The opinion
[This decision has been published in Ohio Official Reports at 91 Ohio St.3d 367.]
COLUMBUS BAR ASSOCIATION v. PLYMALE.
[Cite as Columbus Bar Assn. v. Plymale, 2001-Ohio-71.]
Attorneys at law—Entering into an agreement to share legal fees with a
nonlawyer does not in and of itself constitute a violation of DR 3-102(A)—
Disciplinary complaint dismissed when relator fails to prove, by clear and
convincing evidence, that respondent attorney has violated a Disciplinary
Rule.
(No. 00-1551—Submitted December 13, 2000—Decided April 11, 2001.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 99-49.
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DOUGLAS, J.
{¶ 1} In a complaint filed September 23, 1999, relator, Columbus Bar
Association, charged respondent, Ronald E. Plymale of Columbus, Ohio, Attorney
Registration No. 0033032, with two counts of professional misconduct. Each count
charged respondent with a violation of DR 3-102(A) (sharing a legal fee with a
nonlawyer). Respondent is the principal of the law firm Plymale & Associates (“the
firm”).
{¶ 2} Count One arose out of circumstances related to the firm’s
representation of claimants against manufacturers of silicone breast implants. The
firm represented over five hundred clients with such claims and became a
participant in the global structured settlement that was implemented for these cases.
The deadline for submitting claims for payment under the structured settlement was
September 16, 1994.
{¶ 3} To assist in preparing the claim forms by the September 16 deadline,
respondent hired Scott Cohen, an attorney who was attending medical school.
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Respondent entered into a written employment contract with Cohen on May 23,
1994, in which respondent agreed to pay Cohen, upon timely completion of the
claims forms, a bonus of $5,000 as well as one and one-half percent of the legal
fees collected by the firm from those claims that Cohen was directly involved in
preparing.
{¶ 4} During this same period, Marilou Stafford, a registered nurse, was an
employee of the firm. Stafford was involved in preparing the breast implant claim
forms. Stafford was not an attorney.
{¶ 5} Near the end of July 1994, Cohen abruptly left respondent’s
employment. Cohen’s resignation put respondent in a dilemma because many of
the claim forms were not yet completed and the September 16 deadline was
approaching.
{¶ 6} The record before the court reflects that there is a dispute of fact
relating to the negotiations regarding Stafford’s compensation for her work on the
breast implant claims. Stafford testified that she and respondent had entered into
an oral agreement sometime between December 1993 and February 1994. The
terms of this alleged oral agreement, according to Stafford, required respondent to
pay Stafford a bonus of $5,000 as well as four percent of the gross legal fees
generated by those breast implant claims that Stafford assisted in preparing.
Stafford testified that respondent told her that she was to be paid a higher
percentage of the legal fees than Cohen because she was a full-time employee and
Cohen was a temporary employee.
{¶ 7} Stafford further testified that when respondent later reduced the oral
agreement to writing, at Stafford’s urging, it was not an accurate reflection of their
earlier oral agreement in that the written agreement provided that Stafford would
be paid only one and one-half percent of the legal fees. Stafford testified that
respondent later offered to share two percent of the legal fees.
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{¶ 8} Respondent, on the other hand, although admitting that he offered to
share legal fees with Stafford, testified that he did not extend the offer to pay
Stafford a percentage of the fees until after Cohen quit working for the firm.
According to respondent, because of Cohen’s resignation, respondent was
concerned that the claim forms would not be completed before the deadline.
Respondent therefore immediately approached Stafford and asked whether she
wanted to take over some of Cohen’s responsibilities in exchange for the “same
bonus” that he had offered Cohen, i.e., one and one-half percent of the legal fees.
Respondent testified that Stafford did not verbally accept this offer, but he assumed
by her actions that she accepted.
{¶ 9} Respondent further testified that when he later put the agreement in
writing, at Stafford’s request, he realized that she had not accepted his offer to share
one and one-half percent of the legal fees and instead expected to share four percent
of the legal fees. In an attempt to compromise with Stafford, respondent then
offered to give Stafford two percent of the legal fees. Stafford never accepted this
offer.
{¶ 10} Respondent also testified that during the negotiations with Stafford
regarding the percentage of legal fees to be shared, he became aware that it was
unethical to share legal fees with a nonlawyer. Respondent and Stafford both
testified that before a written agreement was reached, respondent told Stafford that
sharing legal fees with her would be improper and he would have to find another
way to compensate her for her hard work on the breast implant litigation. Both also
testified that respondent never paid Stafford a percentage of the legal fees collected
in relation to the breast implant claims.
{¶ 11} When Stafford’s employment with the firm ended in 1995, she
entered into a written release and settlement agreement with respondent. The
agreement required that respondent pay Stafford $20,000 in exchange for Stafford’s
release of any and all claims she might have against respondent for any reason,
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including those arising out of the employment relationship. Respondent
subsequently paid Stafford $20,000 pursuant to this agreement. Notwithstanding
the release and settlement agreement, Stafford subsequently filed a lawsuit against
respondent. That lawsuit was settled out of court.
{¶ 12} Count Two of the complaint against respondent involved a year-end
bonus policy established by respondent in 1994. The policy was contained in the
firm’s 1994 office manual and provided:
“For the immediate future, commencing in calendar year 1994 and until
terminated by management, each secretary and paralegal assigned to a particular
lawyer will be paid .004 [.4%] of the gross fees earned by that lawyer during the
fiscal year, provided that the lawyer has met or exceeded his pre-established
financial goal for the year.”
{¶ 13} In accordance with this policy, at the end of 1994, a bonus of
$3,946.98 was shared between three legal assistants. The bonus policy was
abolished after the 1994 calendar year.
{¶ 14} A panel of the Board of Commissioners on Grievances and
Discipline of the Supreme Court heard the evidence. With regard to Count One,
the panel determined that respondent had entered into an agreement to share legal
fees with Stafford, a nonlawyer, and that this agreement constituted a sharing of
legal fees in violation of DR 3-102(A). However, with regard to Count Two (year-
end bonus policy), the panel found no violation of DR 3-102(A).
{¶ 15} Accordingly, the panel recommended that respondent be publicly
reprimanded for misconduct related to Count One and that Count Two be
dismissed. The board adopted the findings of fact, conclusions of law, and
recommendations of the panel.
{¶ 16} Although the Board of Commissioners on Grievances and Discipline
makes recommendations to this court in disciplinary proceedings, this court renders
the final determination of facts and conclusions of law. Ohio State Bar Assn. v.
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Reid (1999), 85 Ohio St.3d 327, 708 N.E.2d 193, at paragraph one of the syllabus.
After a thorough review of the record in this case, we conclude that relator has
failed to meet its burden of proving, by clear and convincing evidence, that
respondent’s actions with respect to Count One constituted a violation of DR 3-
102(A). Therefore, we decline to follow the board’s recommendation with regard
to Count One.
{¶ 17} DR 3-102(A) provides that “[a] lawyer or law firm shall not share
legal fees with a non-lawyer * * *.” The board found that respondent did not
actually share legal fees with Stafford; however, it found that respondent and
Stafford had entered into an agreement to share legal fees and the board determined
that entering into such an agreement was in and of itself a violation of DR 3-102(A).
On the contrary, we find that there was never an agreement between respondent
and Stafford to share legal fees. Moreover, we hold that entering into an agreement
to share legal fees with a nonlawyer does not in and of itself constitute a violation
of DR 3-102(A).
{¶ 18} Initially, we note that there was never an executed written agreement
between respondent and Stafford to share legal fees. The board found, however,
that respondent and Stafford had an oral agreement to share fees. We believe that
the board’s finding that there was an oral agreement to share legal fees was based,
at least in part, upon an erroneous finding by the board regarding Stafford’s
testimony. Specifically, the board found that “Stafford testified she entered into a
verbal contract [with respondent] after Mr. Cohen left [respondent’s employment],
which would pay her four percent (4%) of all the attorney’s fees generated by the
breast implant claims she administered.” (Emphasis added.) There is no evidence
in the record before this court to support this finding by the board.
{¶ 19} Our review of the transcript of the hearing before the panel reveals
that Stafford repeatedly testified that “[s]ometime between December of 1993 and
February of 1994” she entered into an oral agreement with respondent to share four
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percent of the attorney fees. She further testified that Cohen left the firm in July or
August 1994. Therefore, contrary to the board’s finding, Stafford did not testify
that she had entered into an oral agreement with respondent to share fees after
Cohen left respondent’s employment.
{¶ 20} Although this discrepancy between the board’s finding and
Stafford’s actual testimony may at first appear inconsequential, we believe that this
inaccurate finding was a significant factor in the board’s conclusion that an oral
agreement had been formed. In this regard, it appears that in determining whether
Stafford’s testimony that respondent agreed to pay her four percent of the legal fees
was credible, the board took into account that Cohen had left the firm and
respondent was in “dire need” of Stafford’s assistance in getting the remaining
claim forms completed. According to Stafford’s testimony, however, the alleged
oral agreement was entered into at least seven months before the deadline for filing
the breast implant claims and at least five months before Cohen left the firm. Thus,
the board erred in considering the firm’s loss of Cohen as a factor in determining
the credibility of Stafford’s testimony regarding the alleged oral agreement.
{¶ 21} After reviewing Stafford’s testimony regarding the alleged oral
agreement, we conclude that it lacks credibility. Specifically, Stafford testified that
respondent agreed to pay her four percent of the legal fees and Cohen, a licensed
attorney attending medical school, only one and one-half percent of the legal fees
simply because she was a permanent employee and Cohen was a temporary
employee. We find this explanation for the alleged discrepancy in payment
arrangements implausible.
{¶ 22} In contrast, we find respondent’s testimony regarding his
negotiations with Stafford to be credible and supported by exhibits in the record.
Respondent testified that he offered to share legal fees with Stafford immediately
after Cohen left because of the looming deadline for filing claims and his need for
Stafford to take over some of Cohen’s responsibilities. Respondent further testified
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that in exchange for taking over some of Cohen’s work, he offered to pay Stafford
the same bonus that he had offered Cohen, i.e., one and one-half percent of the legal
fees. This offer was reduced to writing and the unsigned document was admitted
during the hearing as Joint Exhibit 3. When Stafford refused this offer, respondent
offered to pay her two percent of the legal fees. This written, unsigned offer was
admitted during the hearing as Joint Exhibit 2. Thereafter, respondent revoked all
offers to share fees with Stafford after realizing that it was inappropriate to share
legal fees with a nonlawyer. In short, there was never a meeting of the minds of
the principals regarding an essential term, i.e., the percentage of legal fees to be
shared. See, e.g., Noroski v. Fallet (1982), 2 Ohio St.3d 77, 79, 2 OBR 632, 634,
442 N.E.2d 1302, 1304. Thus, construing the evidence in its entirety, we conclude
that respondent and Stafford did not enter into an agreement to share legal fees.
{¶ 23} Moreover, even if respondent had entered an agreement to share
legal fees with Stafford, such an agreement in and of itself is not sufficient to
establish a violation of DR 3-102(A). DR 3-102(A) explicitly prohibits a sharing
of legal fees; it does not prohibit an agreement to share legal fees.
{¶ 24} Having said that, we hasten to add that we are not suggesting that it
is proper to enter into such an agreement. Canon 9 of the Code of Professional
Responsibility provides that lawyers should avoid even the appearance of
impropriety. EC 9-6. Thus, offering to share a fee with a nonlawyer and/or entering
an agreement to share a fee with a nonlawyer should be avoided.
{¶ 25} For all of the foregoing reasons, we find that, with respect to Count
One, relator has failed to prove, by clear and convincing evidence, that respondent
violated DR 3-102(A). Accordingly, we decline to accept the recommendation of
the board with regard to Count One and hereby dismiss that charge against
respondent.
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{¶ 26} Furthermore, we adopt the board’s findings of fact, conclusions of
law, and recommendation relating to Count Two (year-end bonus policy).
Accordingly, Count Two is hereby dismissed.
Cause dismissed.
RESNICK, F.E. SWEENEY and PFEIFER, JJ., concur.
LUNDBERG STRATTON, J., concurs in part.
MOYER, C.J., and COOK, J., concur in part and dissent in part.
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LUNDBERG STRATTON, J., concurring in part.
{¶ 27} I concur in the dismissal of this action because respondent clearly
recognized that it was inappropriate to share legal fees with a nonlawyer and took
steps to stop performance of the agreement.
{¶ 28} The majority holds that although DR 3-102(A) explicitly prohibits a
sharing of legal fees, it does not prohibit an agreement to share legal fees. I
disagree and would hold that, assuming there was such an agreement, making the
agreement to share legal fees is just as improper under DR 3-102(A) as performing
the agreement. To hold otherwise is simply not logical. However, since respondent
became aware of the prohibition against sharing fees and withdrew his offer or
agreement, I believe that we have the discretion to find that no sanctions are
warranted.
{¶ 29} Moreover, I find it unnecessary for the majority even to reach the
issue of whether entering into an agreement to share legal fees with a nonlawyer
violates DR 3-102(A), because the majority finds that respondent and Stafford
never actually entered into an agreement to share legal fees.
{¶ 30} Accordingly, I respectfully decline to join the majority’s holding that
entering into an agreement to share legal fees with a nonlawyer does not in and of
itself constitute a violation of DR 3-102(A), but concur in the dismissal of the cause.
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COOK, J., concurring in part and dissenting in part.
{¶ 31} I would adopt the recommendations of the board as to both counts
and would publicly reprimand respondent for the violation of DR 3-102(A) set forth
in Count One of the complaint.
MOYER, C.J., concurs in the foregoing opinion.
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Bruce A. Campbell, Bar Counsel for Columbus Bar Association; Louis A.
Jacobs and Jerry Silverstein, for relator.
Mitchell, Allen, Catalano & Boda Co., L.P.A., and William C. Mann;
Kegler, Brown, Hill & Ritter and Geoffrey Stern, for respondent.
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