Friday, October 2, 2009
Another tale of professional ruin from the current California Bar Journal:
The State Bar Court found that [the attorney] committed seven acts of misconduct in a single client matter in which he represented a woman who was hit on the head by a slot machine in a casino in Reno. The woman and her husband first hired an attorney who filed a personal injury case, which resulted in a $100,000 settlement offer. When the clients rejected the offer, the attorney withdrew.
They had difficulty finding a new lawyer, and found [the attorney] in the phone book. He initially declined to represent them, but eventually changed his mind when the clients agreed to lower their expectations about the worth of their case. Because [he] is not a Nevada lawyer, he enlisted the help of an attorney licensed there.
The lawyers negotiated a $250,000 settlement for the clients, which [he] deposited in his client trust account. He disbursed $100,000 to the clients, $300 to a doctor and $75 to the Nevada lawyer. The State Bar Court found that [he] was entitled to a $60,000 fee and should have maintained nearly $90,000 in his trust account. However, the balance in the account dropped to about $500. The bar court found that he misappropriated $89,072.
[The attorney] and the other lawyer also represented the couple in a malpractice action that settled for $30,000. The bar court found that [he] misappropriated the entire amount.
At a meeting with his clients, [he] confessed he spent the money he was holding in trust for the clients, and gave them a check for $50,000 from his trust account. He also later sent them a check for $30,000. None of the money came from settlement funds received on his clients’ behalf.
After the couple filed a complaint with the State Bar, [he] gave them another $30,000 that was part of a loan he took, and he settled several outstanding liens.
After [he] filed for bankruptcy, he gave his clients another $30,000 and asked them to hold the check until he had money in his bank account. He also told the clients he might file for bankruptcy, even though he already had done so.
When one of the clients had open heart surgery five months later, [the attorney] visited him in the hospital and left a cashier’s check for $30,000. He later asked the clients to tell the State Bar they had given their permission for him to use the funds he held in trust for them. He eventually paid the clients the full amount they were owed and paid their liens. He also visited the couple at their home and gave them his collection of old comic books and an antique gun belonging to his father. He wanted the clients to consider this as an exchange for whatever remaining funds they thought he owed them.
The State Bar Court found that [the attorney] committed acts of moral turpitude by misappropriating nearly $120,000 from his clients and by making misstatements to his clients and the bankruptcy court, he failed to maintain client funds in trust or keep his clients informed of significant developments in their case, and he improperly offered to pay his clients’ personal expenses.
In mitigation, the court gave minimal weight to [his] 17 years of practice without any discipline. It did consider his emotional and financial difficulties at the time, including heavy debts incurred by the Belli law firm, where he worked, as a result of several hundred breast implant cases, his acrimonious divorce, the deaths of three people close to him and foreclosure on his house.
In recommending [his] disbarment, Judge Pat McElroy wrote, “his own financial difficulties do not outweigh his fiduciary duty to his clients . . . Instead of accepting responsibility for his misconduct, respondent asked the (clients) to tell the State Bar that they loaned him the settlement funds he had misappropriated, although they had not loaned respondent any funds.”