September 27, 2012
Stiff Penalties For Unauthorized Practice
A decision from the Ohio Supreme Court:
The Supreme Court of Ohio today issued an injunction ordering Michael D. Davie of Shaker Heights and his company, Alpha Legal Services (ALS), to cease from engaging in the unauthorized practice of law, and assessed a $30,000 civil penalty against Davie and ALS.
The penalty was based on two instances in which Davie prepared pleadings and other legal documents for ALS “clients” and later obtained court judgments against them for failing to make full payment for his “legal services,” and a third incident in which Davie prepared a legal document and appeared on behalf of another person at an Ohio Parole Board hearing after identifying himself in a memorandum in a manner that deceived the parole board into believing he was a licensed attorney.
In a 6-1 per curiam opinion, the court adopted a finding by the Board on the Unauthorized Practice of Law that in the first two cases Davie, a paralegal who is not licensed to practice law in Ohio, falsely claimed to have been working under the supervision of a Cleveland attorney, Sebraien M. Haygood, who died between the time of his violations and the beginning of board’s investigation. In support of that finding, the court noted that neither ALS’ contracts with the clients in those cases nor any of the legal documents prepared by Davie for those clients was signed by Haywood or included any indication that Davie was working under Haywood’s supervision, and that Davie had failed to produce any other credible evidence that Haywood had overseen his actions.
In the third case, the court overruled the board’s conclusion that Davie’s appearance before the state parole board did not constitute unauthorized law practice. After reviewing the evidence and objections to the board's finding raised by the Cleveland Metropolitan Bar Association, the court found that the memorandum prepared by Davie cited statutory provisions and case precedents, and advanced legal arguments on behalf of his client, thus constituting the practice of law. The court also found that Davie had intentionally portrayed himself to the parole board as an attorney by using the same signature block and format used by law firms, using the words “Legal Services” in his company name, and identifying himself by a “bar number” that resembled a Supreme Court attorney registration number, without indicating that it was actually a paralegal membership number assigned to him by the Ohio State Bar Association.
In imposing the maximum civil penalty of $10,000 for each of Davie’s unauthorized practice violations, the court wrote: “The panel and board found that on numerous occasions, respondents failed or refused to cooperate in relator’s investigation and the litigation of this case. Davie denied that he received proper service of process in this case, failed to appear for his scheduled deposition twice, and refused to cooperate in the discovery phase of relator’s investigation. Davie also filed an unfounded and frivolous action in the United States District Court for the Northern District of Ohio, seeking a declaratory judgment and injunctive relief to prevent this UPL action from proceeding ... Davie has never admitted that the services he provided in the Brown, Singleton, or Jones matters constituted the unauthorized practice of law, and at the time of the hearing, he continued to challenge the court’s authority to regulate his conduct. Respondents have not agreed to be enjoined from the unauthorized practice of law, and Davie refused to discuss any agreed resolution or stipulations.”
“In light of the significant aggravating factors present in this case, including respondents’ blatant disregard for our prohibitions against the unauthorized practice of law and their efforts to conceal the wrongful nature of their conduct by impugning the character of a deceased attorney who has not been shown to have any involvement in these matters and who cannot defend his good name, we now adopt the board’s recommendation and impose civil penalties of $10,000 in accordance with the board’s recommendation, but impose them for each of the three violations we have found herein.”
The court also ordered Davie to release the judgments that he obtained against the individuals who retained him to perform legal services in the first two cases addressed in today’s decision.
The court’s judgment was joined by Chief Justice Maureen O’Connor and Justices Paul E. Pfeifer, Evelyn Lundberg Stratton, Terrence O’Donnell, Robert R. Cupp and Yvette McGee Brown.
Justice Judith Ann Lanzinger entered a separate opinion in which she concurred with the majority’s findings of unauthorized practice violations in the first two cases, but said she would affirm the board’s conclusion that Davie’s conduct in the parole board case did not constitute unauthorized law practice. With regard to the appropriate sanction, Justice Lanzinger wrote that she would impose civil penalties of $5,000 each for the first two counts, yielding a total civil penalty of $10,000.
The opinion is linked here. (Mike Frisch)
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