*1 No. 25101. Sept. [S.F. 1987.] GUZZETTA, Petitioner, v.
RUDY D. CALIFORNIA, Respondent. THE STATE BAR OF *5 Counsel S. Miller
Edward for Petitioner. Jr., for Rosenthal, Mara Mamet A. Richey, Truitt Herbert M. Respondent.
Opinion Bar Court recom of the State The Review Department THE COURT. practice from Rudy suspended D. Guzzetta be that petitioner mends stayed; of the order be that execution years; of three law for a period years on condi for a of three period on probation be placed that petitioner months, restitution of six actual suspension include an tions which moni $1,819, and supervision probation provisions, various reporting tor. and conclusions findings based on is apparently
The recommendation Court, that the State Bar entirety by in their hearing adopted panel, for trust funds account properly and failed to commingled matter,” employ- him and had withdrawn in the “Gonzalez held to his client to avoid steps prejudice ment without reasonable taking “Hernandez matter.” in the legal competently failed to services perform Court conclude by the State Bar we of the record generated Upon six including the recommended conduct warrants record does not all support Although months’ actual suspension. Bar, governing and rules the violations of statutes of the State
findings the recom- alone proven support are adequately conduct which addition, recommendation is consistent with mended discipline. recently pro- the State Bar has sanctions which
guidelines disciplinary consistency imposition greater in an effort to achieve mulgated ante, Cal.Rptr. v. (See pp. sanctions. Kent [239 *6 77, P.2d 1244].) 739 for Attorney Sanctions titled “Standards for
The guidelines—officially of the Board by —were (Standards) adopted Professional Misconduct” 1985, on effect in went into of the State Bar November and Governors Standards, 1, point- of Governors January In the the Board adopting an imposing set of written ed out that standards comprehensive “[a] state,” and in this has never before existed attorney sanction disciplinary been that, have of sanctions variety noted “a disciplinary wide past, Atty. Sanctions Standards for (Introduction for a offense.” to imposed given 22, were Misconduct, Cal., The 1985.) guidelines for Prof. Bar of Nov. State them, situation, and, the board an in remedy promulgating to this attempt in consistency “achieve greater its that the Standards would expressed hope “identify legal profes- and for the offenses” sanction for similar disciplinary 968 be
sion, may appropriately the the the factors which public courts and an appro- to forth attorney on an set for imposing discipline considered of a sanction lead to the selection priate may those factors means which in (Ibid.) a case.” particular 543, ante, 550-551 (1987) pp. v. Bar
In Greenbaum State [237 168, guidelines new recently noted that the 754], 736 P.2d we Cal.Rptr. sanc disciplinary assessing be in the may appropriate considered properly While Greenbaum tion even for conduct the Standards. predating on this binding it Bar’s are not guidelines also makes clear the State the State indicated that (id., court at we have p. 550), past frequently weight” (see, is to “great Bar’s recommendation as to entitled discipline 738, 700, v. Cal.Rptr. State Bar 41 709 e.g., (1986) Franklin Cal.3d [224 525, Cal.Rptr. P.2d v. Bar 38 Cal.3d 539 699]; (1985) 715 Smith State [213 236, 139]). 698 P.2d conclusions, recom heavily findings,
This court relies on the v. State Bar disciplinary proceedings. (Garlow mendations Court 912, 831, 1106].) 640 P.2d State Bar 30 Cal.3d 916 (1982) Cal.Rptr. [180 we are when impose discipline We do not hesitate the recommended (See, e.g., presented with record recommendation. adequate support 152, 728 P.2d v. State Bar 42 (1986) Cal.Rptr. Cal.3d 943 Mepham [232 case, however, are able of the record is such we 222].) this state by the and 8-101 found only the violations of rules uphold 6-101(A)(2) both findings The is respect State Bar. record otherwise deficient nor the ultimate charges, therein. Neither the conclusions reached charged as relates the conduct findings and conclusions the instant record or Rules attorney violations of as an to the statutes petitioner’s duties been violated.1 Professional Conduct that the State Bar concludes have instead credibility resolved and have not been Questions Finally, this we are are as exists.2 case presented “findings” that a conflict 1 forced to only we are Not does failure court more difficult since this make the work this brings reasoning, also but it determine the basis for the deductive recommended disciplinary question for the adequacy given into of the basis the notice an 590, 409, 673 charges. (See Cal.Rptr. P.2d (1983) v. Gendron State Bar 35 Cal.3d 420 [197 260]; 407].) (1940) v. Bar 16 Woodard Cal.2d 757 P.2d [108 disciplinary testimony recognized conflicting repeatedly We have is offered at that when conflicting state hearing, hearing panel position to evaluate officer or in the ‘better testimony.’ their observing ments after character of the demeanor of the witnesses See also (Himmel 484 P.2d Cal.Rptr. v. State Bar 4 Cal.3d 993]. [94 859]; v. Martin v. P.2d *7 (1979) Cal.Rptr. Prantil State 23 246 589 Cal.3d [152 214, 717, 757]; v. State Bar Lee (1978) State Bar 20 575 P.2d Cal.Rptr. Cal.3d 721 [144 is 927, 361, hearing panel or officer (1970) Cal.Rptr. 449].) 2 472 If the Cal.3d 940 P.2d [88 conflicts, the testimony doubt credibility unable to the the witnesses whose assess relative hearing is on disciplinary be in the should resolved in favor of the since the burden (Hal convincing is warranted. by discipline the State Bar to establish clear and evidence that 228, 421 Cal.Rptr. P.2d (1966) linan v. 65 451 Committee Bar Examiners Cal.2d [55
969 unable to ascertain the basis which the State Bar Court has concluded upon that the conduct it found did occur violated some of the statutes and rules it If carry the State Bar and this court are to out relies upon. their responsibilities to the public to ensure that members of the State Bar are both and competent morally it is essential that the qualified practice, records offered in recommendations of the be support disciplinary adequate 3 confident, to permit this court to act those upon recommendations. We are concerns, that these been to the attention of the having called Court, State Bar the not problem will recur.
Petitioner was charged violating the Rules of Professional Conduct in his representation Manuel Gonzalez from November 1981 through June and in his of Ramon Hernandez in The representation order to show cause charged had violated Business and Professions Code sections 60684and charged 6103.5 It also violations of the 76].) hearing only testimony When panel department report and is that the conflicting, presented ambiguity. this court is awith record of insoluble We cannot ascertain resolve, resolved, whether credibility the State Bar cannot if simply question. or it has 3 difficulty Our relating findings in this case more difficult to the conclusions made by here argument assertion of counsel for the State Bar Bar had not at oral petitioner misappropriated found that findings client funds. from The include withdrawal $1,000 the client pay petitioner’s trust fund of fee without authorization from the wife although findings client he held the funds in trust for her as as client. The well payment necessarily belong also include a part payment made when of the came from funds wife, ing payment Dorothy Hary, to client Gonzalez and his but the another client Perhaps who had no funds in the trust account. to base its recom the State Bar chose not “misappropriation” mended Nonetheless, on because it did not find this conduct to be willful. negligence misdirecting misappropriation even client funds constitutes discipline. (See Cal.Rptr. warrants Schultz v. State Bar 15 803 Cal.3d [126 600].) 543 P.2d statutory All references herein are to the Code. Business and Professions relevant, duty attorney: “(a) support Section insofar as it is recites the of an To Constitution laws United States and of this state. justice “(b) respect judicial maintain the due to the courts of officers. To actions, only “(c) proceedings, appear To counsel or maintain such or defenses as to him or just, person charged legal except public or the defense of a with a offense. her “(d) purpose maintaining employ, To for the the causes confided to him or her such truth, any only judge judicial means as are consistent with never to seek to mislead the or artifice or false statement of fact or law. officer an confidence, every “(e) peril preserve and at To maintain inviolate to himself to the se- crets, her of his or client. personality, “(f) prejudicial all offensive and to advance no fact To abstain from hon- witness, required justice reputation party of a unless of the cause with or or which charged. he she is encourage “(g) either the commencement or the continuance of an pro- Not to action or any corrupt passion ceeding motive of or interest. herself, any reject, personal “(h) Never to consideration to himself or the cause of the oppressed.” defenseless or the 6103: “A disobedience or violation of an order of the requiring Section willful court him profession, ought to do or forbear an act connected with or course of his which he
970 6 and Conduct, 8-101(A),8 6-101(2),7 2-111(A)(2), rules
Rules of Professional 8-101(B)(4).9 to the as charges cause for the
The in the order to show basis stated $7,630.92 by received of handling to petitioner’s Gonzalez matter related by Gonza- sale of a restaurant owned Gonzalez from the his client Manuel lez, represent- claimed an interest. and in Gonzalez’s wife which the com- the funds were Whether proceeding. Gonzalez in a dissolution ed Pursuant to disputed. and his wife Camila was munity of Gonzalez property Camila, Gonzalez, and her attor- his wife an between agreement petitioner, order only on court to be withdrawn ney, Robert Gonzales the funds were maintain failed to Allegedly petitioner or of the stipulation parties. funds, misappropriated account to cover sufficient balance in his trust $1,330.27 him use, belonging his and/or deposited difference to own of account, records complete maintain failed to his law firm into the trust funds and for the of the court that he account obey the funds or to an order or return to Gonzalez and failed to make court required appearances, the monies owed to them. wife matter, seek specific had been retained to the Hernandez to perform from the failure of the seller damages flowing or
performance with charged sell real to his client. He was property under a contract Hernandez, thereby and substantive action on behalf of any to take failing in the best judgment use reasonable and his diligence have failed to in effort to an learning and in the of his application exercise of his skill him, forbear, as any or of his duties good of the oath taken or and violation faith to do attorney, suspension.” for disbarment or such constitute causes Bar. of the State Rules of Professional Conduct All rules herein are to the references from em- the State Bar shall not withdraw 2-111(A)(2) provides Rule that “a member of rights of his prejudice to the ployment client, steps to avoid foreseeable until he has taken reasonable client, other coun- allowing employment time for including giving to his due notice entitled, sel, comply- client is delivering papers property to which the to the client all ing applicable rules.” laws and misconduct, “A member charged provided: 6-101(2), the time of the 7 Rule in effect at diligence habitually...[[[] reasonable willfully Fail to use State Bar shall not learning an effort in application of his judgment his best in of his skill and the exercise employed. accomplish, speed, purpose for which he with reasonable acts determining whether good “The to be considered faith of an is a matter 6-101.” Rule through ignorance imposition done under or mistake warrant here, clients the benefit 8-101(A) requires Insofar that funds held for as relevant rule accounts, member belonging to the deposited shall be “no funds bank trust and that commin deposited therein or otherwise Bar or firm of he is a member shall be which client gled belonging part to the except charges, pay therewith” funds to bank part firm. member of the State Bar or his deliver to “Promptly pay or 8-101(B)(4) requires 9 Rule that a member of the State funds, securities, possession properties in the requested client as or other client the member receive.” of the State Bar which the is entitled to client
971 he had been for which purpose with reasonable accomplish, speed, his oath violating and with from employed, withdrawing employment, attorney. and duties as an has no prior Bar since 1974. He of the State
Petitioner has been member record discipline. we reduce the disci- and that urges
Petitioner seeks review this court thereof, be from suspended in that petitioner lieu pline public reproval, months, stayed, that be suspension law for six that execution practice six months with no actual suspension be on for placed probation of client supervision argues probationary law practice. in factors. light mitigating funds would suffice to protect public determining We exercise our in bar judgment discipline. independent “ However, as is entitled to ‘the State Bar’s recommendation great always . . . . weight. protection concern principal [and]. [o]ur of the public, the in the and the preservation legal profession, of confidence ” attorneys.’ maintenance of the standard for highest possible professional 349, 116, v. 680 (Chefsky State Bar 36 Cal.3d 132 (1984) Cal.Rptr. [202 509, 82], P.2d Jackson v. 23 Cal.3d quoting [153 24, the conclusions of Cal.Rptr. 591 P.2d while not all of 47].) Accordingly, record, conclude that the we department are supported light petitioner’s recommended is appropriate six-month suspension account, to maintain ade- failing conduct in the client trust mishandling funds, to make quate failing prompt records and to account for trust matter, failing perform payment of funds in the Gonzalez matter. in the Hernandez services for which he was retained I. The Gonzalez Matter by Manuel Gonzalez to employed was
Prior to November 1981 petitioner in the Court of San Superior represent proceeding him in a dissolution wife, Manuel’s Camila. Ca- represented County. Attorney Mateo Gonzales community assets dissolution mila of the Gonzalez listed as one The restaurant Gonzalez.” “Taquería proceedings a restaurant called $13,630.92. Petitioner, 1981, Attorney for been sold to November prior orally agreed that from Gonzales, Gonzalez Manuel and Camila and $3,000, each receive $13,630.92, would and the Manuel total of Camila and trust account. $7,630.92 The deposited be balance of would the period ending November account initial balance in the trust $112.47. petitioner deposited the sum of On November $7,630.92 into trust account. 30, 1981, Escrow Fargo
On November sent a letter to Wells $6,000 to be divided Department stating escrow were petition- between Manuel Camila and the balance was be placed *10 the given er’s trust instructions for the distribution account. No were Gonzales, $7,630.92. added Attorney who A this letter was sent copy Order,” the signed the be to Court “to later distributed language pursuant letter, letter, it sign Upon had the and then returned to petitioner. Camila 1981, 30, the added the letter of receiving petitioner returned November words, “or mutual of the stipulation parties.”10 funds, the trust
Next followed series of disbursements from Gonzalez action, later the review trial court the dissolution some which the unauthorized, not found to been proceedings in these have department finally gave an ac- accurately accounted for once completely petitioner or check These disbursements are listed counting under court order. number. 1981, from
Check No. 105: On November check petitioner prepared himself, Guzzetta, Rudy trust D. in the amount payable account $1,000. fees, for his money acknowledged This was although petitioner anyone writing the State Bar Court that he had hearings nothing however, claimed, At- authorizing court Petitioner any payment. denied torney Attorney Gonzales Gonzales orally payment; authorized day of the until of the State Bar learning payment hearing. a check from Check 106: On November prepared No. (All- trust to Allstate and Loan Association payable Savings account $1,077.06. for the payment in the amount of this was state), Apparently that there acknowledged Gonzalez Petitioner mortgage on the residence. on the no order or stipulation authorizing payments written court Allstate Attorney agrees Gonzales that the family apparently residence. residence, initially although mortgage family for the on the payments were Later, Attor- the payments. he denied that he ever authorized (check one ney payment that this and later mortgage Gonzales conceded himself. No. have his client and 108) must been authorized on a check Check 107: On petitioner prepared December No. Gonzalez, husband, in the amount the trust account Manuel payable Attorney letter. Petitioner addition to the Petitioner was therefore aware of Gonzales’s copy of Attorney testified that Gonzales a written he did not or not he sent know whether orally modification, it agreement he discussed although he said that with last him Attorney speak him. him write with Gonzales testified that did Neither adding stipulation parties” to the letter. about the final modification “mutual hearing department conflict. officer nor resolved this $1,810.50. writing nothing there was conceded that again enable was to this and testified that the authorizing payment payment, furniture, taken all the Gonzalez had buy husband Gonzalez to as Camila was for furniture. testified that the payment Manuel Gonzalez also any purchase Attorney authorizing payments of furniture. Gonzales denied 106 and No. other than the checks No. mortgage payments, two 30, 1981, on a check Check 108: On December petitioner prepared No. $1,109.59, which was the trust account to Allstate in the amount of payable Attorney orally by a second authorized mortgage payment apparently Gonzales. *11 29, 1981,
Check 110: On a check on prepared No. December petitioner $1,104.79. the trust Bank in Fargo account to Wells the amount payable in Petitioner took the and a cashier’s check the same proceeds purchased amount to Bank of the West. This cashier’s check to payable was delivered Manuel Gonzalez. money Husband Gonzalez testified that this was used to make a fully on the residence it never payment mortgage, although was Allstate, money shown that the why went to nor was it a mort- explained gage needed to be made a payment through why cashier’s check or two mortgage days. had to be made in two successive payments 26, 1982, Ill: January
Check No. On petitioner a check on the prepared $1,077.66. trust account to Allstate in the amount of This payable was Attorney third it is not clear from the record mortgage payment; whether orally Gonzales knew about or authorized this he con- payment, although ceded the earlier authorizing two. account,
Following these debits from the trust Gonzalez trust original $7,630.92 $7,089.60 $541.32. say, amount had declined from to That is to money had been disbursed. Prior to the Gonzalez in the trust depositing 23, 1981, account on November had a trust account balance of petitioner 22, 1982, $112.47. January For the to disbursement period ending just prior $1,077.66, of check Ill had a No. the amount of the trust account total $1,731.45. credit balance of original
Petitioner made no to the trust account other than the deposits 23, 1981, Gonzalez On money between November and 1982. August 15, 1981, however, October (not trust) to his petitioner deposited general $750. account a check amount of Hary from Andre (Dorothy) 22, 1982, Check 112: a check on the January petitioner No. On prepared $550. Dorothy trust account in the amount of It is payable undisputed to Attorney that petitioner had no written or oral authorization from Gonzales, Gonzalez, make a court order to or Manuel Gonzalez or Camila only had held account payment originally this Since the trust Dorothy. funds, $112 family deposits and no non-Gonzalez of non-Gonzalez made, trust family from Gonzalez entirely been almost was payment monies. a check on 113:11On August petitioner prepared
Check No. $1,400. The amount of trust account Camila Gonzalez payable This amount disbursed check was postdated August Gonzales, Attorney Camila Camila with the authorization of petitioner, Gonzalez, this postdated the amount of the court. order cover check, however, 25, 1982, a check on his part drew on August $1,030.27 a check on account in the amount of as well as nership $300 both checks deposited account in the amount of personal in this finding trust that the review department account. Petitioner contends it the undis because does reflect regard misleading incomplete drawn that all aware when the check was puted evidence that were parties it. con there insufficient the account to cover This evidence were testimony during the check was drawn sisted of the court, Camila, and he had told the Camila’s court appearance, *12 $1,000 account, and to trust attorney deposit that his client was going so, money of sufficient if to would petitioner deposit that he was unable do testified that he client also to cover the check. Petitioner’s own $1,000 so. Petitioner conced if he was able to do deposit to make the agreed ed, however, to make the deposit for his agreement that one reason on the drawn the check previously that insistence of Camila’s be reimbursed. fees should account to petitioner pay to November November 1981 of time from During the period him provide petitioner times that Attorney numerous requested Gonzales On account. money in trust with a Gonzalez written of the accounting 15, 1982, proceed- Gonzalez dissolution November court superior inter required, which ing Interlocutory issued an Hearing,” “order after alia, as as well account in the trust petitioner account for the funds funds providing husband “account for all derived Gonzalez to sale of the family from November During restaurant.” the period to November accounting no written petitioner provided Attorney 8, 1982, Gonzales or and December the court. Between November 16, 1982, Attorney accounting Gonzales an made four demands for written as well as copies of all Attorney Gonzales cancelled checks. In a letter to 11, 1982, dated November until petitioner accounting refused to an provide he of the copy saw court order.
11 Boththe State Bar brief and State incorrectly Bar Court No. have this as check identified 23, 1983, to file a complete On June court ordered superior August on or before and with the court accounting Attorney Gonzales Instead, on accounting. August an 1983. Petitioner failed to such provide an Attorney purported give he Gonzales which sent a letter to That letter listed four payments of funds received and disbursed. accounting furniture, $1,400 Allstate, and the Gonzalez for to Manuel payment disbursement to mention was made of the to Camila Gonzalez. No payment fee, Bank of the West Dorothy, or the for his the disbursement this letter failed to Bar Court concluded that cashier’s check. The State 23, 1983, as it failed under the court order of June accounting as an qualify whom, amounts and disclosure expended, “make material dates of expenditure.” challenges findings depart some of the factual of the review disputes determining appropriate
ment and pline. their relevance to disci particular questions finding he that there stipulation by Attorney (Jonzales was no oral or wntten authorizing or court order $1,077.06 paid the withdrawal of the to Allstate on November 30, 1981, stipulation and that there was no written or court order for the 30, 1981, payment $1,019.59 objection December to Allstate.12His is not findings themselves, however, department's so much to the as to the review approval conclusion that the of his client and Camila Gonzalez was not whether, sufficient authorization for the withdrawals. We need not decide notwithstanding Attorney testimony agree Gonzales's that he did not stipulation parties" addition of the "mutual as a basis for account, petitioner reasonably disbursements from the trust believed that *13 evidentiary by hearing rulings prejudiced 12Petitionerclaims that officer him erroneous ability Attorney argues impeach in his to Gonzales. We find no merit in this claim. He first deposition improperly permitted impeach that the State Bar was to him with a that he had prior opportunity hearing permit The did him not been afforded to review and correct. officer knowledge prior responding question regarding to review the document to to the examiner’s his sign papers required that Camila Gonzalez had been to the escrow related to the sale of then, now, deposition response the restaurant. He claim and makes none that his made no incorrectly. had been transcribed Attorney improperly Gonzales was Petitioner also contends that his cross-examination of restricted, hearing ability the bias of that witness. The impairing thus his to demonstrate relevancy petitioner’s attempt to establish that objection officer sustained an based on deposition petitioner of in an “unhappy” him as a result of a taken Gonzales was ruling sustaining assuming error in the unrelated Even there was domestic relations case. successfully attempt objection, persisted in his prejudice petitioner’s counsel we see no since any feeling petitioner. response. personal to elicit a or bias toward It was a denial of reputation Finally, unduly presenting evidence of his petitioner restricted in claims he was witness, confirms, municipal court veracity. a for candor and that the The record person a judge, permitted testify opinion petitioner was was both that in his to and did honesty, community high integrity high regard in the as to reputation he a that veracity, integrity. 976 permissible. oral assent of the these disbursements parties by fully is are by findings supported warranted other that
Discipline record. “willfully” misappropriate
Petitioner
that he did
argues strenuously
not
this,
“no
that
noting
funds in the trust
The
Bar
account.
concedes
anyone
made
deceive or defraud
findings were
that
intended to
petitioner
However,
Bar Court
relating
actions
to his trust account.”
as the State
noted,
correctly
a
Rules
“good
attorney
involving
faith of an
is not defense
17
(1976)
(Heavey
Professional Conduct
v. State
8-101(A)(B).”
406,
8-101 is
Cal.3d
558
551
Rule
1238].)
P.2d
Cal.Rptr.
[131
attorney
manage
deposit
violated where
funds or fails to
commingles
rule,
injured.
the funds
manner
even if no
designated by
person
(Albertan v.
P.2d
State Bar
37 Cal.3d
(1984)
Cal.Rptr.
[206
into
1487].) Finally,
inquiry
A.L.R.4th
rule 8-101 leaves no room for
v.
(Doyle
Cal.Rptr.
intent.
State Bar
Petitioner’s fiduciary may professional save him from other violations of the con- rules, it is he 8- duct but defense to the violated rule charge and (B). 101(A)
II. Hernandez Matter The into a written contract with Ms. Hernandez entered 1979 Ramon Street in San on Cinderella by him of purchase property for the Rodriguez selling agent Jose. Mr. Hernandez was informed Subsequently, to him. Mr. Hernandez Ms. to sell the Rodriguez going property was not an advisability filing action then about the contacted to consult agreed pay damages. to have Ms. the sale Rodriguez complete seller, against accepted Mr. in an action represent Hernandez $1,000, Petition- in two installments. paid retainer of Mr. Hernandez which were er Court found then the State Bar took the which following steps, representation. fulfill inadequate obligation First, her and have try Rodriguez person contacted Ms. *14 letter, to demand perform the by contract. He never contacted her that informed performance. and was company Petitioner contacted the title not unilaterally, Ms. he did but Rodriguez wished to cancel the escrow Mr. between determine from the title the status of the escrow company that the Hernandez Ms. learned from realtor Rodriguez. escrow, someone seller had and that the had been sold property cancelled else. Hernandez the situation. He met with Mr. and discussed a real Petitioner next made a few calls and consulted investigative phone estate attorney about the of a suit for possibility specific performance effort, since damages. lawyer He and the concluded that it would be a futile sold to specific performance would not he where had been property someone would knowledge damages with no of the Hernandez contract and be hard to show. The State Bar Court twice petitioner represent- found set, ed to Mr. that a court a suit for Hernandez date had been and that property underway. settlement was Petitioner then advised Hernandez residence, buy another and Mr. for that brought Hernandez the papers purchase to him review. $1,000 refunded,
Mr. sought Hernandez to have the fee but resisted and the went to fee associa- through matter arbitration the local bar arbitration, $500, tion. In Mr. Hernandez awarded which December, in paid 1984.
Based on in findings the factual these two matters the review department made the conclusions of law: following
1. There attorney-client was an relationship between respondent (peti- tioner) and Gonzalez. Manuel
2. An attorney his duty owes client a fiduciary dealing with client’s a deposited in trust account. Respondent was constructive trustee for Camila Gonzalez with re- spect to funds in a trust account.
4. An attorney a duty owes as a constructive trustee to his constructive beneficiary that fiduciary is in nature.
5. One rule purpose 8-101(A) and is to (B), provide against proba- bility in some cases of commingling or misappropriating, the possibility many case of commingling in all cases and the misappropriation, danger result commingling will in loss clients’ money.
6. Good faith 8- of an rule involving defense cases 101(A) and (B).
7. Rule 8-101 that all the benefit of requires funds received or held for clients or may others shall be who have a direct interest such funds deposited merely in an identifiable client The rule trust account. is violated own, an attorney’s money commingling his client’s with his *15 by the designated money the manner manage
failure to and such deposit rule if person injured. even no attorney’s (depositor’s)
8. the inquiry Rule 8-101 leaves no room for into intent. (c).
9. of section subdivision Respondent provisions violated 10. Respondent 6-101(2). violated rules 2-111(A)(2), 8-101(A), violated rules Respondent 8-101(B)(4). identify it department The review did not otherwise the conduct which statutory is clear provisions concluded violated these various and rules. It however, recitals, violated petitioner from these that conclusion that We rule and related to his conduct in the (B) Gonzalez matter. 8-101(A) (with- conclusion that violated rules petitioner 2-111(A)(2) infer that the (failure and to 6-101(2) drawal from employment) perform competently) We mystified, to the Hernandez matter. are as to the basis related petitioner (c), conclusion that violated section subdivision as for the finding duty no in the record for that he to we find failed his support actions, only such or defense as proceedings, “counsel or maintain to appear charged or the defense of a with a just except person public him or her legal authority no for a State Bar offers construction that statute offense.” The petitioner misconduct was found have en- encompass which would to in. gaged department of the review that he the conclusion challenges He that his of funds (B)(4). deposit contends into 8-101(A) rule
violated commingling, that he had no not constitute account did the trust to Camila as she was not from account funds either obligation pay was to account to her. We disputed, funds right client and her $1,330.27 from his partnership deposit only that agree did constitute commingling August on personal accounts of the import rule. The clear evidence is the meaning of funds within funds that had been account to restore made deposit was fee, for his own withdrawn, i.e., petitioner withdrawn those improperly $1,000 Camila. The was to have $1,400 check cover postdated client, or if the client by petitioner’s been account the trust deposited into who would himself make so to reimburse unable do he was that, deposited, they funds were once the no suggestion There is deposit. were, his rather were, funds than trust they either believed attorney’s An restora Camila. to his client belonging and/or account is not a further a trust tion of funds withdrawn wrongfully *16 “commin- violation of the Rules of Professional Conduct as a prohibited gling” of and client funds.
We to account to reject obligation claim that he had no petitioner’s Camila, concluded, funds to pay department however. As nature of the agreement to which the from the sale of pursuant proceeds restaurant duty were trust account created a deposited petitioner’s Camila as fiduciary well as to client. As a petitioner’s obligation account funds extended to both an interest in them. parties claiming Having assumed the to hold and disburse the funds as direct responsibility ed the court or by both owed an stipulated parties, petitioner obligation records, a Camila as “client” to maintain complete “render appropriate accounts,” and or deliver “[promptly pay to the client” on request funds he held in trust.
Quite apart failure to maintain and accurate complete accounts, however, records and to render convincing there is clear and evidence of other violations of rule 8-101 by his unauthorized withdrawal $1,000 $550 paid to himself for his fees and trust payment from the funds Dorothy at a time when there were insufficient funds in the trust account to cover the check apart from those of the Gonzalez couple.
Petitioner also disputes conclusion of the State Bar Court that he violated rules 2-111(A)(2) 6-101(2). Petitioner states that his failure to file a on complaint behalf of Mr. Hernandez does not constitute a viola tion of rule 6-101(2), since in his opinion may have done so have been violation of his duty under section (c), subdivision not to pursue matter of dubious merit. Petitioner had been retained at a time in which the property was sold to a bona fide to that prior
purchaser without notice the seller’s contract with his client. He was retained for the purpose protecting Hernandez’s interest if property, necessary by an initiating action for specific performance He damages. took no action to and/or prevent consummation of the sale to the third party, and he offered no evidence in these proceedings any he had made inquiry thereafter investigation to determine whether the seller’s breach of the con tract caused to his client. damage
We agree with that the record does not support the conclusion that his conduct rule He 2-111(A)(2). violated did not withdraw from After the representation Hernandez. been sold he property continued Hernandez, to advise the purchase recommended of other and he property, reviewed the the subseqent purchase. related to His papers conduct consti- tuted an intentional failure to perform legal or reckless services competent- ly, not a withdrawal from of Hernandez. representation
We this that in the Gonzalez agree also that neither conduct nor not impose matter violated section That section does (c). subdivision the duty attorney Quite opposite. an affirmative on an to initiate a lawsuit. by prohibiting It to establish a on his discretion to do so appears limitation be attorney to counsel from not to the maintaining appear actions which do Therefore, of meritorious. a lawsuit on behalf failure initiate petitioner’s Nonetheless, did petitioner’s Hernandez not violate the section. 6- in violate rule failure to act the Hernandez matter did competently13 is and thus warrants the of It irrelevant 101(A)(2), imposition discipline. the only upon by conduct the relied provisions that the violated one of three Similarly, review not violate the section department. petitioner did Gonzalez, his conduct (c), subdivision in his of but other representation that matter does warrant discipline. Mitigating
III. Factors factors aimed at lessening number of presents culpability is too discipline in these incidents and at that the recommended showing First, noted, as been claims the Bar already severe. has and State of actions with to the Gonzalez funds was regard concedes that none the has been noted to deceive or defraud. On other hand it also intended and may faith but is not a defense to good mitigate, misappropriation Bar, (Schultz v. 15 Cal.3d supra, of trust client funds. commingling Bar, Moreover, 17 Cal.3d supra, 553.) See v. State Heavey also Mr. actually had misrepresented found that petitioner State Bar Court set. that court dates been had been filed and Hernandez that an action it is finding, supported factual this petitioner disputes Although is, course, form of deception. a serious of misrepresentation evidence. Such claim based on character for is mitigation Petitioner’s principal area. As the State the San Jose attorneys testimony of several judges relating found, letters and testified provided Court “several personages specific from the individuals’ both Respondent’s [petitioner’s] reputation The veracity candor.” honesty, and in the knowledge community the determi review not affect evidence should department argues that this is nation of these discipline proceedings case. Because the purpose this system, protection in the legal public, confidence preservation is maintenance of relevant this evidence high standards of professionalism, extent that it suggests recommended Standards, is department, or that for a violation proposed particular 6-101(A)(l) provides: “Attorney application 13 Rule now competence means the skill, learning, arising diligence necessary sufficient discharge member’s duties employment representation.” from the or serve the other future misconduct necessary appropriate deter purposes discipline.
Therefore, communi- legal that petitioner’s reputation evidence may record of ty any discipline, with the absence of good, prior coupled that the recommended argument be considered in support six-month is excessive. suspension *18 Discipline
IV. the In Bar the bears bur disciplinary proceedings of that recommendation of the review demonstrating den the v. State (Smith (1985) is unwarranted or erroneous. Bar 38 department 525, 236, 139]; 698 State Bar Cal.3d 539 P.2d Ballard v. Cal.Rptr. [213 35 291 673 P.2d v. (1983) Cal.Rptr. 226]; Cal.3d Dixon State [197 32 653 Cal.3d P.2d He has Cal.Rptr. 321].) [187 so in recognize done this matter. We that the record fails support conclusion the the of that department petitioner commingled funds and violated section subdivision (c). presented He has that evidence officeprocedures his have been improved and taken to steps avoid improper disbursements from client trust funds. In years the eight since he represent Gonzalez repetition ed no of type of that conduct led to proceed these has been ings reported. We are satisfied that the reporting procedures other probation conditions of recommended by the review will department, his reinforce determination to avoid similar conduct Nonethe future. less, the six-month suspension by recommended State Bar not exces is reasonably sive. It can misconduct, be considered deter necessary to future and is consistent the guidelines by suggested the State Bar as the sanction for appropriate misconduct of this nature.
Standard 2.2
of
Standards embodies
for
the recommended sanctions
misconduct involving entrusted funds or
like that misconduct
property,
involved in the Gonzalez matter.
of
2.2 provides
Subdivision
standard
(a)
an
that
attorney who is
funds
guilty of wilful
of entrusted
misappropriation
shall generally
disbarred;
be
subdivision
that an
who
(b) provides
funds,
is not
of
guilty wilful
of such
but who nonetheless
misappropriation
is guilty either of
rule
of such funds
“another
of
commingling
or of
violation
8-101,
Conduct,”
Rules of
“at least a
Professional
shall be subjected to
law,
three-month actual
from the
suspension
practice
irrespective
mitigating circumstances.”
there was
(Italics added.)14 Even
that
assuming
“(a)
provides
Culpability
14 Standard2.2
in full:
misappropriation
of a
member wilful
property
Only
proper
entrusted
shall result in disbarment.
if
amount of funds or
ty misappropriated
insignificantly
is
or if
compelling mitigating
small
the most
circumstances
case,
a
least
this
that at
suggests
no wilful
in this
misappropriation
guideline
is
on the basis of
Gonzalez
three-month actual
warranted
suspension
Further,
failure to make a prompt
matter alone.
have noted petitioner’s
we
him,
specific
and accurate
of funds entrusted
which
accounting
1.2,
(b)(iii).
subdivision
aggravating factor identified
standard
matter,
course,
mis-
we have addition
Gonzalez
matter. The evidence in that matter supports
conduct
the Hernandez
wilfully
competently
Bar’s
failed to
findings
perform
compounded
services for which
employed (rule 6-101),
he
been
legal
new
Although
of the case.
twice
client the status
misrepresenting
minimum
mis-
guidelines
any
do not establish
sanction
such
specific
2.4,
1.2,
it
(see
(b)),15
(b)(ii)
std.
subd.
standard
subdivision
makes
conduct
an
acts of
constitute
circum-
multiple
wrongdoing
“aggravating
clear
than
be
greater
sanction
otherwise would
warranted.
justifying
stance”
Thus,
by the
actual
recommended
State Bar
suspension
the six-month
*19
guidelines.
with the sanctions
the new
contemplated
consistent
appears
circumstances, we
find that the
might
guidelines’ recommend
Under some
in light
harsh or too lenient
of all the circum
are either too
ed sanctions
matter,
the
notwithstanding
shortcom
in the case.
this
stances
record,
the
Bar’s
has not demonstrated that
State
petitioner
ings
v.
Bar
40 Cal.3d
(1985)
Bambic
State
(See
is erroneous.
recommendation
862];
(1983)
707 P.2d
McMorris v.
Cal.Rptr.
323 [219
This order is effective 30 after days filing this opinion. PANELLI, I respectfully J. dissent. Petitioner’s conduct warrants disci but, view, pline my falls far record short of supporting suspension Petitioner, six a full months. I base my conclusion on the as a following: (1) member of the State Bar since has had a good reputation legal community and is respected by judges lawyers community; his he (2) no has record of prior discipline; petitioner did commingle Conduct, August 1982 within the of Rules of rule 8- meaning Professional 101; (4) lacked the intent to deceive or defraud in the Gonzalez matter; and (5) petitioner, although may not have been representation competent, did not withdraw Hernandez representation considerations, matter. In light of these a six-month actual suspension strikes me as an unduly response harsh conduct.
Broussard, J., concurred.