The Ohio Supreme Court indefinitely suspended a Cincinnati attorney for doing little to no work for clients he received through referrals from a now defunct California debt-relief company.

Justin E. Fernandez, whom the Supreme Court publicly reprimanded in 2016, was indefinitely suspended by the Court for violating multiple rules governing the conduct of Ohio attorneys. The per curiam opinion stated the violations included improperly retaining fees paid by the clients, overdrafting his client trust account, and failing to respond to disciplinary investigations.

The Cincinnati Bar Association, which brought the complaint against Fernandez to the Board of Professional Conduct, recommended a one-year suspension. The board recommended an indefinite suspension, and a Court majority adopted that sanction.

Chief Justice Maureen O’Connor and Justices Judith L. French and Patrick F. Fischer voted for the indefinite suspension. They were joined by Second District Court of Appeals Judge Michael T. Hall, sitting for former Justice William M. O’Neill, who resigned.

In a dissenting opinion, Justice Sharon L. Kennedy wrote that the appropriate sanction was the one-year suspension proposed by the bar association. Justices Terrence O’Donnell and R. Patrick DeWine joined her opinion.

Attorney Relied on Outsourced Paralegal Service
Fernandez, a solo practice attorney, represented clients referred to him by Morgan Drexen, a California company that provided paralegal and paraprofessional services to his practice. Fernandez represented at any one time between 100 and 400 clients referred to him by Morgan Drexen and stipulated that the firm performed “non-formal debt resolution” for his clients.

In April 2015, a federal court shut Morgan Drexen’s operations and froze its accounts. The company then filed for bankruptcy and went out of business. Three months later, Morgan Drexen sent letters to clients informing them of the bankruptcy and indicating that the attorney who represented them through the company was no longer affiliated with it.

Fernandez’s clients, Cleora Jean Smith, Betty Smith Carpenter, and Eddie and Amie Foster, were referred to him by Morgan Drexen and received the notifications.

Fernandez had agreed to assist Smith and Carpenter in debt settlements and to file a Chapter 7 bankruptcy for the Fosters. Smith paid $926, Carpenter $2,618, and the Fosters $900 to secure his services. Fernandez did not respond to their efforts to communicate with him and confirmed to the board that his voicemail prompt instructed clients to leave no more than one message per week because of his work volume.

Fernandez did no work for the clients, and did not advise the Fosters they were ineligible to file bankruptcy. He did not return money to the clients.

Board Finds Rule Violations
The board adopted the panel’s findings that Fernandez violated a number of rules, including not acting with reasonable diligence in representing a client; failing to explain a matter to a client that would allow the client to make an informed decision; and not promptly delivering to his clients funds they were entitled to receive. He also violated the rules by failing to respond to disciplinary investigations.

The board concluded that Fernandez acted with a dishonest and selfish motive and that he deserved no mitigating credit for his cooperation in the disciplinary process. Fernandez objected to recommended indefinite suspension. He asked the Supreme Court to consider his intermittent homelessness and unspecified mental disorders, and to suspend him instead for one year.

Court Considers Factors
Fernandez argued that a homeless attorney is likely to have impaired judgment and that poor decision-making, not selfishness, caused his behavior. He also noted that he cooperated after the disciplinary proceedings were initiated.

The Court’s opinion stated there was ample evidence to demonstrate he acted with a selfish motive.

“His business relationship with Morgan Drexen was driven to maximize profit with high-volume representation by using paraprofessionals to perform much of the work with minimal attorney oversight,” the Court stated. “He took his clients’ money, relied on Morgan Drexen to do the work, and failed to adequately monitor the status of his clients’ legal matters.”

The opinion noted that when Fernandez was asked if it were possible other clients were charged fees that he did not earn, he responded that he could not definitively answer because attorneys working with Morgan Drexen were heavily dependent on the electronic information the company’s paraprofessionals assembled. He stated he did not closely review what “was done and what wasn’t done.”

The Court also indicated that Fernandez knew little about the operation of the client trust account Morgan Drexen established for his clients and did not know how money moved between his clients, the company, and himself because he never reviewed the bank records.

“His misconduct is far more serious than his neglect of three client matters, his failure to refund unearned fees, and his failure to maintain required trust-account records, because he completely abdicated his duty to safeguard the client funds entrusted to his care,” the opinion stated.

Fernandez stated he was having mental health issues and a gambling problem, but presented no evidence at the panel hearing that he had been diagnosed by a qualified healthcare professional and that the issues contributed to his misconduct.

In addition to the suspension, the Court ordered that Fernandez’s reinstatement will be conditioned on proof that he made restitution to Smith, Carpenter, and the Fosters; completed 12 hours of continuing legal education focused on law-office and client-trust management; submitted to an evaluation by a qualified healthcare professional; and did not commit any more misconduct. If he is reinstated, he must serve two years of monitored probation.

Dissent Concludes Aggravating Factors Not Proven
Justice Kennedy wrote that although Fernandez’s behavior “fell well short of the professional standards demanded of all attorneys,” the record does not contain clear and convincing evidence that he acted with a selfish motive or failed to cooperate in the disciplinary process.

Regarding a selfish motive, the dissent explained that the board had improperly equated Fernandez’s conduct with a prior case where an attorney had fraudulently altered fee applications to seek payment for court-appointed work that was not performed. The dissenting opinion stated that there is a difference between collecting fees with no intention of completing the work or giving a refund – misconduct that is tantamount to theft – and agreeing to perform the work but failing to do so out of neglect.

The dissent noted that Fernandez had relied on Morgan Drexen and its paralegals to manage his practice and the fees paid by the clients it solicited. Although the evidence indicated that Fernandez took on too many clients and neglected their cases, that does not prove he acted with a selfish motive, the opinion concluded.

Fernandez had conceded that he failed to respond to the bar association’s complaints, but he subsequently admitted his misconduct and accepted responsibility for it during the proceedings. The dissent explained that in other cases the Court has recognized that an attorney’s eventual cooperation is a basis for a lesser sanction, and here the record does not reflect that he exhibited a “complete failure” to cooperate.

The dissenting justices would impose a one-year suspension with the same reinstatement conditions as the majority.

2017-1409. Cincinnati Bar Assn.v. Fernandez, Slip Opinion No. 2018-Ohio-3828.

View oral argument video of this case.

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