Mahoning County Bar Ass'n v. Ruffalo

176 Ohio St. (N.S.) 263
CourtOhio Supreme Court
DecidedMay 20, 1964
DocketD. D. No. 57
StatusPublished

This text of 176 Ohio St. (N.S.) 263 (Mahoning County Bar Ass'n v. Ruffalo) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mahoning County Bar Ass'n v. Ruffalo, 176 Ohio St. (N.S.) 263 (Ohio 1964).

Opinions

Per Curiam.

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 Buffalo, 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, “the 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 [264]*264should 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 misconduct * * *.

( i * # #

“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. * * #

“A loan is not a purchase. So long as there is an agreement that the money is a debt and is to be repaid irrespective of the outcome of the case, it is nonsense to claim that the loan or advance amounts to the purchase of an interest in the litigation. Indeed, a contingent fee contract with an assignment to the lawyer (the recovery of which is wholly dependent upon the outcome) comes much closer to the prohibition in this canon [No. 10] than the simple loan or advancement of money. Yet such a fee contract is perfectly valid in the state of Ohio and has been upheld by the courts of Ohio in litigation involving-lawyers’ claims based upon such contracts. Roberts v. Montgomery, 115 Ohio St., 502, Scheinesohn v. Lemonek, 84 Ohio St., 424, and Cleveland Ry. Co. v. Godfrey, 28 O. L. R., 466 * * *." 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 [265]*265“living expenses * * * during the period between the filing of and the trial or disposal of the ease.” 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 Ke~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), Scheinesohn v. Lemonek, supra (84 Ohio St., 424), Cleveland Ry. Co. v. Godfrey, supra (28 O. L. R., 466), and Reece v. Kyle (1892), 49 Ohio St., 475, 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 [266]*266cases. 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:

“ ‘We worked on that basis for the particular reason that we didn’t want this man to be accused of exactly what he was accused of, which he wasn’t doing and which he did not do, but the fact was that I was trying to protect him. He was trying to help me as an investigator. He had certain knowledge, certain abilities that I needed, and I was trying to protect him, and that was the reason that we worked this thing out this way. With any other person that has ever done any work for me * * * I have paid him by check, but particularly for security reasons for this man, that was the reason we worked it this way. ’

“Later respondent testified that he had no record of payments made to Orlando on his books.

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Related

People Ex Rel. Chicago Bar Ass'n v. McCallum
173 N.E. 827 (Illinois Supreme Court, 1930)
Roberts v. Montgomery
154 N.E. 740 (Ohio Supreme Court, 1926)

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Bluebook (online)
176 Ohio St. (N.S.) 263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mahoning-county-bar-assn-v-ruffalo-ohio-1964.