Ohio State Reports


CLEVELAND BAR ASSN. v. GREENBERG, Unpublished Decision
(12-27-2006) 2006-Ohio-6519 CLEVELAND BAR ASSOCIATION v.
GREENBERG. No. 2006-1210. Supreme Court of Ohio.
Submitted September 20, 2006. Decided December 27, 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[EDITOR’S NOTE: This case is unpublished as indicated by the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. 05-009.

Per Curiam.

{¶ 1} Respondent, Alan D. Greenberg of Pepper Pike,
Ohio, Attorney Registration No. 0011157, was admitted to
the practice of law in Ohio in 1959. Respondent has been
registered in retired status under Gov.Bar R. VI(3) since

{¶ 2} On February 7, 2005, relator, Cleveland Bar
Association, charged respondent with three counts of
professional misconduct. Respondent answered, admitting
most of the facts underlying the complaint but denying that
he had violated the Disciplinary Rules. A panel of the
Board of Commissioners on Grievances and Discipline heard
the cause, making findings of misconduct and a
recommendation, which the board adopted.


{¶ 3} The three counts of misconduct arose from
transactions involving Blue E Investment Company (“Blue
E”), a small commercial loan company that respondent owns,
controls, and represents. In 1998, as in previous and later
years, respondent conducted Blue E business and practiced
law as a sole practitioner out of the same office, acting
interchangeably as either Blue E’s legal counsel or its
corporate officer. Most of Blue E’s customers have been
restaurants and bars.

Counts I and II

{¶ 4} Beginning in 1998, respondent represented the
seller in the sale of a tavern to Ray-Bons, Inc., a
corporation then owned by Bonnie McCormick and Ray
Villanueva, her husband. The seller introduced respondent
to McCormick and Villanueva as the tavern’s attorney and
someone who could “help them out.” McCormick, a housewife of
30 years with no business experience, thereafter relied on
respondent’s advice in various business dealings with Blue
E and others, thinking that he was her lawyer.

{¶ 5} Some months after purchasing the tavern for
$100,000, Ray-Bons sought to borrow $15,000 from Blue E. To
this end, on July 13, 1999, McCormick and Villanueva signed
a cognovit promissory note for $21,075 as officers of
Ray-Bons.[fn1] The terms of the note required payments of
$585 per month for 35 months and a 36th additional payment
of $600, stating an interest rate of 13.5 percent per annum
“after maturity or default.” McCormick and Villanueva also
agreed as corporate officers to give Blue E a security
interest in the tavern fixtures and liquor permit and to
personally guarantee the loan. Respondent prepared the note
and the papers for the security interest and personal
guarantee. Apart from respondent’s legal “help” with these
documents, McCormick and Villanueva were not represented by
counsel in these transactions.

{¶ 6} On August 16, 1999, Ray-Bons made a first
payment of $586, three days late, to Blue E on the
promissory note. On September 1, 1999, Villanueva
personally borrowed $800 more from Blue E, although he did
not sign another note. Ray-Bons failed to make its September
1999 payment on the note, and shortly afterward, the tavern

{¶ 7} On October 4, 1999, about three months after
the $15,000 loan, respondent filed a complaint on behalf of
Blue E to collect on the Ray-Bons cognovit note. His
complaint prayed for judgment in the amount of $21,289,
plus ten percent interest per annum beginning on October 4,
1999, against Ray-Bons, McCormick, and Villanueva. The
$21,289 prayer for relief represented the total due on the
note, i.e., $21,075 (without any rebate of unearned
interest), plus the $800 personal loan to Villanueva, less
Ray-Bons’s single $586 payment on the loan.

{¶ 8} At the disciplinary hearing, attorney George
Argie, whom McCormick eventually retained to represent her,
claimed that respondent had defrauded the court in
obtaining judgment on the cognovit note. He testified that
respondent had overcharged for interest and had improperly
included the $800 personal loan to Villanueva in his prayer
for relief. In Argie’s view, respondent had thereby
misrepresented in his complaint the amount to which he was
entitled on default of the cognovit note.

{¶ 9} Respondent maintained that the cognovit note
did not charge excessive interest. The $6,075 amount, he
claimed, was not “interest”; rather, it was a premium
charged for lending in connection with a high-risk venture.
Thus, respondent claimed, when Ray-Bons defaulted, the
entire amount of the note, or $21,075, became due, even
though the three-year loan had been outstanding for less
than three months. And because the loan was
business-to-business rather than business-to-consumer, the
parties were free to negotiate their own premium according
to their own judgment.

{¶ 10} Respondent further asserted that the 13.5
percent interest rate specified in the cognovit note
applied only to the balance after taking judgment; it did
not apply in calculating interest during the actual life of
the loan. According to respondent, the terms of the loan
were in fact fairly standard between corporate parties of
equal bargaining power transacting commercial business,
especially involving the high-risk purchase and operation
of a bar.

{¶ 11} In adopting the panel’s report, the board
accepted respondent’s explanation of the Ray-Bons $15,000
loan. As to the unpaid $800 personal loan to Villanueva
that respondent had wrapped into the Ray-Bons judgment,
however, the board found that it was a consumer loan
subject to the statutory restrictions on those
transactions. One such restriction is that the lending
institution be licensed by the state, which Blue E was not.

{¶ 12} After obtaining the judgment against
Ray-Bons, McCormick, and Villanueva, respondent took no
further action to collect for over two years. McCormick and
Villanueva divorced in those years, and McCormick succeeded
to Villanueva’s interest in Ray-Bons. Respondent continued
to act as Blue E’s counsel and also gave legal advice to
McCormick regarding her personal concerns and Ray-Bons’s
corporate interests, including acting as their
representative before the Ohio Liquor Commission. At no
time did respondent suggest that McCormick or Ray-Bons
retain independent counsel.

{¶ 13} In November 1999, respondent learned that the
tavern would lose its liquor license unless Ray-Bons
applied for authority from the state to temporarily close
the establishment. Respondent prepared the application for
Ray-Bons, had McCormick sign it, and filed the application
with the state. Respondent’s advice to McCormick was
designed to protect Blue E’s security interest in the liquor
license, although he claimed that his advice was in both
their interests.

{¶ 14} In early 2000, a buyer for Ray-Bons’s tavern
came forward. Respondent drafted papers for the prospective
purchase, for which Blue E again arranged financing. The
buyer’s attorney drafted an interim management agreement
providing for loan payments of $683 per month. All parties
signed the management agreement. McCormick testified that
when she signed, she was still under the impression that
respondent was her lawyer.

{¶ 15} Under the management agreement, the buyer
agreed to direct its payments to Blue E rather than
Ray-Bons, and Blue E was to apply these payments to reduce
Ray-Bons’ debt to Blue E. The buyer eventually defaulted,
by which time Blue E had received $10,745. From this
amount, Blue E applied $4,951.50 to retiring the Ray-Bons
judgment debt and retained $5,739.50 as reimbursement for
various payments made on behalf of Ray-Bons.

{¶ 16} On October 18, 2001, respondent appealed the
denial of the application to renew Ray-Bons’ liquor permit.
Before the Ohio Liquor Control Commission, respondent
identified himself as Ray-Bons’ attorney. He did not tell
McCormick of the appeal.

{¶ 17} McCormick eventually retained Argie, who
attempted to get relief from the cognovit judgment pursuant
to Civ.R. 60(B). Argie was not successful.

{¶ 18} At the disciplinary hearing, respondent
denied any misrepresentation or conflict of interest in his
dealings with Ray-Bons, McCormick, and Villanueva,
insisting that his actions were necessary to protect Blue
E’s security interest in the tavern’s liquor license. The
board, however, found that by knowingly and improperly
obtaining a judgment on the $800 personal loan, with
interest, and by rolling it into a complaint for judgment
on the cognovit note, respondent had violated DR
1-102(A)(4) (prohibiting conduct involving dishonesty,
fraud, deceit, or misrepresentation), 1-102(A)(5)
(prohibiting conduct that is prejudicial to the
administration of justice), and 1-102(A)(6) (prohibiting
conduct that adversely reflects on the lawyer’s fitness to
practice law), as charged in Count I. As to Count II, the
board found that respondent had committed additional
violations of DR 1-102(A)(4) by (1) continuing to advise
McCormick as to her legal interests and those of Ray-Bons
while at the same time acting to protect his own and Blue
E’s financial interest in Ray-Bons’ property and (2)
misrepresenting himself as McCormick’s attorney to a public
agency in pursuit of his own and Blue E’s financial

Count III

{¶ 19} In December 2001, while respondent’s motion
to appoint a receiver for Ray-Bons was pending, Al Molnar
attempted to purchase Ray-Bons’ tavern in the name of his
uncle. Molnar, a convicted felon, was legally barred from
holding a liquor permit in his own name. With his uncle’s
power of attorney and a check for $5,000, Molnar met with
respondent about the prospective purchase.

{¶ 20} Respondent’s role in this transaction also
shifted between representing himself and Molnar or his
uncle. By 2001, Argie was representing Ray-Bons as the
seller, and he recalled Molnar’s saying that respondent was
representing him. In fact, Argie advised respondent in
writing that Molnar considered respondent his counsel.
Respondent admitted that he and Molnar had met in December
2001 and that he had drafted a purchase agreement and
financial documents naming Molnar’s uncle and Ray-Bons as
parties to the sale of Ray-Bons’ tavern. He denied,
however, that he represented Molnar or his uncle in the

{¶ 21} The purchase agreement, which was never fully
executed, provided for a total selling price of $40,000,
with a $5,000 down payment to be paid respondent and Argie
in escrow. Molnar signed the purchase agreement for his
uncle and gave respondent a $5,000 check with the payee
line left blank. Respondent then filled in his and Argie’s
names as payees and forwarded the proposed purchase
agreement and a copy of the check to Argie.

{¶ 22} On January 3, 2002, fearful that the check
might bounce, respondent signed both his name and Argie’s
on the check and deposited it into his own office trust
account. Respondent did not have Argie’s authority to sign
on his behalf or to negotiate Molnar’s check.

{¶ 23} In February 2002, respondent told Argie what
he had done, and Argie immediately advised respondent in
writing that respondent had no authority to endorse the
check for him. Despite his denials that he had ever
represented Molnar or his uncle, respondent wrote a
statement purporting to grant Argie “authority” to speak to
Molnar’s uncle directly, i.e., without respondent’s
involvement. Argie then redrafted the purchase agreement,
obtained Molnar’s and McCormick’s signatures, and forwarded
it to respondent.

{¶ 24} This second purchase agreement designated
Argie as the sole escrow agent. As such, Argie demanded
that respondent forward the $5,000 down payment to him.
Respondent did not reply, nor did he respond to Argie’s
numerous subsequent demands for return of the $5,000.

{¶ 25} Respondent eventually agreed to return the
$5,000 payment to Argie after McCormick filed her
grievance. Argie applied the money to his legal fees with
McCormick’s permission, although the money may have
actually belonged to Molnar because the Ray-Bons tavern
purchase was never completed. The bar and its liquor
license were ultimately sold by a court-appointed receiver,
and over $13,000 of the proceeds of that sale was applied
to satisfy respondent’s judgment against Ray-Bons.

{¶ 26} Because respondent had endorsed Argie’s name
without authority and failed to remit the $5,000 check in
accordance with the terms of the purchase agreement, the
board found that respondent had violated DR 1-102(A)(3)
(prohibiting illegal conduct involving moral turpitude) and

Recommended Sanction

{¶ 27} In recommending a sanction for this
misconduct, the board weighed the aggravating and
mitigating factors of respondent’s 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.”).

{¶ 28} Favoring a severe sanction, the board found
that all of respondent’s misconduct resulted from his
determination to profit from the Blue E loan to Ray-Bons.
The board thus concluded that respondent had acted out of
self-interest, an aggravating factor under BCGD Proc.Reg.
10(B)(2)(b). The board further found that respondent had
harmed a vulnerable victim by taking advantage of
McCormick’s lack of sophistication. BCGD Proc.Reg.
10(B)(1)(h). As an example, the board cited the fact that
respondent had not updated credit information for Ray-Bons
and McCormick to show repayment of at least $16,000 of the
original $21,000 cognovit judgment, a lapse that has helped
ruin McCormick’s credit.

{¶ 29} The board also found in aggravation that
respondent had engaged in a pattern of misconduct and
multiple offenses. BCGD Proc.Reg. 10(B)(1)(c) and (d). In
doing business with McCormick and Molnar, respondent
created conflicts of interest while loosely “representing”
one or both of them, all the while acting in Blue E’s and
his own interest. In particular, respondent either led
McCormick to rely on his advice or did not advise her to
seek independent counsel when she clearly considered him to
be her attorney. Molnar was also under the impression that
respondent represented him.

{¶ 30} In addition, the board determined that
respondent’s testimony was at times so inconsistent and
contradictory that some of his statements must have been
false. The board thus found that respondent had submitted
false evidence, an aggravating factor under BCGD Proc.Reg.
10(B)(1)(f). Respondent also refused to acknowledge his
wrongdoing. BCGD Proc.Reg. 10(B)(1)(g). Even after
purporting in writing to represent McCormick and Ray-Bons
before the Liquor Control Commission and admittedly
exercising no duty of care or loyalty, respondent still
denied that he was ever their lawyer or that he had failed
McCormick and her company in any way.

{¶ 31} In mitigation, the board determined that
respondent had no prior disciplinary record. BCGD Proc.Reg.
10(B)(2)(a). Also, respondent generally cooperated during
the disciplinary proceedings. BCGD Proc.Reg. 10(B)(2)(d).
Finally, the board found that aside from the instant
events, respondent enjoyed a reputation for good character
in the community.

{¶ 32} Relator suggested that respondent be
indefinitely suspended from the practice of law, with the
suspension to commence at such time as respondent requests
reinstatement to the active practice of law, if he ever
does. As an alternative, relator proposed that respondent
serve an 18-month suspension, again with the suspension to
commence when and if respondent resumes active practice.
Respondent advocated dismissal of the complaint or, in the
alternative, a public reprimand, citing the facts that he
is retired and has closed his practice.

{¶ 33} Adopting the panel’s report, the board listed
three instances in which respondent acted with outright
dishonesty. He falsely endorsed a check, he misrepresented
himself as the lawyer for the holder of a liquor license,
and he falsely took a judgment on Villanueva’s $800
personal loan. All prejudiced the administration of justice
and reflected poorly on respondent’s fitness to practice
law. These violations and an absence of significant
mitigating circumstances, as the board observed, have
warranted a lawyer’s permanent disbarment. Disciplinary
Counsel v. Sagen (1991), 61 Ohio St.3d 62, 572 N.E.2d 658.

{¶ 34} In making its recommendation of a sanction,
the board considered the fact that respondent might choose
to leave retirement and return to active status at any
time. It also considered the gravity of his misconduct and
the need to protect the public, balanced against his prior
unblemished record and his reputation for good character.
Taking all these factors into account, the board
recommended that respondent be suspended from the practice
of law for 18 months. The board also recommended that the
suspension commence on the date that respondent resumes
active status, if he ever seeks to do so.


{¶ 35} We agree that respondent violated DR
1-102(A)(3), (4), (5), and (6), as found by the board. We
also agree that the recommended 18-month suspension is

{¶ 36} This case is similar to another instance in
which a seasoned lawyer insisted on advancing his own
interests at the expense of clients and others, losing
sight of how his disloyalty breached professional duties.
In his first disciplinary proceeding, we suspended the
lawyer’s license to practice for two years, staying the
last 18 months, for his unchecked conflicts of interest
with clients, citing his previously unblemished career.
Akron Bar Assn. v. Holder, 102 Ohio St.3d 307,
2004-Ohio-2835, 810 N.E.2d 426. Later, we indefinitely
suspended the same lawyer’s license for further incidents
of multiple representation, especially his indifference to
the attendant risks of compromising some clients’ interests
while protecting others. Akron Bar Assn. v. Holder, 105
Ohio St.3d 443, 2005-Ohio-2695, 828 N.E.2d 621. That lawyer
eventually also retired and later submitted his resignation
in hopes of avoiding disbarment in his third disciplinary
case. We rejected his offered resignation and ordered his
disbarment. Akron Bar Assn. v. Holder, 112 Ohio St.3d 90,
2006-Ohio-6506, N.E.2d.

{¶ 37} Respondent does not object to the board’s
findings of misconduct or recommendation, and an
intermediate suspension period — even though
respondent has retired — is in the public’s
interest. Respondent is therefore suspended from the
practice of law in Ohio for a period of 18 months. The
suspension shall commence on the date that respondent
applies to resume active status, if that ever occurs. Costs
are taxed to respondent.

[fn1] The holder of a cognovit in default obtains a ”
‘judgment without a trial of possible defenses which the
signers of the notes might assert’ ” because “the debtor
consents in advance to the holder’s obtaining a judgment
without notice or hearing.” D.H. Overmyer Co., Inc. v.
Frick Co. (1972), 405 U.S. 174, 176-177, 92 S.Ct. 775, 31
L.Ed.2d 124, quoting Hadden v. Rumsey Products, Inc. (C.A.2,
1952), 196 F.2d 92, 96. “An attorney, whom the note holder
may designate, appears on behalf of the debtor and,
pursuant to provisions of the cognovit note, confesses
judgment and waives the debtor’s right to notice of the
proceedings. See Medina Supply Co. v. Corrado (1996), 116
Ohio App.3d 847, 850 [689 N.E.2d 600]; Overmyer at 176 [92
S.Ct. 775, 31 L.Ed.2d 124].” Simmons Capital Advisors, Ltd.
v. Kendall Group, Ltd., Franklin App. No. 05AP-1087,
2006-Ohio-2272, 2006 WL 1230673.

Judgment accordingly. MOYER, C.J., RESNICK, PFEIFER,

LUNDBERG STRATTON, J., concurs in part and dissents in


{¶ 38} I concur in the opinion and judgment of the
majority, except that I would begin the 18-month suspension
now rather than waiting for respondent to apply to resume
active status, if that ever occurs. I know of no precedent
in this court for a similar delay in imposing discipline.

{¶ 39} If the argument is that we should still
enforce discipline despite respondent’s retired status
because he may apply to resume active status at any time,
then it makes more sense to enforce the discipline now.
That gives respondent an opportunity to reapply for active
status at the expiration of the 18-month suspension, since
other than this incident, he has had no discipline and
otherwise has a good reputation in the community. The fact
that respondent chooses to be retired at this time seems
irrelevant. Delaying discipline seems to make the penalty
even harsher.

{¶ 40} Accordingly, I respectfully dissent as to the
delay in the imposition of respondent’s suspension and
would begin the 18-month suspension immediately.

Cathleen M. Bolek and Todd J. Andersen, for relator.

Richard S. Koblentz and Bryan L. Penvose, for respondent.