Opinion
No. D.D. 88-26
Submitted January 17, 1989 —
Decided March 15, 1989.
Attorneys at law — Misconduct — Two-year suspension — Charging excessive fee — Conduct involving dishonesty.
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline of the Supreme Court, No. 43-87-B.
Relator, Lake County Bar Association, filed a complaint charging respondent, Larry G. Lillback, with misconduct, and specifically with violating DR 2-106 (charging an excessive fee), 1-102 (conduct involving dishonesty), 7-101 (conduct causing prejudice or damage to a client), 7-102 (use of false evidence), and 9-102 (failure to pay to the client funds that the client is entitled to receive). Respondent filed an answer to the complaint on January 27, 1988. The matter was heard by a panel of the Board of Commissioners on Grievances and Discipline of the Supreme Court ("board") on June 16, 1988. The following evidence was presented at the hearing.
In 1984, Elliot A. Beal murdered his wife, Gretchen Spraitz Beal, in California. He later pled guilty to second-degree murder and was sentenced to state prison in California. Elliot Beal's nephew James Beal and his wife Donna, who lived in Painesville, Ohio, became the foster parents of the two minor children of Elliot and Gretchen Beal. The California probate court appointed Harold LaFlamme as guardian ad litem for the children and administrator of Gretchen's estate. On January 1, 1986, Elliot assigned all his interests in Gretchen's estate and insurance to his children, Meghan Kathleen Beal and Elliot Edward Beal (n.k.a. John Elliot Edward Beal).
In February 1986, Donna Beal received some papers concerning Gretchen's estate from Luther Gow, an attorney representing the estate. She hired respondent to represent her in handling the distribution of the estate to the children. Donna agreed that respondent would be compensated from the estate for his services; however, they did not discuss how respondent's fee would be computed.
Later that month, respondent went to California on unrelated business. While there, he met with LaFlamme and Gow. They discussed the possibility of filing a wrongful death action against Elliot on behalf of Gretchen's estate. Gow and LaFlamme opposed this idea because Elliot had no assets other than "some community property in the form of furnishings, automobile, and so forth," and these assets were considered insufficient to justify "dissipating funds of the estate" in a lawsuit. There was no evidence that the decision not to file a wrongful death action was related to Elliot's assignment of rights to John Elliot and Meghan.
The total value of Gretchen's estate was appraised at $132,421.09. The estate consisted of proceeds from two life insurance policies, of which Elliot was the named beneficiary, Gretchen's vested interest in her employer's retirement program, accrued vacation pay and back pay, plus income earned during the administration of the estate. Gow testified that he performed the services necessary to obtain these monies and that respondent, so far as Gow knew, had nothing to do with obtaining them.
On April 3, 1987, respondent filed applications in the Lake County Probate Court for the appointment of Donna Beal as guardian of John Elliot and Meghan Beal. The application stated that a guardian was necessary "because of an estate inheritance."
However, on July 14, 1987, respondent sought from the Lake County Probate Court an extension of time in which to file an inventory. The request stated:
"Donna Beal has retained me on a contingency fee basis to collect the assets for the estate based upon the wrongful death of the mother of the wards."
On August 13, 1987, respondent filed two documents captioned "Application for Authority to Expend Funds." Each application was filed with the Lake County Probate Court and requested "authority to pay Attorney Larry G. Lillback twenty-five percent (25%) of the estate in the amount of $16,552.64 based upon his representation in obtaining the proceeds for the wrongful death settlement." Donna signed one application in her capacity as John Elliot's guardian and one in her capacity as Meghan's guardian. The court signed an order authorizing the expenditure.
Jane Carlysle, the Administrator and Chief Deputy Clerk of the Lake County Probate Court, reviewed the applications on August 17, 1987. Finding it unusual that attorney fees were being sought from the guardianship funds, she called respondent. She asked him "why he was asking for attorney fees in the wrongful death." He replied that "it occurred in California, and that in California * * * their proceedings were not the same as * * * in Ohio, and that he did not get his attorney fees out of the wrongful death in California."
Carlysle asked respondent for further documentation. He responded by filing two documents signed by Donna Beal on August 18: a contingent fee contract and the "Declaration of Donna Beal."
On August 18, Donna had gone to respondent's office where she signed a receipt acknowledging the preliminary distribution of $33,105.25 apiece to John Elliot and Meghan. She also signed two other documents: a contingent fee contract providing that respondent was to receive "twenty-five percent (25%) of the gross proceeds received, prior to lawsuit, and thirty-three percent (33%) after lawsuit" and a document, entitled "Declaration of Donna Beal" that described the preliminary distribution as a "wrongful death settlement." This document was filed with the Lake County Probate Court.
In the upper left corner of the Declaration, the words "LAW OFFICES OF ROUSH GOW" appear, along with the address of that law firm and the attorney number of Luther Gow. However, Gow did not prepare the declaration. Although respondent prepared the declaration, his secretary testified that he did not specifically instruct her to type "LAW OFFICES OF ROUSH GOW" on it. Rather, she typed it there because, at respondent's direction, she was using the receipt as a model; the receipt had been prepared by Gow, and had the same identification in its upper left corner.
Later that day, Donna had second thoughts and called respondent's office. In respondent's absence, his secretary read the contingent fee agreement to Donna over the telephone. Donna realized that, under the agreement, respondent would receive over $33,000. She returned to respondent's office, obtained copies of the documents she had signed, and contacted another lawyer.
Through her new attorney, Donna filed a motion to vacate the probate court's order authorizing payment to respondent. The motion explained that the distribution had not been the result of a "wrongful death settlement." On September 11, 1987, the order was vacated.
Respondent testified at the hearing that it had never occurred to him that he was "misrepresenting something to the Probate Court." He explained his use of the term "wrongful death settlement" by testifying that the insurance companies that had issued the policies had refused to accept Elliot's assignment of rights to his children; thus, respondent said, it was necessary to "go through the probate process" to create an estate through which the insurance proceeds could flow to the children. Because the creation of an estate was made necessary by Elliot's murder of Gretchen, respondent had believed that "the wrongful death settlement was the very creation of the estate."
Although respondent had nothing to do with obtaining the estate proceeds, he assisted Donna in establishing the guardianship and in her eventually adopting John Elliot and Meghan. Moreover, he advised Donna to apply for Social Security benefits and researched California law regarding wrongful death actions. He also had his associate do research relative to the possible filing of suit against the trustee of a testamentary trust which had been established upon the death of Gretchen Beal's mother. Finally, Donna Beal testified that "he was working on getting the money sent out to Ohio" from Luther Gow's office. Respondent testified that he would have billed approximately $3,000 for these services had he charged by the hour.
The panel found that respondent had violated DR 1-102 and 2-106 and recommended that respondent be suspended from the practice of law in Ohio for six months. The board adopted the panel's findings, but recommended a two-year suspension.
Byron Ryan Co., L.P.A., Patrick T. Ryan, Leo R. Collins and Gerald R. Walker, for relator.
John S. Nelson and John J. Hurley, Jr., for respondent.
This court finds that respondent violated the Disciplinary Rules indicated by the board. We also adopt its recommendation. Respondent is therefore suspended from the practice of law in Ohio for a period of two years. Costs taxed to respondent.
Judgment accordingly.
MOYER, C.J., SWEENEY, HOLMES, DOUGLAS, WRIGHT, H. BROWN and RESNICK, JJ., concur.