Cincinnati Bar Assn. v. Mullaney
| Decision Date | 16 September 2008 |
| Docket Number | No. 2008-0412.,2008-0412. |
| Citation | 2008 Ohio 4541,119 Ohio St.3d 412,894 N.E.2d 1210 |
| Parties | CINCINNATI BAR ASSOCIATION v. MULLANEY. Cincinnati Bar Association v. Brooking. Cincinnati Bar Association v. Moeves. |
| Court | Ohio Supreme Court |
John G. Slauson, Richard L. Creighton, and Rosemary D. Welsh, Cincinnati, for relator.
John J. Mueller, L.L.C., and John J. Mueller, Cincinnati, for respondent Darren J. Mullaney.
Kegler, Brown, Hill & Ritter Co., L.P.A., Geoffrey Stern, and Christopher J. Weber, Columbus, for respondents Patrick E. Moeves and John S. Brooking.
{¶ 1} We must determine in this case the appropriate sanction for each of three lawyers who, in accepting customers of Foreclosure Solutions, L.L.C., as clients, committed professional misconduct, including aiding the unauthorized practice of law, improperly sharing legal fees with nonlawyers, and failing to seek lawful objectives of clients by failing to assess their individual needs. Finding that these acts and others violated the Code of Professional Responsibility, the Board of Commissioners on Grievances and Discipline recommends that we publicly reprimand one of the lawyers, order a one-year, conditionally stayed suspension of the second lawyer's Ohio license, and enjoin the third lawyer from practicing pro hac vice in this state for two years. We accept the board's findings of misconduct and recommendation.
{¶ 2} Respondent Darren Joseph Mullaney of Cincinnati, Ohio, Attorney Registration No. 0075929, was admitted to the practice of law in Ohio in 2003. Respondent John S. Brooking of Fort Wright, Kentucky, Attorney Registration No. 0055654, was admitted to the Ohio bar in 1991 and is also admitted in Kentucky. Respondent Patrick F. Moeves of Fort Wright is admitted to the practice of law in Kentucky and has been admitted to practice pro hac vice in a number of Ohio courts.
{¶ 3} Relator, Cincinnati Bar Association, charged respondents in three separate complaints with various violations of the Disciplinary Rules. A three-member panel of the board heard the cases during consolidated proceedings on three days in December 2007 and then found that respondents had committed misconduct warranting sanctions of varying severity. The board adopted the findings of misconduct and recommendations for a public reprimand (Mullaney), stayed one-year suspension (Brooking), and injunction against pro hac vice practice (Moeves).
{¶ 4} The parties have not objected to the board report.
{¶ 5} Respondents Brooking and Moeves are principals in Brooking, Moeves & Halloran, P.L.L.C. ("the Brooking firm"), a law firm established in September 2004 and located in Fort Wright, Kentucky. Respondent Mullaney was employed as an associate of the Brooking firm and its predecessors, Moeves & Associates, P.L.L.C., and Moeves & Halloran, P.L.L.C., from May 2004 until May 2006. Foreclosure Solutions, L.L.C., is a company located in Ohio that purports to serve homeowners threatened with foreclosure by helping them set up a savings plan, so that after the homeowners follow the plan, Foreclosure Solutions can use the money saved to negotiate with the lenders to reinstate the loan and avoid foreclosure.
{¶ 6} In 2003, Moeves, then a principal in the law firm of Moeves & Associates, P.L.L.C., worked out a deal with Timothy Buckley, president of Foreclosure Solutions, agreeing to represent Foreclosure Solutions' customers in Kentucky courts. Pursuant to their agreement, Moeves began accepting clients from Foreclosure Solutions, who routinely obtained a limited power of attorney to hire an attorney for its customers, and Moeves collected a flat fee from Foreclosure Solutions of $125 for each client. With the formation of the Brooking firm in the fall of 2004, Moeves and Buckley extended their agreement to include representation of Foreclosure Solutions' customers in Ohio courts.
{¶ 7} Foreclosure Solutions' customers paid between $700 and $1,100 for the company's services, the goal of which was to stall pending foreclosure proceedings while trying to negotiate a settlement with the lender. The company is not a licensed or accredited consumer-credit-counseling agency. Nor is Buckley or any of his employees, to the respondents' knowledge, licensed to practice law in any jurisdiction.
{¶ 8} Foreclosure Solutions advertised to attract customers and often sent advertisements to defendants listed on court foreclosure dockets. Agents of the company told prospective customers that an attorney and legal services would be furnished to them as part of their fee. The company then hired a lawyer for the customer-client to respond in court to the recently filed foreclosure action. The client had no choice in the lawyer's selection, and after the lawyer was hired, Foreclosure Solutions' agents continued to negotiate directly with the foreclosing creditors.
{¶ 9} Foreclosure Solutions' agents met with customers to collect the company's fee and had the customer sign a standardized contract, the "Work Agreement," containing the basic terms and conditions of the engagement. The agent also had the customer sign a standardized limited power of attorney appointing Foreclosure Solutions as the customer's attorney-in-fact, which, in addition to authorizing the hiring of an attorney, allowed company agents to negotiate on the customer's behalf with creditors. Neither the Work Agreement nor the limited power of attorney identified any particular lawyer, established when a lawyer was to be hired, or informed the client of the amount of the lawyer's fee.
{¶ 10} As the solution to a customer's foreclosure troubles, the Work Agreement provided for the customer to set up a savings account and deposit a certain amount of money into it on a regular basis; Foreclosure Solutions would then use that money as a bargaining chip in negotiations with the creditor. Foreclosure Solutions determined the amount the client was to periodically deposit in the savings account. The Work Agreement specified that bankruptcy was considered a last resort.
{¶ 11} Once the Foreclosure Solutions customer had signed the Work Agreement and limited power of attorney, the agent completed a financial worksheet and determined the savings recommendation. The agent then collected Foreclosure Solutions' fee, none of which was designated as attorney fees. From this $700 to $1,100 fee, Foreclosure Solutions paid the lawyers their flat fee.
{¶ 12} Under the arrangement with Foreclosure Solutions, the Brooking firm represented approximately 2,000 clients in Ohio foreclosure proceedings during 2005 and 2006, at first accepting $125 and later $150 for each case. Among these clients were Richard and Karen Godfrey, who filed a grievance with relator, Fred Grant, Valerie Johnson, Dorene Brown, Rick Dorn, Roger Porter, William Armitage, Shelia Keyes, Lorrinzo Wimberly, Martiese Head, Roberta and Frederick Warr, Michael Zaback, Annie Crowell, Thomas and Michelle Sambor, and Mark Stoves. Mullaney represented all these clients except Dorn and Stoves.
{¶ 13} Brooking represented Foreclosure Solutions' customers during the spring and summer of 2006, after Mullaney left the firm, and then again beginning in September of that year, after the lawyer who had replaced Mullaney left the firm. Between the two of them, Mullaney and Brooking defended clients against foreclosure in the common pleas courts of Hamilton, Butler, Clermont, Cuyahoga, Montgomery, Union, Van Wert, Auglaize, Franklin, Greene, Lucas, Stark, Trumbull, Muskingum, Perry, Mercer, Lorain, and Summit Counties, among others. After courts granted his motions to appear pro hac vice, Moeves handled numerous foreclosure cases in Cuyahoga, Hamilton, Stark, Summit, Portage, Defiance, Van Wert, Sandusky, and Butler Counties.
{¶ 14} Respondents did not oversee solicitations or have any other involvement with Foreclosure Solutions' customers before the company sent its customers' files to the Brooking firm. When received by the firm, the files typically contained the Work Agreement, the limited power of attorney, an intake sheet that had been completed by a Foreclosure Solutions' agent, and a copy of the complaint in foreclosure. The intake sheet, another standardized form, contained the client's financial information. The Brooking firm often received several client files at a time, together with one check for all the fees.
{¶ 15} When it accepted a new case, the Brooking firm routinely sent the client an informational brochure entitled "The Nuts and Bolts of an Ohio Foreclosure" that Moeves and Mullaney had prepared. As the foreclosure actions went forward, Mullaney, Brooking, or Moeves responded in court with standardized pleadings and other filings, sending copies to the clients. Cases rarely if ever went to trial, and if the parties could not negotiate a resolution, trial courts granted judgment to the lenders and ordered the sale of the property. At that time, Mullaney, Brooking, or Moeves notified the client of the sale date and sent a standardized letter recommending that the client contact a bankruptcy lawyer.
{¶ 16} Mullaney, Brooking, and Moeves realized that when Foreclosure Solutions was successful in its solicitation of customers, Foreclosure Solutions, rather than the customers themselves, hired the Brooking firm to represent the customers in their pending foreclosure actions. The respondents also realized that their clients were not told in any of the Foreclosure Solutions paperwork the portion of the fee that would go toward legal fees. Moreover, Mullaney, Brooking, and Moeves knew that Foreclosure Solutions' agents were continuing to negotiate with lenders on their customers' behalf while the Brooking firm represented the customers as clients.
{¶ 17} In following its typical procedure, the Brooking...
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