Cincinnati Bar Assn. v. Hauck

[Cite as Cincinnati Bar Assn. v. Hauck, 129 Ohio St.3d 209, 2011-Ohio-3281.]

CINCINNATI BAR ASSOCIATION v. HAUCK.

[Cite as Cincinnati Bar Assn. v. Hauck, 129 Ohio St.3d 209, 2011-Ohio-3281.]

Attorneys at law — Misconduct — Failure to maintain client funds in segregated

account — Failure to maintain records of client funds — Failure to

maintain professional-liability insurance — One year suspension, with

six-months stayed.

(No. 2011-0023 — Submitted March 23, 2011 — Decided July 7, 2011.)

ON CERTIFIED REPORT by the Board of Commissioners on Grievances and

Discipline of the Supreme Court, No. 10-022.

__________________

Per Curiam.

{¶ 1} Respondent, John W. Hauck of Cincinnati, Ohio, Attorney

Registration No. 0023153, was admitted to the practice of law in Ohio in 1978. In

February 2010, relator, Cincinnati Bar Association, filed a complaint charging

respondent with failing to maintain client funds in a separate, interest bearing trust

account, failing to maintain adequate records of client funds in his possession,

commingling client funds with his own, and failing to notify his clients that he did

not carry malpractice insurance.

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

a panel of the Board of Commissioners on Grievances and Discipline conducted a

hearing to determine the appropriate sanction for respondent’s misconduct. The

panel and board adopted the stipulated findings of fact and misconduct. While the

panel recommended that respondent be suspended from the practice of law for 12

months with six months stayed on conditions, the board, citing extraordinary

evidence in mitigation, recommended that the entire 12-month suspension be

stayed. Because respondent has stipulated to misconduct involving dishonesty,

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fraud, deceit, or misrepresentation, we conclude that an actual suspension is

warranted. Accordingly, we suspend respondent from the practice of law for 12

months, with six months stayed on conditions.

Misconduct

{¶ 3} In February 2009, respondent issued a $2,800 check from a

National City Bank account to the guardian of a minor, representing the proceeds

of the minor’s personal-injury claim. At the end of March 2009, after discovering

that the guardian had not negotiated the check, respondent directed the bank to

stop payment. At a guardianship hearing before the probate court, respondent

advised the magistrate that there may have been commingling in the account, and

that because the account balance had dropped below $2,800, he would need time

to replenish the account and reissue the check. He did not remit the funds to the

guardian until June 2009.

{¶ 4} Beginning in 2003 and continuing through 2009, respondent

commingled his personal and business funds with client funds in a single National

City Bank account to avoid overdraft charges on his personal and business

accounts. While comingling these funds, respondent failed to maintain adequate

records of client funds in his possession.

{¶ 5} The National City Bank account that respondent used is registered

to “ABC Company,” a nonprofit entity that he had formed. The checks that he

issued from that account, however, were deceptive, because they did not identify

ABC Company as the owner of the account. Instead, they bore respondent’s

name followed by “Attorney at Law,” and “IOLTA,” giving the false impression

that the checks were drawn on his client trust account.

{¶ 6} Respondent testified that one of the reasons he used the ABC

Company account was to avoid tax garnishments by the Internal Revenue Service

(“IRS”) for income taxes and employment taxes that he owed. Although he

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admitted that he had had issues with the Internal Revenue Service in the 1980s

and early 1990s, he claimed that he was not aware of any pending IRS issues.

{¶ 7} In addition to respondent’s banking irregularities, the parties have

stipulated that respondent ceased to carry professional-malpractice insurance as of

April 1, 2009. They have also stipulated that he did not begin informing his

clients about his uninsured status until sometime in February 2010.

{¶ 8} Based on these facts, the parties have stipulated, the panel and

board have found, and we agree that respondent has violated Prof.Cond.R. 1.15(a)

(requiring a lawyer to hold property of clients separate from the lawyer’s own

property), 1.15(b) (permitting a lawyer to deposit his or her own funds in a client

trust account for the sole purpose of paying or obtaining a waiver of bank service

charges), 1.4(c) (requiring a lawyer to inform the client in a writing signed by the

client if the lawyer does not maintain professional-liability insurance), and 8.4(c)

(prohibiting a lawyer from engaging in conduct involving dishonesty, fraud,

deceit, or misrepresentation).1

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 Section 10(B) of the Rules and Regulations Governing Procedure on

Complaints and Hearings Before the Board of Commissioners on Grievances and

1. Although relator’s complaint did not charge respondent with a violation of Prof.Cond.R. 8.4(c),

we have previously recognized that a respondent’s review of and consent to stipulated facts and

the stipulated violations, and his waiver of a hearing, satisfied the due-process requirements of In

re Ruffalo (1968), 390 U.S. 544, 550-551, 88 S.Ct. 1222, 20 L.Ed.2d 117. See Disciplinary

Counsel v. Jackson (1999), 86 Ohio St.3d 104, 105, 712 N.E.2d 122. Here, respondent stipulated

to the facts and violation and received a hearing.

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Discipline (“BCGD Proc.Reg.”). Disciplinary Counsel v. Broeren, 115 Ohio

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

{¶ 10} The panel and board found that respondent’s dishonest motive was

an aggravating factor. See BCGD Proc.Reg. 10(B)(1)(b). As mitigating factors,

the panel and board cited respondent’s lack of a prior disciplinary record, his full

and free disclosure and cooperative attitude toward the disciplinary proceeding,

and the fact that no clients were harmed. BCGD Proc.Reg. 10(B)(2)(a) and (d).

{¶ 11} The panel and board also observed that respondent had submitted

“compelling testimony” from Kathy King, a magistrate of the Hamilton County

Domestic Relations Court, regarding his integrity and honesty. The panel

discounted this testimony in light of respondent’s admission that his use of the

ABC Company checking account was deceitful and recommended that respondent

be suspended from the practice of law for 12 months, with six months stayed on

conditions. The board, however, gave greater weight to King’s testimony, which

recounted respondent’s history of public service, beginning in law school and

continuing throughout his 30 years of practice, including his participation in

projects and investments designed to strengthen Cincinnati’s low-income

community. Therefore, the board recommended that respondent’s entire 12-

month suspension be stayed on conditions.

{¶ 12} “Dishonest conduct on the part of an attorney generally warrants

an actual suspension from the practice of law.” Disciplinary Counsel v. Rooney,

110 Ohio St.3d 349, 2006-Ohio-4576, 853 N.E.2d 663, ¶ 12, citing Disciplinary

Counsel v. Beeler, 105 Ohio St.3d 188, 2005-Ohio-1143, 824 N.E.2d 78, ¶ 44,

and Disciplinary Counsel v. Fowerbaugh (1995), 74 Ohio St.3d 187, 191, 658

N.E.2d 237. We acknowledge respondent’s extensive work with the poor,

including his full-time volunteer work with the public defender’s office after he

graduated from law school, the investment of his inherited wealth in the

rehabilitation of buildings and social service agencies in the inner-city

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neighborhood of Over-the-Rhine, and his dedication to the poor and

disadvantaged people of that area. These good works, however, do not excuse

respondent’s complete disregard of the Rules of Professional Conduct requiring

attorneys to maintain client funds separate from their own and to maintain

detailed records of all funds received on behalf of a client. Nor do they

compensate for his deceptive course of conduct that spanned more than five years.

{¶ 13} Having considered respondent’s conduct, the aggravating and

mitigating factors, and our precedent, we conclude that the appropriate sanction

for respondent’s misconduct is a 12-month suspension, with six months stayed on

the conditions that he serve six months of monitored probation in accordance with

Gov.Bar. V(9) and that he commit no further misconduct.

{¶ 14} Accordingly, we suspend respondent from the practice of law in

Ohio for 12 months, with six months stayed on the conditions that he serve six

months of supervised probation with a monitor appointed by relator in accordance

with Gov.Bar R. V(9) and that he commit no further misconduct. If respondent

fails to comply with the conditions, the stay will be lifted, and he will serve the

entire 12-month suspension. Costs are taxed to respondent.

Judgment accordingly.

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

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

__________________

James K. Rice and Richard H. Johnson, for relator.

John H. Burlew, for respondent.

______________________

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