Toledo Bar Assn. v. Stewart

[Cite as Toledo Bar Assn. v. Stewart, 135 Ohio St.3d 316, 2013-Ohio-795.]
TOLEDO BAR ASSOCIATION v. STEWART.
[Cite as Toledo Bar Assn. v. Stewart, 135 Ohio St.3d 316, 2013-Ohio-795.]
Attorneys—Misconduct—Violations of the Rules of Professional Conduct,
including failure to act with reasonable diligence in representing a client,
failure to maintain separate account and to keep complete records of trust
account, and failure to cooperate in a disciplinary investigation—Two-
year suspension, 12 months stayed on conditions.
(No. 2012-1338—Submitted January 9, 2013—Decided March 12, 2013.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 11-014.
__________________
Per Curiam.
{¶ 1} Respondent, John C. Stewart of Lambertville, Michigan, Attorney
Registration No. 0042580, was admitted to the practice of law in Ohio in 1989.
He is also licensed to practice law in Michigan. In a second amended complaint,
relator, Toledo Bar Association, has charged Stewart with professional
misconduct in his handling of five separate client matters.1 The alleged
misconduct consists mainly of accepting retainers from clients and then failing to
perform the contracted work, failing to reasonably communicate with the clients,
failing to return client files and the unearned portion of their fees on termination
1. Relator charged respondent with misconduct under applicable rules for acts occurring before
and after February 1, 2007, the effective date of the Rules of Professional Conduct, which
supersede the Disciplinary Rules of the Code of Professional Responsibility. Although 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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of his representation, and failing to cooperate in several of the resulting
disciplinary investigations.
{¶ 2} At the hearing before a panel of the Board of Commissioners on
Grievances and Discipline, the parties submitted 47 exhibits, including several
stipulations of fact, and presented testimony from seven witnesses, including
Stewart. The panel found that relator had proven a number of violations by clear
and convincing evidence but, in the absence of testimony from certain grievants,
recommended that Count One and certain alleged violations in Counts Two, Four,
and Five be dismissed. Having considered the proven misconduct, the applicable
aggravating and mitigating factors, and the sanctions we have imposed for
comparable misconduct, the panel recommended that Stewart be suspended from
the practice of law for two years, with one year stayed on conditions. The board
adopted the panel’s findings of fact and misconduct, as well as its recommended
sanction, and there are no objections.
{¶ 3} We adopt certain of the board’s findings of fact and misconduct,
suspend Stewart from the practice of law for two years, and stay the second year
on the conditions recommended by the board.
Misconduct
Count One
{¶ 4} The first count of relator’s complaint alleges that Stewart failed to
act with reasonable diligence in handling a client’s divorce matter and that he
failed to keep the client reasonably informed about the status of the matter. The
client was not subpoenaed and did not appear at the hearing. Consequently,
relator withdrew his allegation that Stewart had failed to reasonably communicate
with the client.
{¶ 5} The stipulations and Stewart’s testimony demonstrate that the delays
in the client’s divorce proceedings were caused by Stewart’s and the divorcing
parties’ relocation, as well as the wife’s multiple pregnancies during the pendency
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of the action and the resultant need for genetic testing after the births to determine
parentage. Because relator did not present any evidence contradicting Stewart’s
testimony, the board recommends that we dismiss Count One of relator’s
complaint. We adopt the board’s findings of fact and dismiss this count.
Count Two
{¶ 6} The second count of relator’s complaint arises from Stewart’s
representation of Brian and Lisa Heaton for damages arising from a Kroger
pharmacy error that caused their infant son to receive an overdose of a
prescription medication. The Heatons believed that their claim was worth
$250,000, and when their first attorney valued their claim at no more than
$20,000 to $30,000, they terminated his representation and retained Stewart.
Stewart did not evaluate their claims, but filed a civil suit against Kroger in
September 2002.
{¶ 7} Knowing that he would need a medical expert to establish causation,
Stewart discussed the Heatons’ claim with one of the child’s treating physicians.
The doctor reported that the pharmacist’s improper dosage instructions
proximately caused the child to have an elevated enzyme level in blood tests.
Because the elevation was minimal, the doctor explained that it could not have
caused permanent injury. Nonetheless, medical protocol required reporting of the
error and testing for possible adverse effects. The doctor stated that the damages
were limited to the numerous needle pricks necessary to perform the blood tests
and the inconvenience of having the tests done. He required a $2,500 retainer for
his expert testimony. The Heatons did not pay this retainer.
{¶ 8} Stewart failed to respond to Kroger’s requests for discovery, despite
the fact that Kroger sought and obtained an order to compel discovery, and failed
to comply with a pretrial order to furnish proof of causation. On February 23,
2005, with Kroger’s motion for summary judgment pending, Stewart voluntarily
dismissed the case. He refiled the case on February 22, 2006, but again failed to
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furnish requested discovery even after the court granted Kroger’s motion to
compel.
{¶ 9} At this time, Mr. and Mrs. Heaton had separated and were in the
process of divorcing. Kroger’s counsel made a one-time offer to settle the case
for $5,000. The board found that at that time, Stewart was communicating only
with Mr. Heaton and that he failed to advise Mrs. Heaton, either orally or in
writing, of the settlement offer or to obtain her consent to the settlement. This
finding, however, is inconsistent with (1) Stewart’s uncontroverted testimony that
he did obtain Mrs. Heaton’s consent to the settlement, (2) Mr. Heaton’s
uncontroverted testimony that Stewart communicated the offer to him and Mrs.
Heaton, that they were both fully aware of the settlement offer, and that the
settlement offer was discussed with their respective counsel in their divorce
proceedings, and (3) the board’s recommendation that we dismiss alleged
violations of Prof.Cond.R. 1.4(a)(3) (requiring a lawyer to keep the client
reasonably informed about the status of a matter) and 1.4(a)(4) (requiring a
lawyer to comply as soon as practicable with reasonable requests for information
from the client) with respect to this count. Therefore, we reject this finding.
{¶ 10} On August 14, 2007, Stewart advised Kroger’s counsel that his
clients had accepted the settlement offer. He waited almost one year before
responding to counsel’s request for information regarding the apportionment of
the settlement. Because Stewart had taken no action to obtain probate court
approval of the minor’s settlement, Kroger’s counsel prepared and filed the
necessary documents in April 2008. Stewart then failed to appear at the probate
court hearing. He did, however, submit an entry of dismissal with prejudice in the
civil action before the probate court had approved the settlement.
{¶ 11} The board found that Kroger’s counsel mailed separate checks for
Stewart’s fee and the minor’s portion of the settlement in October 2008 and that
Stewart cashed his check. The board also found that he made no effort to
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distribute the minor’s portion of the settlement or to deposit it into his client trust
account, having apparently lost or mislaid the check. In August 2009, Mrs.
Heaton called Kroger’s counsel to inquire about the status of the settlement.
Kroger’s counsel then reissued the check and, with consent of the probate court,
deposited it into a trust account for the minor.
{¶ 12} Relator made numerous attempts to communicate with Stewart
regarding Mrs. Heaton’s grievance. His only response was one voice-mail
message promising to send a response, which was never provided.
{¶ 13} Based upon these facts, the board found that Stewart violated DR
6-101(A)(1) and Prof.Cond.R. 1.1 (requiring a lawyer to provide competent
representation to a client), DR 6-101(A)(3) and Prof.Cond.R. 1.3 (requiring a
lawyer to act with reasonable diligence in representing a client), and Prof.Cond.R.
1.15(a) (requiring a lawyer to hold property of clients in an interest-bearing client
trust account, separate from the lawyer’s own property), 1.15(d) (requiring a
lawyer to promptly deliver funds or other property that the client is entitled to
receive), and 8.1(b) (prohibiting a lawyer from knowingly failing to respond to a
demand for information by a disciplinary authority during an investigation).
Because Mrs. Heaton did not testify and because the nature and extent of
Stewart’s communications are not clear from the record, the board recommends
that we dismiss the alleged violations of Prof.Cond.R. 1.4(a)(3) and (4) with
respect to this count. We adopt the board’s findings of fact and misconduct,
except with respect to Mrs. Heaton’s knowledge of the settlement, and hereby
dismiss the alleged violations of Prof.Cond.R. 1.4(a)(3) and (4) with respect to
this count.
Count Three
{¶ 14} In August 2008, Robert Johnston hired Stewart to file a mechanic’s
lien on behalf of his company, National Management Finishes, L.L.C. Stewart
filed the lien on October 28, 2008.
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{¶ 15} In February 2009, at Johnston’s request, Stewart filed a complaint
to foreclose on the lien. The defendant filed an answer, counterclaim, and
demands for discovery. Although Stewart informally requested an extension of
time to respond, he did not submit a response to the discovery demands. The
defendant then moved for summary judgment. Stewart obtained an extension of
time to respond to the motion, but once again failed to file a response. The court
granted summary judgment and awarded a $43,000 judgment against the client’s
company on the defendant’s counterclaim.
{¶ 16} Johnston testified that after he learned of the judgment from a third
party, he asked Stewart to return his case file, but never received it. In addition,
Stewart stipulated that his professional-liability insurance terminated in April
2009 and that he failed to advise Johnston that he no longer had coverage.
{¶ 17} The board found that Stewart violated Prof.Cond.R. 1.1, 1.3,
1.4(a)(3), 1.4(c) (requiring a lawyer to inform the client if the lawyer does not
maintain professional liability insurance), and 1.16(d) (requiring a lawyer
withdrawing from representation to take steps reasonably practicable to protect a
client’s interest). We adopt these findings of fact and misconduct.
Count Four
{¶ 18} The parties stipulated and the board found that in July 2009, Victor
Neubert hired Stewart to represent him and his son with regard to injuries that the
son had suffered in a dirt-bike accident earlier that month. Stewart met with the
Neuberts in August 2009, interviewed the son in early 2010, and promised to
provide Neubert with an update. Stewart testified that he wrote a letter to the
owners of the land where the accident had occurred but did not follow up when
they failed to respond. Although relator’s complaint alleges that Neubert called
Stewart no fewer than 20 times and that his calls were not returned, Neubert was
not subpoenaed and did not testify at the panel hearing.
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{¶ 19} Stewart did not respond to any of relator’s communications
regarding the Neubert grievance. He did, however, testify that he returned some
of Neubert’s calls and that he knew that “there weren’t 20 calls without me
responding to them.” He also admitted that he did not carry professional-liability
insurance from April 2009 until September 2011 and that he had failed to advise
his clients, including Neubert, of that fact.
{¶ 20} With respect to this count, the board found that Stewart violated
Prof.Cond.R. 1.3, 1.4(c) and 8.1(b). Citing the absence of Neubert’s testimony,
however, the board recommends that we dismiss the alleged violations of
Prof.Cond.R. 1.1 and 1.4(a)(3). We adopt these findings of fact and misconduct
and hereby dismiss the alleged violations of Prof.Cond.R. 1.1 and 1.4(a)(3) with
respect to this count.
Count Five
{¶ 21} In August 2010, Patricia Chase retained Stewart and paid him $640
to draft and file a consent order granting her shared custody of her two children.
On March 1, 2011, Stewart submitted a consent judgment and shared-parenting
plan to the domestic relations court. The court approved the shared-parenting
plan but instructed Stewart to modify certain aspects of the order and resubmit it.
Stewart never submitted a modified order, and at the time of the panel hearing, the
matter remained unresolved.
{¶ 22} In August 2011, relator sent Stewart a letter of inquiry asking him
to respond to Chase’s grievance. At some point, Stewart left a voice-mail
message for relator stating that he had moved and that there had been a delay in
the forwarding of his mail, and asking if it was too late to submit a written
response to the grievance. He did not, however, submit a response.
{¶ 23} The board found that Stewart violated Prof.Cond.R. 1.1, 1.3,
1.4(a)(3), and 8.1(b) but recommends that we dismiss an alleged violation of
Prof.Cond.R. 8.4(d). We adopt the board’s findings of fact and misconduct with
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respect to Count Five and hereby dismiss the alleged violation of Prof.Cond.R.
8.4(d).
Sanction
{¶ 24} 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.
{¶ 25} As aggravating factors, the board found that Stewart has engaged in
a pattern of misconduct involving multiple offenses, failed to cooperate in the
disciplinary process in three of the four counts in which we have found
misconduct, and failed to acknowledge the wrongful nature of his conduct. See
BCGD Proc.Reg. 10(B)(1)(c), (d), (e), and (g). In addition, the board found that
Stewart has attempted to downplay the gravity of his misconduct, claiming that
his clients lost nothing as a result of his neglect—(1) the Heatons eventually
received their portion of the settlement funds, (2) Johnston lost nothing because
the $43,000 judgment in favor of the defendant on its counterclaim is not against
Johnston personally, but against his insolvent company, and (3) Neubert obtained
new counsel and was able to pursue his son’s personal-injury claim. He also
maintains that the delays in Chase’s case were not caused by his inaction, but
were the result of her ex-husband’s failure to cooperate. For these reasons, the
board found that Stewart does not appreciate the true nature of his professional
responsibility to his clients. Moreover, the board found that Stewart had
demonstrated an unwillingness to obey court orders in Counts Two and Five and
failed to obey the prehearing orders of the panel chair, requiring the exchange of
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exhibits and the timely exchange and filing of witness and exhibit lists in advance
of the hearing.
{¶ 26} As mitigating factors, the board found that Stewart did not have a
prior disciplinary record and that there was no evidence of a dishonest or selfish
motive. See BCGD Proc.Reg. 10(B)(2)(a) and (b). The board noted that Stewart
claimed that he and his wife were divorcing when he neglected Neubert’s case
and that his father’s illness and death distracted him during the pendency of the
Chase matter, but nonetheless it found that the aggravating factors outweighed the
mitigating factors present in this case.
{¶ 27} Relator noted that we have indefinitely suspended lawyers who
have engaged in a pattern of neglect and failed to cooperate in the resulting
disciplinary investigation. See, e.g., Cleveland Bar Assn. v. Davis, 121 Ohio
St.3d 337, 2009-Ohio-764, 904 N.E.2d 517. However, relator recommends that
Stewart be suspended from the practice of law for two years with one year stayed
on the conditions that he immediately submit to an evaluation by the Ohio
Lawyers Assistance Program (“OLAP”), enter into an OLAP contract, comply
with OLAP’s treatment recommendations, and serve a one-year period of
monitored probation in accordance with Gov.Bar R. V(9).
{¶ 28} The board believed that Stewart’s conduct falls somewhere
between the conduct of the attorneys in Toledo Bar Assn. v. Gregory, 132 Ohio
St.3d 110, 2012-Ohio-2365, 969 N.E.2d 1182 (imposing a six-month stayed
suspension on an attorney who failed to hold property of clients in an interest-
bearing client trust account separate from the lawyer’s own property and failed to
maintain required records of client funds held by the lawyer), and Toledo Bar
Assn. v. Woodley, 132 Ohio St.3d 120, 2012-Ohio-2458, 969 N.E.2d 1192(imposing an indefinite suspension on an attorney who failed to provide
competent representation, neglected several client matters, engaged in the practice
of law while under a registration suspension, and failed to cooperate in the
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ensuing disciplinary investigation). The board recommends that we suspend
Stewart from the practice of law for a period of two years, but stay the second
year of that suspension on the conditions that he engage in no further misconduct,
complete six hours of continuing legal education (“CLE”) in law-office
management and practice by a sole practitioner in addition to the requirements of
Gov.Bar R. X, and serve one year of monitored probation in accordance with
Gov.Bar R. V(9).2 No objections have been filed.
{¶ 29} Having considered Stewart’s misconduct and the aggravating and
mitigating factors present, as well as the sanctions we have imposed for
comparable misconduct, we agree that a two-year suspension, with the second
year stayed on conditions, is the appropriate sanction in this case.
{¶ 30} Accordingly, we suspend Stewart from the practice of law for a
period of two years but stay the second year of that suspension on the conditions
that he engage in no further misconduct, complete six hours of CLE in law-office
management and practice by a sole practitioner in addition to the requirements of
Gov.Bar R. X, and that upon reinstatement, he serve one year of monitored
probation in accordance with Gov.Bar R. V(9). Costs are taxed to Stewart.
Judgment accordingly.
O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY,
FRENCH, and O’NEILL, JJ., concur.
__________________
Paul D. Giha, James P. Silk Jr., and Michael A. Bonfiglio, Bar Counsel,
for relator.
John C. Stewart, pro se.
______________________
2. Noting that the record contains no evidence suggesting that Stewart suffers from any chemical
dependency or mental disability, the board rejected relator’s recommendation that Stewart be
required to submit to an OLAP evaluation.
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