Erie-Huron Counties Joint Certified Grievance Committee v. Derby , 131 Ohio St. 3d 144 ( 2012 )

[Cite as Erie-Huron Counties Joint Certified Grievance Commt. v. Derby, 131 Ohio St.3d 144,
2012-Ohio-78.]
ERIE-HURON COUNTIES JOINT CERTIFIED
GRIEVANCE COMMITTEE v. DERBY.
[Cite as Erie-Huron Counties Joint Certified Grievance Commt. v. Derby,
131 Ohio St.3d 144, 2012-Ohio-78.]
Attorney misconduct, including failing to act with reasonable diligence in
representing clients, failing to keep clients reasonably informed, and
failing to inform clients that the attorney lacks professional-liability
insurance—Two-year suspension with 18 months stayed on conditions.
(No. 2011-1036—Submitted August 8, 2011—Decided January 17, 2012.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 10-061.
__________________
Per Curiam.
{¶ 1} Respondent, Charles Paul Derby of Norwalk, Ohio, Attorney
Registration No. 0055272, was admitted to the practice of law in Ohio in 1991. In
August 2010, relator, Erie-Huron Counties Joint Certified Grievance Committee,
charged Derby with multiple violations of the Rules of Professional Conduct
arising from his neglect of eight client bankruptcy matters, failure to reasonably
communicate with his clients, and failure to notify his clients that he did not
maintain malpractice insurance.
{¶ 2} The evidence in this case includes the parties’ stipulations of fact,
the testimony of five of the clients affected by Derby’s misconduct, the testimony
of Stephanie Krznarich, the clinical director of the Ohio Lawyers Assistance
Program (“OLAP”), and Derby’s admission that he committed the charged
misconduct.
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{¶ 3} The panel and board accepted the parties’ stipulations, made
findings of fact and misconduct, and recommend that we suspend Derby from the
practice of law for 18 months, with 12 months stayed on conditions. We adopt
the board’s findings of fact and misconduct, but in light of the aggravating factors
in this case and Derby’s need for ongoing mental-health and substance-abuse
treatment, we conclude that a two-year suspension with 18 months stayed on the
conditions recommended by the board, followed by two years of monitored
probation, is the appropriate sanction.
Factual Background and Misconduct
{¶ 4} Derby began his solo law practice in 1995, and at the time of the
misconduct, approximately one-half of his practice involved personal
bankruptcies. In 2004, his wife began assisting him in the management of his
practice, serving as his paralegal and secretary. Beginning in 2006, Derby faced
significant stress in his personal life—his wife was gravely ill, and he became her
primary caregiver. Derby testified that when his wife died in May 2007, he
mentally “shut down to a degree” and began to experience severe financial
problems; he lost his home to foreclosure in 2008. Derby contacted OLAP in
April 2008 and entered into a three-year OLAP contract the following month to
address his diagnoses of “alcohol dependence” and “adjustment disorder with
depressed mood and disturbance in conduct.”
{¶ 5} Derby admitted that he had engaged in a pattern of misconduct
from late 2007 through 2009 and that he had committed all of the charged ethical
violations. Although Derby’s clients had paid him substantial retainers and filing
fees, he neglected eight separate personal-bankruptcy matters and failed to keep
his clients reasonably informed or to reply to their repeated requests for
information. In four of the matters, Derby failed to file bankruptcy petitions in a
timely manner. In the remaining four matters, the bankruptcy cases were
dismissed because he did not file all of the necessary documentation. In two of
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January Term, 2012
the matters, the bankruptcy court ordered Derby to disgorge fees and expenses
that he had received from his clients. Derby also failed to provide notice, in a
writing signed by his clients, that he did not maintain malpractice insurance.
{¶ 6} Derby’s clients testified that his failure to handle their legal matters
in a timely and competent manner caused them personal stress and frustration
because they continued to receive calls from creditors seeking payment of the
debts they sought to discharge in bankruptcy. At least one client was afraid that
her wages would be garnished and that as a result, she would lose her job.
{¶ 7} Derby has admitted, and the board has found, that he committed
multiple violations of Prof.Cond.R. 1.3 (requiring a lawyer to act with reasonable
diligence in representing a client), 1.4(a)(3) (requiring a lawyer to keep the client
reasonably informed about the status of a matter), 1.4(a)(4) (requiring a lawyer to
comply as soon as practicable with reasonable requests for information from the
client), and 1.4(c) (requiring a lawyer to inform the client if the lawyer does not
maintain professional-liability insurance).
Sanction
{¶ 8} 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.
{¶ 9} As aggravating factors, the board found that Derby had engaged in
a pattern of misconduct involving multiple offenses, that his clients were
vulnerable and were harmed by his misconduct, and that Derby had failed to make
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restitution until the bankruptcy court ordered him to do so in two cases and relator
counseled him to do so in the remaining cases. See BCGD Proc.Reg. 10(B)(1)(c),
(d), (h), and (i).
{¶ 10} As mitigating factors, the board found that Derby does not have a
prior disciplinary record, made full and free disclosure to the board, cooperated in
the disciplinary process, and acknowledged the wrongful nature of his conduct.
BCGD Proc.Reg. 10(B)(2)(a) and (d). At relator’s urging, by the date of the
disciplinary hearing, Derby had worked with grievants in seven of the eight
affected client matters to either refund their money or complete their bankruptcy
proceedings. With respect to the remaining grievants, Tammy and Brian Harp, he
has returned $600 of the $1,000 they advanced to him and has given them a
promissory note for the remaining $400. He testified that he is working manual-
labor jobs to raise the money to satisfy that obligation. Therefore, the board
found that Derby had made a good-faith effort to make restitution or rectify the
consequences of his misconduct. See BCGD Proc.Reg. 10(B)(2)(c).
{¶ 11} Although the board determined that neither Derby’s alcohol abuse
nor his depression qualified as a mitigating factor pursuant to BCGD Proc.Reg.
10(B)(2)(g), it nonetheless accorded some mitigating effect to his recovery
efforts.
{¶ 12} In considering the proper sanction for Derby’s misconduct, the
board cites Erie-Huron Grievance Commt. v. Stoll, 127 Ohio St.3d 290, 2010-
Ohio-5985, 939 N.E.2d 166, and Dayton Bar Assn. v. Hunt, 127 Ohio St.3d 390,
2010-Ohio-6148, 939 N.E.2d 1247. In Stoll, the attorney had failed to file the
documents necessary to close 20 separate probate estates, an accounting in a
guardianship matter, and a settlement entry in a bankruptcy proceeding. Stoll at
¶ 3-4. Although Stoll presented evidence that he suffered from depression and
anxiety, he contacted OLAP only days before his disciplinary hearing and did not
establish that his conditions were causally related to his misconduct. Id. at ¶ 9.
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January Term, 2012
To ensure that Stoll was able to successfully manage his illness, we imposed a
two-year suspension with one year conditionally stayed, and we conditioned his
reinstatement upon the submission of medical proof establishing his ability to
competently and ethically practice law and on his continued compliance with his
OLAP contract. Id. at ¶ 13-14. We also ordered that upon reinstatement, he serve
a two-year period of monitored probation. Id. at ¶ 14.
{¶ 13} In Hunt, however, we imposed a six-month suspension based upon
the attorney’s neglect of a single client matter, his failure to keep that client
reasonably informed about the status of the matter, and his failure to respond to
the relator’s investigation of a separate client grievance. Hunt, ¶ 5-8, 11.
{¶ 14} Here, the board found that Derby’s conduct was more egregious
than that of Hunt and less egregious than that of Stoll, and therefore recommends
that we suspend him from the practice of law for 18 months with 12 months
stayed on the conditions that he (1) renew his OLAP contract when it expires, for
the period of time recommended by OLAP, (2) fully comply with all OLAP
recommendations, including regular attendance at Alcoholics Anonymous
meetings, (3) make full restitution to his former clients Tammy and Brian Hart,
and (4) commit no further misconduct. Additionally, the board recommends that
Derby’s reinstatement be conditioned upon the certification of a qualified
psychiatrist that he is able to return to the competent, ethical, and professional
practice of law, and that during the period of his stayed suspension and for two
years following that suspension, Derby be under the supervision of a monitor
appointed by relator.
{¶ 15} We find, however, that respondent’s conduct is more comparable
to that of Stoll and to the attorney in Disciplinary Counsel v. Clark (1997), 78
Ohio St.3d 302, 302-303, 677 N.E.2d 1181. In Clark, we imposed a two-year
suspension with one year stayed on conditions, citing the “repetitive nature” of
Clark’s violations, involving the acceptance of retainers from two clients, failure
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to perform any meaningful work, and failure to return the retainers until just
before his disciplinary hearing. Due to aggravating factors present in this case
and Derby’s need for ongoing mental-health and substance-abuse treatment, we
conclude that a two-year suspension with the final 18 months stayed on the
conditions recommended by relator, followed by two years of monitored
probation, is necessary to protect the public.
{¶ 16} Accordingly, we suspend Charles Paul Derby from the practice of
law in Ohio for two years, with the final 18 months stayed on the conditions that
he (1) immediately renew his OLAP contract, if he has not already done so, for
the period of time recommended by OLAP, (2) fully comply with all OLAP
recommendations, including regular attendance at Alcoholics Anonymous
meetings, (3) make full restitution to his former clients Tammy and Brian Hart,
and (4) commit no further misconduct. Derby’s reinstatement will be conditioned
upon the certification of a qualified psychiatrist that he is able to return to the
competent, ethical, and professional practice of law. During the period of his
stayed suspension and for two years following that suspension, he must submit to
the supervision of a monitor appointed by relator in accordance with Gov.Bar R.
V(9). If Derby fails to comply with the conditions, the stay will be lifted and he
will serve the entire two-year suspension. Costs are taxed to Derby.
Judgment accordingly.
O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL,
LANZINGER, CUPP, and MCGEE BROWN, JJ., concur.
__________________
James J. Martin and Richard B. Hauser, for relator.
Charles Paul Derby, pro se.
______________________
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