Columbus Bar Assn. v. Fishman

[Cite as Columbus Bar Assn. v. Fishman, 98 Ohio St. 3d 172, 2002-Ohio-7086.]
COLUMBUS BAR ASSOCIATION v. FISHMAN.
[Cite as Columbus Bar Assn. v. Fishman, 98 Ohio St. 3d 172, 2002-Ohio-7086.]
Attorneys at law — Misconduct — One-year suspension — Improperly
promoting professional services — Aiding nonlawyers in the
unauthorized practice of law — Sharing legal fees with nonlawyers —
Failing to reasonably protect client confidences — Commingling client
funds with own funds in an out-of-state bank account — Failing to keep
appropriate accounts.
(No. 2002-1101 — Submitted November 13, 2002 — Decided December 26,
2002.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 01-54.
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Per Curiam.
{¶1} Respondent, Andrew M. Fishman of Columbus, Ohio, Attorney
Registration No. 0031290, was admitted to the Ohio bar in 1965. Under a
February 1998 contract with American Heritage Corporation (“AHC”), a Nevada
corporation that sells fixed annuities, AHC and respondent marketed living trusts
to elderly consumers.1 They also arranged for AHC-affiliated insurance agents to
try to sell insurance to those who had purchased the living trust agreements.
{¶2} Initially, AHC sent direct-mail solicitations to consumers based on
a retirement-age-or-older demographic. Respondent did not participate or
exercise any authority in this process, although solicitations appeared to be
correspondence from his office. The solicitations suggested as an inducement that
1. The events at issue in this case are only those occurring before January 1, 2001, after
which AHC changed its operations and its relationship with respondent.
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consumers would receive a free guide on how to avoid probate and save taxes by
replying via an attached card. Returned cards were delivered to AHC offices, and
AHC and respondent considered these replying consumers to be prospective
clients.
{¶3} Upon receipt of reply cards, AHC representatives contacted these
prospective clients and attempted to arrange personal interviews. Respondent
played no role in the process of collecting reply cards and scheduling interviews.
AHC representatives then interviewed clients, using a presentation based on
materials prepared by AHC about hypothetical difficulties and costs associated
with the probate process and the advantages of creating a living trust. In
answering prospective clients’ questions, interviewers were not supposed to
express legal opinions and were to refer such questions to respondent.
Respondent was available to clients by telephone after they had decided to engage
his services; however, he did not attend interviews to oversee interviewers’
remarks or representations.
{¶4} During some periods of the agreement between AHC and
respondent, interviewers were compensated by AHC only if prospective clients
agreed to retain respondent’s services in preparing a living trust. During other
periods, interviewers were compensated by AHC for six hours of work if a
potential client engaged respondent’s services and for one and one-half hours if
the client did not, regardless of the actual time spent.
{¶5} If after their interview prospective clients decided to pay for
preparation of a living trust, interviewers completed an information sheet and had
the clients execute a fee and engagement agreement. Interviewers then collected,
either at the interview or afterward, a fee of $1,695. In accordance with the
interviewers’ instruction, the clients made their checks payable to respondent,
who later endorsed the checks as necessary, copied the paperwork to check it for
completion, and forwarded the copied preparatory documents to AHC.
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{¶6} AHC deposited, accounted for, and disbursed fees paid for the
living trusts by using a California bank and without placing the funds in client
trust accounts despite the fact that the trusts had not yet been prepared. And
pursuant to the agreement between respondent and AHC, AHC personnel had
signature authority to make deposits and withdrawals from accounts so that
respondent’s specific consent was not required. On more than one occasion, these
accounts were overdrawn, and checks written by AHC personnel were initially
dishonored, although the checks were later covered.
{¶7} After clients had paid their fee, AHC personnel or an affiliate
prepared the clients’ living trusts and forwarded the documents to respondent for
his review. When approved, AHC assigned “delivery agents,” usually licensed to
sell insurance, to meet with clients and finalize the living trust paperwork.
Delivery agents arranged for clients to execute their trusts, obtained
documentation to transfer assets and fund the trusts, and took any other action to
effectuate the trust. Prior to the delivery agent visits, respondent typically called
clients to advise that the agent was a licensed insurance salesperson and to see
whether the client had any objection to the visit. Working on commission, the
agents delivering the final trust documentation attempted to sell annuities to these
clients.
{¶8} For each living trust sold, AHC paid respondent $150 for his
participation.
{¶9} On November 2, 2001, relator, Columbus Bar Association, filed an
amended complaint charging respondent with various violations of the Code of
Professional Responsibility. A panel of the Board of Commissioners on
Grievances and Discipline heard the cause, and based on the parties’ stipulations,
testimony, and exhibits, found that, in engaging in the described marketing
system, respondent had violated DR 2-103(C) (improperly using an organization
or person to promote a lawyer’s services), DR 3-101(A) (aiding a nonlawyer in
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the unauthorized practice of law), 3-102(A) (sharing fees with a nonlawyer), 4-
101(D) (failing to reasonably protect client confidences), 9-102(A) (failing to
deposit client funds in an identifiable Ohio trust account), and 9-102(B)(3)
(failing to render appropriate accounts).
{¶10} In recommending a sanction, the panel consulted the mitigating
and aggravating considerations in Section 10 of the Rules and Regulations
Governing Procedure on Complaints and Hearings Before the Board of
Commissioners on Grievances and Discipline. The panel considered as
mitigating factors character witnesses’ descriptions of respondent’s competence
and integrity and that respondent has been a practicing lawyer for over thirty-five
years without any previous findings of professional misconduct. The parties
stipulated that respondent had cooperated completely in the disciplinary process.
As aggravating factors, the panel considered respondent’s misconduct to be more
egregious than the living trust marketing scheme used by the attorney in
Cincinnati Bar Assn. v. Kathman (2001), 92 Ohio St. 3d 92, 748 N.E.2d 1091, and
noted that respondent could see nothing unprofessional about his marketing
tactics.
{¶11} The panel recommended that respondent be suspended from the
practice of law in Ohio for one year. The board adopted the panel’s findings of
misconduct and recommendation. Because ample proof of the cited infractions
exists in the record and because a one-year suspension is a commensurate
sanction, we agree with the board.
{¶12} Respondent unquestionably violated DR 2-103(C). He contracted
with an organization that independently targeted and solicited prospects for his
representation, dispatched personnel to offer that representation, and then paid
itself, respondent, and the personnel for their services. Despite respondent’s
arguments to the contrary, this was not a lawyer’s accepting employment in
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response to his own advertising, notwithstanding any compliance with more
content-oriented rules on the subject.
{¶13} Respondent also insists that he sufficiently supervised lay AHC
personnel through his client contact and documentary review and thereby did not
violate DR 3-101(A). But he misses the point.
{¶14} To counsel a client, an attorney must advise only in accordance
with the client’s best interest and, consequently, after independent analysis has
revealed what those interests are. Thus, it is not enough for an attorney to look
over the shoulders of nonattorneys in a process through which clients are advised
about and accede to a living trust. In that situation, the reviewing attorney enters
the relationship too late—the nonattorney has already processed information for
the client about his or her affairs and has generated a legal solution of which the
client is already convinced. Kathman, 92 Ohio St. 3d 92, 94, 748 N.E.2d 1091.
Compound this scenario with the fact that the nonattorney has a financial stake in
the legal solution, and there can be no real confidence in the attorney. The
attorney’s status as the client’s personal, yet objective advocate has been
sacrificed for the sake of the sale.
{¶15} It is manifest from the evidence in this case that AHC
representatives not only explained legal principles relative to wills and trusts, they
also manipulated these principles in directing prospective clients to choose living
trusts. Such client consultation is, at its most elemental, the practice of law.
Disciplinary Counsel v. Willis, 96 Ohio St. 3d 142, 2002-Ohio-3614, 772 N.E.2d
625, at ¶ 3-8. Respondent therefore unquestionably also aided nonattorneys in the
unauthorized practice of law.
{¶16} Respondent violated DR 4-101(D) by failing to reasonably protect
his clients from the improper use of their confidences and secrets by associates
and others whose services he engaged. Respondent facilitated the arrangement
through which a client’s private information was disseminated to insurance agents
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whose primary purpose was to sell annuities on commission. He then obtained
the client’s permission to be solicited without first exercising any real
independent judgment as to whether the solicitation was for the client’s benefit.
Again, despite respondent’s arguments to the contrary, this practice is simply not
analogous to the use of copier or courier services, as is practical and necessary, in
furthering the best interests of the client.
{¶17} The remaining violations found by the board all relate to the
financial side of respondent’s business with AHC. The board concluded that
respondent impermissibly shared fees with AHC, commingled unearned funds in
an out-of-state bank account, and failed to properly account for client property.
We concur that respondent committed this misconduct and quote the board’s
cogent explanation:
{¶18} “Respondent exercised little control over [AHC representatives]
and their sales activities and * * * funds for these legal services were collected
and funneled through bank accounts controlled by AHC. Prior to January 1,
2001, the process of depositing, accounting for and disbursing the funds received
from the client for legal work to be accomplished in the future by Respondent was
done by AHC in its offices outside Ohio using bank accounts outside of Ohio.
The accounts used for these purposes were not IOLTA accounts, nor were they
maintained as trust accounts. Individuals who [were] not attorneys and who
[were] not directly employed by the Respondent, but with whom Respondent had
contractual relationships, [had] signature authority over such accounts and [could]
and [did] make deposits and withdrawals from these accounts without the direct
knowledge or consent of Respondent. Accounts in which funds belonging to
Respondent’s clients [had] been deposited by AHC [were] overdrawn, and checks
written on those accounts [were] dishonored.”
{¶19} Having concluded that respondent violated DR 2-103(C), DR 3-
101(A), 3-102(A), 4-101(D), 9-102(A), and 9-102(B)(3), we turn our review to
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the recommended sanction. In Kathman, 92 Ohio St. 3d 92, 748 N.E.2d 1091, we
first addressed the issue of attorneys aiding nonattorneys in the sale or marketing
of living trusts. In that case, we suspended the attorney from the practice of law
for six months for participating in the business of marketing living trusts and
thereby violating DR 3-102(A) and 3-101(A), among other Disciplinary Rules.
And more recently, we imposed a public reprimand for similar misconduct based
on the board’s recommendation and significant evidence of mitigating
circumstances. Columbus Bar Assn. v. Moreland, 97 Ohio St. 3d 492, 2002-Ohio-
6726, 780 N.E.2d 579.
{¶20} We agree that the misconduct here warrants a more severe sanction
than in either Kathman or Moreland. Respondent abandoned his professional
responsibility to protect his clients’ best interests. But respondent went far
beyond this. He surrendered to AHC his duty to keep separate and properly
account for his clients’ funds. Then, he set up his clients as sales prospects for
insurance agents with no overriding commitment to their financial and personal
security. Even the unseasoned attorney Moreland recognized this impropriety
when confronted with it. Yet respondent remains oblivious to the full
significance of his unprofessional conduct.
{¶21} For these reasons, we agree that respondent’s misconduct deserves
the sanction recommended by the board. Respondent is hereby suspended from
the practice of law in Ohio for one year. Costs are taxed to respondent.
Judgment accordingly.
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY COOK and LUNDBERG
STRATTON, JJ., concur.
PFEIFER, J., dissents and would indefinitely suspend respondent.
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Wiles, Boyle, Burkholder & Bringardner and Michael L. Close; James K.
Hunter III; John K. McManus; Bruce A. Campbell, Bar Counsel, and Jill M.
Snitcher McQuain, Assistant Bar Counsel, for relator.
Kegler, Brown, Hill & Ritter, Geoffrey Stern and Christopher J. Weber,
for respondent.
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