Cleveland Metropolitan Bar Ass'n v. Fonda

[Cite as Cleveland Metro. Bar Assn. v. Fonda, 138 Ohio St. 3d 399, 2014-Ohio-850.]
CLEVELAND METROPOLITAN BAR ASSOCIATION v. FONDA.
[Cite as Cleveland Metro. Bar Assn. v. Fonda, 138 Ohio St. 3d 399,
2014-Ohio-850.]
Attorneys—Misconduct—Failure to act with reasonable diligence—Failure to
keep clients reasonably informed of status of legal matters—Failure to
respond to reasonable requests for information—One-year suspension,
stayed on conditions.
(No. 2013-0571—Submitted August 20, 2013—Decided March 12, 2014.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 12-030.
____________________
Per Curiam.
{¶ 1} Respondent, Charles Walter Fonda of Cleveland, Ohio, Attorney
Registration No. 0022753, was admitted to the practice of law in Ohio in 1981. In
April 2012, relator, Cleveland Metropolitan Bar Association, charged Fonda with
professional misconduct arising from his alleged neglect of two separate client
matters. Relator amended its complaint in July 2012 to allege an additional
violation of the Rules of Professional Conduct in Count One.
{¶ 2} With respect to both clients, a panel of the board found that Fonda
failed to act with reasonable diligence, failed to keep the clients reasonably
informed about the status of their legal matters, and failed to comply with their
reasonable requests for information. But the panel recommended that several
other alleged violations be dismissed. The board adopted the panel’s findings of
fact, conclusions of law, and recommended sanction of a one-year suspension, all
stayed on conditions.
SUPREME COURT OF OHIO
{¶ 3} Fonda objects to the board’s findings of misconduct with regard to
Count Two of the complaint, arguing that no violations occurred, and urges us to
impose a lesser sanction of a public reprimand for the violations found by the
board with respect to Count One of the complaint. Having thoroughly reviewed
the record, we overrule Fonda’s objections, adopt the board’s findings of fact and
conclusions of law, and suspend Fonda from the practice of law in Ohio for one
year, but stay the entire suspension on the conditions recommended by the board.
Misconduct
{¶ 4} Before the hearing, the parties entered into stipulations of fact—
but not misconduct—and relator submitted the deposition testimony of Damon
Walton to the board. At the hearing, the parties presented a number of exhibits
and the live testimony of four witnesses, including Fonda.
Count One—The Schub Matter
{¶ 5} The board found that on June 29, 2007, California resident Janice
Schub retained Fonda to probate her brother’s estate. Their written agreement
obligated Fonda to “prepare and file the Initial Application to Administer Estate
and To Probate Will, Appointment of Appraiser form, all documents necessary to
transfer real estate and other documents, and [to handle] the filing of accounts and
closing of the estate.” Schub understood that Fonda would handle all phases of
closing the estate—including the filing of an Ohio estate tax return and any
necessary federal tax returns.
{¶ 6} Without requesting an extension of time, Fonda filed the Ohio
estate tax return on May 10, 2010—almost 20 months late. As a result of this
delay, the estate paid $1,080.66 in accrued interest.
{¶ 7} Fonda filed the decedent’s 2007 federal income tax return on July
19, 2011—39 months late. Due to Schub’s own efforts, the Internal Revenue
Service waived the penalty for late filing and reduced the interest on the late
payment to $180.65. Because Fonda waited until July 2011 to file the federal
2
January Term, 2014
estate tax return—making it approximately 42 months late—the estate paid
$436.95 in penalties and interest. On these facts, the board found that Fonda
violated Prof.Cond.R. 1.3 (requiring a lawyer to act with reasonable diligence in
representing a client).
{¶ 8} By March 2010, Fonda stopped returning Schub’s calls, and when
he did not respond to her letters and e-mails, she resorted to sending him a letter
by certified mail. Schub terminated his services and requested her file in January
2012—approximately four and one-half years after she retained him. At the time
of the hearing in December 2012, Schub had still not received her file.
{¶ 9} The board found that Fonda’s failure to keep Schub reasonably
informed about the status of her case and his failure to respond to her calls
violated 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)
and that his failure to promptly return her file on request violated Prof.Cond.R.
1.16(d) (requiring a lawyer withdrawing from representation to take steps
reasonably practicable to protect a client’s interest).
{¶ 10} However, the board determined that relator had offered no
evidence that Fonda’s fee of approximately $12,000 was clearly excessive or that
he failed to communicate with Schub about his fees and expenses. The board
therefore recommended that we dismiss alleged violations of Prof.Cond.R. 1.5(a)
(prohibiting a lawyer from making an agreement for, charging, or collecting an
illegal or clearly excessive fee) and 1.5(b) (requiring an attorney to communicate
the nature and scope of the representation and the basis or rate of the fee and
expenses within a reasonable time after commencing the representation). It also
concluded that relator failed to prove that Fonda’s conduct was prejudicial to the
administration of justice and, therefore, recommends that we dismiss an alleged
violation of Prof.Cond.R. 8.4(d) (prohibiting a lawyer from engaging in conduct
3
SUPREME COURT OF OHIO
that is prejudicial to the administration of justice). We adopt these findings of
fact and conclusions of law.
Count Two—The Walton Matter
{¶ 11} Damon Walton purchased a truck from a Cleveland auto dealer in
February or March 2009. He agreed to make the down payment in installments.
After several such payments, the dealer made two demands for more money.
After Walton refused the second request, the dealer repossessed the truck with the
purchase contract and other personal property inside. On May 13, 2009, Walton
retained Fonda to prepare a demand letter and negotiate a resolution of his dispute
with the dealer. He paid $100 of Fonda’s $250 retainer at that time and the
remainder at a second meeting two days later. But after that meeting, Fonda
would not accept or return Walton’s phone calls.
{¶ 12} In late July or early August 2009, Walton went to Fonda’s office
without an appointment to discuss his case. At that time, Fonda showed him a
copy of a demand letter he had sent to the dealer on July 23, 2009. Walton’s
frequent calls to Fonda again went unanswered or unreturned, and after he
became verbally abusive toward Fonda’s assistant, she refused to take his calls.
After Fonda finally scheduled a meeting with him for July 27, 2010, Walton
suffered severe injuries in an assault and missed his appointment.
{¶ 13} From October 2010 to March 2011, Walton attempted to contact
Fonda numerous times. In early March, Fonda advised Walton that if he wanted
to file suit against the dealer he would need to make an additional payment of
$100. Walton met with Fonda on March 7, 2011, and gave him a check for $100
drawn on his mother’s account. Fonda did not negotiate the check, file a lawsuit,
or communicate with Walton after that date.
{¶ 14} Walton filed a grievance against Fonda in November 2011. He
terminated his representation in January 2012 and requested the return of his file
at that time. Fonda did not respond to his request, though his counsel did send the
4
January Term, 2014
March 7, 2011 check and copies of Walton’s documents to relator’s counsel in
July 2012, and counsel forwarded them to Walton.
{¶ 15} The board found that Fonda failed to act with reasonable diligence
during the 33 months that he represented Walton, in violation of Prof.Cond.R. 1.3,
that he failed to reasonably communicate with Walton in violation of
Prof.Cond.R. 1.4(a)(4), and that he failed to promptly return Walton’s file in
violation of Prof.Cond.R. 1.16(d). But the board recommended that we dismiss
the alleged violation of Prof.Cond.R. 8.4(d) based on the insufficiency of the
evidence.
{¶ 16} Fonda objects to the board’s findings of fact and misconduct,
arguing that he acted with reasonable diligence and promptness and fully
performed the services that Walton hired him to provide. He contends that
pursuant to the terms of his written agreement with Walton, he was not obligated
to render further services until Walton signed a litigation agreement and advanced
court costs. He claims that without such an agreement, he could not have violated
Prof.Cond.R. 1.4(a)(3) or 1.4(a)(4) because his representation was complete and
there was no additional information for him to provide to Walton. He further
claims that he had nothing to return to Walton and, therefore, could not have
violated Prof.Cond.R. 1.16(d).
{¶ 17} The written representation agreement that Fonda and Walton
signed provides:
The CLIENT has retained and hereby does retain the
ATTORNEY to prepare a demand letter on his behalf to Auto Rite
(salesman/finance manager Von) for the return of his vehicle
and/or funds deposited with Auto-Rite relating to a vehicle
transaction with Auto-Rite, which transpired at the end of March,
2009. The attorney is specifically retained to prepare such demand
5
SUPREME COURT OF OHIO
letter, and to proceed with follow-up negotiations, if any. Should a
lawsuit be required, the parties hereto will proceed under a
separate agreement.
{¶ 18} Fonda argues that he acted with reasonable diligence and
promptness in performing the limited tasks that were required under this contract
with Walton and that he had no duty to communicate with Walton about those
efforts or the possibility of filing suit once those efforts failed. But Fonda waited
more than two months to send the simple, three-paragraph demand letter to the
dealer. Though Fonda now suggests that this delay was occasioned by Walton’s
failure to deliver documents relating to his purchase of the vehicle, he admitted in
his testimony that at their first meeting, Walton advised him that those documents
were in the vehicle when it was repossessed. Thus, Fonda’s claims that it was
Walton who occasioned the delay are unavailing.
{¶ 19} At his deposition, Walton testified that after paying the retainer, he
called Fonda three or four times a week, but Fonda did not return his calls. He
stated that he stopped by Fonda’s office one day in July or August 2009 to check
on his case, and Fonda showed him a July 29, 2009 letter addressed to the dealer.
This evidence clearly and convincingly demonstrates that Fonda’s failure to keep
Walton informed about the status of his legal matter and failure to comply with
Walton’s reasonable requests for information began during his initial
representation of the client.
{¶ 20} Fonda’s failure to reasonably communicate with Walton also
extended beyond the initial agreement of representation. While it appears that the
dealer did not respond to Fonda’s letters seeking the return of the truck or a
refund of Walton’s down payment, Walton testified that he was told that Fonda
was still working on his case and that it would be headed to court “soon.” When
Walton demanded that Fonda refund his money if he was not going to work on
6
January Term, 2014
the case, Fonda told him to bring in an additional $100 for a filing fee to take the
matter to court. Walton delivered the money to Fonda in person a few days later.
Fonda accepted the check and placed it in Walton’s file (though he never cashed
it), but he never mentioned a new agreement or presented one for Walton’s
signature, and he never filed suit on Walton’s behalf. Fonda knew that Walton
wanted to pursue his case in court and led him to believe for more than two and a
half years that it would be filed. Thus, his protestations that the terms of the fee
agreement expressly required a second agreement before litigation would be
pursued, while true, are unavailing.
{¶ 21} In Cuyahoga Cty. Bar Assn. v. Hardiman, 100 Ohio St. 3d 260,
2003-Ohio-5596, 798 N.E.2d 369, ¶ 10, we stated that an attorney-client
relationship can be formed by implication, based on the conduct of the attorney
and the reasonable expectations of the client. See also Disciplinary Counsel v.
Furth, 93 Ohio St. 3d 173, 184, 754 N.E.2d 219 (2001) (finding a violation of DR
6-101(A)(3), which prohibited neglect of an entrusted legal matter, when the
client reasonably believed that the attorney was representing him and his son in a
legal matter). In Hardiman, we found that the client reasonably believed that he
had secured legal representation based on the acceptance by the attorney’s office
of a partial payment of the retainer, the attorney’s failure to advise the client that
the representation would not commence until the full retainer was received, and
the attorney’s knowledge of the legal subject matter. Hardiman at ¶ 11.
{¶ 22} Unlike Hardiman, Fonda attempted to limit the scope of his
representation in his written agreement with Walton, but his actions after that
contract was signed—including his representations that the case would soon go to
court, his acceptance of the $100 check for court costs, his corresponding failure
to present Walton with a new agreement, and perhaps most importantly, his
failure to correct Walton’s obvious belief that Fonda’s representation extended to
litigation without a new agreement—conveyed a different message. Walton’s
7
SUPREME COURT OF OHIO
testimony clearly and convincingly demonstrates that Fonda’s actions led him to
reasonably believe that the representation continued until he terminated Fonda’s
services in January 2012. Consequently, we find that Fonda’s conduct continued
to violate Prof.Cond.R. 1.3, 1.4(a)(3), and 1.4(a)(4) until that time.
{¶ 23} Fonda also challenges the board’s finding that he violated
Prof.Cond.R. 1.16(d), which provides:
As part of the termination of representation, a lawyer shall
take steps, to the extent reasonably practicable, to protect a client’s
interest. The steps include giving due notice to the client, allowing
reasonable time for employment of other counsel, delivering to the
client all papers and property to which the client is entitled, and
complying with applicable laws and rules. Client papers and
property shall be promptly delivered to the client. “Client papers
and property” may include correspondence, pleadings, deposition
transcripts, exhibits, physical evidence, expert reports, and other
items reasonably necessary to the client’s representation.
{¶ 24} Here, Fonda asserts that Walton deposited no papers or property
with him, that he did not possess any other items reasonably necessary for
Walton’s representation, and that therefore, he had nothing to promptly return
when Walton requested his file. But in his testimony, Fonda admitted that the
$100 check he received (but did not cash) belonged to Walton and his family and
that the correspondence he sent to the dealer on Walton’s behalf would be helpful
to any attorney that Walton might hire to pursue his claim. Yet Fonda waited
until July 25, 2012—more than six months after Walton requested his file—to
deliver those items to relator for forwarding to Walton. Moreover, the evidence
clearly and convincingly demonstrates that despite Walton’s clear belief that
8
January Term, 2014
Fonda would continue to represent him in a lawsuit, he failed to advise Walton of
his intention to withdraw as required by Prof.Cond.R. 1.16(d).
{¶ 25} Based on the foregoing, we find that there is sufficient evidence to
establish that Fonda has violated Prof.Cond.R. 1.3, 1.4(a)(3), 1.4(a)(4), and
1.16(d) as found by the board. Therefore, we overrule Fonda’s objections as to
those findings of misconduct, adopt the board’s findings of fact and misconduct,
and dismiss the alleged violation of Prof.Cond.R. 8.4(d) as recommended by the
board.
Sanction
{¶ 26} 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.
{¶ 27} The board found that several aggravating factors are present,
including a pattern of misconduct, multiple offenses, and the vulnerability of and
harm to the affected clients. See BCGD Proc.Reg. 10(B)(1) (c), (d), and (h).
Mitigating factors found by the board include the absence of prior disciplinary
offenses and the absence of a dishonest or selfish motive. See BCGD Proc.Reg.
10(B)(2)(a) and (b).
{¶ 28} This matter was originally scheduled for hearing on August 27,
2012, but at Fonda’s request, that hearing was continued until December 10,
2012, to permit him to obtain a psychological evaluation pursuant to his August 1,
2012 contract with the Ohio Lawyers Assistance Program (“OLAP”). The board
acknowledged the report of James M. Medling, Ph.D., the clinical psychologist
who evaluated Fonda in late August 2012 and commenced his psychological
9
SUPREME COURT OF OHIO
counseling. Dr. Medling diagnosed Fonda with generalized anxiety disorder and
dysthymic disorder, opined that those disorders contributed to Fonda’s
misconduct in the Schub and Walton matters, and stated that “[c]urrently and with
continued psychological treatment, Mr. Fonda is able to provide competent,
ethical professional service to his clients.” While this report satisfies three of the
four criteria set forth in BCGD Proc.Reg. 10(B)(2)(g)1 for recognizing a mental
disability as a mitigating factor in attorney-disciplinary proceedings, the fourth
factor—a sustained period of successful treatment—is not present here, because
Fonda’s treatment began just over three months before the hearing. The board
acknowledged the diagnosis but did not state that it was mitigating.
{¶ 29} Before the board, relator argued in favor of a one-year suspension
with no more than six months stayed on conditions. Fonda urged the board to
find that he had not committed any misconduct or to recommend only a public
reprimand. The board, however, recommended that we suspend Fonda from the
practice of law for one year, all stayed, on the conditions that he make restitution
of $707.33 to Schub (representing the $1,698.26 in interest and penalties that
Fonda stipulated was the result of his failure to timely file tax documents on
behalf of the estate, less a $990.93 payment that he made to the Cuyahoga County
treasurer on behalf of the estate) and that he remain in compliance with his
August 1, 2012 OLAP contract.
1. BCGD Proc.Reg. 10(B)(2)(g) provides that chemical dependency or mental disability may be
considered in favor of recommending a less severe sanction when all of the following are present:
(i) A diagnosis of a chemical dependency or mental disability by a qualified
health care professional or alcohol/substance abuse counselor;
(ii) A determination that the chemical dependency or mental disability
contributed to cause the misconduct;
(iii) In the event of chemical dependency, a certification of successful
completion of an approved treatment program or in the event of mental
disability, a sustained period of successful treatment;
(iv) A prognosis from a qualified health care professional or
alcohol/substance abuse counselor that the attorney will be able to return to the
competent, ethical professional practice under specified conditions.
10
January Term, 2014
{¶ 30} Fonda objects to the board’s recommended sanction, arguing that
with credit for additional mitigating factors not found by the board—including his
mental disability, full and free disclosure to the board and cooperative attitude
toward the disciplinary proceedings, and his good character and reputation as
attested to in multiple letters to the board—a public reprimand is the proper
sanction for his misconduct.
{¶ 31} As previously discussed, Fonda’s mental disability does not
qualify as a mitigating factor because the record does not demonstrate that he has
achieved a sustained period of successful treatment. And we are not persuaded by
Fonda’s claims that he made a full and free disclosure to the board or displayed a
cooperative attitude toward the proceedings. Although he stipulated that the
interest and penalties assessed against the decedent’s estate were incurred as a
result of the late filing of the estate tax returns, at the hearing and in his
objections, he attempted to disclaim responsibility for some of those charges as
being occasioned by the late discovery of additional estate assets. Moreover, he
attempted to disavow responsibility for his failures in the Walton matter by
focusing on the contractual limitation on the scope and duration of his
representation—despite the fact that he also engaged in misconduct during the
admitted portion of his representation. Thus, we cannot find that he made full and
free disclosure to relator or that he demonstrated a cooperative attitude toward
these proceedings.
{¶ 32} Fonda has submitted letters from three clients, generally praising
his legal work and his prompt attention to their inquiries. He also submitted five
letters from colleagues praising his competence, character, and integrity, although
none of them stated that they were aware of the nature of the charges against him,
and one acknowledged that he did not know the circumstances of relator’s
investigation. The board made no mention of these character references in its
report. While they are evidence of Fonda’s good character and reputation, they
11
SUPREME COURT OF OHIO
are of limited value and do not absolve him of responsibility for his misconduct in
his representation of Schub and Walton.
{¶ 33} Fonda cites a number of cases in which we have imposed public
reprimands, focusing on the mitigating factors present in those cases and arguing
that they are similar to the mitigating factors that he has urged us to find in this
case. Fonda’s conduct, however, is not comparable. For example, in Disciplinary
Counsel v. Agopian, 112 Ohio St. 3d 103, 2006-Ohio-6510, 858 N.E.2d 368, ¶ 6,
15, we publicly reprimanded an attorney who, due to careless and sloppy
timekeeping practices, overbilled the county for court-appointed work. Lorain
Cty. Bar Assn. v. Stuart, 135 Ohio St. 3d 117, 2012-Ohio-5687, 984 N.E.2d 1041,
¶ 11, involved an attorney who failed to provide competent representation to a
client and failed to notify his client that he did not maintain professional liability
insurance. And while the conduct at issue in Trumbull Cty. Bar Assn. v. Rucker,
134 Ohio St. 3d 282, 2012-Ohio-5642, 981 N.E.2d 866, ¶ 3-4, involved neglect of
a client’s legal matter, failure to deposit client funds in an interest-bearing client
trust account, and charging a “nonrefundable” fee without making certain
required disclosures to the client, the matter was submitted to the board on a
consent-to-discipline agreement.
{¶ 34} In Cleveland Metro. Bar Assn. v. Gusley, 133 Ohio St. 3d 534,
2012-Ohio-5012, 979 N.E.2d 319, ¶ 1, 6, we approved a consent-to-discipline
agreement and publicly reprimanded an attorney who failed to enter into a written
contingent-fee agreement with a client and failed to register for the electronic-
filing system of the federal district court, which resulted in missing a filing
deadline of which he otherwise would have been notified. And in Columbus Bar
Assn. v. Bhatt, 133 Ohio St. 3d 131, 2012-Ohio-4230, 976 N.E.2d 870, ¶ 10, 16,
19, we publicly reprimanded an attorney who stipulated that he had neglected two
client matters, failed to keep those clients reasonably informed about their
matters, failed to notify them that his professional liability insurance lapsed for
12
January Term, 2014
several months during his representation, and failed to deposit funds into his
client trust account pending the resolution of a shareholder dispute regarding
ownership of the funds.
{¶ 35} In contrast to the cases that Fonda cites, he has neglected the legal
matters of two clients and failed to reasonably communicate with those clients for
more than three years, and then when those clients were fed up with his inaction,
he failed to promptly return the case files and one client’s check for court costs.
Although he stipulated to many facts and does not challenge the findings of
misconduct with respect to the Schub matter, he steadfastly maintains that he
completed Walton’s representation and did nothing wrong in that case.
Moreover, Fonda attributes much of his misconduct to his anxiety and dysthymic
disorder, which were diagnosed less than three months before his panel hearing,
and for which he has not demonstrated a sustained period of successful treatment.
{¶ 36} We find the facts of this case to be most comparable to those of
Disciplinary Counsel v. Brueggeman, 128 Ohio St. 3d 206, 2010-Ohio-6149, 943
N.E.2d 509. Brueggeman neglected four separate client matters, failed to keep
three clients reasonably informed about the status of their matters, and failed to
comply with the reasonable requests of those three clients for information. Id. at
¶ 5-6, 10-11, 14, 19. He also knowingly failed to respond to multiple letters of
inquiry from disciplinary counsel, although he did provide full and free disclosure
and exhibit a cooperative attitude in the proceedings once relator filed his
complaint. Id. at ¶ 4, 8, 13, 16, 18, and 22. Based on the board’s
recommendation, however, we determined that Brueggeman’s diagnosed
dysthymia was a mitigating factor and imposed a 12-month suspension, fully
stayed on the conditions that he serve one year of monitored probation, comply
with his existing OLAP contract, continue counseling, and refrain from any
additional misconduct. Id. at ¶ 23-25, 27.
13
SUPREME COURT OF OHIO
{¶ 37} While Fonda’s misconduct is somewhat less egregious than that of
Brueggeman, we have not found his anxiety and dysthymia to be mitigating
factors as we did in Brueggeman. And we believe that a term suspension, all
stayed on conditions, is the best way to ensure that those disorders will not cause
additional harm to the public. Accordingly, we suspend Charles Walter Fonda
from the practice of law for one year, but stay the entire suspension on the
conditions that he make restitution of $707.33 to Schub within 90 days of the date
of this order, that he remain in compliance with his August 1, 2012 OLAP
contract, and that he engage in no further misconduct. Costs are taxed to Fonda.
Judgment accordingly.
O’CONNOR, C.J., and LANZINGER, KENNEDY, FRENCH, and O’NEILL, JJ.,
concur.
PFEIFER and O’DONNELL, JJ., dissent and would impose a public
reprimand.
____________________
Heather M. Zirke, Bar Counsel; and Jones Day, Joseph E. Huigens, and
Robert S. Faxon, for relator.
Lester S. Potash; and Stanley E. Stein & Associates Co., L.P.A., and
Stanley E. Stein, for respondent.
_________________________
14