respondent undertook to represent Alberta L. Kirk, as

executor of the estate of Margaret F. Jewell. During the administration of the

estate, respondent failed to distribute estate funds promptly because he had used a

portion of the estate money for his own purposes. Respondent did eventually

transmit all estate proceeds to Kirk.

      On March 20, 1996, relator filed a complaint against respondent charging,

among other things, that in his actions with respect to Csiszarik, respondent

violated DR 1-102(A)(4) (engaging in conduct involving dishonesty, fraud, deceit,

or misrepresentation), and 9-102(B)(4) (failing to pay to a client the funds to

which the client is entitled). The relator also charged that with respect to his

handling of the Kirk matter, respondent violated DR 1-102(A)(4), 9-102(B)(3),

and 9-102(B)(4). Respondent filed an answer admitting the violation of DR 9-

102(B)(4) with respect to the grievance filed by Csiszarik, but denying the

violation of DR 1-102(A)(4).            In his answer, respondent denied relator’s

allegations with respect to the Kirk matter.

      A panel of the Board of Commissioners on Grievances and Discipline of the

Supreme Court (“board’) held a hearing on April 18, 1997. The panel found the

facts as alleged and found further, in mitigation, that respondent acknowledged his

errors, attended three hours of continuing legal education on the use of trust funds,

and not only paid Csiszarik the $1,768.98, but also refunded all attorney fees

which he had charged. The panel concluded that in both the Csiszarik and Kirk

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matters respondent had violated DR 1-102(A)(4) and 9-102(B)(3) (failing to

maintain a complete record of all client funds coming into a lawyer’s possession)

and (4), and recommended, on the basis of an agreement by the relator and the

respondent, that respondent be suspended from the practice of law for six months

and that immediately thereafter he be placed on supervised probation for eighteen

months.    The board adopted the findings and conclusions of the panel and

recommended that respondent be suspended from the practice of law for two

years, with eighteen months of the suspension stayed, and that after the six-month

actual suspension, respondent be placed on probation for eighteen months.

                              __________________

      Janice M. Bernard and Bruce A. Campbell, for relator.

      Gregory M. Kostelac, pro se.

                              __________________

      Per Curiam. DR 9-102 is clear. Subsections (B)(3) and (4) of the rule

require a lawyer to maintain a complete accounting for all funds coming into his

possession and promptly to deliver to a client funds which the client is entitled to

receive.

      This rule is designed to limit the prospect for, or temptation to, use client

funds to the client’s detriment. See Toledo Bar Assn. v. McCreery (1982), 69

Ohio St.2d 359, 23 O.O.3d 322, 432 N.E.2d 209. The rule not only protects

clients, but motivates lawyers to avoid even the appearance of impropriety. Thus,

we have held that even where the client suffers no harm, an attorney’s

commingling of his own funds with client funds or the attorney’s use of client

funds for operating expenses is subject to sanction. Akron Bar Assn. v. Hughes

(1976), 46 Ohio St.2d 369, 75 O.O.2d 446, 348 N.E.2d 712; Columbus Bar Assn.

v. Thompson (1982), 69 Ohio St.2d 667, 23 O.O.3d 541, 433 N.E.2d 602.

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      While we are concerned that at one time respondent used his client trust

account as an operating account, relator did not charge respondent with a violation

of DR 9-102(A) (funds of clients paid to a lawyer shall be deposited in an

identifiable bank account in which no funds of the lawyer shall be deposited).

Relator, however, did prove that respondent maintained the kind of accounting for

his own and his clients’ funds which we characterized in Disciplinary Counsel v.

Kick (1986), 28 Ohio St.3d 91, 93, 28 OBR 187, 188, 502 N.E.2d 640, 642, as

“dismal.” Relator also charged and proved that in the Kirk matter respondent did

not promptly pay to his client the funds to which she was entitled.

      We therefore accept the findings, conclusions, and recommendation of the

board. The malefactions in Disciplinary Counsel v. Kick warranted suspension.

We therefore suspend respondent from the practice of law for two years with

eighteen months of the suspension stayed. After the six-month actual suspension,

respondent shall be on probation for eighteen months under the supervision of

relator. Costs are taxed to respondent.

                                                             Judgment accordingly.

      MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and

LUNDBERG STRATTON, JJ., concur.

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