The opinion
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Northwest Ohio Bar Association v. Noble.
[Cite as Northwest Ohio Bar Assn. v. Noble (1992),
Ohio St.3d .]
Attorneys at law -- Misconduct -- Two-year suspension --
Violation of Disciplinary Rules in handling of two
bankruptcy cases -- Engaging in conduct involving
dishonesty, fraud, deceit or misrepresentation --
Continuing multiple employment where employment may
adversely affect professional judgment on behalf of client
-- Unauthorized communication with party represented by
another lawyer -- Conduct adversely reflecting on fitness
to practice law -- Neglect of a legal matter entrusted --
Failure to preserve identity of client funds.
(No. 91-2003 -- Submitted February 18, 1992 -- Decided
September 2, 1992.)
On Certified Report by the Board of Commissioners on
Grievances and Discipline of the Supreme Court, No. 90-51.
Relator, Northwest Ohio Bar Association, filed a complaint
charging respondent, John D. Noble, with multiple violations of
the Code of Professional Responsibility stemming from his
handling of two bankruptcy cases. The matter was heard by a
panel of this court's Board of Commissioners on Grievances and
Discipline ("board"). The record and stipulations disclose the
following facts:
The Walter Bankruptcy
On March 18, 1987, Noble filed a Chapter 12 bankruptcy
petition on behalf of Jimmie Walter, a farmer. Noble then
sought to obtain credit for Walter to buy seed and fertilizer
for his 1987 crops. Noble contacted three suppliers:
Glenn-Garno Seeds, Prattville Fertilizer and Grain Co., Inc.
("Prattville") and Falor Farm Center, Inc. All three agreed to
supply Walter with fertilizer and seed, extending an
approximate total of $170,000 worth of credit. As "input
creditors," these suppliers were entitled to first priority
liens on the 1987 crops from certain specified acreage.
Moreover, pursuant to the bankruptcy court's order, each time
Walter received proceeds from the sale of these crops, the
input creditors were to receive ninety percent and Walter ten
percent, on a check-by-check basis. Under Noble's agreement
with Walter, Noble was to get one half of Walter's share, i.e.,
five percent of the proceeds, in payment of attorney fees.
Noble agreed to disburse the crop proceeds and file
Uniform Commercial Code liens to protect the input creditors'
security interest. Noble perfected the liens, for which
service he billed Prattville $250.
A Disclosure Statement and Plan, prepared by Noble and
relied upon by the input creditors, showed that the input
creditors were to receive a priority lien on eight hundred
acres of corn and five hundred fifty-eight acres of soybeans.
However, Walter was participating in a government program that
limited his 1987 corn acreage to approximately four hundred
seventy-five acres. At the hearing Noble claimed ignorance of
this limitation; he said that, in preparing the disclosure, he
had relied on Walter's statements as to how much Walter
intended to plant.
On August 26, 1987, Noble signed a waiver of the input
creditors' priority in the 1987 crops in favor of the United
States Department of Agriculture. The input creditors never
authorized this.
On September 28, 1987, the Metamora Elevator Co. issued a
$30,492.46 check to Walter for his 1987 soybean crop. Noble
did not disburse ninety percent to the input creditors and ten
percent to Walter, as the court order required. Instead, he
disbursed $14,848 to John Deere Credit Corporation ("John
Deere") and $1,559.40 to Lyons L.P. Gas without the knowledge
or approval of the input creditors. Noble also disbursed
$1,524.62 to himself, even though he had neither sought nor
obtained the bankruptcy court's approval of his fee. Finally,
Noble disbursed $1,489.85 to Walter and $11,070.59 to the input
creditors.
Noble followed a similar pattern with two subsequent
checks. On October 23, 1987, the Commodity Credit Corporation
issued a check for $26,547.39. Noble disbursed $13,154.68 to
the input creditors, gave Walter $10,000, and paid himself
$3,392.71, again without seeking the court's permission.
(Moreover, Noble's self-payment far exceeded the five percent
his fee agreement called for.) On November 5, 1987, Metamora
Elevator Co. issued a check for $4,806.95. Although Walter was
entitled to only ten percent, Noble disbursed $697.01 to Walter.
At the hearing, Noble tried to justify his improper
disbursement of the September check by asserting that the
September check might have been from the sale of 1985-1986
stored crops, not 1987 crops subject to the input creditors'
liens. Had that been so, the input creditors would have been
entitled to no portion of the September check. The $10,000
payment to Walter from the October check was intended to
reimburse Walter for the allegedly erroneous September
disbursements to the input creditors. However, an affidavit
prepared by Noble and signed by Walter in December 1987
indicates that the September check represented 1987 crop
proceeds; moreover, Noble so stated a year later during a
deposition of Walter.
Noble also testified that, had he not paid John Deere from
the September check, John Deere would have repossessed Walter's
equipment, making it impossible for Walter to get the 1987 crop
in; thus, paying John Deere was in the input creditors'
interest. Nevertheless, Noble admitted that he failed to
inform the input creditors that he intended to pay John Deere
or to obtain their permission to do so.
When the input creditors discovered that Walter had not
planted as many acres as his April disclosure statement had
said he would, they hired a lawyer, Jan Stamm, to represent
their interests. Although Noble knew that the input creditors
had hired Stamm, he directly contacted Prattville's manager
twice. Noble stipulated that this conduct violated DR 7-104.
The Cook Bankruptcy
In 1987, Mr. and Mrs. Norman Cook hired Noble to handle
their Chapter 11 bankruptcy. Noble filed the Cooks' bankruptcy
petition. On January 2, 1989, with the bankruptcy action still
pending, Norman Cook died.
On April 1, 1989, Mrs. Cook liquidated the family farm and
its equipment. The Cooks owed the Farmers Home Administration
("FmHA") over $200,000, secured by a lien on the equipment;
however, FmHA agreed to allow the equipment's sale and accept
the proceeds, less funeral costs, in settlement. Accordingly,
the bankruptcy court issued an order permitting Mrs. Cook to
sell all property and equipment free of lien.
The proceeds from the equipment's sale totaled
$14,330.11. Noble subsequently received a check in that
amount, made out to him and Mrs. Cook, dated April 3, 1989.
Noble deposited this check into his trust account and used
$4,517.75 to pay the funeral expenses, leaving $9,812.36.
However, instead of settling FmHA's claim with this money,
Noble used it to pay personal expenses. Moreover, he
commingled his own funds into the trust account in an attempt
to cover his defalcations. Noble stipulated that this conduct
violated DR 1-102(A)(4), 1-102(A)(6) and 9-102.
To Mrs. Cook's detriment, Noble delayed the disposition of
her bankruptcy case while trying to replace the misappropriated
funds. He did not file a Plan and Disclosure Statement with
the bankruptcy court until January 1990, and when he did file
it, he initially failed to provide for the United States
Trustee's fees. Moreover, he never filed an Application for
Settlement of Indebtedness with FmHA, as required. Not until
June 11, 1990, did Noble finally send FmHA a check for
$9,812.36.
Mrs. Cook hired new counsel in June 1990; counsel filed
her settlement application with FmHA in October. By then,
however, Mrs. Cook had collected over $70,000 in death
benefits, which she was required to disclose on the
application. An FmHA representative informed new counsel that
the $9,812.36 settlement proposal was no longer acceptable.
Noble stipulated that his delay violated DR 6-101 and harmed
Mrs. Cook financially.
In mitigation, Noble testified that his son committed
suicide in 1978 and that Noble had been under extraordinary
emotional and financial stress ever since. Noble's emotional
state deteriorated to a point where "I hated the world * * *."
He had serious marital problems and overextended himself
financially. Finally, in 1989 or 1990, a court entered a
$900,000 judgment against Noble for injuring another person in
an auto accident in 1987.
The panel found that, in the Walter bankruptcy, Noble
violated DR 1-102(A)(4) (dishonesty, fraud, deceit, or
mispresentation), 5-105(B) (continuing multiple employment
where employment may adversely affect professional judgment on
behalf of client), and 7-104(A)(1) (unauthorized communication
with party represented by another lawyer). In the Cook
bankruptcy, the panel found Noble violated DR 1-102(A)(4),
1-102(A)(6) (conduct adversely reflecting on fitness to
practice), 6-101(A)(3) (neglect of a legal matter entrusted to
him) and 9-102(A) (failure to preserve identity of client
funds). The panel recommended a two-year suspension. The
board made the same findings and recommendation.
Weaner, Zimmerman, Bacon, Yoder & Hubbard and Stanley J.
Yoder; and James P. Spriggs, for relator.
John D. Noble, pro se, and Charles W. Kettlewell, for
respondent.
Per Curiam. We concur in the board's findings and
recommendation. John D. Noble is suspended from the practice
of law in Ohio for two years. Costs taxed to respondent.
Judgment accordingly.
Moyer, C.J., Sweeney, Holmes, Douglas, Wright, H. Brown
and Resnick, JJ., concur.