Ohio Supreme Court Fines Collection Agency $282,500

The Ohio Supreme Court Wednesday ordered a collection agency to stop engaging in the unauthorized practice of law and fined the business and its owner $282,500.

The Court said that Derek Wooten, co-owner of collection agency Aaron, Derek, Carter & Steen (ADCS), a collections agency in Beachwood filed collection actions on behalf of those payday lenders and healthcare providers in municipal and common pleas courts, and personally signed the complaints in those courts. In August 2008, the Akron Bar Association notified Wooten that he was practicing law without a license and instructed him to stop negotiating claims for other individuals or corporations.

The Cleveland Bar Association submitted a complaint against Wooten and ADCS in 2012. The bar association included more than 100 pleadings that ADCS and Wooten had filed, mostly for check-cashing or payday-loan companies, in municipal and small claims courts in Rocky River, Bedford, Willoughby, Euclid, and Akron.

In a 5-2 decision Wednesday, the Supreme Court noted that Wooten and ADCS offered minimal cooperation in the investigation and pointed to the Akron Bar Association’s earlier order. The court determined that Wooten and ADCS committed 113 offenses, and they harmed the defendants in the lawsuits they filed.

The court, in a per curiam opinion, issued a civil penalty against Wooten and ADCS of $2,500 per offense, totaling $282,500. Wooten and ADCS are prohibited from signing pleadings, appearing in court proceedings, and engaging in mediation on behalf of any other party, and they must inform their clients that they are not authorized to file complaints or represent their clients in any court of law.

The court’s majority was joined by Chief Justice Maureen O’Connor and Justices Paul E. Pfeifer, Terrence O’Donnell, Sharon L. Kennedy, and Judith L. French. Justices Judith Ann Lanzinger and William M. O’Neill dissented, noting that they would instead impose a $25,000 civil penalty against Wooten and ADCS.