Michigan Attorney Who Reported His Violations Indefinitely Suspended
The Ohio Supreme Court today indefinitely suspended a Michigan man who reported to authorities that his failing health led to his inability to provide the services he promised Ohio clients.
In a unanimous per curiam decision, the Supreme Court ruled that Charles R. Smith III of Ann Arbor needs to pay back nearly $37,000 to former clients and take other steps if he ever intends to practice law again in Ohio.
Smith Never Followed Through on Client Bankruptcy Filings
Smith, who spent most of his legal career with other businesses, opened a solo practice in 2008 in Sandusky focusing on bankruptcy law. In February 2014, he notified the Office of Disciplinary Counsel that his deteriorating health caused him to close his practice, and that many of his clients paid in advance for legal fees and court costs. He stated he could not immediately complete the work or refund their money.
Soon after, former clients began filing grievances against Smith with the Erie-Huron Bar Association. The bar association discovered 43 separate matters where clients paid Smith to file bankruptcy petitions, but he failed to do so or refund their money. Smith and the bar association agreed that he owed $36,800 to those clients and that he violated several rules governing attorneys, including failing to act with reasonable diligence in representing a client; not holding a client’s funds in interest-bearing accounts; withdrawing legal fees and expenses from a client trust account before earning the fees or paying the expenses; and failing to promptly return any unearned fees.
The bar association presented Smith’s actions to the Board of Professional Conduct, which found that Smith’s clients were vulnerable and harmed because they were relying on Smith to protect them from creditors. The board acknowledged that Smith reported his troubles to disciplinary counsel, and believed that his physical health caused him to close his practice. But the board noted that Smith did not provide any substantiating medical evidence to demonstrate his health condition led to his failing to serve his clients.
The Court stated that while misappropriation of client funds have led it to disbar attorneys, Smith’s actions are similar to other attorneys who received indefinite suspensions for rule violations. The opinion noted that Smith had no prior discipline in his lengthy career, admitted his conduct, and helped determine the amount he still owes each client.
The Court ruled that if Smith wants to be reinstated, he must make full restitution of the $36,800 he owes the clients, not commit any more misconduct, obtain a passing score on a professional-responsibility exam, and complete 12 hours of continuing education on law office management. If reinstated, Smith would be subjected to two years of monitored probation.
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