Toledo Bar Assn. v. Hetzer

[Cite as Toledo Bar Assn. v. Hetzer, 137 Ohio St.3d 572, 2013-Ohio-5480.]

TOLEDO BAR ASSOCIATION v. HETZER.

[Cite as Toledo Bar Assn. v. Hetzer, 137 Ohio St.3d 572, 2013-Ohio-5480.]

Attorney misconduct, including failing to maintain an accurate record of funds

held for each client and failing to safeguard funds held in escrow—Public

reprimand.

(No. 2013-0567—Submitted June 5, 2013—Decided December 19, 2013.)

ON CERTIFIED REPORT by the Board of Commissioners on Grievances and

Discipline of the Supreme Court, No. 12-004.

____________________

Per Curiam.

{¶ 1} Respondent, Nicholas Wayne Hetzer of Sylvania, Ohio, Attorney

Registration No. 0031302, was admitted to the practice of law in Ohio in 1978. In

February 2012, a probable-cause panel of the Board of Commissioners on

Grievances and Discipline certified that there was probable cause for filing

relator’s three-count formal complaint, which alleged that Hetzer had committed

multiple violations of the Rules of Professional Conduct by (1) improperly

deducting his legal fee from marital funds he held in trust for a divorce client and

the client’s spouse, (2) failing to safeguard the remaining escrowed funds and

instead giving them directly to his client on the termination of their attorney-client

relationship, (3) failing to timely deposit client funds into his client trust account,

(4) failing to reconcile his client trust account on a monthly basis, and (5) failing

to maintain accurate accounting statements for his client trust account.

{¶ 2} The parties submitted a timely consent-to-discipline agreement in

which Hetzer stipulated that he had committed the charged misconduct and the

parties agreed that a public reprimand was the appropriate sanction for his

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misconduct. The panel recommended that the agreement be adopted, but the

board rejected it and returned the matter to the panel for further proceedings.

{¶ 3} The parties submitted stipulations of fact, misconduct, and

aggravating and mitigating factors. After conducting a hearing and receiving

additional evidence after the hearing regarding the disposition of the marital funds

distributed to Hetzer’s former client, the panel made findings of fact and

conclusions of law and recommended that Hetzer be publicly reprimanded for his

misconduct. The board adopted the findings, conclusions, and recommendation

of the panel. Having thoroughly reviewed the record, we adopt the board’s

findings of fact and misconduct and publicly reprimand Hetzer.

Misconduct

{¶ 4} Mark McKarus retained Hetzer on July 13, 2009, to represent him

in a domestic-relations matter. At that time, McKarus gave Hetzer a $10,000

retainer. McKarus gave Hetzer an additional cash payment of $5,000 in

September 2009, though Hetzer had not requested it. Hetzer admitted that he

never deposited the $5,000 payment in his client trust account and that his receipt

of those funds is not reflected on the escrow summary sheet where he kept records

of the funds received from and expended on behalf of McKarus. He testified,

however, that McKarus “got full and complete credit for that [$]5,000 in

subsequent bills.” Hetzer also stipulated that he did not perform a monthly

reconciliation of his client trust account.

{¶ 5} On October 26, 2009, McKarus gave Hetzer a $64,762.12 check

representing the proceeds from the sale of a marital asset—a boat. Hetzer did not

deposit that check until January 27, 2010—one day after McKarus gave him a

$5,400 check representing the proceeds from the sale of a Jeep, which was also a

marital asset. Hetzer testified that there was no reason for the delayed deposit

other than “general procrastination” and his belief that his relationship with

McKarus might soon end.

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January Term, 2013

{¶ 6} McKarus terminated Hetzer’s representation on February 9, 2010.

That day, Hetzer wrote a $4,277.50 check to himself for the balance of his fees,

deducting that amount from the $70,162.12 in marital funds that he held on behalf

of McKarus and his spouse. In addition to admitting that he had deducted his fees

from the marital assets he held in trust, Hetzer admitted that he also had issued a

check for the remaining balance—$65,884.62—directly to McKarus. Hetzer

testified that when he advised McKarus that the funds needed to be turned over to

his new counsel, McKarus insisted that Hetzer write the check out to him and that

he would deliver it to his new attorney. Stipulated exhibits submitted by the

parties following the panel hearing show that the full $70,162.12 was ultimately

deposited into the trust account of McKarus’s new counsel and that McKarus’s

spouse suffered no financial harm as a result of Hetzer’s conduct.

{¶ 7} Hetzer acknowledged that his conduct was improper and stated

that if he was confronted with a similar situation in the future, he would handle

the matter differently. He suggested that he would get a pay-over order, transfer

the funds into opposing counsel’s trust account, or establish a separate account to

prevent the funds from going directly to the client.

{¶ 8} Hetzer testified that he knew better than to withdraw his legal fees

from escrowed funds or release escrowed funds directly to his client but that his

actions were the result of anger, stupidity, and emotion. He stated that he was “so

exasperated” at the conclusion of his relationship with McKarus that he “just

wanted to close the chapter [on the] case” and so he had done “a very stupid thing

that [he] would not do again.”

{¶ 9} The parties stipulated and the board found that Hetzer’s conduct

violated Prof.Cond.R. 1.15(a) (requiring a lawyer to maintain a record for each

bank account, maintain the current balance for each client, and perform a monthly

reconciliation), 1.15(e) (requiring a lawyer in possession of funds in which two or

more persons claim an interest to hold those funds in his client trust account until

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the dispute is resolved), and 1.3 (requiring a lawyer to act with reasonable

diligence in representing a client).

{¶ 10} We adopt the board’s findings of fact and find that Hetzer violated

Prof.Cond.R. 1.3 by failing to timely deposit McKarus’s $5,000 payment and the

proceeds from the sale of marital assets into his client trust account and violated

Prof.Cond.R. 1.15(a) by failing to hold McKarus’s property in an interest-bearing

client trust account, separate from his own property. He also violated

Prof.Cond.R. 1.15(a)(2)(ii) by failing to maintain an accurate record of the funds

he received on McKarus’s behalf, violated Prof.Cond.R. 1.15(a)(5) by failing to

reconcile his client trust account on a monthly basis, and twice violated

Prof.Cond.R. 1.15(e)—first, by paying his own fees with funds that he held in

escrow for the benefit of the McKaruses, and then, by releasing the remainder of

the escrowed funds directly to his client.

Sanction

{¶ 11} When imposing sanctions for attorney misconduct, we consider

relevant factors, including the ethical duties that the lawyer violated and the

sanctions imposed in similar cases. Stark Cty. Bar Assn. v. Buttacavoli, 96 Ohio

St.3d 424, 2002-Ohio-4743, 775 N.E.2d 818, ¶ 16. In making a final

determination, we also weigh evidence of the aggravating and mitigating factors

listed in BCGD Proc.Reg. 10(B). Disciplinary Counsel v. Broeren, 115 Ohio

St.3d 473, 2007-Ohio-5251, 875 N.E.2d 935, ¶ 21.

{¶ 12} The parties stipulated that no aggravating factors exist in this case,

and the board found none. Mitigating factors include the facts that Hetzer does

not have a record of prior discipline, made full and free disclosure to the board

and maintained a cooperative attitude toward the disciplinary proceedings, and

submitted evidence of his strong character and reputation within the legal

community. See BCGD Proc.Reg. 10(B)(2)(a), (d), and (e). Letters from four

fellow attorneys generally describe Hetzer as a professional and competent

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January Term, 2013

attorney, and several note his volunteer service on the substance-abuse committee

of the Toledo Bar Association. A letter from Patricia Shordt Intagliata, director of

the pro bono program for the Toledo Bar Association, thanks Hetzer for his

service to the program.

{¶ 13} Scott Mote, executive director of the Ohio Lawyers Assistance

Program (“OLAP”), submitted a letter to the panel, identifying Hetzer as a

personal friend and a key resource for OLAP in the northwestern part of the state.

He testified regarding Hetzer’s involvement in the Lawyers Assistance

Committee, a predecessor to OLAP, his participation in the formation of OLAP,

and his ongoing volunteer work with the organization.

{¶ 14} Comparing the facts of this case to those in Cincinnati Bar Assn. v.

Helbling, 124 Ohio St.3d 510, 2010-Ohio-955, 924 N.E.2d 364, the parties urged

the panel to recommend a public reprimand for Hetzer’s misconduct. Helbling

had deposited client funds into his trust account and issued a check for litigation

expenses on behalf of the client. But the check was returned for insufficient funds

because Helbling had made several transfers of funds from his client trust account

to his business account before the check was presented for payment. Id. at ¶ 4-5.

We found that he violated Prof.Cond.R. 1.15(a)(2)(iv) by failing to maintain a

record of one client’s current balance and the trust account’s outstanding checks,

violated Prof.Cond.R. 1.15(a)(3)(ii) by failing to maintain a record of which

client’s funds were affected by each client-trust-account credit and debit, violated

Prof.Cond.R. 1.15(c) by failing to maintain a client advance for litigation

expenses in his client trust account, and violated Prof.Cond.R. 1.15(c) by causing

a portion of one client’s funds to cover the expenses of another client. Id. at ¶ 7.

We publicly reprimanded Helbling, noting that there were no aggravating factors

present and that mitigating factors included the absence of prior discipline, his

cooperative attitude and full disclosure to the board, and his immediate action to

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rectify the consequences of his misconduct. Id. at ¶ 8; see also BCGD Proc.Reg.

10(B)(2)(a), (c), and (d).

{¶ 15} The panel and board found that this case is analogous to Helbling

and recommend that we publicly reprimand Hetzer for his misconduct. We adopt

the board’s reasoning and agree that a public reprimand is the appropriate

sanction for Hetzer’s misconduct.

{¶ 16} Accordingly, Nicholas Wayne Hetzer is publicly reprimanded for

violating Prof.Cond.R. 1.3, 1.15(a), 1.15(a)(2)(ii), 1.15(a)(5), and 1.15(e). Costs

are taxed to Hetzer.

Judgment accordingly.

O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY,

FRENCH, and O’NEILL, JJ., concur.

____________________

McKenny, Ernsberger & Grude, L.L.C., and David G. Grude; Law Offices

of Margelefsky & Mezinko, L.L.C., and Vincent S. Mezinko; and Michael A.

Bonfiglio, Bar Counsel, for relator.

Reminger Co., L.P.A., Nicholas D. Satullo, and Jonathan H. Krol, for

respondent.

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