Thursday, 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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