Login | September 25, 2024
Attorney suspended for paying own expenses with client’s settlement funds
DAN TREVAS
Supreme Court
Public Information Office
Published: September 24, 2024
The Supreme Court of Ohio recently suspended a Cuyahoga County attorney for two years, with 18 months stayed, based partly on his felony conviction for using his client’s settlement funds to pay his own expenses.
In a per curiam opinion, the Supreme Court suspended Robert Smith III of Beachwood. The Court found Smith violated several professional conduct rules when he withheld for two years the settlement funds he received for a client, and for misappropriating money he owed to a medical center that treated many of his clients.
Justices Patrick F. Fischer, R. Patrick DeWine, Michael P. Donnelly, Melody Stewart, and Joseph T. Deters joined the opinion. Chief Justice Sharon L. Kennedy concurred in part and dissented in part and would impose an indefinite suspension. Justice Jennifer Brunner did not participate in the case.
Second Conviction Leads to Additional Sanction
The Cleveland Metropolitan Bar Association filed a complaint against Smith in 2023 with the Board of Professional Conduct based on his most recent ethics violations. However, Smith was suspended 30 years ago after he was convicted in 1993 in federal court for theft of government property. He was suspended for two years and reinstated to the practice of law in 1995.
In 2014, Wilma Javey hired Smith to file a personal injury lawsuit against a Cincinnati area transit authority after she fell on a bus. Smith filed the lawsuit in March 2016. Nearly three years later, Javey agreed to settle the case for $12,000.
Smith deposited the settlement check into his client trust account. He then sent Javey a statement showing he was deducting $3,996 for his legal fees and another $840 in expenses. Javey told Smith she thought his fee was excessive and requested an itemized list of services he provided.
Smith sent her a list but did not give her any of the settlement. She filed a grievance against him. In April 2021, more than two years after the settlement, Smith agreed to waive his fee and provided Javey the full $12,000.
In the interim, authorities investigated the use of Javey’s funds while in Smith’s client trust account. Smith admitted the account balance dropped below the amount he proposed to pay to Javey. The settlement money was used during those two years to pay Smith’s business and personal expenses.
He was indicted in January 2022 for grand theft for retaining her settlement and spending it for his own purposes. He pleaded guilty to fourth-degree felony theft and was accepted into a diversion program that allowed him to avoid incarceration. He was placed on one year of community control.
Lawyer Withholds Payments to Medical Center
When representing injured clients, Smith often referred them to Chagrin Medical Center. Smith made arrangements with the center’s owner to delay the billing for the client’s treatment until after the cases were settled. In 2020, Chagrin was awaiting payment for 10 of Smith’s clients.
In the meantime, Smith settled the cases of four clients who owed money to the medical center, two in 2017 and one each in 2018 and 2019. Instead of paying the client charges owed to Chagrin from the settlements, Smith kept the money. The center’s owner filed a grievance against Smith in 2020. In April 2021, Smith paid Chagrin $10,108 to cover the costs of the four clients’ treatments.
Smith admitted he did not have the money in the client trust account to pay Chagrin promptly after those settlements because he used the funds for his business and personal expenses. Smith was asked to explain at his disciplinary hearing why he misappropriated the funds. He responded that he “guessed” it was out of desperation, and he was “trying to stay afloat.”
The bar association and Smith stipulated, and the board agreed, that Smith violated several rules, including failing to keep client funds separate from his own property, not promptly delivering funds to clients and others owed money, and engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.
The board recommended the Court suspend Smith for two years. Part of the reasoning was that Smith had previously been convicted of a crime and suspended in the 1990s. The bar association and Smith suggested that less emphasis be placed on a 30-year-old conviction. They proposed that he be suspended for two years with 18 months stayed under certain conditions and that he serve 18 months of probation monitored by another attorney if he is reinstated to practicing law.
The Court found the partially stayed suspension was appropriate. In addition, Smith must complete six hours of continuing legal education on managing a law office and client trust account, and he must not commit any further misconduct. If reinstated, he must serve 18 months of monitored probation with an attorney who will aid him in adopting and implementing policies and practices to ensure he complies with professional conduct rules.
The Court also charged Smith with the costs of the disciplinary proceedings.
The case is cited 2023-0708. Cleveland Metro Bar Assn. v. Smith, Slip Opinion No. 2024-Ohio-4502.