An Ohio appeals court affirms a decision finding that an attorney breached his contract to pay fees to a company that provides marketing and document services for estate attorneys. However, remand is required to determine whether the attorney committed theft by deception. Estate Planning Legal Services v. Cox (Ohio App., 12th Distr., Nos. CA2006-11-140, CA2006-12-141, May 12, 2008).
Ohio attorney Michael G. Cox contracted with Estate Planning Legal Services, P.C. (EPLS), a Michigan law firm, to market and sell estate planning documents in Ohio. EPLS acted as Mr. Cox's marketing and sales agent in Ohio, referred him clients, and prepared the documents. In return, Mr. Cox paid EPLS half of the client's fees. Eventually, the relationship broke down and Mr. Cox, dissatisfied with the client referrals, stopped paying EPLS a portion of the fees.
EPLS sued Mr. Cox for, inter alia, breach of contract, breach of fiduciary duty, conversion and theft. Mr. Cox countersued for breach of contract. The trial court granted EPLS' motion for summary judgment and ordered Mr. Cox to pay EPLS actual damages of $11,718 and treble damages of $35,154 for committing theft by deception. Mr. Cox appealed, arguing that EPLS breached the contract and that he was entitled to "mitigate" his damages by withholding payment.
The Ohio Court of Appeals, Twelfth District, reverses the treble damages award and remands for further consideration, finding that although Mr. Cox clearly breached the contract by failing to pay EPLS its share of the clients' fees, it is not clear that the trial court considered whether Mr. Cox had the requisite mens rea to commit theft by deception. The court notes that the contract between Mr. Cox and EPLS was a "thinly-veiled fee-splitting arrangement" and that there appear to be numerous ethical violations committed by both parties.
To download the full text of this decision in PDF format, go to: https://www.sconet.state.oh.us/rod/docs/pdf/12/2008/2008-ohio-2258.pdf.
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