The Supreme Court of Ohio today suspended a Lorain County attorney for two years, with one year stayed, for mishandling clients’ funds while on probation from a prior charge of mishandling client funds.

In a unanimous per curiam opinion, the Supreme Court suspended Kenneth Nelson II of Avon Lake from the practice of law. The suspension is partly related to Nelson’s failure to produce records regarding fees he charged clients. He claimed his legal assistant lost the records after the two were forced to flee their Cleveland office during the May 2020 nationwide protests in the wake of George Floyd’s death.

The Court ruled that if Nelson is reinstated to the practice of law, he must serve a two-year period of monitored probation with an attorney who will oversee Nelson’s financial arrangements with clients.

This is Nelson’s third sanction since 2015. The Court publicly reprimanded him in October 2015 for committing multiple ethics violations when representing a single client. In December 2017, the Court suspended him for two years, with 18 months stayed, for several ethical violations, including failing to deposit and hold client fees in a client trust account until the fees were earned.

In this case, the Court noted the 2017 sanction “was insufficient to deter Nelson from engaging in additional misconduct.”

Lawyer’s Participation in Bar Association Program Raises Concerns
Following Nelson’s reinstatement to the practice of law in July 2018, he was placed on one year of probation and reported to a monitoring attorney focused on “trust-account and record-keeping requirements relating to fees and other client materials.”

While under supervision, Nelson sought to participate in the Lorain County Bar Association’s “Modest Means Program.” That program aimed to provide affordable legal representation to clients who could not afford attorneys at local market rates. Attorneys participating in the Modest Means Program would accept a $500 retainer and bill clients $75 per hour. Bar association executive director Jeannie Motylewski testified that she discussed the program with Nelson by phone and emailed him copies of the sample fee agreements to explain the program terms to clients.

Between early 2019 and early 2020, Nelson accepted 18 referrals from the Modest Means Program. In February 2020, the bar association began investigating Nelson’s compliance with the terms of his monitored probation and his handling of the retainers paid by his Modest Means Program clients. Two months later, the bar association notified Nelson that he had violated the program’s rules. The bar association told him it intended to revoke his probation and request the Supreme Court reinstate his suspension.

The bar association filed a complaint with the Board of Professional Conduct, claiming Nelson was failing to hold the retainer fees in a client trust account until they were earned and that he made a false statement to the Supreme Court when trying to terminate the oversight of the monitoring attorney. The bar association also claimed Nelson failed to cooperate with the disciplinary proceeding regarding his violations.

Attorney Questioned About Fee Agreements
At the disciplinary hearing, Motylewski produced a copy of the email and fee agreement she sent Nelson to explain the Modest Means Program participation rules. Nelson objected, claiming he did not recall speaking to Motylewski and did not receive the documents.

Nelson testified that he used his own agreement form and that he misunderstood the terms of the program. Rather than obtaining a $500 retainer and charging $75 per hour, Nelson said he thought the program allowed him to charge a $500 flat fee. Because he charged a flat fee, he believed that those funds were considered “earned upon receipt” and that he did not have to deposit the retainers into his client trust account.

The board noted the rules allow an attorney to charge a flat fee and consider the money earned upon receipt. A lawyer taking that approach, however, must notify the client in writing that the client may be entitled to a refund of all or part of the fee if the lawyer does not complete the representation.

The bar association had pressed Nelson for copies of the fee agreement he used with the 18 clients to determine if he properly notified them of their refund rights. At the disciplinary hearing, Nelson produced one copy and claimed the other 17 were missing. The copy he provided complied with the rules, but the opinion noted the agreement was signed by a client four days after the bar association notified Nelson he was under investigation.

Protests, Assistant Blamed for Missing Agreements
The board noted that the bar association began asking about the fee agreements in February 2020 and requested he produce them in October 2020 as part of the discovery process related to the complaint. Nelson twice requested extensions of time to comply and did not produce the documents. He argued in January 2021 that the documents did not need to be turned over because they were protected by attorney-client privilege.

When ordered by the chair of the board’s three-member disciplinary-hearing panel to turn over the agreement, Nelson first admitted the documents were misplaced.

He testified that he and his legal assistant fled his downtown Cleveland offices during the protests, and he thought his legal assistant had taken a box home that contained the fee agreements. He said his assistant later told Nelson she was unable to locate the box and was still looking for the agreements.

When asked why he did not provide the bar association with the agreements in February 2020, months before the protests, he claimed the association did not ask for the documents.

“The board found that Nelson’s actions throughout the disciplinary process rendered his testimony and defense suspect,” the opinion stated.

Nelson waited nearly a year to assert the documents were missing, the board noted, and he did not explain why he did not call his legal assistant to testify at the hearing about how the agreements went missing. The board noted he did not call any of his clients to testify about the terms of the agreements, and he did not obtain any copies of the agreement from his clients.

The board found Nelson violated the ethical rules requiring him to keep client funds secured and not take them until he did the work to earn the money.

Attorney Lied When Attempting to End Probation
In May 2020, Nelson sought to terminate the monitored probation from his 2017 sanction. He filed the application four days after meeting with the bar association’s ethics committee, which met to discuss his compliance with the Modest Means Program. But on the application to the Court, he submitted a sworn statement indicating he complied with all conditions of his probation and that no disciplinary proceedings were pending against him.

Nelson claimed this statement was true because he “believed” he was not subject to a disciplinary proceeding as he thought he was complying with the Modest Means Program rules. Regardless of whether he was complying, Nelson admitted he was being investigated at the time. And the board concluded that he made a false statement when he claimed he no investigation was pending.

The Court noted that Nelson violated the notification rules regarding the potential return of the deposits, but it found no evidence that the Modest Means Program clients received anything less than diligent and professional representation and that Nelson did not inappropriately profit from his misconduct.

The Court stayed the second year of Nelson’s suspension and stated he will be required to serve the full suspension if he commits any additional misconduct. If reinstated, he must submit all client fee agreements and client-trust-account records to his monitoring attorney monthly for two years. The Court also ordered Nelson to pay the costs of the disciplinary proceedings.

2021-0759. Lorain Cty. Bar Assn. v. Nelson, Slip Opinion No. 2022-Ohio-1288.

View oral argument video of this case.

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