Lawyer’s Plan a Lose, Lose
by Ron Davis
An Ohio attorney won’t be practicing law for a while as a result of findings that he represented both a Cleveland shopping center and a prospective tenant during a business transaction.
The suspension of the attorney follows an investigation of the transaction by the local bar association. The association’s disciplinary group ultimately concluded that the attorney’s actions were a conflict of interest.
Details in the case show that the attorney had represented the prospective tenant, who suffered from a severe disabling injury, for many years. The attorney often did not charge his client for that work—especially after his disability occurred in 1994.
Recently, the attorney began representing the shopping center. And when a vacancy occurred after one of the tenants there went out of business, the attorney presented to his disabled client the idea of leasing the vacated premises.
The previous tenant, however, had lost at least $3,000 while operating the business. Moreover, the equipment that the disabled client would lease as part of the deal, had depreciated in value by $45,000. Nevertheless, the disabled client voluntarily agreed to attempt operating the business.
In response, the attorney generated the documents needed for his client to establish a corporate structure. Among the documents was one designating the attorney as the agent for the company. While performing those services, however, the attorney sent a letter to the disabled client advising that he represented only the shopping center in the lease arrangements. As a result, the client participated in the execution of the lease without an attorney.
Within months of signing the lease, the client’s business failed and he moved from the shopping center. The attorney, acting on the shopping center’s behalf, sued him for payments due under the lease. The shopping center later won an award for $38,822.25 and placed a lien on the house of the disabled man.
When the local bar association learned details of the matter, an investigation began. The investigators found that the attorney had no prior disciplinary record, had been a dedicated volunteer in the Cleveland Legal Aid Society for many years, and had been active in numerous civic and professional organizations. On the other hand, the investigators were not convinced of the attorney’s remorse over the plight of his disabled client. They also believed that the attorney had chosen for financial reasons to protect the interests of the shopping center over those of the disabled client.
The investigators therefore recommended the attorney’s suspension from the practice of law in Ohio for one year, with a stay of six months on the condition that he commit no further misconduct and reimburse his disabled client for $1,500.
The Supreme Court of Ohio upheld that suspension, explaining, “[The attorney] did not commit his misconduct to take advantage of his disabled client, but it created an actual conflict of interest.” (Cuyahoga County Bar Association v. Newman, 808 N.E.2d 375)
Decision: May 2004
Published: July 2004