Youngstown Daily Legal News

Court issues public reprimand for attorney who mishandled client funds

ANNIE YAMSON
Special to the Legal News
Published: November 4, 2016

An Avon Lake attorney who mishandled client funds recently received a public reprimand from the state's highest court.

The unanimous decision from the Ohio Supreme Court adopted a recommendation from the Board of Professional Conduct.

The attorney, Gerald Morton Smith, was admitted to the practice of law in Ohio in 1961. The disciplinary case stemmed from the May 4, 2015, filing of an eight-count complaint by the Lorain County Bar Association.

In the complaint, the bar association alleged that Smith violated the Rules of Professional Conduct in his representation of a single client by charging a clearly excessive fee, failing to deposit the fee into a client trust account, failing to advise the client that he might be entitled to a refund of all or part of the fee if it was not earned, failing to maintain required trust-account records and representing to the client that he could improperly influence government officials to achieve a favorable resolution of the client's criminal matter.

After a hearing before a panel of the Board of Professional Conduct, the board adopted findings of fact and issued a report to the Ohio Supreme Court along with a recommendation that the appropriate sanction for Smith would be a public reprimand.

According to a summary of those findings, Smith's disciplinary case stemmed from his firm's representation of Robert Gonzalez in a criminal matter.

In 2008, Gonzalez's son, Robert Gonzalez Jr., requested that Smith represent his father. Smith informed him that he would accept the representation and that his fee would be $25,000.

The following day, Gonzalez Jr. paid Smith $10,000 and four days later, an additional $15,000.

Gonzalez was indicted on April 9, 2008, on several serious offenses, including kidnapping and abduction with firearm specifications. He faced more than 32 years in prison if convicted on all counts.

After Gonzalez's arraignment, Smith told him that he would require an additional $50,000 to represent him. Gonzalez Jr. paid $45,000 of that additional fee.

But court documents state that Smith never entered into a written fee contract with Gonzalez, which created uncertainty regarding the nature of the fees.

In his testimony on the matter, Smith was inconsistent in his description of the fees, first characterizing them as a flat fee, then a retainer, and then a retainer until a flat fee could be set.

"It is clear, however, that no portion of the $70,000 fee was ever deposited into Smith's client trust account and that Smith failed to advise Gonzalez in writing that if the entire fee was not earned, he might be entitled to a refund of some or all of the fee," case summary states.

Smith also failed to maintain records, bank accounts, and bank statements and failed to retain monthly reconciliations for Gonzalez that would have demonstrated the manner in which he handled client funds.

Less than a month after his indictment, Gonzalez was released on bond. Later that year, he pleaded guilty to most of the charged offenses and he was sentenced to a total of five years in prison. He ended up serving about three and a half years before his release in November 2012.

"The board found that there was little question that Smith provided Gonzalez with very effective assistance of counsel," the Supreme Court wrote in its per curiam opinion. "The board also found that regardless of how Smith characterized his fee, his handling of the funds violated several Rules of Professional Conduct."

Smith also stipulated that he violated several rules.

"When imposing sanctions for attorney misconduct, we consider several relevant factors, including the ethical duties that the lawyer violated, the aggravating and mitigating factors listed in Rule for the Government of the Bar V(13), and the sanctions imposed in similar cases," the high court wrote.

The board found as relevant mitigating factors the absence of a disciplinary record in Smith's more than 50-year legal career, the absence of a dishonest or selfish motive and his full and free disclosure to the board and cooperative attitude during the course of the disciplinary proceedings.

Apart from the charged misconduct, the board also noted that Smith had a good reputation as an attorney.

"The only aggravating factor present is that Smith engaged in multiple offenses," the Supreme Court wrote.

After reviewing the board's findings of fact, the mitigating and aggravating factors and similar disciplinary cases, the high court adopted the board's finding of misconduct and concluded that its recommendation was appropriate.

"Accordingly, Gerald Morton Smith is publicly reprimanded for the misconduct described above," the high court concluded.

The case is cited Lorain Cty. Bar Assn. v. Smith, Slip Opinion No. 2016-Ohio-7469.

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