Opinion
D.D. No. 84-36
Decided March 13, 1985.
Attorneys at law — Misconduct — One-year suspension — Misuse of clients' funds — "Check kiting."
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline of the Bar.
The Toledo Bar Association, relator herein, filed a complaint with the Board of Commissioners on Grievances and Discipline of the Bar ("board") charging C. Thomas Gruhler, respondent herein, with violations of DR 1-102(A)(4) and (6) of the Code of Professional Responsibility. These charges centered on alleged misconduct relating to respondent's trust account and misuse of client funds. A hearing was conducted before a three-member panel of the board on July 17, 1984. The following facts were developed largely through stipulations between the parties and the transcript of a hearing held by relator's Grievance Committee and admitted by stipulation.
Respondent was admitted to the bar in 1966 and has been in an individual practice since 1974 in Toledo, Ohio. In connection with his law practice, personal affairs, and other business ventures, respondent maintained five checking accounts with a number of financial institutions in the Toledo area, including an account with Ohio Citizens Bank denominated "Gruhler Company, L.P.A., Clients' Trust Account."
During a period of several months in 1982, respondent's client trust account was repeatedly overdrawn. For periods beginning in March 1982 and continuing through August 1982, respondent's client trust account carried negative balances ranging from $5.13 to $1,317.63. The record further reflects that during this time respondent was involved in what is referred to as a "check kiting" scheme whereby respondent would transfer funds among his various checking accounts to cover checks written on a particular account. As a result of this procedure, respondent came to owe $2,589.42 to Ohio Citizens Bank as well as smaller sums to several other banks. The smaller sums were paid back shortly after respondent's check kiting scheme was discovered. Respondent satisfied his debt to Ohio Citizens Bank on the day prior to the hearing before the three-member panel, approximately two years after incurring the debt.
Respondent explained that he was experiencing financial difficulties due to his inability to timely pay for an advertisement placed in the Yellow Pages which could have resulted in the disconnection of his telephone service.
The board found that respondent's conduct constituted a violation of DR 1-102(A)(4) and (6). The board further recommended that respondent be suspended from the practice of law for a period of one year. Relator, Toledo Bar Association, filed objections to the board's findings and recommendation.
Messrs. Marshall Melhorn and Mr. Richard M. Kerger, for relator.
Messrs. Britz Zemmelman and Mr. Harland M. Britz, for respondent.
Initially, there is no dispute that respondent violated DR 1-102(A)(4) and (6). Relator's sole objection to the board's findings and recommendation deals with the recommended sanction of a one-year suspension. The Toledo Bar Association has advocated throughout this entire proceeding that respondent be permanently disbarred or, at the minimum, be indefinitely suspended. Relator characterizes respondent's conduct as intentional, fraudulent, and amounting to theft from his clients. Respondent, having filed no objections to the board's report, would accept a one-year suspension or, ideally, a public reprimand. For the following reasons, we adopt the board's findings as well as its recommendation that respondent be suspended for one year.
In Lake Cty. Bar Assn. v. Baxter (1983), 4 Ohio St.3d 82, this court held that an indefinite suspension was the appropriate sanction for an attorney involved in a check kiting scheme where in excess of $16,000 remained unpaid to the bank involved.
Furthermore, this court stated in Disciplinary Counsel v. Morton (1983), 5 Ohio St.3d 206, 208:
"* * * There are few ethical breaches which impact more negatively on the integrity of the legal profession than the misuse of a client's funds."
In Disciplinary Counsel v. Lucey (1984), 14 Ohio St.3d 18, 21, we added:
"This is true whether the attorney's actions are due to dishonesty or, as was the case herein, ignorance and ineptitude."
This court's disciplinary decisions make it quite clear that misuse of client funds by attorneys will not be tolerated. In the case at bar, there is no indication that any client was damaged or that the rights of a client were prejudiced as a result of respondent's misconduct, even though at several times there were insufficient funds in respondent's client trust account. It was fortuitous that respondent was not required to disburse the funds of a client during the times that the trust account was overdrawn. Nevertheless, respondent's conduct required him to make restitution to a number of financial institutions which placed his integrity into issue with respect to future deposits of client funds. Without intent to diminish the gravity of respondent's conduct, this court, in light of all the circumstances herein, does not feel that respondent merits permanent disbarment or an indefinite suspension; rather, the appropriate sanction is a one-year suspension.
Accordingly, the relator's objections to the board's report are overruled, the findings and recommendation of the board are adopted, and respondent is hereby suspended from the practice of law for a period of one year.
Judgment accordingly.
CELEBREZZE, C.J., SWEENEY, LOCHER, HOLMES, C. BROWN, DOUGLAS and WRIGHT, JJ., concur.