Daddy Issues No Defense

The Ohio Supreme Court has remanded for consideration of restitution a matter involving misconduct by two attorneys in handling the estate of a former Cleveland Mayor and State Supreme Court Justice and the affairs of the widow.

The attorneys who engaged in misconduct are brother and sister. They were both associates in their father’s law firm.

He resigned from the firm and  the Bar.

In June 2004, Eleanor Locher retained GM&M to represent her in the administration of the estate of her late husband, Ralph S. Locher, a former mayor of Cleveland and a former justice of the Supreme Court of Ohio. At the time of his death, Ralph Locher had less than $200,000 in probate assets but more than $1 million in nonprobate assets. After her husband died, Mrs. Locher moved Judson Manor retirement facility, but she moved back home after about a week  because she hated being there. By November 2004, Mrs. Locher increasingly was relying on the law firm’s attorneys to help her handle her affairs and invest her assets.

Most relevant to the misconduct of the two respondents in this case, Zoller set up an account titled “Gurney, Miller & Malone, Special Account Locher” (“the special account”) on behalf of Mrs. Locher, as the primary vehicle for managing her money. This “partnership type” account did not bear interest, was not identified as an IOLTA account or a client trust account, and was not designated as a fiduciary account. Mrs. Locher and the two respondents were the only signatories on the account.

The misconduct came to light after the widow died.

Mrs. Locher died at age 95 on December 20, 2010, with only modest assets remaining, including approximately $289 in the special account and the house that she had lived in until her death, which was the subject of a reverse mortgage. In charging her the stipulated amount of almost $330,000 in attorney fees for its performance, the law firm employing the three lawyers who handled her affairs had received an average of approximately $55,000 in attorney fees from her in each year of the representation; when only the first two years of the representation are considered, Mrs. Locher paid the firm an average of well over $125,000 a year in attorney fees…

For not much. 

the panel found that Zoller and Edward Mamone had engaged in conduct that violated a number of Rules of Professional Conduct, as stipulated by the parties. Specifically, Zoller was found to have violated Prof.Cond.R. 1.5(a) (prohibiting a lawyer from making an agreement for, charging, or collecting a clearly excessive fee), 1.15(a) (requiring a lawyer to hold a client’s funds in an interest-bearing account with a clearly identifiable fiduciary title), 1.15(a)(2) (requiring a lawyer to maintain a complete record of an account held by the lawyer containing a client’s funds), and 1.15(a)(5) (requiring a lawyer to perform and retain a monthly reconciliation of an account held by the lawyer containing a client’s funds). Edward Mamone was found to have violated Prof.Cond.R. 1.15(a), 1.15(a)(2), and 1.15(a)(5). These were the same violations that his sister had committed except that he was not found to have collected excessive fees.

It was father’s fault did not work as a defense

There was much made by the parties at the hearing of the asserted fact that respondents’ father, Joseph Mamone, was the mastermind behind the ongoing, improper charging of excessive fees and that respondents were but minor players who were restrained from acting in the best interests of their client, at least in part, because of the familial relationship that existed between them and Joseph Mamone. However, there is no basis in the law to support this position. Neither case law nor the Rules of Professional Conduct provide for any kind of exception when one is complicit in permitting a relative to charge a client extraordinarily excessive legal fees, and we will not create such an exception here.

 The court

Respondents were acting as licensed attorneys in the state of Ohio and, as such, were responsible for protecting the interests of their client. Those responsibilities included preventing their father, who was never a signatory on the special account, from writing and signing inappropriate checks drawn on that account. While Joseph Mamone may have been primarily responsible for the charging of excessive fees, his plot would have failed but for the role played by respondents in this scheme. The collective silence of Zoller and Edward Mamone occasioned by their failure to oversee the special account was vital to their father’s success in overcharging Mrs. Locher. Even though many of the excessive fees were paid through checks signed by Mrs. Locher on other accounts that respondents were not responsible for, excessive fees were also paid from the special account, and had respondents properly monitored the special account on which their father was not a signatory, they would have discovered obvious improprieties that would have alerted them that their father was taking advantage of Mrs. Locher.

The Board of Commissioners on Grievances and Discipline has recommended a stayed suspension for both.

The Board’s findings are linked here.  (Mike Frisch)