The recently retired Niles city law director was suspended for two years, with one year stayed, by the Ohio Supreme Court today for professional misconduct associated with the private law practice he maintained in conjunction with his public office.

A unanimous Supreme Court found J. Terrence Dull violated several rules governing the conduct of Ohio attorneys, including misappropriating $37,000 in client funds that he was instructed to invest. The per curiam opinion noted that the presumed sanction for an attorney who misappropriates client funds is disbarment, but several mitigating factors weighed in favor of a suspension, including Dull making full restitution and paying interest on the funds to his former client. Dull retired from his law director post in early 2017.

Investment Money Diverted on Office Space
In 1996, Dull created an investment trust for his client, Joseph S. Scaglione, and Dull became the trustee of Scaglione’s trust. In 2011, Scaglione gave Dull two checks totaling $45,000 and instructed him to invest the money in a Vanguard fund. Instead of investing the money, Dull placed it in his client trust account.

Scaglione discovered from Vanguard statements that Dull did not make the additional investment, but because of market fluctuations at the time, he instructed Dull to hold the investment until market conditions improved.

In 2012, Scaglione asked Dull to provide him $8,000 from the investment trust, which Dull did by writing a check from the client trust account. In 2015 Scaglione requested $27,000 from the trust to buy a new car, but Dull informed him he no longer had any of Scaglione’s money. Dull told Scaglione that he used the remaining $37,000 he had been holding in the investment trust.

Scaglione terminated Dull as the trustee and filed a grievance against him with the Trumbull County Bar Association.

At a disciplinary proceeding, Dull indicated that he had moved into new office space in 2010 and the operating costs were more than he anticipated. He admitted that between 2011 and 2013, he periodically withdrew Scaglione’s money to cover his expenses, hoping that he would make enough money to refund the client trust account before Scaglione requested more withdrawals.

Dull Admits Wrongdoing
In 2016, the bar association filed charges against Dull with the Board of Professional Conduct.

Dull admitted he failed to properly maintain client trust account records, and failed to make the required disclosure to clients that he lacked malpractice insurance.

Dull was able to collect the resources to refund Scaglione’s $37,000 and Dull paid him an additional $11,500, which was to make up for lost interest and opportunity from the failure to invest the money when Dull originally received it.

The board found Dull violated the rule that requires a lawyer to inform a client if the lawyer does not maintain malpractice insurance and to obtain the client’s written acknowledgment of that notice. He also was found to have engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation; to have failed to keep client funds in an account separate from the lawyer’s own property; and to have failed to maintain proper records of client funds.

The board recommended the Supreme Court suspend Dull for one year, with six month stayed, with conditions.

Court Imposes Tougher Sanction
When imposing a sanction, the Court considers several factors including aggravating circumstances that could enhance a penalty and mitigating factors that could lead to a less-severe punishment.

The board found Dull had a dishonest or selfish motive and engaged in a pattern of misconduct. The board described Scaglione as Dull’s longtime, trusting friend, and that Dull’s misconduct was directed at a vulnerable victim.

The board also found that Dull had no prior disciplinary record during his 40-year legal career, made full restitution, cooperated with the disciplinary proceedings, and presented evidence of good character and reputation.

The board examined numerous cases of other attorneys disciplined for misappropriation and determined that the cases where attorneys were disbarred or indefinitely suspended generally involved more serious misconduct, including prior disciplinary records; failure to make restitution; and failure to cooperate in the disciplinary process.

The opinion stated that the board concluded an actual suspension was warranted for Dull because it would protect the public and give him time to be educated about the proper use of a client trust account.

While the board recommended the one-year suspension, the Court found his behavior warranted a longer time out from practice. The Court wrote that at the time of his disciplinary hearing, which was seven months after the bar association filed its complaint, Dull had not yet requested his clients sign the acknowledgments stating he lacked malpractice insurance. He also admitted at that time he had not started to retain the required trust account records.

“Under these circumstances, a two-year suspension with the second year conditionally stayed is more appropriate. This sanction takes into account the significant mitigating factors in this case, gives Dull the necessary time to become more knowledgeable about the professional-conduct rules relevant to private practice, and reinforces our long-held position that the continuing public confidence in the judicial system and the bar requires that strict discipline be imposed in misappropriation cases,” the opinion stated.

The second year of the suspension was stayed on the conditions that he complete a continuing legal education course regarding client trust accounts and that he commit no further misconduct.

2017-0490. Trumbull Cty. Bar Assn. v. Dull, Slip Opinion No. 2017-Ohio-8774.

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