Court Opinion

ID: 2691616
Source: CourtListenerOpinion
Date Created: 2014-08-01 21:07:34.108397+00
Date Added: 2024-06-11T09:57:25.063692
License: Public Domain

[Cite as Disciplinary Counsel v. Bandman, 125 Ohio St.3d 503, 2010-Ohio-2115.]

                       DISCIPLINARY COUNSEL v. BANDMAN.
                      [Cite as Disciplinary Counsel v. Bandman,
                        125 Ohio St.3d 503, 2010-Ohio-2115.]
Attorneys at law — Misconduct — Misappropriation of trust assets — Indefinite
        suspension.
  (No. 2009-2316 — Submitted February 24, 2010 — Decided May 20, 2010.)
    ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
                    Discipline of the Supreme Court, No. 09-035.
                                 __________________
        Per Curiam.
        {¶ 1} Respondent, Marc Benjamin Bandman of Lewis Center, Ohio,
Attorney Registration No. 0038487, was admitted to the practice of law in Ohio in
1987. Based upon its findings that respondent committed multiple violations of
the Rules of Professional Conduct in administering a client’s family trust, the
Board of Commissioners on Grievances and Discipline recommends that we
suspend respondent’s license to practice indefinitely.           We adopt the board’s
findings of misconduct and the recommended sanction.
                                      Misconduct
        {¶ 2} In April 2009, relator, Disciplinary Counsel, filed a complaint
charging respondent with violations of Prof.Cond.R. 1.7(a)(2) (providing that a
lawyer’s continued representation of a client creates a conflict of interest if there
is a substantial risk that the lawyer’s ability to represent the client will be
materially limited by the lawyer’s own personal interests), 8.4(c) (prohibiting
conduct involving dishonesty, fraud, deceit, or misrepresentation), 8.4(d)
(prohibiting conduct prejudicial to the administration of justice), and 8.4(h)
(prohibiting conduct that adversely reflects on the lawyer’s fitness to practice
                             SUPREME COURT OF OHIO

law). These alleged violations arose from respondent’s conduct in writing checks
drawn on a client’s family trust account, payable to himself, his business, and his
fiancée and business partner without the knowledge or approval of the grantor or
her granddaughter, who served as her attorney-in-fact.
        {¶ 3} The stipulated facts and testimony at the panel hearing
demonstrate, and the board found, that the client had worked for respondent’s
mother and her family for a number of years and had helped raise him from
infancy. Respondent considered her to be his “surrogate mom or grandmother.”
At the time of the hearing in this matter, the client was 96 years old.
        {¶ 4} In October 2005, at the client’s request, respondent prepared the
family trust.   Pursuant to the client’s wishes, the trust agreement designated
respondent as the trustee. The client executed the trust agreement on November
2, 2005, and funded the trust with $59,249.83 she received from the sale of her
home.
        {¶ 5} Respondent waited until June 2007 to submit a bill for preparation
of the trust and other estate-planning tasks. The client’s attorney-in-fact paid the
$6,000 invoice with funds held outside of the trust. In the interim, the client was
diagnosed with dementia in 2006.
        {¶ 6} Respondent testified that he did not initially intend to charge a fee
for administering the trust but that the client insisted that he should be paid for his
services. When he eventually decided to charge for his services, he failed to
advise either the client or her attorney-in-fact. Instead, in April 2007, respondent
began writing checks drawn on the trust account and made payable to himself, his
business, and his business partner and fiancée. While he testified that some of the
money represented earned fees, he also acknowledged that to alleviate his own
financial difficulties, he “borrowed” money from the trust on a short-term basis,
believing that his actions would not affect anybody.

                                          2
                                January Term, 2010

       {¶ 7} From April 2007 to March 2008, respondent wrote 31 checks,
totaling $60,050, without the knowledge or consent of the client or her attorney-
in-fact. As of June 18, 2008, only $4,805.18 remained in the trust account.
Although respondent testified that he considered the majority of the money he
withdrew to be a loan, he did not create or sign a promissory note setting forth the
terms for repayment.
       {¶ 8} In the spring of 2008, respondent advised the client’s attorney-in-
fact that he had improperly taken funds from the trust but did not share the trust
account records or advise her that she might want to speak with another attorney
before agreeing to resolve the matter. Nor did he obtain a written waiver of this
inherent conflict of interest. On June 24, 2008, respondent repaid $45,000 to the
trust, representing the amount he claimed to have borrowed, without interest. As
of the date of the hearing, respondent remained the trustee of the family trust.
       {¶ 9} Respondent acknowledged that he and relator were unable to reach
an agreement as to what fees, if any, he was entitled to receive for services he
allegedly provided to the trust. At the panel hearing, respondent claimed that the
$45,000 he repaid to the trust represented money that he had “borrowed” and that
the remaining balance of $15,050 represented legitimate payments to himself and
to his fiancée for services rendered on behalf of the trust. Despite the fact that
respondent charged administration fees equaling approximately 25 percent of the
trust assets, he testified that the client’s family had not questioned him about any
of the charges or, to his knowledge, filed a claim with the Client Security Fund.
       {¶ 10} Respondent testified that he wrote five checks on April 16, 2007,
but dated them as if they had been issued on April 15, April 30, June 30,
September 30, and December 31, 2006. He admitted that he wrote misleading
and inaccurate notations on the memo line for some of the 31 checks, falsely
indicating that those checks represented payments for services provided to the
trust. He further admitted that after the client’s attorney-in-fact began to request

                                          3
                              SUPREME COURT OF OHIO

bank statements or other documentation regarding the trust assets, he provided her
with a December 2007 bank statement that he had altered to (1) reflect that the
account balance was $53,210.82 on December 18, 2007, when the actual balance
on that date was only $43,702.62, and (2) conceal a $2,500 check that he had
written to himself that had cleared the account in November 2007.
          {¶ 11} In addition to these findings of the board, we also note that
respondent testified that he failed to keep contemporaneous records of the hours
he devoted to trust business, preparing only a “recap” of the work performed at a
later time. Moreover, the charges for some of the services he claims to have
rendered are questionable, at best. For example, respondent testified that he
charged one-half hour for reviewing the trust’s December 2005 bank statement,
and one hour for his fiancée to review that document and enter the statement’s
information into an accounting record. Yet the bank statement reflects only the
beginning account balance and a single transaction – the deposit of $181.65 in
accrued interest.
          {¶ 12} Similarly, for the first quarter of 2006, respondent claims to have
billed five hours, two hours at his rate and three hours at his fiancée’s rate, for
“Trust administration including reviewing statements and entry into accounting
record and filing paperwork and reviewing bank rates and charges.” Yet the bank
statements for the months of November 2005 through April 2006, like the
December 2005 statement, reflect only a monthly deposit of accrued interest.
Furthermore, none of the statements reveal any bank charges that would require
review.
          {¶ 13} The parties stipulated and the board found that respondent’s
conduct violated Prof.Cond.R. 1.7(a)(2), 8.4(c), 8.4(d), and 8.4(h). The record
demonstrates by clear and convincing evidence that respondent violated his duties
to both his client and the trust by appropriating trust assets for his own benefit and
concealing his actions by (1) falsely dating checks to make it appear as though he

                                          4
                                January Term, 2010

had routinely billed the trust for services rendered, (2) making false and
misleading notations on checks asserting that they represented payment for the
quarterly administration of the estate, and (3) altering a bank record to conceal
his wrongful actions. Respondent’s actions created a conflict of interest between
his own interests and those of his client, which he failed to disclose to his client.
These actions involving misappropriation, misrepresentation, and deceit are also
inherently prejudicial to the administration of justice and adversely reflect upon
respondent’s fitness to practice law. Therefore, we accept the board’s findings of
misconduct.
                                     Sanction
       {¶ 14} When imposing sanctions for attorney misconduct, we consider
relevant factors, including the ethical duties that the lawyer violated and the
sanctions imposed in similar cases. Stark Cty. Bar Assn. v. Buttacavoli, 96 Ohio
St.3d 424, 2002-Ohio-4743, 775 N.E.2d 818, ¶ 16.               In making a final
determination, we also weigh evidence of the aggravating and mitigating factors
listed in Section 10(B) of the Rules and Regulations Governing Procedure on
Complaints and Hearings Before the Board of Commissioners on Grievances and
Discipline (“BCGD Proc.Reg.”). Disciplinary Counsel v. Broeren, 115 Ohio
St.3d 473, 2007-Ohio-5251, 875 N.E.2d 935, ¶ 21.
       {¶ 15} The board noted that respondent has spent a significant portion of
his legal career focused upon technological issues related to the practice of law.
After passing the bar exam, he was employed by the Ohio attorney general’s
office, where he set up the first e-mail system for the National Association of
Attorneys General. He later started his own business in records management and
performed some consulting work. The work he performed for this client and the
trust was the only legal work for which he charged a fee. He did not maintain
malpractice insurance, because he did not have any other clients.

                                         5
                             SUPREME COURT OF OHIO

       {¶ 16} The board found that four of nine aggravating factors weighed in
favor of a more severe sanction, including (1) a dishonest or selfish motive, (2) a
pattern of misconduct, (3) multiple offenses, and (4) the vulnerability of and
resulting harm to the victim. BCGD Proc.Reg. 10(B)(1)(b), (c), (d), and (h).
       {¶ 17} In mitigation, the parties stipulated and the board found that the
respondent does not have a prior disciplinary record and that he has demonstrated
a cooperative attitude toward the disciplinary proceedings. BCGD Proc.Reg.
10(B)(2)(a) and (d). The board noted that respondent has exhibited significant
remorse for his actions and paid restitution of $45,000 to the trust. The board also
considered that respondent claimed to have self-reported his actions to
Disciplinary Counsel in 2008 on the advice of an attorney friend, who had filed a
complaint with Disciplinary Counsel.
       {¶ 18} Having weighed these factors, the board recommends that we
indefinitely suspend respondent’s license to practice law, with reinstatement
conditioned upon proof that he has made full restitution, including interest, to the
trust, or reimbursed the Client Security Fund for any claims paid as the result of
his misconduct.
       {¶ 19} We have previously recognized that permanent disbarment is the
appropriate sanction for cases involving the misappropriation of client funds.
See, e.g., Cuyahoga Cty. Bar Assn. v. Churilla (1997), 78 Ohio St.3d 348, 350,
678 N.E.2d 515. This is because “[t]he continuing public confidence in the
judicial system and the bar requires that the strictest discipline be imposed in
misappropriation cases.” Cleveland Bar Assn. v. Belock (1998), 82 Ohio St.3d 98,
100, 694 N.E.2d 897. As the board notes, however, we have previously imposed
indefinite suspensions in misappropriation cases, based in part upon the existence
of mitigating factors. See, e.g., Akron Bar Assn. v. Dietz, 108 Ohio St.3d 343,
2006-Ohio-1067, 843 N.E.2d 786, ¶ 23 (mitigating factors included payment of
restitution, waiver of fees, no prior discipline during career of more than 20 years,

                                         6
                                 January Term, 2010

and good character); Disciplinary Counsel v. Nagorny, 105 Ohio St.3d 97, 2004-
Ohio-6899, 822 N.E.2d 1233, ¶ 15 (mitigating factors included payment of
restitution, good character, remorse).
       {¶ 20} Having weighed respondent’s conduct and the aggravating and
mitigating factors, and having considered the sanctions imposed for comparable
conduct, we adopt the board’s recommended sanction of an indefinite suspension,
with reinstatement conditioned upon proof that respondent has made full
restitution, including interest, to the trust, or reimbursed the Client Security Fund
for any claims paid as the result of his misconduct. Accordingly, Marc Benjamin
Bandman is indefinitely suspended from the practice of law in the state of Ohio.
Costs are taxed to respondent.
                                                             Judgment accordingly.
       PFEIFER, LUNDBERG STRATTON, O’CONNOR, O’DONNELL, LANZINGER, and
CUPP, JJ., concur.
       BROWN, C.J., not participating.
                              __________________
       Jonathan E. Coughlan, Disciplinary Counsel, and Robert R. Berger, Senior
Assistant Disciplinary Counsel, for relator.
       Alvin E. Matthews Jr., for respondent.
                            ______________________

                                         7