[This opinion has been published in Ohio Official Reports at
83 Ohio St.3d 314.]
OFFICE OF DISCIPLINARY COUNSEL v. EWING.
[Cite as Disciplinary Counsel v. Ewing, 1998-Ohio-286.]
Attorneys at law—Misconduct—Disbarment—Engaging in conduct involving
dishonesty, fraud, deceit, or misrepresentation—Engaging in conduct
prejudicial to the administration of justice—Engaging in conduct adversely
reflecting on fitness to practice law—Disregarding the ruling of a tribunal.
(No. 98-715—Submitted May 27, 1998—Decided September 30, 1998.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 97-5.
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{¶ 1} On October 14, 1997, relator, Office of Disciplinary Counsel, filed an
amended complaint charging that respondent, Charles W. Ewing of Amlin, Ohio,
Attorney Registration No. 0025146, had violated several Disciplinary Rules while
acting as counsel for two real estate companies. Respondent filed an answer, and
the matter was submitted to a panel of the Board of Commissioners on Grievances
and Discipline of the Supreme Court (“board”), which made the following findings
of fact.
{¶ 2} On July 21, 1991, the state of Ohio filed a complaint and motion for
preliminary and permanent injunctions in common pleas court against American
Real Estate Cooperatives, CMH, Inc. (“ARC-O”), and a related company for their
violations of the Ohio Consumer Sales Practices Act. By a consent order of August
29, 1991, later modified on October 16, 1991, the parties agreed to a preliminary
injunction under which the companies would deposit into a “performance guaranty
fund” seventy-five percent of all funds which came into their possession as a result
of real estate closings until the case was resolved, and that further, the companies
would not transfer assets of any kind without an order of the common pleas court.
SUPREME COURT OF OHIO
{¶ 3} In April 1992, in a separate case, the court entered a judgment of
$11,000 against ARC-O in favor of a former realtor of the company. Because there
might be a conflict between the cases, the attorneys for the state, and respondent,
who was then representing the companies, agreed that the companies would deposit
their funds, including the performance guaranty fund, into respondent’s trust
account until the conflict could be resolved.
{¶ 4} On May 18, 1992, just before the trial in the suit brought by the state
was about to begin, ARC-O filed a Chapter 11 case in the United States Bankruptcy
Court for the Southern District of Ohio. Both the common pleas judge and the
bankruptcy judge ruled that the automatic stay provisions of the Bankruptcy Code
did not prevent the state’s lawsuit from proceeding. Ultimately, the suit resulted in
a $122,000 judgment against the companies, which was affirmed by the court of
appeals.
{¶ 5} Early in July 1992, at the Section 341 hearing in the Chapter 11 case,
the state discovered that respondent had totally disbursed the funds in the trust
account. By letter in July, the state asked for an accounting with respect to the trust
account. Respondent did not answer. Again, in August, the state asked for an
accounting, threatening a contempt action against the company and against
respondent if the accounting was not forthcoming. At the last moment respondent
provided an accounting, which indicated that all the funds in the trust account had
been disbursed. Without common pleas court or bankruptcy court authorization,
between March and August 1992, respondent had distributed more than $40,000
from the trust account, including $10,000 as his retainer for the Chapter 11
proceedings and $600 for the bankruptcy court filing fee.
{¶ 6} Respondent’s position was that of the funds in the trust account,
twenty-five percent or $10,000 could be paid to him as a retainer for filing the
Chapter 11 case, and the balance of the funds could be used by the company.
However, in the order appointing respondent as counsel to the company as debtor-
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January Term, 1998
in-possession in the Chapter 11 case, the bankruptcy judge specifically struck out a
proposed paragraph allowing respondent to compensate himself without prior court
approval. When converting the Chapter 11 reorganization case to a Chapter 7
bankruptcy case over a year later, the bankruptcy judge noted that with respect to
the money in respondent’s trust account, “it is highly irregular, given the
outstanding state court order, to utilize these funds without some disposition from
this Court. The Debtor has only recently sought some determination from this
Court, after the funds have been expended.”
{¶ 7} The state obtained an order from the common pleas court, finding the
company and respondent in contempt for disbursing the funds and further finding
them jointly and severally liable to the trust account in the amount of $40,000.
After the common pleas court decision, respondent filed a motion in the bankruptcy
court seeking to void any action of the common pleas court and any action to
enforce the threatened contempt action. The bankruptcy judge, however, issued an
“Order of Abstention” allowing the matter to proceed in the state courts. The court
of appeals ultimately affirmed the judgment of the common pleas court.
{¶ 8} The panel concluded that by disbursing money from the ARC-O trust
funds in his hands, respondent violated DR 1-102(A)(4) (engaging in conduct
involving dishonesty, fraud, deceit, or misrepresentation), (5) (engaging in conduct
prejudicial to the administration of justice), (6) (engaging in conduct adversely
reflecting upon the attorney’s fitness to practice law), and 7-106(A) (disregarding
the ruling of a tribunal). The panel noted that in mitigation, respondent presented
his position that by the filing of the Chapter 11 proceeding in the bankruptcy court,
Sections 542 and 543 of the Bankruptcy Code required that he pay the funds on
hand to the company. The panel said that these issues had been determined
adversely to respondent by the ruling of the court of appeals in the contempt case.
{¶ 9} The panel further noted that respondent had previously received a sixmonth suspension in Columbus Bar Assn. v. Ewing (1992), 63 Ohio St.3d 377, 588
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N.E.2d 783, and an indefinite suspension in Columbus Bar Assn. v. Ewing (1996),
75 Ohio St.3d 244,
661 N.E.2d 1109, and recommended that respondent be
disbarred from the practice of law in Ohio. The board adopted the findings,
conclusions, and recommendation of the panel.
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Jonathan E. Coughlan, Disciplinary Counsel, and Harald F. Craig III,
Assistant Disciplinary Counsel, for relator.
Charles W. Ewing, pro se.
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Per Curiam.
{¶ 10} We adopt the findings and conclusions of the board. Orders entered
both by the common pleas court and the bankruptcy court specifically prohibited
respondent from disbursing legal fees to himself from the trust funds. The order of
August 29, 1991 as modified on October 16, 1991 provided that the company would
not transfer assets without order of the common pleas court. In entering his 1992
order appointing respondent as counsel in the Chapter 11 case, the bankruptcy judge
specifically deleted a paragraph which would have allowed respondent to
compensate himself without prior court approval. Respondent therefore knew that
the funds he held in his trust account could not be disbursed either to himself as
legal fees or to the company for operating expenses without authorization from
either the common pleas court which established the fund or the bankruptcy court
which controlled the financial reorganization of ARC-O. Nevertheless, respondent
chose to violate the orders of both courts.
{¶ 11} We agree with the board’s recommendation. Respondent is hereby
disbarred from the practice of law in Ohio. Costs taxed to respondent.
Judgment accordingly.
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and
LUNDBERG STRATTON, JJ., concur.
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January Term, 1998
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