Shimko v. Lobe

813 N.E.2d 669, 103 Ohio St. 3d 59
CourtOhio Supreme Court
DecidedAugust 25, 2004
DocketNo. 2003-1017
StatusPublished
Cited by32 cases

This text of 813 N.E.2d 669 (Shimko v. Lobe) 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
Shimko v. Lobe, 813 N.E.2d 669, 103 Ohio St. 3d 59 (Ohio 2004).

Opinions

Alice Robie Resnick, J.

{¶ 1} This is an appeal from a judgment upholding the constitutionality of DR 2-107(B), which requires that disputes over the division of fees between lawyers who are not in the same firm be resolved in accordance with mediation or arbitration proceedings provided by a local bar association or, when necessary, by the Ohio State Bar Association.

{¶ 2} The cause emanates from a dispute between plaintiff-appellant, Timothy A. Shimko, and defendant-appellee Thomas G. Lobe, both of whom are admitted [60]*60to practice law in Ohio. The dispute centers on the terms of an oral agreement with regard to the division of legal fees for litigation in California.

{¶ 3} On September 19, 1995, Lobe wrote to defendant-appellee Cleveland Bar Association (“CBA”), requesting that the dispute be “set down for mandatory and binding Arbitration.” Lobe’s request was made pursuant to the Bylaws and Rules of the Division of Fees Mediation and Arbitration Committee, which were adopted by the CBA’s Board of Trustees on September 25, 1992, to implement DR 2-107(B). Under the committee’s bylaws, “any decision rendered by a sole arbitrator or an arbitration panel is final and binding.”

{¶ 4} In a letter dated September 29, 1995, Shimko opposed Lobe’s request for arbitration on the grounds that Lobe had failed to allege sufficient facts to invoke the committee’s jurisdiction. On December 8, 1995, the committee’s secretary notified the parties that the committee was accepting jurisdiction and recommended that Lobe file the requisite petition. Lobe then submitted a formal petition for arbitration.

{¶ 5} Shimko commenced this action in 1996 by filing the first of two complaints for declaratory judgment in the Franklin County Court of Common Pleas against Lobe, CBA, and defendant-appellee Ohio State Bar Association (“OSBA”) (case No. 96CVH02-1206). In that complaint, Shimko sought a declaration that DR 2-107(B) violates several provisions of the Ohio and United States Constitutions and, therefore, is invalid and unenforceable. Finding that “[t]he practice of law is a privilege granted by the Supreme Court to those persons * * * who agree to be bound by the rules of the profession” and that the “regulation of * * * fee disputes is a proper function of the Court in its superintendence of the Bar,” the trial court held that DR 2-107(B) “does not violate the Plaintiffs rights existing under the Constitutions of the State of Ohio and the United States.”

{¶ 6} The court of appeals affirmed the trial court’s judgment, except to the extent that it had decided the issue of whether DR 2-107(B) deprives Shimko of his right to a jury trial as guaranteed by Section 5, Article I of the Ohio Constitution without having made a factual determination of reasonableness. Espousing the proposition that “ ‘[n]o one has an absolute right to practice law, and the State may impose reasonable conditions and limitations upon those who wish to exercise that privilege,’ ” the majority of the court of appeals framed the determinative inquiry under Section 5, Article I in terms of whether DR 2-107(B) “is reasonable and, therefore, appellant should be bound by it.” Shimko v. Lobe (1997), 124 Ohio App.3d 336, 347, 706 N.E.2d 354, quoting Kelley Drye & Warren v. Murray Industries, Inc. (D.N.J.1985), 623 F.Supp. 522, 527. The appellate court believed, however, that it needed a “factual basis to assess the reasonableness of this rule” and, in accordance with that belief, remanded the cause to the [61]*61trial court “for a hearing to determine the reasonableness of the rule in * * * eliminating appellant’s right to a jury trial.” Id. at 347-348, 706 N.E.2d 354.

{¶ 7} On February 20, 1998, Shimko’s cross-appeal to this court was dismissed for failure of prosecution. (1998), 81 Ohio St.3d 1450, 690 N.E.2d 545. On April 1, 1998, this court refused to accept appellees’ discretionary appeal. (1998), 81 Ohio St.3d 1502, 691 N.E.2d 1061. Shimko then dismissed his original action pursuant to Civ.R. 41(A).

{¶ 8} Shimko refiled his complaint on April 5, 1999. The second complaint (case No. 99CVH04-2793) essentially duplicated the first, with the addition of two new claims not involved in this appeal.

{¶ 9} On April 17 and 18, 2000, an evidentiary hearing was held before a magistrate in accordance with the earlier mandate from the court of appeals to determine the reasonableness of DR 2-107(B). In a decision filed September 13, 2000, the magistrate concluded that “DR 2-107(B) is a reasonable restriction on the practice of law, and therefore constitutional.” In so doing, the magistrate found that in compelling arbitration of fee disputes between lawyers, the rule serves to prevent the erosion of public confidence in the legal profession, particularly by “avoiding what many perceive as the tawdry spectacle of lawyers fighting over the carcass of a fee” and “helps to preserve the confidentiality of attorney-client communication and to preserve privileges.”

{¶ 10} In a decision dated August 13, 2001, the trial court adopted the magistrate’s decision over Shimko’s objections, with one minor modification as to a finding of fact.

{¶ 11} On Shimko’s appeal, the court of appeals affirmed all aspects of the trial court’s various rulings, concluding that “[bjased on the evidence presented at the [April 17, 2000] hearing * * * the compulsory arbitration and mediation provision of [DR 2-107(B) ] is a reasonable restriction on those who practice law in Ohio.” 152 Ohio App.3d 742, 2003-Ohio-2200, 790 N.E.2d 335, ¶ 32. Moreover, the court of appeals found that “attorneys admitted to the practice of law in Ohio, including [Shimko], agree to have a ‘dispute between lawyers arising under this rule’ submitted to mediation or arbitration. By doing so, they have waived the right to a jury trial in [cases involving such] fee disputes.” Id. The court also held that by providing for mediation or arbitration through bar associations, “[t]he Supreme Court has not unlawfully delegated judicial authority to resolve [such] fee disputes,” since the lawyer’s consent upon admission “to be bound [by] the Code of Professional Responsibility, including DR 2-107(B)’s provisions * * * gives the mediators or arbitrators their authority to resolve the fee disputes.”

{¶ 12} The cause is now before this court pursuant to the acceptance of a discretionary appeal.

[62]*62{¶ 13} In this appeal, Shimko proposes that DR 2 — 107(B) is unconstitutional for two reasons: (1) it denies attorneys the right to a jury trial as guaranteed by Section 5, Article I of the Ohio Constitution, and (2) it creates or delegates the power to create tribunals unauthorized by law.

{¶ 14} For the reasons that follow, we reject both these propositions and hold that DR 2-107(B) is a lawful exercise of this court’s inherent and plenary power to regulate, control, and define the practice of law in Ohio.

I

RIGHT OF TRIAL BY JURY

{¶ 15} Beginning with the adoption of Supreme Court Rule XXVI in February 1875, see 24 Ohio St.

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Cite This Page — Counsel Stack

Bluebook (online)
813 N.E.2d 669, 103 Ohio St. 3d 59, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shimko-v-lobe-ohio-2004.