The Ohio Supreme Court today fined a California lawyer and his firm $2,000 for representing an Ohioan in a debt collection case in the state without having a license to practice law in Ohio.

In a per curiam decision, the Supreme Court ruled that Michael J. Klosk and Klosk Law Firm Inc. informed an attorney for CitiFinancial that it represented an Ohio client and sought to negotiate a settlement of the debt owed the institution by the client. Neither Klosk nor anyone associated with his firm is licensed to practice law in Ohio.

Klosk minimally cooperated with Ohio authorities investigating his activities. However, he did indicate that he did not accept any Ohio clients since June 2011 and virtually ceased all activity in the state at that time.

Chief Justice Maureen O’Connor and Justices Terrence O’Donnell, Sharon L. Kennedy, Judith L. French, Patrick F. Fischer, R. Patrick DeWine, and Mary DeGenaro joined the opinion. Justice R. Patrick DeWine concurred in judgment only.

Firm Engages in Debt Settlements
Klosk and his firm provide counseling and assistance to individuals seeking to reduce their consumer debt. Once retained, the firm contacts their clients’ creditors and attempts to negotiate reductions in outstanding debts.

In January 2010, an Ohio debtor granted Klosk power of attorney to communicate with creditors. Klosk communicated with the Ohio lawyer representing CitiFinancial, and in a letter to the institution indicated the Klosk Law Firm represented the debtor. Klosk also sent CitiFinancial’s lawyer a copy of the power of attorney form.

Bar Association Claims Rule Violation
The Ohio State Bar Association became of aware of Klosk’s activities and filed a complaint with the Board on the Unauthorized Practice of Law in November 2013. Klosk initially responded, admitting some of the conduct, but denied that it constituted the unauthorized practice of law. Klosk asked, and was granted, a delay in responding to the charges by the board.

In December 2015, the bar association served requests for admissions on Klosk and his firm.Nearly a year later, Klosk had not answered those requests, and the board deemed them admitted.  It later granted summary judgment to the bar association, finding Klosk violated the law.

Court Supports Sanction
The Court’s opinion stated that the unauthorized practice of law in Ohio includes both “rendering of legal services for another,” and holding out to the public that one represents oneself as authorized to practice law when the person is not admitted to practice in Ohio.

The Court stated that in prior decisions it has ruled that an individual who negotiates legal claims on behalf of another in Ohio without being admitted to the practice of law in this state is violating the law. It also noted that being granted a power of attorney is not a defense to the charge of the unauthorized practice of law.

The Court stated there is “no doubt” Klosk and the firm violated the Ohio law. Along with the fine, the Court granted an injunction that prevents Klosk and the firm from practicing in the state.

2018-0533. Ohio State Bar Assn. v. Klosk, Slip Opinion No. 2017-Ohio-4864.

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