2018 Ohio 3268
Ohio2018Background
- Neal H. Magee II drafted the Bruce Family Revocable Living Trust (2008) and was later appointed guardian of William Bruce’s property and successor trustee by a Delaware chancery court (2010). The court required inventories and annual audited accountings and set trustee fees at 1% annually, authorizing legal fees only to specified counsel.
- While serving as trustee and guardian, Magee transferred large sums from trust accounts to his personal accounts (hundreds of thousands of dollars), paid himself unauthorized trustee and attorney fees, and amended the trust (adding his children as successor trustees and changing distribution terms) without chancery-court approval after Bruce was adjudicated incompetent.
- Beneficiaries (Nationwide Children’s Hospital Foundation and Goucher College) demanded accountings; Magee provided incomplete or fabricated documentation, failed to comply with court orders, and engaged in transactions conveying trust-related West Virginia property to himself as executor.
- A probate court ordered a forensic accounting and restitution; the forensic accountant found unauthorized withdrawals and many undocumented transactions. Magee failed to comply fully with court orders and paid only partial amounts ordered for accounting and fees.
- The Columbus Bar Association charged Magee with multiple Rules of Professional Conduct violations; the Board of Professional Conduct found numerous ethics breaches (misappropriation, falsification, disobedience of tribunal orders, lack of diligence, conflict of interest, failure to cooperate). The board recommended permanent disbarment and restitution totaling $312,899.47.
- The Ohio Supreme Court adopted the board’s findings, ordered aggregate restitution ($312,899.47 broken down to successor trustee, beneficiaries, counsel, and accountants), and permanently disbarred Magee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Misappropriation of trust funds / trustee duty breaches | Magee misappropriated trust funds, paid himself unauthorized fees, and failed to account for transfers. | Magee disputed none of the stipulated facts; implied defenses included asserted POA authority to amend trust. | Court found misappropriation and unauthorized self-payments; misconduct proven; disbarment warranted. |
| Unauthorized amendment of trust and conflict of interest | Amendment was self-serving after grantor incompetency and without court approval, creating a material conflict. | Magee claimed power-of-attorney authority to amend trust. | Court held amendment was improper given incompetency and lack of court approval; conflict and self-dealing established. |
| Falsification/concealment and disobedience of tribunal orders | Magee submitted fabricated statements, concealed transactions, and disobeyed chancery and probate orders to provide accountings. | Magee largely failed to contest stipulated documentary evidence and did not comply or explain omissions. | Court found falsification, concealment, and disobedience of tribunal orders; violations of multiple professional rules. |
| Failure to cooperate with disciplinary investigation | Magee ignored subpoenas, failed to produce records, and delayed responses. | No effective cooperative response; late production only at deposition. | Court found violations of cooperation rules and used lack of cooperation as aggravating factor. |
Key Cases Cited
- Cleveland Bar Assn. v. Dixon, 95 Ohio St.3d 490, 769 N.E.2d 816 (2002) (misappropriation of client funds carries presumptive sanction of disbarment)
- Cincinnati Bar Assn. v. Sanz, 128 Ohio St.3d 373, 944 N.E.2d 674 (2011) (attorney permanently disbarred for misappropriating trust funds and failing to account)