Failure to register as an attorney

Ohio State Reports

Unpublished

DISCIPLINARY COUNSEL v. JONES, Unpublished Decision
(12-202006) 2006-Ohio-6367 DISCIPLINARY COUNSEL v. JONES.
No. 2006-1562. Supreme Court of Ohio. Submitted October
17, 2006. Decided December 20, 2006.

[EDITOR’S NOTE: This case is unpublished as indicated by the
issuing court.] On Certified Report by the Board of
Commissioners on Grievances and Discipline of the Supreme
Court, No. 06-013.

Jonathan E. Coughlan, Disciplinary Counsel, and Carol A.
Costa, Assistant Disciplinary Counsel, for relator.

Per Curiam.

{¶ 1} Respondent, David Ross Jones, last known
address in Charleston, South Carolina, Attorney
Registration No. 0005283, was admitted to the practice of
law in Ohio in 1972. Respondent’s license to practice has
been under suspension since December 2, 2005, for his
failure to register as an attorney for the 2005/2007
biennium beginning September 1, 2005. In re Attorney
Registration Suspension, 107 Ohio St.3d 1431,
2005-Ohio-6408, 838 N.E.2d 671.

{¶ 2} On February 13, 2006, relator, Disciplinary
Counsel, charged respondent with two counts of professional
misconduct. Respondent was served with the complaint but
did not answer, and relator moved for default pursuant to
Gov.Bar R. V(6)(F). A master commissioner appointed by the
Board of Commissioners on Grievances and Discipline granted
the motion, making findings of fact and conclusions of law
and recommending a sanction. The board adopted the master
commissioner’s findings of fact, conclusions of law, and
recommendation.

Misconduct

{¶ 3} Count I charged that respondent had
misappropriated large sums of money from a charitable
foundation that had been established by a client who is now
deceased and that he had thereby violated DR 1-102(A)(3)
(prohibiting illegal conduct involving moral turpitude),
1-102(A)(4) (prohibiting conduct involving dishonesty,
fraud, deceit, or misrepresentation), 1-102(A)(5)
(prohibiting conduct prejudicial to the administration of
justice), 1-102(A)(6) (prohibiting conduct that adversely
reflects on a lawyer’s fitness to practice law),
9-102(B)(3) (requiring a lawyer to maintain complete
records of all client funds in the lawyer’s possession and
to render appropriate counts), and 9-102(B)(4) (requiring a
lawyer to promptly pay or deliver requested funds in the
lawyer’s possession that the client is entitled to
receive). Count II charged that respondent had violated
Gov.Bar R. V(4)(G) by failing to cooperate in the
investigation of this misconduct.

Count I

{¶ 4} In 1983, Carl H. DeVoe executed a will
providing that the residue of his estate be distributed to
a revocable trust. DeVoe also executed a revocable trust
that provided that any assets remaining in his estate after
the distribution of funds to a marital trust and a family
trust be distributed to the DeVoe Foundation. Respondent
was named trustee of the revocable trust and was designated
executor and personal representative of DeVoe’s estate.

{¶ 5} The DeVoe Foundation was incorporated in 1983
and organized exclusively to promote the charitable,
educational, and scientific purposes of six charities
— the American Cancer Society, the Knights Templar
Eye Foundation, the American Heart Association, the Kidney
Foundation, the Shriners Hospital for Crippled Children, and
the Arthritis Foundation. DeVoe, respondent, and another
lawyer were members of the foundation and were initially
named trustees for the foundation. The board of trustees
included the executive directors of the six named charities
to which funds were to be disbursed. The DeVoe Foundation’s
articles of incorporation specified that no one other than
the named charities receive distributions from the
foundation’s net earnings.

{¶ 6} DeVoe died on March 23, 1996. The next month,
respondent applied to administer the DeVoe estate in the
Cuyahoga County Common Pleas Court, Probate Division. In
August 1996, respondent filed an inventory and appraisal,
valuing the DeVoe estate at $1,117,550.77.

{¶ 7} In October 1997, respondent sent two checks-a
$12,213.19 check representing proceeds from a Paine Webber
securities account and a $4,032.34 check representing
proceeds from a Merrill Lynch securities account —
to the Arthritis Foundation. With each check, respondent
enclosed a letter advising that the payment was made in
accordance with the DeVoe estate plan. In March 1998,
respondent sent a bank draft for $10,000, drawn from an
account entitled “David R. Jones, Trustee, Unified Trust
Agreement,” to the Arthritis Foundation and advised that
the disbursement was the charity’s distributive share.

{¶ 8} In May 1998, an attorney for the Arthritis
Foundation questioned whether respondent had paid all the
funds to which the organization was entitled and asked to
examine the DeVoe Foundation’s financial records.
Respondent, who had not called a meeting of the DeVoe
Foundation board of trustees since DeVoe’s death, did not
provide an accounting of the foundation’s assets and
disbursements.

{¶ 9} In April 1999, respondent sent $10,000 each to
the American Cancer Society, the Arthritis Foundation, and
the Kidney Foundation by check drawn from the DeVoe
Foundation’s bank account.

{¶ 10} On October 7, 1999, the Arthritis Foundation
filed a complaint in the Cuyahoga County Court of Common
Pleas, alleging that respondent had violated the DeVoe
Foundation’s corporate regulations, breached his fiduciary
duties to the foundation, and refused to produce the
foundation’s financial records for review. The complaint
also requested that the DeVoe Foundation be dissolved and
its assets distributed in equal shares to the specified
charitable organizations.

{¶ 11} On January 22, 2002, the common pleas court
entered a default judgment against respondent, finding that
he had breached his fiduciary duties, and removed him as an
officer and trustee of the DeVoe Foundation. The court
further found respondent personally liable to the specified
charitable organizations for what the court determined to
be the assets of the DeVoe Foundation — $751,145.10.

{¶ 12} In January 2005, the DeVoe Foundation’s bank
account was closed pursuant to court order. At that time,
the account contained a balance of $519,549.69. The
Cuyahoga County Common Pleas Court further ordered that
this money be distributed to the charities in accordance
with the mission of the DeVoe Foundation.

{¶ 13} The Kidney Foundation also took legal action
against respondent in 2004 to recover its share of the
DeVoe Foundation assets. The Geauga County Court of Common
Pleas entered a default judgment against respondent for
$751,145.10. The court found that respondent’s assets were
subject to execution and enjoined him from transferring any
of his assets. The court further found respondent liable
for $750,000 in punitive damages, plus attorney fees and
costs. The Kidney Foundation and other charities entitled
to proceeds from the DeVoe Foundation have since initiated
foreclosure proceedings against respondent’s property to
collect on their judgments.

{¶ 14} In investigating the grievance filed against
respondent, relator subpoenaed the bank records for the
DeVoe Foundation’s checking account. These records
indicated that the account had a balance of $672,654.70 as
of January 1, 2004. The records also revealed that after
his court-ordered removal as officer and trustee, respondent
continued to write checks against the DeVoe Foundation’s
bank account, including seven drafts made out to an
organization named 8490 Kinsman, L.L.C.

{¶ 15} In 1997 and 1998, 8490 Kinsman Road, in
Russell, Ohio, was apparently the address for respondent’s
law office. In 1999, respondent established 8490 Kinsman,
L.L.C. (the “Kinsman Company”) to “pursue any purpose(s)
for which individuals may lawfully associate themselves”
and to “own, operate, manage and sell the real property
known as 8490 Kinsman Road, Russell, Ohio.” Respondent
served as a member, manager, or representative and as
statutory agent for the Kinsman Company. As of January 1,
2004, the Kinsman Company bank account had a balance of
$2,551.62. From January 2004 to December 2004, however,
deposits totaling $152,570.16 were placed in that account,
$135,000 of which could be traced to the seven checks
written against the DeVoe Foundation’s bank account. During
the same period, withdrawals of $147,819.58 were made from
the Kinsman Company’s bank account, $141,000 of which was
disbursed through checks made out to respondent’s wife.

{¶ 16} Finding that respondent had misappropriated
at least $141,000 of funds that his client had intended to
donate to charitable causes, the board found that
respondent had violated the Disciplinary Rules as charged
in Count I of relator’s complaint.

Count II

{¶ 17} During the investigation of this misconduct,
relator initially had difficulty locating respondent but
eventually learned that he had moved to South Carolina.
Relator advised respondent of the grievance filed against
him by certified mail, and on February 25, 2005, he
responded. In a one-page, handwritten letter, respondent
advised that he had disbursed over $100,000 to charities
named in the DeVoe Foundation Articles of Incorporation and
that over $500,000 remained in the foundation’s bank
account. Respondent provided nothing, however, to document
these assertions.

{¶ 18} Relator later sent respondent two more
letters. The first letter, which respondent received by
Federal Express, asked specific questions regarding the
DeVoe Foundation funds; the second letter asked for
respondent’s response to a proposed formal complaint.
Respondent did not reply to either letter. The panel and
board thus found that respondent had also violated Gov.Bar
R. V(4)(G).

Recommended Sanction

{¶ 19} In recommending a sanction for respondent’s
misconduct, the master commissioner and board weighed the
mitigating and aggravating factors of his case. See Section
10 of the Rules and Regulations Governing Procedure on
Complaints and Hearings Before the Board of Commissioners
on Grievances and Discipline (“BCGD Proc.Reg.”).

{¶ 20} Adopting the master commissioner’s report,
the board found no evidence of mitigating circumstances to
weigh in favor of lenience. In contrast, the master
commissioner and the board found six of the nine
aggravating factors set forth in BCGD Proc.Reg. 10(B)(1).
Apparently because of respondent’s license suspension for
failing to register, the board found that respondent had a
prior disciplinary record. See BCGD Proc.Reg. 10(B)(1)(a).
The board found that respondent had acted dishonestly and
for his own profit in misappropriating the DeVoe Foundation
funds and that he had done so repeatedly, demonstrating a
pattern of misconduct. BCGD Proc.Reg. 10(B)(1)(b) and (c).
Respondent had further failed to participate in the
disciplinary process and to acknowledge his wrongful
conduct. BCGD Proc.Reg. 10(B)(1)(e) and (g). Finally, the
board found that respondent had failed to make restitution.
BCGD Proc.Reg. 10(B)(1)(i).

{¶ 21} Relator advocated respondent’s permanent
disbarment. The master commissioner recommended disbarment,
citing as doubly distressing the fact that the
misappropriated funds were intended for charity. The board
adopted the recommendation to disbar.

Review

{¶ 22} Respondent reprehensibly misappropriated
funds intended by his client to serve charitable purposes
and then ignored his duty to assist in relator’s
investigation of the wrongdoing. We therefore agree that he
violated DR 1-102(A)(3), 1-102(A)(4), 1-102(A)(5),
1-102(A)(6), 9-102(B)(3), and 9-102(B)(4), and Gov.Bar R.
V(4)(G). The presumptive disciplinary measure for such acts
is disbarment. Columbus Bar Assn. v. Moushey, 104 Ohio
St.3d 427, 2004-Ohio-6897, 819 N.E.2d 1112, ¶ 16;
Disciplinary Counsel v. Millonig, 108 Ohio St.3d 154,
2006-Ohio-420, 841 N.E.2d 779, ¶ 14.

{¶ 23} Respondent is therefore permanently disbarred
from the practice of law in Ohio. Costs are taxed to
respondent.

Judgment accordingly.

MOYER, C.J., RESNICK, PFEIFER, LUNDBERG STRATTON, O’CONNOR,
O’DONNELL and LANZINGER, JJ., concur.