Submitted April 5, 2017
Certified Report by the Board of Professional Conduct of the
Supreme Court, No. 2011-072.
J. Drexel, Disciplinary Counsel, and Stacy Solochek Beckman,
Assistant Disciplinary Counsel, for relator.
Montgomery, Rennie & Jonson, L.P.A., and George D.
Jonson, for respondent.
1} Respondent, Scott Clifford Smith of Pepper Pike,
Ohio, Attorney Registration No. 0039828, was admitted to the
practice of law in Ohio in 1988. In August 2011, relator,
disciplinary counsel, charged Smith with multiple violations
of the Rules of Professional Conduct and the Disciplinary
Rules of the Code of Professional Responsibility, arising
from his alleged use of unethical billing practices and
charging of excessive fees in five separate cases involving
three clients who operated nursing homes in Ohio.
2} The Board of Professional Conduct found that
Smith engaged in the charged misconduct, and it recommended
that Smith be indefinitely suspended from the practice of law
and required to make restitution to his former firm, which
had issued substantial refunds to the affected clients. After
this court remanded the cause to allow for additional
discovery, see Disciplinary Counsel v. Smith, 143
Ohio St.3d 325, 2015-Ohio-1304, 37 N.E.3d 1192, ¶ 15, a
panel of the board conducted a second hearing and issued a
report reaffirming its original findings and recommending the
3} Smith objects to the board's findings and
recommended sanction and argues that (1) the findings are
based on insufficient evidence and are against the manifest
weight of the evidence, (2) his former firm and clients
thwarted his attempts to obtain discovery after this court
remanded the cause for that purpose, thereby depriving him of
due process, and (3) the ethical violations found by the
board do not support the recommended sanction.
4} For the reasons that follow, we sustain
Smith's objection to the recommended sanction but
overrule his remaining objections. We adopt the board's
findings of fact and misconduct and find that a two-year
suspension from the practice of law and an order that Smith
pay $20, 796.50 in restitution to his former law firm is the
appropriate sanction in this case.
History and Findings of Fact and Misconduct
5} Smith joined the law firm of Weston Hurd, L.L.P.,
in 1989, became a partner in 1996, and served as the
firm's managing partner from 2004 or 2005 until his
resignation in 2007. In March 2007, a member of Smith's
practice group informed partner Victor DiMarco that Smith had
altered firm billing records to take credit for work that
DiMarco had performed as an associate at the firm. DiMarco
reviewed the billing records and alerted the firm's
management committee of apparent irregularities. The firm
commenced an internal investigation into Smith's billing
practices and, on the advice of outside ethics counsel,
reviewed the billing records in five of Smith's cases:
Seigmund v. Edgewood Manor Nursing Home, Ottawa
County Court of Common Pleas case No. 06-CV-087; Maxey v.
Altercare of Canton, Stark County Court of Common Pleas
case No. 2006-CV-03231; Lawson v. Altercare of Wadsworth
Ctr. for Rehabilitation & Nursing Care, Inc., Medina
County Court of Common Pleas case No. 05-CIV-0980; Hanson
v. Valley View Nursing & Rehabilitation Ctr., Summit
County Court of Common Pleas case No. CV-2005-03-1379; and
Heppner v. Beverly Enterprises-Ohio, Inc., Lake
County Court of Common Pleas case No.
05-CV-002059. Smith participated in the investigation to
some degree but resigned after the firm informed him that it
would be contacting his clients about the billing
6} As part of the investigation, the firm examined
the bills for 88 cases involving the three clients at issue,
identified the suspicious entries in each bill, and met with
the clients to discuss their findings. The firm reduced the
questionable time by 50 to 60 percent and ultimately issued
refunds totaling more than $350, 000 to the affected clients.
The firm also filed the grievance that gives rise to this
7} In the resulting disciplinary complaint, relator
alleged that while Smith was employed by Weston Hurd, he
billed work as his own though it had actually been performed
by another attorney, billed time in excess of the time
actually spent on particular tasks, billed for work that was
never performed by anyone at the firm, and billed multiple
cases and clients for identical services and time on the same
8} The board found that Smith's billing
narratives were false and that in some instances, his billing
practices resulted in clearly excessive fees. The board also
found that Smith acted in direct conflict not only with his
firm's general billing practices but, more importantly,
with his clients' express expectations and instructions.
9} Specifically, the board found that under Weston
Hurd's billing practices, attorneys tracked their
billable time on handwritten sheets that included a narrative
description of the tasks performed and the amount of time
expended on the task. The firm's administrative staff
compiled the data and generated monthly billing memoranda.
After the lead attorney on a case reviewed the billing
memoranda and made any necessary changes or adjustments, the
firm's accounting department generated and sent invoices
to the firm's clients and their affiliates, including
accountants, third-party administrators ("TPAs")
and monitoring counsel for the client's insurance
carriers, and the individual nursing homes involved in the
Johnson, a Weston Hurd partner at the time of the internal
investigation, participated in the review of Smith's
billing records. Johnson testified that Smith used "the
same terminology * * * over and over again for a lot of these
different entries" and that the entries were
"either at the wrong point in the litigation for what
was going on" or recorded "clearly excessive time
for what the activity was." He noted a "disturbing
number" of instances in which Smith had recorded the
same time entry and narrative on multiple files on the same
day using ditto marks. Johnson also noted that while the five
client files at issue in this case were available for
purposes of cross-referencing time entries against work
product during a meeting that the firm held with Smith in
July 2007 so that he could explain his time entries,
"[v]ery little [cross-referencing] happened because it
became pretty obvious as we went into the process, * * *
there wasn't going to be anything in [the files]."
In addition to those irregularities, the board also found at
least one billing entry in which Smith had crossed out the
initials of then-associate Victor DiMarco, replaced them with
his own initials to claim credit for the work, and increased
the amount of time billed for the activity.
10} Throughout this disciplinary proceeding,
Smith's testimony focused on the alleged billing
practices of Beverly, which was the only affected
long-term-care company to use electronic billing and
document-management programs to interface with the firm.
Smith claimed that he maintained bare-bones files at the firm
because he uploaded the majority of his work product directly
to Serengeti, a billing system, and PowerBrief, a repository
for documents and pleadings. According to Smith, others at
Weston Hurd had limited or no access to these systems and
aside from Smith and three others, "no one else was
approved to even see these * * * secret files."
11} At his first disciplinary hearing, Smith
testified that each Beverly case had a "matrix, "
which he described as an eight- to eleven-page document that
graphed out the litigation phases. He claimed that a
preapproved budget was assigned to each phase and that he
would bill generically against a preapproved billing entry
and matrix budget for each phase. At his deposition, Smith
testified that although he believed the amount of time he
billed was accurate, it would be impossible to correlate his
billing narratives with work product in the file because
"the narratives and the dates [attached to that time]
were not relevant." He openly admitted that his billing
narratives did not accurately describe his work. But he
argued that his clients had requested and approved generic
billing narratives to avoid revealing confidential
information that might later be used to support an award of
punitive damages against them under the Ohio Nursing Home
Patients' Bill of Rights, codified at R.C. 3721.10 et
seq. Alternatively, he suggested that the work described in a
billing narrative might have been performed in a different
case altogether because Beverly allegedly instructed him to
bill other matters to the company's open files.
12} The board found Smith's explanation for his
billing practices "incredible, " for four reasons.
First, during the firm's internal investigation, Smith
"submitted exceedingly brief, unhelpful responses"
to written questions and failed to adequately explain his
billing practices. For example, the board noted that Smith
could have logged onto Serengeti or PowerBrief to show his
work product to his partners at the outset of the
investigation (when he still had access to the systems) but
that he never offered to do so. The board also found that he
vacillated between stating that his client-confidentiality
agreements prohibited him from disclosing the electronic
content related to the ...