Columbus Bar Assn. v. Fishman

[Cite as Columbus Bar Assn. v. Fishman, 98 Ohio St.3d 172, 2002-Ohio-7086.]

COLUMBUS BAR ASSOCIATION v. FISHMAN.

[Cite as Columbus Bar Assn. v. Fishman, 98 Ohio St.3d 172, 2002-Ohio-7086.]

Attorneys at law — Misconduct — One-year suspension — Improperly

promoting professional services — Aiding nonlawyers in the

unauthorized practice of law — Sharing legal fees with nonlawyers —

Failing to reasonably protect client confidences — Commingling client

funds with own funds in an out-of-state bank account — Failing to keep

appropriate accounts.

(No. 2002-1101 — Submitted November 13, 2002 — Decided December 26,

2002.)

ON CERTIFIED REPORT by the Board of Commissioners on Grievances and

Discipline of the Supreme Court, No. 01-54.

__________________

Per Curiam.

{¶1} Respondent, Andrew M. Fishman of Columbus, Ohio, Attorney

Registration No. 0031290, was admitted to the Ohio bar in 1965. Under a

February 1998 contract with American Heritage Corporation (“AHC”), a Nevada

corporation that sells fixed annuities, AHC and respondent marketed living trusts

to elderly consumers.1 They also arranged for AHC-affiliated insurance agents to

try to sell insurance to those who had purchased the living trust agreements.

{¶2} Initially, AHC sent direct-mail solicitations to consumers based on

a retirement-age-or-older demographic. Respondent did not participate or

exercise any authority in this process, although solicitations appeared to be

correspondence from his office. The solicitations suggested as an inducement that

1. The events at issue in this case are only those occurring before January 1, 2001, after

which AHC changed its operations and its relationship with respondent.

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consumers would receive a free guide on how to avoid probate and save taxes by

replying via an attached card. Returned cards were delivered to AHC offices, and

AHC and respondent considered these replying consumers to be prospective

clients.

{¶3} Upon receipt of reply cards, AHC representatives contacted these

prospective clients and attempted to arrange personal interviews. Respondent

played no role in the process of collecting reply cards and scheduling interviews.

AHC representatives then interviewed clients, using a presentation based on

materials prepared by AHC about hypothetical difficulties and costs associated

with the probate process and the advantages of creating a living trust. In

answering prospective clients’ questions, interviewers were not supposed to

express legal opinions and were to refer such questions to respondent.

Respondent was available to clients by telephone after they had decided to engage

his services; however, he did not attend interviews to oversee interviewers’

remarks or representations.

{¶4} During some periods of the agreement between AHC and

respondent, interviewers were compensated by AHC only if prospective clients

agreed to retain respondent’s services in preparing a living trust. During other

periods, interviewers were compensated by AHC for six hours of work if a

potential client engaged respondent’s services and for one and one-half hours if

the client did not, regardless of the actual time spent.

{¶5} If after their interview prospective clients decided to pay for

preparation of a living trust, interviewers completed an information sheet and had

the clients execute a fee and engagement agreement. Interviewers then collected,

either at the interview or afterward, a fee of $1,695. In accordance with the

interviewers’ instruction, the clients made their checks payable to respondent,

who later endorsed the checks as necessary, copied the paperwork to check it for

completion, and forwarded the copied preparatory documents to AHC.

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January Term, 2002

{¶6} AHC deposited, accounted for, and disbursed fees paid for the

living trusts by using a California bank and without placing the funds in client

trust accounts despite the fact that the trusts had not yet been prepared. And

pursuant to the agreement between respondent and AHC, AHC personnel had

signature authority to make deposits and withdrawals from accounts so that

respondent’s specific consent was not required. On more than one occasion, these

accounts were overdrawn, and checks written by AHC personnel were initially

dishonored, although the checks were later covered.

{¶7} After clients had paid their fee, AHC personnel or an affiliate

prepared the clients’ living trusts and forwarded the documents to respondent for

his review. When approved, AHC assigned “delivery agents,” usually licensed to

sell insurance, to meet with clients and finalize the living trust paperwork.

Delivery agents arranged for clients to execute their trusts, obtained

documentation to transfer assets and fund the trusts, and took any other action to

effectuate the trust. Prior to the delivery agent visits, respondent typically called

clients to advise that the agent was a licensed insurance salesperson and to see

whether the client had any objection to the visit. Working on commission, the

agents delivering the final trust documentation attempted to sell annuities to these

clients.

{¶8} For each living trust sold, AHC paid respondent $150 for his

participation.

{¶9} On November 2, 2001, relator, Columbus Bar Association, filed an

amended complaint charging respondent with various violations of the Code of

Professional Responsibility. A panel of the Board of Commissioners on

Grievances and Discipline heard the cause, and based on the parties’ stipulations,

testimony, and exhibits, found that, in engaging in the described marketing

system, respondent had violated DR 2-103(C) (improperly using an organization

or person to promote a lawyer’s services), DR 3-101(A) (aiding a nonlawyer in

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the unauthorized practice of law), 3-102(A) (sharing fees with a nonlawyer), 4-

101(D) (failing to reasonably protect client confidences), 9-102(A) (failing to

deposit client funds in an identifiable Ohio trust account), and 9-102(B)(3)

(failing to render appropriate accounts).

{¶10} In recommending a sanction, the panel consulted the mitigating

and aggravating considerations in Section 10 of the Rules and Regulations

Governing Procedure on Complaints and Hearings Before the Board of

Commissioners on Grievances and Discipline. The panel considered as

mitigating factors character witnesses’ descriptions of respondent’s competence

and integrity and that respondent has been a practicing lawyer for over thirty-five

years without any previous findings of professional misconduct. The parties

stipulated that respondent had cooperated completely in the disciplinary process.

As aggravating factors, the panel considered respondent’s misconduct to be more

egregious than the living trust marketing scheme used by the attorney in

Cincinnati Bar Assn. v. Kathman (2001), 92 Ohio St.3d 92, 748 N.E.2d 1091, and

noted that respondent could see nothing unprofessional about his marketing

tactics.

{¶11} The panel recommended that respondent be suspended from the

practice of law in Ohio for one year. The board adopted the panel’s findings of

misconduct and recommendation. Because ample proof of the cited infractions

exists in the record and because a one-year suspension is a commensurate

sanction, we agree with the board.

{¶12} Respondent unquestionably violated DR 2-103(C). He contracted

with an organization that independently targeted and solicited prospects for his

representation, dispatched personnel to offer that representation, and then paid

itself, respondent, and the personnel for their services. Despite respondent’s

arguments to the contrary, this was not a lawyer’s accepting employment in

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response to his own advertising, notwithstanding any compliance with more

content-oriented rules on the subject.

{¶13} Respondent also insists that he sufficiently supervised lay AHC

personnel through his client contact and documentary review and thereby did not

violate DR 3-101(A). But he misses the point.

{¶14} To counsel a client, an attorney must advise only in accordance

with the client’s best interest and, consequently, after independent analysis has

revealed what those interests are. Thus, it is not enough for an attorney to look

over the shoulders of nonattorneys in a process through which clients are advised

about and accede to a living trust. In that situation, the reviewing attorney enters

the relationship too late—the nonattorney has already processed information for

the client about his or her affairs and has generated a legal solution of which the

client is already convinced. Kathman, 92 Ohio St.3d 92, 94, 748 N.E.2d 1091.

Compound this scenario with the fact that the nonattorney has a financial stake in

the legal solution, and there can be no real confidence in the attorney. The

attorney’s status as the client’s personal, yet objective advocate has been

sacrificed for the sake of the sale.

{¶15} It is manifest from the evidence in this case that AHC

representatives not only explained legal principles relative to wills and trusts, they

also manipulated these principles in directing prospective clients to choose living

trusts. Such client consultation is, at its most elemental, the practice of law.

Disciplinary Counsel v. Willis, 96 Ohio St.3d 142, 2002-Ohio-3614, 772 N.E.2d

625, at ¶ 3-8. Respondent therefore unquestionably also aided nonattorneys in the

unauthorized practice of law.

{¶16} Respondent violated DR 4-101(D) by failing to reasonably protect

his clients from the improper use of their confidences and secrets by associates

and others whose services he engaged. Respondent facilitated the arrangement

through which a client’s private information was disseminated to insurance agents

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whose primary purpose was to sell annuities on commission. He then obtained

the client’s permission to be solicited without first exercising any real

independent judgment as to whether the solicitation was for the client’s benefit.

Again, despite respondent’s arguments to the contrary, this practice is simply not

analogous to the use of copier or courier services, as is practical and necessary, in

furthering the best interests of the client.

{¶17} The remaining violations found by the board all relate to the

financial side of respondent’s business with AHC. The board concluded that

respondent impermissibly shared fees with AHC, commingled unearned funds in

an out-of-state bank account, and failed to properly account for client property.

We concur that respondent committed this misconduct and quote the board’s

cogent explanation:

{¶18} “Respondent exercised little control over [AHC representatives]

and their sales activities and * * * funds for these legal services were collected

and funneled through bank accounts controlled by AHC. Prior to January 1,

2001, the process of depositing, accounting for and disbursing the funds received

from the client for legal work to be accomplished in the future by Respondent was

done by AHC in its offices outside Ohio using bank accounts outside of Ohio.

The accounts used for these purposes were not IOLTA accounts, nor were they

maintained as trust accounts. Individuals who [were] not attorneys and who

[were] not directly employed by the Respondent, but with whom Respondent had

contractual relationships, [had] signature authority over such accounts and [could]

and [did] make deposits and withdrawals from these accounts without the direct

knowledge or consent of Respondent. Accounts in which funds belonging to

Respondent’s clients [had] been deposited by AHC [were] overdrawn, and checks

written on those accounts [were] dishonored.”

{¶19} Having concluded that respondent violated DR 2-103(C), DR 3-

101(A), 3-102(A), 4-101(D), 9-102(A), and 9-102(B)(3), we turn our review to

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the recommended sanction. In Kathman, 92 Ohio St.3d 92, 748 N.E.2d 1091, we

first addressed the issue of attorneys aiding nonattorneys in the sale or marketing

of living trusts. In that case, we suspended the attorney from the practice of law

for six months for participating in the business of marketing living trusts and

thereby violating DR 3-102(A) and 3-101(A), among other Disciplinary Rules.

And more recently, we imposed a public reprimand for similar misconduct based

on the board’s recommendation and significant evidence of mitigating

circumstances. Columbus Bar Assn. v. Moreland, 97 Ohio St.3d 492, 2002-Ohio-

6726, 780 N.E.2d 579.

{¶20} We agree that the misconduct here warrants a more severe sanction

than in either Kathman or Moreland. Respondent abandoned his professional

responsibility to protect his clients’ best interests. But respondent went far

beyond this. He surrendered to AHC his duty to keep separate and properly

account for his clients’ funds. Then, he set up his clients as sales prospects for

insurance agents with no overriding commitment to their financial and personal

security. Even the unseasoned attorney Moreland recognized this impropriety

when confronted with it. Yet respondent remains oblivious to the full

significance of his unprofessional conduct.

{¶21} For these reasons, we agree that respondent’s misconduct deserves

the sanction recommended by the board. Respondent is hereby suspended from

the practice of law in Ohio for one year. Costs are taxed to respondent.

Judgment accordingly.

MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY COOK and LUNDBERG

STRATTON, JJ., concur.

PFEIFER, J., dissents and would indefinitely suspend respondent.

__________________

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Wiles, Boyle, Burkholder & Bringardner and Michael L. Close; James K.

Hunter III; John K. McManus; Bruce A. Campbell, Bar Counsel, and Jill M.

Snitcher McQuain, Assistant Bar Counsel, for relator.

Kegler, Brown, Hill & Ritter, Geoffrey Stern and Christopher J. Weber,

for respondent.

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