Am. Express Travel Related Serv. Co., Inc. v. Mandilakis, 68783

CourtUnited States Court of Appeals (Ohio)
Writing for the CourtBLACKMON
Citation675 N.E.2d 1279,111 Ohio App.3d 160
PartiesAMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC. et al., Appellants, v. MANDILAKIS et al.; Scanlon, Appellee. *
Docket NumberNo. 68783,68783
Decision Date20 May 1996

Page 160

111 Ohio App.3d 160
675 N.E.2d 1279
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC. et al., Appellants,
v.
MANDILAKIS et al.; Scanlon, Appellee. *
No. 68783.
Court of Appeals of Ohio,
Eighth District, Cuyahoga County.
Decided May 20, 1996.

[675 N.E.2d 1280]

Page 161

Weston, Hurd, Fallon, Paisley & Howley, Jerome W. Cook and William H. Baughman, for appellants.

Steven G. Janik, Cleveland, for appellee.

Page 162

BLACKMON, Judge.

The issue before us is whether American Express Travel Related Services Company, Inc. and First Data Corporation ("AMEX" and "First Data"), plaintiffs-appellants, have a cause of action against Thomas J. Scanlon, defendant-appellee, a lawyer whose client, Michael A. Mandilakis, embezzled $2,613,574.35 from them. They assert generally that the Ohio Code of Professional Responsibility is relevant to a lawyer's substandard conduct for purposes of civil liability; consequently, DR 7-102(B)(1) may be the basis for civil liability in this action. To support this premise, they argue that because the Ohio Supreme Court failed to specifically preamble DR 7-102(B)(1) with a no-liability provision, it reticently sanctioned civil liability on this basis. Thus, they conclude that Scanlon was Mandilakis's lawyer, he knew of the embezzlement, he failed to disclose it to AMEX and First Data as mandated by DR 7-102(B)(1), and, thus, he is liable.

Scanlon, on the other hand, asserts that AMEX and First Data's premise of liability is invalid. He argues that to establish negligence against a lawyer, there must be malpractice, fraud, privity, or maliciousness. In this case, Scanlon argues, none of these actions exist, thus making this case ripe for summary judgment. The trial court agreed and granted summary judgment. AMEX and First Data appeal and assign the following error:

"The trial court committed reversible error by granting defendant Thomas J. Scanlon's motion for summary judgment because the deposition testimony of defendant Michael A. Mandilakis, and other documentary support attached to American Express' opposition brief, directly contradicted attorney Scanlon's affidavit, the sole documentary support attached to his motion for summary judgment, thereby establishing genuine issues of material fact as to whether attorney Scanlon had knowledge for almost three years of his client's continuing embezzlement against American Express."

After reviewing the record and the arguments of the parties, we affirm the decision of the trial court. The apposite facts follow.

On August 3, 1992, AMEX and First Data filed a complaint against Michael Mandilakis and Danielle Hacker for unjust enrichment and conversion. According to the complaint, Hacker, a former AMEX and First Data employee, conspired with Mandilakis to embezzle $2,613,574.35 over a three-and-one-half-year period. According to the complaint, Hacker was employed as a collector. Her job was to process requests by AMEX's money order agents for reimbursement of funds they advanced to pay AMEX money orders. Hacker was to gather supporting documents for such requests then issue checks to the agents.

From November 22, 1988 until June 26, 1992, Hacker submitted illegitimate check requests to AMEX and First Data, which falsely[675 N.E.2d 1281] indicated thatMandilakis 1

Page 163

was entitled to reimbursement for overpayment on American Express traveler's checks. As a result of the requests, AMEX and First Data issued more than $2,613,574.35 in checks payable to Mandilakis and/or his aliases. These checks were allegedly received and negotiated by Mandilakis who then converted the funds to his own use.

The complaint sought recovery of the amount embezzled, punitive damages, attachment of Mandilakis's property as well as any money or credits he had on deposit in any of several named banks, imposition of a constructive trust for the benefit of AMEX and First Data, and an injunction prohibiting Mandilakis from transferring, withdrawing or otherwise disposing of the funds or any real or personal property purchased with the embezzled funds.

On March 10, 1994, AMEX and First Data filed their second amended complaint adding Mandilakis's wife, Sylvia, as a defendant. The complaint also added several additional defendants including Mandilakis's attorney, Thomas Scanlon, and his firm, Donahue & Scanlon. 2 The complaint alleged, in late 1988 or early 1989, Mandilakis told Scanlon that he was involved in an embezzlement scheme against AMEX and First Data. According to the complaint, DR 7-102(B)(1) imposed a duty upon Scanlon to ask Mandilakis to stop the scheme and, if unsuccessful, to notify AMEX and First Data about the embezzlement.

DR 7-102(B)(1) provides as follows:

"A lawyer who receives information clearly establishing that [h]is client has, in the course of the representation, perpetrated a fraud upon a person or tribunal, shall promptly call upon his client to rectify the same, and if his client refuses or is unable to do so, he shall reveal the fraud to the affected person or tribunal."

Scanlon moved for dismissal of the complaint, arguing that Ohio's Code of Professional Responsibility could not be used to define a standard of care in tort actions. The motion was denied on June...

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26 practice notes
  • John M. Mcguire v. Draper, Hollenbaugh and Briscoe Co., L.P.A., 02-LW-4629
    • United States
    • United States Court of Appeals (Ohio)
    • November 4, 2002
    ...Disciplinary Rules does not, in itself, create a private cause of action. Am. Express Travel Related Serv. Co. v. Mandilakis (1996), 111 Ohio App.3d 160, 675 N.E.2d 1279. * * * {¶51} Moreover, the power to determine violations of the Disciplinary Rules is reserved to [the Ohio Supreme Cour......
  • Fred Siegel Co., L.P.A. v. Arter & Hadden, 97-1998
    • United States
    • United States State Supreme Court of Ohio
    • April 7, 1999
    ...Disciplinary Rules does not, in itself, create a private cause of action. Am. Express Travel Related Serv. Co. v. Mandilakis (1996), 111 Ohio App.3d 160, 675 N.E.2d 1279. The lower courts in this case correctly recognized that improper solicitation of clients in violation of the Disciplinar......
  • Wilkey v. Hull, Case No. 1:07-cv-160.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • February 3, 2009
    ...that may impose such a duty does not give rise to a private right of action. American Express Travel Related Serv. Co. v. Mandilakis, 111 Ohio App.3d 160, 675 N.E.2d 1279 (1996). And an alleged breach of a hospital's bylaws by an attorney during peer review proceedings similarly cannot supp......
  • Kutnick v. Fischer, 2004 Ohio 5378 (OH 10/7/2004), Case No. 81851.
    • United States
    • United States State Supreme Court of Ohio
    • October 7, 2004
    ...Supreme Court. The rules do not create a claim for civil liability. American Express Travel Related Services Co. v. Mandilakis (1996), 111 Ohio App.3d 160, 166. "It is well established that the violation of a disciplinary rule does not create a private cause of action." Montali v. Day, Cuya......
  • Request a trial to view additional results
26 cases
  • John M. Mcguire v. Draper, Hollenbaugh and Briscoe Co., L.P.A., 02-LW-4629
    • United States
    • United States Court of Appeals (Ohio)
    • November 4, 2002
    ...Disciplinary Rules does not, in itself, create a private cause of action. Am. Express Travel Related Serv. Co. v. Mandilakis (1996), 111 Ohio App.3d 160, 675 N.E.2d 1279. * * * {¶51} Moreover, the power to determine violations of the Disciplinary Rules is reserved to [the Ohio Supreme Cour......
  • Fred Siegel Co., L.P.A. v. Arter & Hadden, 97-1998
    • United States
    • United States State Supreme Court of Ohio
    • April 7, 1999
    ...Disciplinary Rules does not, in itself, create a private cause of action. Am. Express Travel Related Serv. Co. v. Mandilakis (1996), 111 Ohio App.3d 160, 675 N.E.2d 1279. The lower courts in this case correctly recognized that improper solicitation of clients in violation of the Disciplinar......
  • Wilkey v. Hull, Case No. 1:07-cv-160.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • February 3, 2009
    ...that may impose such a duty does not give rise to a private right of action. American Express Travel Related Serv. Co. v. Mandilakis, 111 Ohio App.3d 160, 675 N.E.2d 1279 (1996). And an alleged breach of a hospital's bylaws by an attorney during peer review proceedings similarly cannot supp......
  • Kutnick v. Fischer, 2004 Ohio 5378 (OH 10/7/2004), Case No. 81851.
    • United States
    • United States State Supreme Court of Ohio
    • October 7, 2004
    ...Supreme Court. The rules do not create a claim for civil liability. American Express Travel Related Services Co. v. Mandilakis (1996), 111 Ohio App.3d 160, 166. "It is well established that the violation of a disciplinary rule does not create a private cause of action." Montali v. Day, Cuya......
  • Request a trial to view additional results

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