Mahoning County Bar Ass'n v. Ruffalo
| Citation | 199 N.E.2d 396,176 Ohio St. 263,27 O.O.2d 161 |
| Parties | , 8 A.L.R.3d 1142, 27 O.O.2d 161 MAHONING COUNTY BAR ASSOCIATION v. RUFFALO. D. D. No 57. |
| Decision Date | 20 May 1964 |
| Court | United States State Supreme Court of Ohio |
The facts are stated in the opinion.
David C. Haynes and Comus M. Beard, Youngstown, for relator.
John J. Chester and C. Richard Grieser, Columbus, for respondent.
This proceeding was set in motion in 1962 when the Mahoning County Bar Association filed its written complaint with the Board of Commissioners on Grievances and Discipline, charging John Ruffalo, Jr., an attorney at law of the city of Youngstown admitted to the Bar of Ohio in 1946, with unprofessional and unethical conduct in violation of the Canons of Professional Ethics.
The complaint, consisting of 14 charges, was referred to a three-member hearing panel for the taking of evidence and for report. Upon hearing, the panel concluded that charges numbered 3, 8, 9, 10, 11, 12 and 13 had been proved, and that respondent had violated Canons 10, 27, 29 and 32 of the Canons of Professional Ethics. Based on the findings and conclusions of the panel and the record, the board recommended that respondent be disbarred.
As stated in paragraph five of the syllabus in In re Lieberman (1955), 163 Ohio St. 35, 125 N.E.2d 328, '[t]he degree of proof required in a disbarment proceeding is a preponderance of the evidence.' To the same effect see the per curiam opinion in Cleveland Bar Association v. Fleck (1961), 172 Ohio St. 467, 469, 178 N.E.2d 782.
In cases of this kind, the board of commissioners acts for and on behalf of this court. In doing so, it makes recommendations as to the facts which should be found and the action which should be taken by this court. However, this court has full responsibility for determining what the facts are and what action should be taken on those facts.
As to charge No. 8, it is stated in respondent's brief:
'The facts * * * which are alleged in this charge are that respondent 'did advance monies to certain clients * * * while their claims were pending, which advances were deducted from any settlements * * * later received in settlement of said claims.' Those facts do not * * * constitute stitute misconduct * * *.
'* * *
'The record shows that respondent did advance monies to certain clients, but with the understanding that such monies were to be repaid irrespective of the outcome of the pending litigation. * * *
But cf. Canon 13.
Canon 10 provides:
'The lawyer should not purchase any interest in the subject-matter of the litigation which he is conducting.'
Canon 42 reads:
'A lawyer may not properly agree with a client that the lawyer shall pay or bear the expenses of litigation; he may in good faith advance expenses as a matter of convenience, but subject to reimbursement.'
It is clear that the word 'expenses' appearing after the semicolon refers to 'expenses of litigation.' It would not include advances of the kind admittedly made by respondent for 'living expenses * * * during the period between the filing of and the trial or disposal of the case.' See opinion No. 288 of the Legal Ethics Committee of the American Bar Association, 41 A. B. A. Journal, 33, issue of January 1955. We cannot reconcile the majority opinion in People ex rel. Chicago Bar Association v. McCallum (1930), 341 Ill. 578, 173 N.E. 827, on this question with Canons 10 and 42.
It is obvious that, where the advancement of living expenses is made, as in the instant case, to enable a disabled client and his family to survive, any agreement by the disabled client to repay them would not have the effect of providing the attorney with any reasonable source of repayment other than the proceeds received on trial or settlement of his client's claim. In effect, the attorney has purchased an interest in the subject matter of the litigation that he is conducting. The canons contemplate that this will be proper only where the advance is for 'expenses of litigation.'
It may be observed that the cases of Roberts v. Montgomery, supra (115 Ohio St. 502, 154 N.E. 740), Scheinesohn v. Lemonek, supra (84 Ohio St. 424, 95 N.E. 913), Cleveland Ry. Co. v. Godfrey, supra (28 Ohio Law R. 466), and Reece v. Kyle (1892), 49 Ohio St. 475, 31 N.E. 747, 16 L.R.A. 723, were all decided before this court adopted by rule the Canons of Professional Ethics. In view of the adoption of those canons, those cases would no longer be applicable to the extent that they are inconsistent with provisions of the canons.
As to charge No. 13, the report of the board summarizes the evidence and facts as follows:
'It is charged that the respondent conspired with * * * Orlando and paid Orlando money for preparing lawsuits against the Baltimore & Ohio Railroad which was Orlando's employer.
'The evidence in support of this charge is not in dispute. Orlando worked as an investgator for the respondent from 1953 to July 19, 1962. During this same period he was also an employee of the Baltimore & Ohio Railroad. He was suspended by the railroad on July 21, 1962, on charges of soliciting claims. A hearing was held on these charges but Orlando did not appear because he says he was in the New Castle Hospital. During his employment with the respondent, Orlando was paid $25 a day plus expenses and investigated all of the respondent's railroad cases. He said that he worked an average of ten or fifteen days a month for the respondent. Withholding slips, internal revenue form 1099, were received in evidence * * * and showed the following amounts paid to Orlando by the respondent:
"1957 -- $2,950.00
"1958 -- 1,250.00
"1959 -- 1,237.37
"1960 -- 3,829.25
"1961 -- 4,716.00
'According to Orlando, respondent paid him in cash for which Orlando said he signed receipts. Orlando said that the respondent kept no records, but paid Orlando on the basis of Orlando's records, but didn't keep these records after his income tax returns were filed * * *. Respondent stated:
'The respondent was ordered by a subpoena issued by the board * * * to produce 'all your records, checks, disbursements and receipts of any kind or nature showing payments to Michael Orlando * * * for the years 1957, 1958, 1959, 1960, 1961 and 1962.' Respondent only produced the withholding slips * * *. Respondent was also requested by the chairman of the panel to produce all of his records so that counsel for the relator could determine for themselves whether or not his records contained any entries which would reflect on the payments made by respondent to Orlando * * *. The respondent did not produce his records and refused to comply with the request of the chairman of the panel * * *.
'Although the full extent of Orlando's activities in behalf of the respondent could perhaps be better determined if respondent had submitted his records for examination as requested by the chairman of the panel, there is no dispute about the fact that the respondent did employ Orlando to investigate cases against the Baltimore & Ohio Railroad while Orlando was working for that railroad * * *. Furthermore, the respondent admits that he kept no entries of payments to Orlando so that he would have no record which would disclose the fact that Orlando was employed by the respondent. The panel questioned the respondent at length * * * on his views relating to the practice of employing Orlando to investigate cases against the Baltimore & Ohio, while he was employed by the company. He saw nothing wrong with the practice because he was 'doing something altogether different from the type of work he was doing on the railroad' * * *. But he admitted employing Orlando because of the advantages in having a railroad man working for him * * *. He saw no distinction between employing any railroad employee and one who was investigating claims against his own employer, because 'our concepts have changed * * *.''
With respect to this summarization, respondent's brief in this court states:
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