Disciplinary Counsel v. Darling (Slip Opinion) , 2022 Ohio 870 ( 2022 )

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Disciplinary Counsel v. Darling, Slip Opinion No. 2022-Ohio-870.]
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SLIP OPINION NO. 2022-OHIO-870DISCIPLINARY COUNSEL v. DARLING.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Disciplinary Counsel v. Darling, Slip Opinion No.
2022-Ohio-870.]
Attorneys—Misconduct—Violations of the Rules of Professional Conduct, including
failure to safeguard a client’s settlement funds and making false statements
to his client about the status of those funds, misdemeanor theft conviction
for passing bad checks, and dishonest conduct during the ensuing
disciplinary proceedings—Indefinite suspension from the practice of law.
(No. 2021-1232—Submitted November 10, 2021—Decided March 24, 2022.)
ON CERTIFIED REPORT by the Board of Professional Conduct of the Supreme
Court, No. 2020-034.
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Per Curiam.
{¶ 1} Respondent, Stephen Michael Darling, of Columbus, Ohio, Attorney
Registration No. 0080930, was admitted to the practice of law in Ohio in 2006. In
a June 2021 amended complaint, relator, disciplinary counsel, charged Darling with
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eight ethical violations arising from his failure to safeguard a client’s personal-
injury settlement, false statements to his client about the status of those funds,
misdemeanor theft conviction for passing bad checks, and dishonest conduct during
the ensuing disciplinary proceedings.
{¶ 2} The parties entered into stipulations of fact, misconduct, and
aggravating and mitigating factors. After conducting a hearing, a three-member
panel of the Board of Professional Conduct accepted the stipulations of fact and
misconduct and made some additional findings. Citing the significant aggravating
factors present in this case, the panel recommended that we indefinitely suspend
Darling from the practice of law in Ohio, with certain conditions on his
reinstatement. The board adopted the panel’s findings of fact, conclusions of law,
and recommended sanction. No objections have been filed.
{¶ 3} We adopt the board’s findings of misconduct and recommended
sanction.
Misconduct
Count One: The Lusk Matter
{¶ 4} Joshua Lusk was injured in a car accident in October 2016. Later that
month, he retained Darling to represent him in his personal-injury claim. He signed
a contingent-fee agreement in which he agreed to pay Darling 20 percent of any
recovery. Darling faxed a letter of representation to the at-fault driver’s insurance
company, United Services Automobile Association (“USAA”).
{¶ 5} Before retaining Darling, Lusk had commenced chiropractic
treatment for his injuries. At Darling’s direction, Lusk informed the chiropractor’s
office that he was represented by counsel, directed the chiropractor to send all
record and billing statements to Darling, and agreed that his treatment would be
paid out of any settlement proceeds. Lusk completed his treatment in December
2016, at a cost of $8,835.
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{¶ 6} Lusk settled his personal-injury claim in May 2017, and USAA issued
a $14,000 check jointly payable to Lusk and Darling. Both Lusk and Darling
endorsed the settlement check and Lusk deposited it into his personal bank account.
In June 2017, Darling met with Lusk at Lusk’s home. At that time, Lusk wrote a
$12,000 check payable to Darling, with the understanding that Darling would take
his $2,800 legal fee, attempt to negotiate the balance due to the chiropractor, and
after paying the negotiated amount, return any remaining funds to Lusk.
{¶ 7} Darling did not prepare a closing statement setting forth the
distribution of the settlement funds. Nor did he maintain a client trust account.
Instead, he deposited Lusk’s check into his personal account at Huntington Bank.
Between June and November 2017, Lusk and his wife, Lillian Connors, contacted
Darling seeking the return of any excess funds.
{¶ 8} Darling misappropriated the funds earmarked to pay the chiropractor;
by October 5, 2017, his Huntington bank account had a balance of just $5,735.81.
In October, Darling sent Lusk a check for $482.40 drawn on Darling’s Park
National Bank account. On November 2, Darling sent Lusk another check for $500.
However, despite his agreement with Lusk, Darling failed to pay the chiropractor.
{¶ 9} On November 21, the chiropractor sent Darling a letter demanding
immediate payment in full and stating that attempts to reach him by telephone had
been unsuccessful. The letter further stated that if no payment arrangements were
made within ten business days, the account would be prepared for collection.
Darling did not respond to that letter and continued to misappropriate the funds to
pay personal expenses. By July 23, 2018, Darling’s Huntington bank account
contained just $209.20.
{¶ 10} In January 2019, the chiropractor sent Darling another letter
demanding payment. Darling again failed to respond. The following month, Lusk
received a letter notifying him that the chiropractor had sent the debt to collection.
Around that time, Connors, Lusk’s wife, emailed Darling to request all
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documentation regarding Lusk’s claim, the settlement, and payments that had been
made on Lusk’s behalf. On February 28, Darling replied that he was out-of-state
and requested the approximate dates of the matter, which Connors provided to him
later that day. Darling let Connors know that he would return to town the next day
and would “confirm upon arrival.”
{¶ 11} On March 1, Connors sent Darling an email to notify him that the
debt had been sent to collections. In his response, Darling stated that he would not
return to his office for another week, asked Connors to send the documents she had
received from the collection agency, and stated that he wondered “why this
suddenly came up years later.” Darling did not follow up with Connors when he
returned from his trip. But in response to a March 19 email from Connors, he stated
that he had looked at his old records and determined that the “insurer check was
made payable to [Lusk]” and that he had personally delivered the check to Lusk at
his home. He also asked for the documentation from the collection agency and
offered to “figure this out with them.”
{¶ 12} From March 21 through March 26, Connors, Lusk, and Darling
exchanged multiple emails. In response to Connors’s request for a “statement of
fees,” Darling stated that he only kept client files for 18 months. He reiterated that
he had a record of the check issued by USAA and that he recalled personally
delivering it to Lusk. Lusk responded and explained that while Darling had
delivered the check, Lusk had then issued a $12,000 check to Darling “to settle all
debts owed as a result of the accident and also deduct your fees, per [Darling’s]
instruction.” Lusk went on to state, “I need you to help me understand what
happened with the funds once it was entrusted to you. Something had to have been
done with it between then and November when you issued a ‘payout’ check to me.
I can’t understand why you would have paid me anything, had you not already been
paid yourself.” Darling replied, stating that he would “look again for any remaining
record of the fee statement.” He asked, “[I]s the issue what you got paid? Or the
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agency contacting you two years later? Just so I understand what I’m looking for.”
He then asked Lusk, “[D]o you have any idea what triggered this now and not 2+
years ago when the files still existed?”
{¶ 13} Connors responded to Darling, stating:
The settlement was $14K. $2K was kept by Josh to pain &
suffering. $12K of the settlement was paid to you to distribute
against the bills that were provided to you when the prescribed
treatment was concluded and to pay your fee [for] your services.
Either you didn’t pay the chiropractor, or, you did, and they did not
allocate it accordingly in their system. As far as we are concerned,
funds were provided with the expectation that they would be
distributed to clear all debts owed to the chiropractor per yours and
Josh’s agreement. We need you to prove that those payments
actually took place.
{¶ 14} Connors sent Darling copies of the $12,000 check and a bank
statement showing that the check had been cashed. Darling again offered to contact
the collection agency and asked Connors to send him all the documents so that he
could contact the chiropractor’s office. Connors declined Darling’s offer to contact
the collection agency and again requested documentation regarding the disposition
of the $12,000 entrusted to Darling.
{¶ 15} Connors also declined Darling’s request to speak with her and Lusk
by telephone, stating:
I do not feel that a conversation will be of any benefit to us
at this time. The remedy to the situation is cut and dry. Either you
paid * * * for the chiropractic care received with the proceeds from
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the settlement that I already paid you in June of 2017 or you did not.
I feel a direct answer with supporting documentation is a reasonable
request.
{¶ 16} Darling replied stating that he intended to obtain outside counsel,
that the case was a long time ago and that he was trying to help figure it out after
the file was destroyed. He further blamed Connors and Lusk for his failure to
resolve the matter, stating, “You asked for help yet you don’t want me to talk with
the parties directly involved. This does not make sense.” After exchanging several
more emails, Connors requested whatever paperwork Darling possessed. Darling
complied with that request approximately two weeks later. When Connors and
Lusk reviewed the paperwork, they discovered a copy of a malpractice-insurance
waiver that purportedly had been signed by Lusk—but Lusk denied having seen or
signed that document. Thereafter they filed a grievance with relator.
{¶ 17} Darling has stipulated that his response to relator’s letter of inquiry
regarding Lusk and Connors’s grievance contained at least four false statements of
fact. Darling falsely stated in his response that he had sent a letter to USAA on
May 17, 2017, directing the insurer to pay the chiropractor directly, when in fact,
he created that letter in response to relator’s letter of inquiry. Darling also falsely
stated that he “did not hold funds related to this matter at any point.” In addition,
he falsely claimed that he had incurred $1,913.30 in fees and expenses related to
Lusk’s representation. Lastly, Darling falsely claimed that he had sent $500 out of
his own pocket to Lusk in November 2017 “[a]s a professional courtesy and
because Mr. Lusk had a business relationship with a mutual friend.” Darling
refused to stipulate or admit that he had forged Lusk’s signature on the malpractice-
insurance waiver until immediately before his disciplinary hearing. In his
disciplinary-hearing testimony, Darling admitted that he was not honest with Lusk
and Connors and that he had attempted to convince them that he had paid the
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chiropractor knowing that he had misappropriated the funds earmarked for that
payment.
{¶ 18} Darling stipulated and the board found that his conduct violated
Prof.Cond.R. 1.5(c)(2) (requiring a lawyer entitled to compensation under a
contingent-fee agreement to prepare a closing statement to be signed by the lawyer
and the client detailing the calculation of the lawyer’s compensation and any costs
and expenses deducted from the settlement), 1.15(a) (requiring a lawyer to hold the
property of clients in an interest-bearing client trust account, separate from the
lawyer’s own property), 1.15(d) (requiring a lawyer to promptly deliver funds or
other property that a client or a third party is entitled to receive), 1.15(e) (requiring
a lawyer to promptly distribute all funds or other property as to which the interests
are not in dispute), 8.1(a) (prohibiting a lawyer from knowingly making a false
statement of material fact in connection with a disciplinary matter), and 8.4(c)
(prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit,
or misrepresentation). We adopt these findings of misconduct.
Count Two: Criminal Conduct
{¶ 19} In May 2020, Darling maintained an account at Park National Bank.
From May 7 through May 13, he deposited three checks into that account. On each
of the those checks, he had redacted the remitter information on each of those
checks and handwrote “7061 Post Preserve Dublin, Ohio 43016” in its place. The
first two checks for $1,495 and $1,850, were written on a closed account at Bank
of the Internet, and the third check, for $2,490, was written on a closed Huntington
Bank account. All three checks were returned by the issuing banks leaving
Darling’s account overdrawn by $4,250.21.
{¶ 20} In a November 9, 2020 bill-of-information, Darling was charged
with two counts of forgery, one count of passing bad checks, and one count of
theft—all fifth- degree felonies. On April 1, 2021, he pleaded guilty to the lesser
included offense of theft, a first-degree misdemeanor, and the remaining charges
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were dismissed. Darling was sentenced to 60 days in jail, suspended on the
condition that he pay $4,250.21 in restitution to Park National Bank and complete
40 hours of community service. He was also ordered to serve one year of probation
that was to terminate upon his payment of restitution and completion of community
service. Darling had made full restitution to the bank at the time of his sentencing
but had not completed his community service at the time of his disciplinary hearing.
{¶ 21} The parties stipulated that Darling’s actions related to his theft
conviction violated Prof.Cond.R. 8.4(b) (prohibiting a lawyer from committing an
illegal act that reflects adversely on the lawyer’s honesty or trustworthiness) and
8.4(c).
Recommended Sanction
{¶ 22} When imposing sanctions for attorney misconduct, we consider all
relevant factors, including the ethical duties that the lawyer violated, the
aggravating and mitigating factors listed in Gov.Bar R. V(13), and the sanctions
imposed in similar cases.
{¶ 23} The board found that five aggravating factors are present, namely
Darling (1) acted with a dishonest or selfish motive, (2) engaged in a pattern of
misconduct, (3) committed multiple offenses, (4) submitted false evidence, false
statements, or other deceptive practices during the disciplinary process, and (5)
failed to make restitution in accordance with his stated intentions at his disciplinary
hearing. See Gov.Bar R. V(13)(B)(2), (3), (4), (6), and (9).
{¶ 24} As for mitigating factors, the board found that Darling has no prior
discipline, that he had criminal penalties imposed with respect to count two, and
that he made full restitution in the criminal matter—though he has not made
restitution in the Lusk matter. See Gov.Bar R. V(13)(C)(1), (3) and (6).
{¶ 25} The parties also stipulated that Darling had made full and free
disclosure and exhibited a cooperative attitude toward the disciplinary proceedings
after relator filed his complaint. The board, however, gave that factor little
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mitigating weight because Darling’s hearing testimony was, at times, “evasive,
equivocal, or not completely forthright.” For example, the board noted that Darling
initially testified that he went into private practice because he was “ready to sort of
go out on my own and see what solo practice was like,” implying that he had
voluntarily left his employment with the State of Ohio Department of Commerce.
It was not until a panel member asked him whether he had left state employment
with “a cloud over [his] head” that Darling disclosed that he had been let go because
he was performing outside consulting work.
{¶ 26} In determining the appropriate sanction for Darling’s misconduct,
the board was guided by the principle that the primary purpose of disciplinary
sanctions is to protect the public rather than punish the offender. See, e.g.,
Disciplinary Counsel v. O’Neill, 103 Ohio St.3d 204, 2004-Ohio-4704, 815 N.E.2d
268, ¶ 53. The board considered four cases in which we imposed partially stayed
term suspensions for misconduct involving the misappropriation of client funds.
Among those cases was Disciplinary Counsel v. Burchinal, 133 Ohio St.3d 38,
2012-Ohio-3882, 975 N.E.2d 960. There we imposed a two-year suspension with
18 months conditionally stayed on an attorney who misappropriated settlement
proceeds intended to pay the subrogated medical expenses of three clients and
concealed his failure to timely file a personal-injury claim on behalf of two others.
Although Burchinal acted with a dishonest or selfish motive and engaged in a
pattern of misconduct involving multiple offenses as Darling did here, there were
also significant mitigating factors in that case that are not present in this one.
Specifically, Burchinal self-reported his misconduct, made full restitution to his
clients, and established the existence of a mitigating mental disorder. Id. at ¶ 16.
{¶ 27} The board found that the facts of this case were most comparable to
Disciplinary Counsel v. Miller, 126 Ohio St.3d 221, 2010-Ohio-3287, 932 N.E.2d
323, and Cuyahoga Cty. Bar Assn. v. Maybaum, 112 Ohio St.3d 93, 2006-Ohio-
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6507, 858 N.E.2d 359—two cases in which we indefinitely suspended attorneys
who engaged in similar misconduct involving the misappropriation of client funds.
{¶ 28} Like Darling, Miller agreed to keep part of a client’s settlement to
pay the client’s medical bills but deposited the funds into his personal account and
converted them to his own use. Miller at ¶ 4. Miller also charged a clearly
excessive fee and failed to cooperate in the ensuing disciplinary investigation. Id.
at ¶ 7-8. Although he was not charged with a violation of Prof.Cond.R. 8.1(b) as
Darling was in this case, we nonetheless found that his use of deceptive practices
during the disciplinary process was an aggravating factor weighing in favor of a
greater sanction. Id. at ¶ 7-8, 11. Like Darling, Miller also acted with a dishonest
or selfish motive, refused to acknowledge the wrongful nature of his misconduct,
and failed to make restitution. But the only mitigating factor in Miller was a lack
of prior discipline. Id. at ¶ 11.
{¶ 29} Similarly, Maybaum held back a portion of a client’s settlement
proceeds and represented that he would attempt to negotiate a discount with the
client’s medical provider, pay the negotiated rate, and then forward any remaining
balance to his client. Instead of immediately commencing negotiations to lower his
client’s medical bills, he misappropriated the funds and tried to placate his client as
her creditors attempted to collect the overdue medical bills. Maybaum at ¶ 6. In
addition to aggravating factors like those present in the current case, Maybaum had
previously been disciplined for the same type of misconduct. Id. at ¶ 14. The
mitigating factors in the Maybaum case included Maybaum’s cooperation in the
disciplinary proceeding and evidence of his good character and reputation. Also,
Maybaum eventually negotiated his client’s medical bills and refunded the
remaining settlement proceeds after the client filed a grievance against him.
Darling, on the other hand, has failed to pay Lusk’s medical bills or otherwise make
restitution in this case—even after he represented at his disciplinary hearing that
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payment was forthcoming and the panel chair held the record open to receive proof
of that payment.
{¶ 30} Here, in addition to misappropriating client funds as Burchinal,
Miller, and Maybaum did, Darling was convicted of a first-degree-misdemeanor
theft offense for writing bad checks on his own closed bank accounts, depositing
those checks into another bank account, and withdrawing the funds before the
checks were returned. Then, at his disciplinary hearing, he attempted to frame his
misconduct as a series of “mistakes” and did not admit that his conduct was
intentional until forced to do so under direct questioning. Furthermore, when
Darling was asked where he spent the settlement proceeds that he had
misappropriated from Lusk, he stated that he had spent them on ordinary expenses
like rent, food, gas, and insurance. But when pressed by the panel members, he
acknowledged that he had traveled to Florida and Aruba. As the board stated,
“[Darling] only admits to those actions that he cannot evade.”
{¶ 31} On these facts we adopt the board’s recommendation that Darling be
indefinitely suspended from the practice of law, that his reinstatement to the
practice of law be conditioned on his payment of restitution, submission to an Ohio
Lawyers Assistance Program (“OLAP”) evaluation, compliance with all treatment
recommendations arising from that evaluation, and that upon reinstatement, he be
required to work with a monitoring attorney.
Conclusion
{¶ 32} Accordingly, Stephen Michael Darling is indefinitely suspended
from the practice of law and ordered to make restitution of $8,835 to Lifestyle
Medical Solutions, formerly known as Spine and Sports Chiropractic Center, within
60 days of this order. In addition to the requirements of Gov.Bar R. V(25),
Darling’s reinstatement to the practice of law shall be conditioned upon the
submission of proof that he has submitted to an evaluation conducted by OLAP and
is in compliance with any treatment recommendations arising from that evaluation.
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Upon reinstatement to the practice of law, Darling may be required to work with a
monitoring attorney for a period of time and under such conditions as are
determined during the reinstatement process. Costs are taxed to Darling.
Judgment accordingly.
O’CONNOR, C.J., and KENNEDY, FISCHER, DEWINE, DONNELLY, STEWART,
and BRUNNER, JJ., concur.
_________________
Joseph M. Caligiuri, Disciplinary Counsel, Donald M. Scheetz, Chief
Assistant Disciplinary Counsel, and Kelli Christine Schmidt, Assistant Disciplinary
Counsel, for relator.
Montgomery Jonson, L.L.P., and George D. Jonson, for respondent.
_________________
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