Ohio State Bar Ass'n v. Watkins Global Network, L.L.C.

• Citation: 2020 Ohio 169,159 Ohio St.3d 241,150 N.E.3d 68
• Decision Date: 23 January 2020
• Docket Number: No. 2019-0008,2019-0008
• Parties: OHIO STATE BAR ASSOCIATION v. WATKINS GLOBAL NETWORK, L.L.C., et al.
• Court: United States State Supreme Court of Ohio

159 Ohio St.3d 241

150 N.E.3d 68

2020 Ohio 169

OHIO STATE BAR ASSOCIATION

v.WATKINS GLOBAL NETWORK, L.L.C., et al.

No. 2019-0008

Supreme Court of Ohio.

Submitted June 11, 2019

Decided January 23, 2020

Plunkett Cooney, Alvand A. Mokhtari, Columbus, and Eugene Whetzel, Bar Counsel, for relator.

Mario Watkins, pro se.

Stewart, J. {¶ 1} In June 2014, relator, the Ohio State Bar Association, filed a complaint with the Board on the Unauthorized Practice of Law charging that respondent Mario W. Watkins, in an individual capacity, as the owner of respondent Watkins Global Network, L.L.C., and while doing business as respondent Jones, Marco & Stein, engaged in the unauthorized practice of law by representing small businesses in debt-settlement negotiations with creditors.

{¶ 2} After reviewing the matter on relator's motion for summary judgment, a panel of the board found that respondents had practiced law in violation of Ohio's licensure requirements on 31 occasions—each relating to a separate business client for whom respondents negotiated debt settlements between the years 2008 and 2013. The panel recommended enjoining respondents from any future unauthorized practice of law, imposing a civil fine in the amount of $1,000 per violation for a total fine of $31,000, to be paid jointly and severally by respondents, and ordering respondents to pay the costs associated with the case. The board adopted the panel's findings of fact, conclusions of law, and recommendations.

{¶ 3} After reviewing the record, we reject the board's conclusion that respondents engaged in the unauthorized practice of law on 31 occasions. Watkins failed to gain any clients while doing business as respondent Jones, Marco & Stein. And for reasons explained in greater detail below, we find only one instance in which Watkins, while working as an employee of Watkins Global, engaged in the unauthorized practice of law. For that single violation, we agree with the board that a $1,000 civil penalty is warranted. We further enjoin Watkins and Watkins Global from engaging in the unauthorized practice of law in the future. Costs are waived.

I. RELEVANT BACKGROUND

{¶ 4} Watkins Global is an Ohio limited-liability company that represents small-business debtors in debt-settlement negotiations with creditors in exchange for either an hourly fee or a contingent fee. Watkins is and has been the owner, registered agent, and sole employee of Watkins Global since the company was first registered with the Ohio Secretary of State in 2007.

Watkins is not, and has never been, licensed to practice law in the state of Ohio.

{¶ 5} In August 2012, Watkins registered the name Jones, Marco & Stein as a fictitious name for Watkins Global with the Ohio Secretary of State. Although the name suggests otherwise, Watkins is the only individual associated with Jones, Marco & Stein. Watkins operated under the fictitious name for a short period of time between August 2012 and October 2012; he sent marketing letters to potential clients on Jones, Marco & Stein letterhead. However, no clients retained Watkins as a result of these letters. In October 2012, relator sent a letter to respondents questioning their business practices. Watkins answered relator's letter of inquiry and further cooperated in relator's investigation by producing client files and giving deposition testimony. In a letter dated May 15, 2013, Watkins detailed the number of clients he had represented in debt-settlement negotiations and the amount of fees he had collected from those clients from 2007 to 2013:

  2007     No clients            No income
                  2008     One client            $734.00
                  2009     One client            $922.00
                  2010     Six clients           $15,857.00
                  2011     Four clients          $11,050.00
                  2012     Seventeen clients     $40,180.00
                  2013     Two clients           $1,400.00
                

Watkins's letter further advised relator that he had ceased engaging in debt negotiations as Jones, Marco & Stein after he received relator's October 2012 letter advising him of the investigation.

{¶ 6} On June 14, 2014, relator filed its complaint with the board pursuant to Gov.Bar R. VII(5). In it, relator asserted that respondents had "represented businesses in negotiations with creditors to resolve debts since 2008" and, in so doing, had "engaged in the unauthorized practice of law by acting as an intermediary to advise, counsel or negotiate on behalf of a business in an attempt to resolve a collection claim between debtors and creditors." Relator further alleged that "[r]espondents engaged in [31] instances of misconduct from 2008 through 2013" and that the business owners who hired respondents had been harmed by the $70,143 in fees respondents collected for services rendered. Relator attached Watkins's letter detailing the number of clients and amount of fees collected since 2008 as an exhibit to the complaint ("Exhibit 1").

{¶ 7} In their answer, respondents admitted that they had represented businesses in debt-settlement negotiations with creditors but denied that their actions amounted to the practice of law. Respondents further denied ever advising their clients in legal matters.

{¶ 8} Thereafter, relator filed a motion for summary judgment, which respondents opposed. Finding in favor of relator, the board adopted the following finding of the panel:

[T]he undisputed facts establish Respondents Watkins Global Network LLC, Jones Marco & Stein and Mario W. Watkins engaged in the unauthorized practice of law by providing advice, counseling and negotiating business debts on behalf of 31 small business customers with the customer's creditors or the creditors' legal counsel as identified by Respondents in the letter attached and authenticated as Complaint, Exhibit 1.

II. DISPOSITION

A. Defining the Unauthorized Practice of Law

{¶ 9} The unauthorized practice of law includes both holding oneself out as an attorney when one is not licensed to practice law, Gov.Bar R. VII(2)(A)(4), and "rendering * * * legal services for another" although not admitted to practice law in Ohio, Gov.Bar R. VII(2)(A)(1). For decades, we have maintained that "rendering legal services" includes appearing on behalf of another in court, preparing pleadings and other papers for use in legal actions, preparing legal instruments of all kinds, and providing legal advice and counsel to clients. See Land Title Abstract & Trust Co. v. Dworken , 129 Ohio St. 23, 193 N.E. 650 (1934), paragraph one of the syllabus; Cincinnati Bar Assn. v. Telford , 85 Ohio St.3d 111, 112, 707 N.E.2d 462 (1999). In Ohio State Bar Assn. v. Kolodner , 103 Ohio St.3d 504, 2004-Ohio-5581, 817 N.E.2d 25, ¶ 15, however, we stated that the unauthorized practice of law also "includes representation by a nonattorney who * * * negotiates on behalf of an individual or business in the attempt to resolve a collection claim between debtors and creditors."

{¶ 10} In this case, both relator and the board rely on our statements in Kolodner to conclude that respondents engaged in the unauthorized practice of law when they represented 31 clients in debt-settlement negotiations. Today, we use this case as an opportunity to clarify that our statements in Kolodner do not amount to a per se rule that any person who negotiates a settlement of a debt on behalf of another but who does not have a license to practice law in the state of Ohio engages in the unauthorized practice of law. Instead, whether a person engages in the unauthorized practice of law turns on the specific actions a person takes while attempting to negotiate a settlement and whether those actions constitute the rendering of legal services.

B. Kolodner

{¶ 11} In Kolodner , we considered whether a nonattorney who had held himself out as an attorney-in-fact and who stipulated that he had "advised, counseled, and represented various customers regarding payment of their outstanding debts and negotiated settlements of the debts," id. at ¶ 3, had engaged in the unauthorized practice of law. Kolodner himself conceded that this behavior constituted the unauthorized practice of law. Id. at ¶ 4. And we agreed. Id. at ¶ 15. Although we cited two cases, Cincinnati Bar Assn. v. Telford , 85 Ohio St.3d 111, 707 N.E.2d 462 (1999), and Cincinnati Bar Assn. v. Cromwell , 82 Ohio St.3d 255, 695 N.E.2d 243 (1998), to support our statement in Kolodner that the practice of law includes negotiating the settlement of a debt for another, those cases do not support such a general statement of the law. Specifically, in those cases, the respondents gave legal advice to clients, drafted legal documents, and asserted legal defenses as part of the negotiation process. Thus, Kolodner, Telford , and Cromwell are distinguishable from this case because the respondents in those cases used legal tactics and methods during negotiations to effect results for their clients. See Cincinnati Bar Assn. v. Foreclosure Solutions, L.L.C. , 123 Ohio St.3d 107, 2009-Ohio-4174, 914 N.E.2d 386, ¶ 26 (noting that advising debtors of their legal rights and the terms and conditions of settlement in negotiations to avoid pending foreclosure or other collection proceedings constituted the unauthorized practice of law in both Kolodner and Telford ).

{¶ 12} Indeed, the board's apparent view that our statement in Kolodner amounts to a per se rule that any attempt at settling debts on behalf of another is the practice of law is both incorrect and inconsistent with our later pronouncement in Cleveland Bar Assn. v. CompManagement, Inc., 111 Ohio St.3d 444, 2006-Ohio-6108, 857 N.E.2d 95, ¶ 59-60. This court concluded in CompManagement that the respondents—nonattorneys who appeared in a representative capacity before the Industrial Commission and the Bureau of Workers' Compensation in conformity with an Industrial Commission resolution—did not engage in the unauthorized practice of law when they negotiated workers' compensation claims on behalf of employers. 111 Ohio St.3d 444, 2006-Ohio-6108, 857 N.E.2d 95...