Wednesday, March 15, 2017

Stayed Suspension For "Fundamental" Misunderstanding Of Trust Account Purposes

An attorney who "fundamentally misunderstood" the purpose of an escrow account was sanctioned by the Ohio Supreme Court

During the second investigation, relator discovered that despite relator’s previous warning and Barbera’s membership on the local certified grievance committee, Barbera fundamentally misunderstood the purpose of a client trust account and therefore had misused his. Specifically, Barbera believed that all money coming into his law practice had to be “washed” through his client trust account, so he deposited all the money he received from clients into that account, even money that he had already earned, which resulted in his commingling his earned fees with client funds. In addition, Barbera later admitted that his accounting and recordkeeping practices were “poor and disorganized,” that he had not always performed the required monthly reconciliations of his client trust account, and that because of a computer problem, he had not maintained the records for his client trust account—including individual client ledgers, deposit receipts, canceled checks, and monthly reconciliation ledgers—that the disciplinary rules required him to retain. 

Dan Trevas summarizes the decision 

The Ohio Supreme Court today issued a one-year stayed suspension for a former part-time Medina city prosecutor and placed him on monitored probation.

Richard Barbera of Medina was sanctioned for violating professional conduct rules for Ohio attorneys because he mismanaged his client trust account and failed to cooperate with investigators from the Office of the Disciplinary Counsel. In a unanimous per curiam opinion, the Court found that Barbera did not misappropriate any client money or harm any client. However, he “fundamentally misunderstood” the purpose of client trust account and misused it.

In addition to serving as part-time city prosecutor, Barbera, now a solo attorney, is a former member of the Medina County Bar Association Certified Grievance Committee. The committee is charged with the responsibility of considering complaints about attorneys, according to the bar association.

Barbera Fails to Provide Investigators Information
In 2011, disciplinary counsel was notified by Barbera’s bank that his client trust account was overdrawn. The office notified Barbera of the matter, advised him to comply with the rules, and urged him to cooperate in any future investigation. In 2014, the office received a second notice from Barbera’s bank. Between April and July 2014, disciplinary counsel sent Barbera four letters requesting information about the second overdraft and he failed to respond. A month later, after another letter was sent, Barbera sent a one-page fax to disciplinary counsel indicating he would send his formal response later that evening, but he did not send it.

Disciplinary counsel subpoenaed Barbera for a September deposition, which was cancelled after Barbera said he would promptly provide all requested information. He did not send the information, and nine months later, disciplinary counsel sent another letter to Barbera seeking more documentation. Barbera responded by phone claiming to have “computer issues” and asked to set up a meeting. However, he failed to comply with repeated requests to schedule a meeting.

A deposition was scheduled for September 2015, which was rescheduled to October at Barbera’s request. At the deposition he admitted to mismanaging the account, but did not produce any trust-account records requested by disciplinary counsel.

Disciplinary counsel concluded that despite Barbera’s serving on the certified grievance committee, he did not understand the purpose of the client trust account, which led to him commingling his earned fees from clients with those he had to hold until earned. Barbera later admitted his accounting and recordkeeping were “poor and disorganized,” and he did not retain the financial records that the professional conduct rules require.

The Ohio Board of Professional Conduct found Barbera violated various provisions in the rule regarding the appropriate holding of client property and maintaining financial records. The parties also stipulated that Barbera violated the rules requiring him to cooperate with a disciplinary investigation.

Board Considers Sanction
In developing a recommended sanction, the board considered aggravating circumstances, including Barbera’s engagement in a pattern of misconduct, the multiple offenses, and failure to cooperate. It also considered mitigating factors, including a lack of a selfish or dishonest motive, no prior discipline, and acknowledgment of wrongful nature of his conduct.

The parties also stipulated that Barbera was diagnosed with depression and anxiety-related disorders, but the board noted that he did not see a physician about the conditions until three months before his disciplinary hearing in 2016. He also entered into a contract with the Ohio Lawyers Assistance Program (OLAP) in 2014, but did not attempt to implement treatment recommendations until years later.  The board therefore declined to recognize his mental disorders as a mitigating factor. 

Stayed Suspensions Issued in Similar Cases
In its consideration of the board’s recommendation of a one-year stayed suspension, the Court stated that similar suspensions were issued to three other attorneys who failed to adequately operate their client trust accounts and did not fully cooperate with the investigations. The Court stayed the suspension on the condition that Barbera comply with his OLAP contract, continue therapy, comply with all therapy recommendations, complete three hours of continuing legal education on client trust accounting practices, abide by the trust account rules, submit to one year of monitored probation, and commit no further misconduct.

Chief Justice Maureen O’Connor and Justices Terrence O’Donnell, Sharon L. Kennedy, Judith L. French, William M. O’Neill and R. Patrick DeWine joined the opinion.

Justice Patrick F. Fischer did not participate.

2016-1159. Disciplinary Counsel v. Barbera, Slip Opinion No. 2017-Ohio-882.

(Mike Frisch)

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