Lorain County Bar Association v. Nelson.
152 Ohio St. 3d 222
| Ohio | 2017Background
- In 2015 respondent Kenneth A. Nelson II accepted a $10,000 cash fee to represent Efren Vega in federal criminal charges; Nelson treated it as a "flat fee earned on receipt" and kept it in a personal lockbox rather than a client trust account.
- Vega discharged Nelson about two weeks after retention; Nelson acknowledged some work done but did not provide a written notice at time of fee collection that unearned portions might be refundable, nor did he notify clients in writing that he lacked malpractice insurance.
- Vega's girlfriend, Linda Sanchez, sought a refund; after months without one she filed a grievance. Nelson delayed responding to multiple relator inquiries and did not formally reply until March 2016, the day after refunding $9,000.
- The Board found Nelson violated several Professional Conduct rules (including 1.4(c), 1.5(d)(3), 1.15(c), 1.16(e), and rules requiring cooperation with disciplinary investigations) and recommended a two-year suspension with 18 months stayed.
- The Supreme Court agreed, finding Nelson failed to comply with flat-fee and trust-account rules and failed to cooperate; it imposed a two-year suspension with 18 months stayed, required CLE in law-office management, and one year monitored probation on reinstatement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Nelson violated Prof.Cond.R.1.5(d)(3) and mishandled client funds | Relator: Nelson charged a flat/"earned on receipt" fee without the required written notice and kept client funds out of trust | Nelson: He "effectively" gave notice orally upon discharge and therefore fee could be retained outside trust | Held: No — oral notice after discharge fails to satisfy rule; funds should have been in trust; violation proven |
| Whether Nelson violated Prof.Cond.R.1.15 (trust-account & recordkeeping) | Relator: Keeping $10,000 in a home lockbox and failing monthly reconciliations breached trust-account rules | Nelson: Treats fee as earned; argues limited weight since he intended refund | Held: Violation proven — portion unearned, funds not properly safeguarded or recorded |
| Whether Nelson failed to cooperate with disciplinary investigation | Relator: Nelson ignored multiple inquiries and delayed formal response for months | Nelson: Treated matter as a fee dispute and sought private resolution | Held: Violation proven — duty to timely respond independent of fee-dispute belief |
| Appropriate sanction (suspension length and stay conditions) | Relator/Board: Two-year suspension, 18 months stayed, with conditions due to second offense and failure to cooperate | Nelson: Fully stayed one-year suspension adequate given refund and eventual cooperation | Held: Two-year suspension with 18 months stayed; actual six months required; CLE and monitored probation imposed |
Key Cases Cited
- Lorain Cty. Bar Assn. v. Nelson, 144 Ohio St.3d 414 (2015) (prior public reprimand for similar conduct)
- Columbus Bar Assn. v. McCord, 150 Ohio St.3d 81 (2016) (explains when advance fees are lawyer property if rule conditions met)
- Dayton Bar Assn. v. Scaccia, 141 Ohio St.3d 35 (2014) (one-year suspension, six months stayed for similar trust-account and flat-fee violations)
- Disciplinary Counsel v. Summers, 131 Ohio St.3d 467 (2012) (actual suspension for noncompliance with flat-fee notice, failure to refund, and dishonesty)
- Dayton Bar Assn. v. Washington, 143 Ohio St.3d 248 (2015) (fully stayed suspension where strong mitigation, restitution, and cooperation existed)