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Daily Court Reporter - News ‘Significant acts of dishonesty” lead to indefinite suspension of attorney

 

‘Significant acts of dishonesty” lead to indefinite suspension of attorney

Dan Trevas, Supreme Court of Ohio

The Ohio Supreme Court recently indefinitely suspended a Columbus attorney who deliberately made false statements during legal proceedings, disobeyed rules in multiple courts, and engaged in dishonest conduct throughout his disciplinary proceedings.

In a 4-3 decision the Supreme Court suspended Kenneth R. Donchatz from the practice of law. The per curiam decision stated that Donchatz violated the rules governing Ohio attorneys in four separate matters, including two instances where he filed entries to conclude court proceedings in ways favorable to him without the authorization of the opposing attorney.

The three dissenting justices indicated they would have accepted a Board of Professional Conduct proposal to suspend Donchatz for two years, with six months stayed on conditions.

In the decision, the Court relied on a prior decision that held lawyers have diminished First Amendment protections during the course of a judicial proceeding; and can be subject to punishment for making malicious statements about judicial officers. The Court extended that rule to statements about lawyers or court officers during judicial proceedings.

In the decision, the Court also announced its previous ruling that the First Amendment does not protect lawyers from punishment for making malicious statements about judicial officers. Its ruling also applies to statements about lawyers or court officers during official proceedings. Donchatz was accused of defaming of an opposing attorney.

Court Told Judgment Paid When It Was Not

The Cleveland Metropolitan Bar Association filed a complaint with the professional conduct board against Donchatz for multiple rule violations.

In 2010, the Davey Tree Expert Company obtained a default judgment against Donchatz for unpaid bills, and without confirming that the judgment amount was paid and without receiving authorization from Davey Tree, Donchatz filed a satisfaction of judgment notice in Franklin County Municipal Court.

Davey Tree’s attorney told Donchatz the bill was not paid and asked him to withdraw the satisfaction of judgment. Donchatz confirmed the judgment had not been paid, but did not withdraw his filing. Later the municipal court reinstated the judgment. Almost three years after the initial ruling against Donchatz, he asked the court to reconsider, which the court denied. In 2014 he paid the judgment as well as additional sanctions issued by the court.

The board found Donchatz violated several rules by his actions including knowingly making a false statement to a court, bringing a proceeding that is unsupported by law or a good faith argument to modify the law, and engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.

Client Made $100,000 Loan, Then Fee Disputed

In 2007 Donchatz began to represent a friend, Linda Cracknell, in the dissolution of a family partnership. Although there was no written fee agreement, Cracknell and Donchatz agreed there would be no fee, and Cracknell testified that when she offered to pay for his representation, Donchatz told her, “Don’t worry about it.”

However in 2013, Donchatz sent Cracknell an email inquiring about his fee. He also accepted an antique desk and a $100,000 loan from her. He did not provide Cracknell with a required written notice, which would advise of the potential conflict of interest from the deal and encourages the client to seek out independent representation from another attorney before making the loan. He also did not provide her with a written notice of the loan terms that she requested.

Five years after the loan was made, Cracknell agreed to accept $57,000 and the return of the desk as repayment. Based on Donchatz’s admission that he did not provide the written notices, the board found he violated the rule prohibiting a lawyer from entering into a business transaction with a client without providing the required written notices, and failed to communicate the rate he charged for fees and expenses within a reasonable time after being hired.

Attorney Charges Donchatz Lied About Her

Donchatz represented attorney Carol Hampton in a disciplinary hearing, in which Hampton testified that she met three times with J.T. Holt, the lawyer representing the person who filed a grievance against her. She said Holt tape-recorded the three meetings.

The grievance against Hampton was handled by assistant disciplinary counsel Karen Osmond who provided Donchatz with two recorded conversations between Holt and Hampton. When asked for the third recording, Osmond contacted Holt and later told Donchatz that Holt denied making three. She then gave Donchatz Holt’s phone number and invited him to verify directly with Holt that there was no third recording.

The next day, Donchatz filed a motion in limine asking a board hearing panel considering Hampton’s case to drop a charge against her. Donchatz reasoned that the recording of the third meeting would prove Hampton was innocent and he alleged that Osmond “knows without a doubt that a recording exists,” and it contains statements that would exonerate Hampton. His motion stated that Osmond was choosing to hide “behind a discovery rule rather than making sure that justice is fulfilled in this case.”

Osmond responded by stating Donchatz statements about her were “just false” and that in his effort to get the charge dismissed he failed to inform the hearing panel that Osmond investigated the alleged third recording and did not locate it, told Donchatz it did not exist, and gave Donchatz the opportunity to investigate for himself.

The board found rules violations in Donchatz’s representation of Hampton, including filing a motion that contained false statements and misrepresentations. Donchatz objected to the finding and argued that he had a reasonable basis for his allegations based on conversations with Hampton and her son, who believed the conversation was taped. He also argued that his statements were opinions and protected by the First Amendment of the U.S. Constitution.

The Court’s opinion noted the First Amendment protects attorneys as it would any other citizen, except when the attorney is acting in some professional capacity when the speech occurs. The Court acknowledged that lawyers in pending cases are subject to ethical restrictions on speech, and that narrow restrictions on their speech are justified when that speech is highly likely to obstruct or prejudice the administration of justice.

In its 2003 Disciplinary Counsel v. Gardner decision, the Court developed a standard to determine if a lawyer’s statements during a judicial proceeding about a judicial officer were made with “knowledge or reckless disregard of their falsity.” The Court extended that standard to statements made about other lawyers and court officers during the course of judicial proceedings.

The Court will consider what a “reasonable attorney” would do in a similar circumstance and “whether the attorney had a reasonable factual basis for making the statement.”

The board found Donchatz’s evidence that the third recording was far from certain and noted that he tried once to contact Holt, not using the phone number provided by Osmond, but another given to him by his client, and did not make any other attempts to discuss the recording directly with Holt.

It ruled that no reasonable attorney would have alleged that Osmond was “fully aware” of the evidence or would shift the blame for his own failure to discover the information by “impugning the integrity of an assistant disciplinary counsel, the office of disciplinary counsel, and the entire disciplinary process.”

Judgment Requested From Court Without Informing Other Party

While a member of a law firm, Donchatz represented Leader Technologies Inc., and its principal Michael McKibben. The firm later initiated legal action against Leader and McKibben for unpaid attorney fees, and when the law firm dissolved, Donchatz set up Recovery Funding LLC and continued to pursue the unpaid fees.

The matter was referred to mediation with a magistrate assigned to mediate. The parties reached an agreement on the amount of the attorney fees but were unable to resolve several other issues. Donchatz then circulated a draft “stipulated entry and consent judgment.” Neither Leader or McKibben consented to the terms of Donchatz’s document and without any direction from the magistrate, Donchatz submitted the document to the judge assigned to the case. The document did not indicate it was a draft or proposal and did not mention that other issues remained unresolved.

The judge adopted the consent judgment and terminated the case, prompting McKibben and Leader’s attorney to request the Donchatz withdraw the document. The attorney sent an email to Donchatz warning him that if he did not withdraw it, he would file a disciplinary complaint against Donchatz. Donchatz refused to withdraw the document and filed a response opposing Leader and McKibben’s objection to the entry.

The trial court ultimately vacated the consent judgment, finding the parties had not settled the matter, and that the entry was signed in error.

The professional conduct board found that Donchatz violated several rules by filing the entry. Donchatz opposed, arguing that on the advice of his attorney, he believed his submission to the trial court complied with the local rules for Franklin County courts. The rule he cited indicated that the attorney for a party in whose favor a “decision, order, decree or judgment is rendered” can prepare a journal entry and submit it to the attorney for the opposing party. The other attorney has three days to approve or reject the proposal. If the attorney approves, the entry will be signed by the trial judge, and if the attorney rejects it, the trial judge will decide what the entry will state.

The board found the rule did not apply because there was no decision in Donchatz’s favor, and that he made a false statement to the court when he testified the magistrate told him to circulate a stipulated entry and consent judgment. The attorney for Leader and McKibben testified that the mediator instructed Donchatz to put his settlement proposal in writing, and the board believed the opposing attorney’s version of the dispute.

Court Weighs Factors When Determining Sanction

In developing a recommended sanction, the board considered mitigating factors, including the absence of any prior discipline of Donchatz and the court order to pay Davey Tree’s judgment and attorney fees. The board also considered aggravating circumstances, and found Donchatz committed multiple offenses, refused to accept responsibility for his misconduct, and acted with a selfish motive because he “repeatedly and intentionally” failed to withdraw court filings calculated for his personal advantage. The board also found he caused damage to his clients and his profession.

The board noted that Donchatz’s response to each of the four counts lacked credibility and called his integrity into question. The bar association that brought the complaint asked the board to propose an indefinite suspension, while Donchatz argued for a suspension that would be fully stayed. The board proposed a two-year suspension with six months stayed on the condition that he not engage in further misconduct.

The Court noted in its past rulings it “will not allow attorneys who lie to courts to continue practicing law without interruption.” The opinion stated the Court acknowledged that Donchatz submitted 16 letters attesting to his honesty, compassion, zealous representation, and voluntary service through the Ohio Center for Law-Related Education. But it noted that only four of the letter writers indicated they were aware of the serious ethical charges pending against Donchatz and the mitigating effect of the letters do not overcome the other aggravating factors.

“As a result of the significant acts of dishonesty at the heart of three of the four counts of relator’s amended complaint, and the false and contradictory statements that Donchatz has made throughout the disciplinary process, we find that the sanction recommended by the board will not adequately protect the public from future harm,” the opinion stated.

Chief Justice Maureen O’Connor and Justices Terrence O’Donnell, Patrick F. Fischer, and R. Patrick DeWine joined the majority opinion.

Justices Sharon L. Kennedy, Judith L. French, William O’Neill dissented, indicating they would have accepted the board’s proposed two-year suspension with six months stayed.

2016-0859. Cleveland Metro Bar Assn. v. Donchatz, Slip Opinion No. 2017-Ohio-2793.

Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion, but only for noteworthy cases. Opinion summaries are not to be considered as official headnotes or syllabi of court opinions. The full text of this and other court opinions are available online.

Date Published: May 29, 2017

 

Supreme Court of Ohio

 

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