Fully Stayed Suspension For Trust Account Mismanagement

As in the previous post, the Ohio Supreme Court ordered a stayed suspension for an attorney’s mismanagement of her trust account.

The Board of Professional Conduct had recommended a partially-stayed suspension. 

Adelstein admitted to failing to deposit unearned fees from two clients into her client trust account, commingling personal funds with client funds in that account, and authorizing or initiating 19 transactions that resulted in overdrafts or insufficient-funds events in that account. We acknowledge that some of Adelstein’s actions were taken with a dishonest or selfish motive. In addition, we are troubled that she failed to take corrective action after representing that she would rectify her deficient client-trust-account management practices at the conclusion of relator’s first investigation.

Even so, we are convinced that the bulk of Adelstein’s violations are the result of her failure to fully understand her obligations under the Rules of Professional Conduct with respect to properly managing her clients’ funds and client trust accounts and the result of her status as a sole practitioner with no support staff to assist her with those tasks. In addition, Adelstein has made full and free disclosure to relator and has generally cooperated in this disciplinary proceeding. Her conduct has not caused any harm to her clients or to other people, and two clients have attested to her competence and capability as an attorney. Furthermore, at her disciplinary hearing, she testified that she had opened new personal and operating accounts and keeps her operating-account checks in a separate binder from her client-trust-account checks, which helps her distinguish the two accounts. Relator has also acknowledged that she was in compliance with her client-trust account obligations at the time of the hearing. In addition, at oral argument before this court, Adelstein’s counsel indicated that Adelstein is willing to be assessed by the Ohio Lawyers Assistance Program (“OLAP”) and comply with OLAP’s recommendations; relator agreed that this would be an appropriate condition in this case.

Justice Kennedy concurred and dissented

A fully stayed suspension is not commensurate with sanctions that have been imposed for similar misconduct in other cases. Because Adelstein’s misconduct is more akin to—and in some ways more egregious than—the misconduct at issue in Disciplinary Counsel v. Alexander, 133 Ohio St.3d 232, 2012-Ohio-4575, 977 N.E.2d 633, I would adopt the recommendation of the board and suspend Adelstein from the practice of law for one year, with six months of the suspension stayed on conditions.

Precedent

Although the majority decides to fully stay the board’s recommended one-year suspension, it begins its analysis by stating that misconduct “involving dishonesty, fraud, deceit, or misrepresentation usually requires an actual suspension from the practice of law,” majority opinion at ¶ 26, citing Disciplinary Counsel v. Fowerbaugh, 74 Ohio St.3d 187, 190-191, 658 N.E.2d 237 (1995). The majority ultimately abandons that rule of thumb, but it bears pointing out that Fowerbaugh is not applicable in cases like this one in which the attorney’s misconduct involves only abusing her client trust accounts and there are no misrepresentations to clients or courts. 

…At the time Fowerbaugh was decided, this court had a “growing concern with the increase in the discipline matters referred to [this court] by the Board of Commissioners on Grievances and Discipline [the predecessor to the Board of Professional Conduct] in which members of the bar of Ohio have deceived their clients or a court.” Id. We explained: “A lawyer who engages in a material misrepresentation to a court or a pattern of dishonesty with a client * * * violates, at a minimum, the lawyer’s oath of office that he or she will not ‘knowingly * employ or countenance any * * * deception, falsehood, or fraud.’ ” Id., quoting former Gov.Bar R. I(8)(A).

Thus

This court’s holding in Fowerbaugh that an attorney receive an actual term of suspension when he engages in a pattern of misconduct involving dishonesty, fraud, deceit, or misrepresentation is limited to situations in which that pattern of misconduct involves a client or a court and concerns a legal matter that the client has entrusted to the lawyer. Therefore, I reject the majority opinion’s broadening of this court’s holding in Fowerbaugh to include misconduct involving client trust accounts.

(Mike Frisch)