Disciplinary Counsel v. Terbeek

[Cite as Disciplinary Counsel v. Terbeek, 135 Ohio St. 3d 458, 2013-Ohio-1912.]
DISCIPLINARY COUNSEL v. TERBEEK.
[Cite as Disciplinary Counsel v. Terbeek, 135 Ohio St. 3d 458,
2013-Ohio-1912.]
Attorneys—Misconduct—Misappropriation of funds from client trust account—
Permanent disbarment.
(No. 2012-2056—Submitted February 6, 2013—Decided May 16, 2013.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 12-047.
____________________
Per Curiam.
{¶ 1} Respondent, Jeffrey Lee Terbeek of Columbus, Ohio, Attorney
Registration No. 0033227, was admitted to the practice of law in Ohio in 1973.
{¶ 2} In June 2012, a probable-cause panel of the Board of
Commissioners on Grievances and Discipline certified a complaint filed by
relator, disciplinary counsel, against Terbeek. The complaint alleged that he had
misappropriated funds that he was obligated to hold in escrow for the individual
who sold a business to his client, that he had admitted that he used those funds for
personal purposes, and that he had failed to disclose his misappropriation in his
response to a complaint for breach of contract filed by the seller.
{¶ 3} Although the board caused relator’s complaint to be served on
Terbeek by certified mail, he did not answer it or otherwise appear in this
disciplinary proceeding. Therefore, relator moved for default.
{¶ 4} A master commissioner appointed by the board determined that the
materials submitted in support of relator’s default motion were sufficient, found
by clear and convincing evidence that Terbeek committed the charged
misconduct, and recommended that he be permanently disbarred from the practice
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of law in Ohio. The board adopted the master commissioner’s report in its
entirety. On December 19, 2012, this court issued an order to show cause why the
court should not confirm the board’s recommendation and enter an order of
discipline. No objections have been filed.
{¶ 5} We adopt the board’s findings of fact and misconduct, and having
considered the aggravating and mitigating factors present as well as the sanctions
imposed for comparable misconduct, we agree that permanent disbarment is the
appropriate sanction.
Misconduct
{¶ 6} Terbeek represented Diep Nguyen Vo in the purchase of a tailoring
business from Eugene Pearson in 1994. Diep Nguyen Vo agreed to pay $15,000
for the trade name, equipment, fixtures, and inventory of the business. Because
there were existing liens against the business, the agreement required Terbeek to
hold the entire $15,000 purchase price in escrow until Pearson satisfied the liens.
{¶ 7} Terbeek held the funds in escrow in his client trust account from
approximately December 1994 until December 2001, when he began to withdraw
the funds for his personal use. He withdrew the majority of the funds in two
checks issued to himself—the first for $2,500 on December 29, 2001, and the
second for $12,000 on May 17, 2002. At an investigative deposition conducted
prior to relator’s filing of the disciplinary complaint, Terbeek admitted that he
withdrew the remaining $500 for his personal use, although he did not have
records to document the transaction.
{¶ 8} In a July 6, 2010 letter to Pearson’s counsel, Terbeek stated that
although he could not recall the specific issues surrounding the sale of the
tailoring business, he remembered that the funds were to be held in escrow until
the outstanding tax lien was satisfied. He also stated that the reason for holding
the funds “seems to be still in effect.”
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January Term, 2013
{¶ 9} In November 2010, Pearson filed a breach-of-contract action
against Terbeek and against a nonparty to the contract, Vuong Hai Vo, based on
the failure to forward the purchase money to him. It is not clear from the record
why Pearson sued Vuong Hai Vo rather than Diep Nguyen Vo, who was the
contracting party. In his answer, Terbeek stated that he had withheld the funds
pending the satisfaction of the liens, which had not yet been paid. Although
Pearson served two separate discovery requests and twice moved the court to
compel discovery and to impose sanctions, Terbeek did not respond. Neither
Terbeek nor Vuong Hai Vo appeared at the pretrial hearing, at which the court
granted Pearson’s motions to compel and set the matter for a sanctions hearing to
be held on the same date as the trial.
{¶ 10} When Terbeek and Vuong Hai Vo failed to appear at the trial,
Pearson voluntarily dismissed the complaint against Vuong Hai Vo and the court
entered a judgment against Terbeek for $15,000, plus interest, attorney fees of
$2,500, and sanctions of $750. Although Terbeek then failed to appear for a
scheduled judgment-debtor examination, he did appear at a January 2012 show-
cause hearing, where he admitted that he had taken the funds held in escrow for
his personal use. Pearson averred that as of August 6, 2012, Terbeek had not paid
any portion of the judgment.
{¶ 11} The board found that Terbeek’s conduct that occurred before
February 1, 2007, violated DR 1-102(A)(4) (prohibiting a lawyer from engaging
in conduct involving dishonesty, fraud, deceit, or misrepresentation), 1-102(A)(6)
(prohibiting a lawyer from engaging in conduct that adversely reflects on the
lawyer’s fitness to practice law), and 9-102(A)(2) (requiring funds belonging in
part to a client and in part to a lawyer, either presently or potentially, to be
deposited in a client trust account and permitting the lawyer to withdraw the
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undisputed portion belonging to him or her).1 The board also found that his
conduct on and after February 1, 2007, violated Prof.Cond.R. 1.15 (requiring a
lawyer to hold funds belonging to a client or third party in a client trust account
separate from his own property), 8.4(c) (prohibiting a lawyer from engaging in
conduct involving dishonesty, fraud, deceit, or misrepresentation), 8.4(d)
(prohibiting a lawyer from engaging in conduct that is prejudicial to the
administration of justice), and 8.4(h) (prohibiting a lawyer from engaging in
conduct that adversely reflects on the lawyer’s fitness to practice law).
{¶ 12} We adopt these findings of fact and misconduct.
Sanction
{¶ 13} 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 BCGD Proc.Reg. 10(B). Disciplinary Counsel v. Broeren, 115 Ohio
St.3d 473, 2007-Ohio-5251, 875 N.E.2d 935, ¶ 21.
{¶ 14} In this case, Terbeek misappropriated funds that he was obligated
to hold in escrow for a third party and used them for personal purposes. When
confronted by that third party about the status of those funds, he advised that the
condition precedent for their release had not been satisfied. But while that
statement may have been true, it also effectively concealed the fact that Terbeek
had already misappropriated the funds. In addition to this misappropriation and
misrepresentation, Terbeek failed to provide requested discovery, failed to appear
1. Because Terbeek’s misconduct occurred both before and after the adoption of the Rules of
Professional Conduct on February 1, 2007, relator charged him under the applicable rules of both
the former Code of Professional Responsibility and the current Rules of Professional Conduct. To
the extent that 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.
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January Term, 2013
at scheduled court hearings, and failed to respond to the disciplinary complaint
filed against him.
{¶ 15} The board found that three of the aggravating factors identified in
BCGD Proc.Reg. 10(B)(1) are present—a dishonest or selfish motive, lack of
cooperation in the disciplinary process, and the failure to make restitution. See
BCGD Proc.Reg. 10(B)(1)(b), (e), and (i). The only evident mitigating factor is
the absence of a prior disciplinary record. See BCGD Proc.Reg. 10(B)(2)(a).
{¶ 16} Recognizing that the misappropriation of client funds carries a
“presumptive sanction of disbarment,” Cleveland Bar Assn. v. Dixon, 95 Ohio
St.3d 490, 2002-Ohio-2490, 769 N.E.2d 816, ¶ 15, and citing several cases in
which we have imposed that ultimate sanction for comparable misappropriation
offenses, the board recommends that we permanently disbar Terbeek. See Greene
Cty. Bar Assn. v. Saunders, 132 Ohio St. 3d 29, 2012-Ohio-1651, 968 N.E.2d 470
(permanently disbarring an attorney who converted more than $40,000 that his
client had entrusted to him to pay taxes due on her mother’s estate, neglected
other client matters, and failed to cooperate in the resulting disciplinary
investigation); Cleveland Metro. Bar Assn. v. Freeman, 128 Ohio St. 3d 421,
2011-Ohio-1483, 945 N.E.2d 1034 (permanently disbarring an attorney who
misappropriated client funds, engaged in multiple instances of neglect, and failed
to cooperate in the ensuing disciplinary investigation); Disciplinary Counsel v.
Zumstein, 93 Ohio St. 3d 544, 757 N.E.2d 327 (2001) (permanently disbarring an
attorney who misappropriated funds from the escrow account of a title agency,
causing checks issued to the agency’s clients to be dishonored).
{¶ 17} Terbeek did not object to the board’s recommendation. After the
deadline for filing objections had passed, however, he tendered his application for
retirement or resignation to the Office of Attorney Services. In re Retirement or
Resignation of Terbeek, case No. 2013-0069. We have stated:
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Gov.Bar R. VI(6)(C) permits lawyers who are the subject
of disciplinary proceedings to resign from the practice of law with
the designation “resigned with disciplinary action pending.” This
rule does not exist to allow lawyers to exhaust the participants and
procedures of the disciplinary system in hope of ultimately evading
the recommended sanction. Lawyers resorting to resignation
during disciplinary proceedings should therefore resign at the
beginning of the proceedings. This immediately removes the
lawyer from the practice of law, thereby protecting the public and
sparing the disciplinary process the time and expense of the
proceedings. Rarely will this court accept a resignation tendered at
the end of the proceedings, when the benefit to the public and the
disciplinary process no longer remains.
Disciplinary Counsel v. Lentes, 120 Ohio St. 3d 431, 2008-Ohio-6355, 900 N.E.2d
167, ¶ 6, citing Akron Bar Assn. v. Holder, 112 Ohio St. 3d 90, 2006-Ohio-6506,
858 N.E.2d 356.
{¶ 18} Terbeek waited until his disciplinary proceedings were almost
complete before tendering his application for resignation. At this late stage of the
proceedings, the public will not benefit from his resignation. Therefore, we find
that he has forfeited his opportunity to resign. See Lentes at ¶ 5. And in the
absence of mitigating evidence that would warrant a deviation from the
presumptive sanction of permanent disbarment, we agree that this ultimate
sanction is appropriate here.
{¶ 19} Accordingly, Jeffrey Lee Terbeek is permanently disbarred from
the practice of law in Ohio. Costs are taxed to Terbeek.
Judgment accordingly.
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O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY,
FRENCH, and O’NEILL, JJ., concur.
____________________
Jonathan E. Coughlan, Disciplinary Counsel, and Heather Hissom
Coglianese, Assistant Disciplinary Counsel, for relator.
________________________
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