Disciplinary Counsel v. Edwards

[Cite as Disciplinary Counsel v. Edwards, 134 Ohio St.3d 271, 2012-Ohio-5643.]

DISCIPLINARY COUNSEL v. EDWARDS.

[Cite as Disciplinary Counsel v. Edwards,

134 Ohio St.3d 271, 2012-Ohio-5643.]

Attorneys—Misconduct—Multiple client-trust-account improprieties—Acts involving

dishonesty, fraud, deceit, or misrepresentation—Two-year suspension, all

stayed on conditions.

(No. 2012-0681—Submitted July 10, 2012—Decided December 5, 2012.)

ON CERTIFIED REPORT by the Board of Commissioners on Grievances and

Discipline of the Supreme Court, No. 11-053.

____________________

Per Curiam.

{¶ 1} Respondent, Steve J. Edwards of Grove City, Ohio, Attorney

Registration No. 0000398, was admitted to the practice of law in Ohio in 1979. In

June 2011, relator, disciplinary counsel, filed a complaint alleging that Edwards

had committed professional misconduct by withdrawing $69,500 from his client

trust account for his personal use.

{¶ 2} The parties have submitted stipulations of fact and misconduct, as

well as a number of stipulated exhibits. While they agree that Edwards

committed the acts charged in the complaint and that his conduct violated

Prof.Cond.R. 1.15(a) (requiring a lawyer to hold property of clients in an interest-

bearing client trust account, separate from the lawyer’s own property) and 8.4(h)

(prohibiting a lawyer from engaging in conduct that adversely reflects on the

lawyer's fitness to practice law), Edwards challenges relator’s allegation that his

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conduct involved dishonesty, fraud, deceit, or misrepresentation in violation of

Prof.Cond.R. 8.4(c).1

{¶ 3} The panel adopted the parties’ stipulations of fact and misconduct,

but declined to find that the evidence established a violation of Prof.Cond.R.

8.4(c). Citing the presence of numerous mitigating factors, the panel rejects

relator’s proposed sanction of a one-year suspension with six months stayed on

conditions, and recommends that we impose a one-year suspension, fully stayed

on conditions, for Edwards’s misconduct.

{¶ 4} The board amended the panel’s findings of fact and conclusions of

law to find that Edwards’s misappropriation of funds from his client trust account

involved dishonesty, fraud, deceit, or misrepresentation and therefore violated

Prof.Cond.R. 8.4(c). Accordingly, the board increased the recommended sanction

to a two-year suspension, fully stayed on the conditions recommended by the

panel.

{¶ 5} Relator objects to the recommended sanction, arguing that

Edwards’s deceitful misappropriation of client funds warrants an actual

suspension from the practice of law. For the reasons that follow, we overrule

relator’s objection, adopt the board’s findings of fact and misconduct, and

suspend Edwards from the practice of law for two years, all stayed on conditions.

Misconduct

{¶ 6} Edwards, a sole practitioner with a practice consisting primarily of

environmental groundwater litigation and personal-injury work, maintained a

client trust account. The funds in that account consisted primarily of proceeds

withheld from his clients’ personal-injury settlements to cover subrogated

interests in those cases. Edwards held those funds while he attempted to negotiate

reductions in the subrogated claims for the benefit of his clients.

1. Relator withdrew an alleged violation of Prof.Cond.R. 8.4(d) (prohibiting a lawyer from

engaging in conduct that is prejudicial to the administration of justice).

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January Term, 2012

{¶ 7} Between May 28, 2009, and October 15, 2010, Edwards wrote ten

checks, totaling $69,500, to himself from his client trust account. The last of

those checks caused his client trust account to be overdrawn by $832.34. In

response to relator’s letter of inquiry regarding the overdraft, Edwards admitted

that he had overdrawn his trust account and also reported his misappropriation of

client funds.

{¶ 8} Based upon this conduct, the parties stipulated and the panel found

that Edwards had failed to hold client funds in an interest-bearing client trust

account separate from his own property in violation of Prof.Cond.R. 1.15(a) and

that he had consequently engaged in conduct adversely reflecting on his fitness to

practice law in violation of Prof.Cond.R. 8.4(h). The board adopted these

findings of fact and misconduct and also found that Edwards had engaged in

dishonesty, fraud, deceit, or misrepresentation in violation of Prof.Cond.R. 8.4(c)

as charged in the complaint. We adopt the board’s findings of fact and

misconduct and find that Edwards’s unauthorized removal of funds from his

client trust account and use of those funds for his own purposes necessarily

involves dishonesty, regardless of whether he made any false representations

regarding his conduct.

Sanction

{¶ 9} 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.

{¶ 10} Edwards has practiced law for more than 30 years without a

disciplinary violation. See BCGD Proc.Reg. 10(B)(2)(a). He has fully

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cooperated in relator’s investigation, acknowledged the wrongful nature of his

conduct, and blames no one but himself for his misconduct. See BCGD Proc.Reg.

10(B)(2)(d). He testified that during the 17 months that he was misappropriating

funds from his client trust account, he continued to negotiate the subrogated

interests of his clients and pay them as they became due. There are no allegations

that he improperly delayed payment of those interests or that he failed to negotiate

in good faith. There has been no harm to Edwards’s clients or their subrogees—

rather, it is the public perception of the profession that suffers when its members

misappropriate client funds as Edwards has.

{¶ 11} Edwards has made full restitution to his trust account, making a

$17,000 payment in December 2009 (before relator initiated his investigation),

$15,000 in November 2010, and $37,500 in December 2010 (after relator initiated

his investigation), and no clients have been harmed as a result of his misconduct.

See BCGD Proc.Reg. 10(B)(2)(c). He has also submitted letters from a colleague,

four clients, his two employees, and his pastor attesting to his good character and

reputation aside from the charged misconduct. See BCGD Proc.Reg. 10(B)(2)(e).

And Edwards has sought guidance and counsel from attorney Richard F. Swope,

who has agreed to serve as his mentor.

{¶ 12} At the hearing, Edwards testified that he had separated from his

wife in 2005 and that in 2009, he began loaning her money from his client trust

account—$53,900 in all—to support her private-investigation business. He

testified that he “felt that if [he] loaned her money, it would show her that [he]

was able to provide for [his] family, and [he] would—it would be a reason for the

marriage to continue.” Edwards’s wife did not repay the loan, and at the time of

the hearing, the couple was negotiating to dissolve the marriage.

{¶ 13} After Edwards’s misconduct came to light, he reached out to the

Ohio Lawyers Assistance Program (“OLAP”) and submitted to a detailed

psychosocial assessment, in which he was diagnosed with adjustment disorder

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January Term, 2012

with mixed anxiety and depressed mood. He entered into a two-year mental-

health contract with OLAP on November 22, 2010, and has participated in

individual counseling with Judith E. Fisher, M.S.W., L.I.S.W., since December 1,

2010.

{¶ 14} Fisher reports that Edwards became distraught after his wife and

the mother of his two sons left their marriage in 2005 and that he became

obsessed with winning her back and reuniting his family. When his wife

encountered financial difficulties in her business, Edwards believed that she

would be more inclined to return to their marriage if he provided financial

assistance. Edwards was also experiencing his own financial difficulties, having

advanced $200,000 of his own funds for some of his environmental cases when

his clients could not afford to do so and having increased the financial support he

provided to his aging parents. Fisher reports that the combination of these life

events caused Edwards to become depressed, that his depressive symptoms

adversely affected his judgment and behaviors, and that there is a direct causal

relationship between these circumstances and his ethical lapses.

{¶ 15} Fisher indicates that Edwards has worked hard to understand how

his mental issues affected his judgment and has come to realize that he must

dissolve his marriage and curtail his involvement in cases that require significant

outlays of his personal funds. Fisher further states that with the continued

assistance of OLAP and individual counseling, Edwards is capable of

competently, ethically, and professionally practicing law. Therefore, we find that

Edwards’s mental disability qualifies as a mitigating factor pursuant to BCGD

Proc.Reg. 10(B)(2)(g).

{¶ 16} In contrast to these significant mitigating factors, the panel and

board found only one aggravating factor—that Edwards engaged in a pattern of

misconduct over a one-and-a-half-year period. Citing the abundance of

mitigating evidence in this case and distinguishing the two cases cited by relator

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on the grounds that they involved additional aggravating factors such as the

respondent’s lack of remorse or the presence of actual harm to clients, the panel

rejected relator’s proposed sanction of a one-year suspension, with six months

stayed on conditions. Instead, the panel recommended that Edwards be

suspended for one year, all stayed on the conditions that he remain in compliance

with his OLAP contract, continue to participate in counseling with a mental-

health professional, and commit no further misconduct. The board, however,

recommends that we suspend Edwards for two years, all stayed on the conditions

set forth by the panel.

{¶ 17} Relator objects to the board’s recommended sanction, arguing that

an attorney’s misappropriation of funds from a client trust account warrants an

actual suspension from the practice of law.

{¶ 18} We are cognizant that our precedent recognizes that the

presumptive sanction for misappropriation is disbarment. See, e.g., Disciplinary

Counsel v. Hunter, 106 Ohio St.3d 418, 2005-Ohio-5411, 835 N.E.2d 707, ¶ 37.

We have recognized, however, that this sanction may be tempered with sufficient

evidence of mitigating or extenuating circumstances and typically impose an

actual suspension from the practice of law in cases involving misappropriation,

dishonesty, fraud, deceit, or misrepresentation. See, e.g., Disciplinary Counsel v.

Bubna, 116 Ohio St.3d 294, 2007-Ohio-6436, 878 N.E.2d 632 (imposing a one-

year suspension with six months stayed on an attorney who commingled personal

and client funds, repeatedly overdrew his client trust account, and failed to pay

medical expenses from a client’s settlement); Dayton Bar Assn. v. Gerren, 103

Ohio St.3d 21, 2004-Ohio-4110, 812 N.E.2d 1280 (imposing a six-month actual

suspension on an attorney who withdrew for his own use settlement funds that

had been set aside to pay his client’s medical bill, the nonpayment of which

resulted in a judgment against the client).

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{¶ 19} Nonetheless, we have consistently recognized that the primary

purpose of disciplinary sanctions is not to punish the offender, but to protect the

public. See, e.g., Disciplinary Counsel v. O’Neill, 103 Ohio St.3d 204, 2004-

Ohio-4704, 815 N.E.2d 286, ¶ 53. With that purpose in mind, and in

consideration of the significant mitigating factors present in this case, we

conclude that a two-year conditionally stayed suspension is the appropriate

sanction for Edwards’s misconduct.

{¶ 20} Accordingly, we overrule relator’s objection, adopt the board’s

findings of fact and misconduct, and suspend Edwards from the practice of law in

Ohio for two years, all stayed on the conditions that he extend his existing OLAP

contract for an additional two years from the date of this order, continue to

participate in individual counseling with a mental-health professional, comply

with all recommendations of OLAP and his treating mental-health professional,

and commit no further misconduct. If Edwards fails to comply with the

conditions of the stay, the stay shall be lifted, and Edwards shall serve the entire

two-year suspension. Costs are taxed to Edwards.

Judgment accordingly.

O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL,

LANZINGER, CUPP, and MCGEE BROWN, JJ., concur.

__________________

Jonathan E. Coughlan, Disciplinary Counsel, and Carol A. Costa,

Assistant Disciplinary Counsel, for relator.

William C. Mann, for respondent.

________________________

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