Source: https://law.justia.com/cases/california/supreme-court/3d/7/676.html
Timestamp: 2019-05-27 08:13:39
Document Index: 549063079

Matched Legal Cases: ['§ 6103', '§ 6106', '§ 6083', '§ 13', '§ 930', '§ 940', '§ 2257', '§ 6067', '§ 452']

Justia › US Law › Case Law › California Case Law › Cal. 3d › Volume 7 › Black v. State Bar
In Bank. (Opinion by The Court.) [7 Cal. 3d 677]
The two proceedings were heard by different local committees and were argued at different times before the board. It is appropriate, however, for us to consider the two proceedings together. (Cf. Cutler v. State Bar, 71 Cal. 2d 241, 243 [78 Cal. Rptr. 172, 455 P.2d 108].)
Petitioner was admitted to practice in 1962. In both proceedings he was charged in a notice to show cause with violating his oath and duties as an attorney (Bus. & Prof. Code, §§ 6103, 6067, & 6068), wilfully [7 Cal. 3d 681] violating rule 9 of the Rules of Professional Conduct, fn. 3 and committing acts involving moral turpitude (Bus. & Prof. Code, § 6106). In one of the proceedings (L.A. 29855) he was also charged with wilfully violating rule 7 of the Rules of Professional Conduct, fn. 4 and in that proceeding it was charged in particular that he wrongfully loaned $10,000 belonging to the Turrentine estate for which he was the attorney to other clients without the administratrix' approval and without any authority and thereby represented conflicting interests (count 1), that in making such loans he intentionally converted to his own purposes $10,000 belonging to his client (count 2), and that he misrepresented to the administratrix that he was required by law and the State Bar to invest at least one-third of the estate and based on this misrepresentation obtained her consent to the investment of one-third of the estate, and thereafter, contrary to her instructions, failed to invest in any proper estate investment and instead loaned the entire $10,000 to other clients (count 3).
In June 1966 petitioner was retained by Mrs. Lorraine Washington to probate the estate of her deceased brother, Harold Turrentine. Mrs. Washington was thereafter made administratrix of the estate, the sole asset of which was a $10,000 insurance policy. In August 1966 petitioner received a $10,000 check representing proceeds of the policy and after securing Mrs. Washington's endorsement on the check deposited it in a trust account. [7 Cal. 3d 682]
Petitioner testified: During a telephone conversation with Mrs. Washington several weeks after the check was deposited in the trust account he asked her permission to lend the money to two clients of his and stated that they would be willing to pay the bank rate of interest for a loan and that he would guarantee the loans, and she stated for him to go ahead. She had theretofore said she was not interested in savings institutions because they did not pay enough interest. The only thing he discussed with her "regarding one-third" was the amount of his attorney fees from the sale of some Utah property. fn. 9 He believed the loans were proper because he had the authorization [7 Cal. 3d 683] of the administratrix, who had told him she was the sole heir. fn. 10 In 1966 he had been in practice only four years, did mainly criminal law, and had not handled any probate before the Turrentine estate, although he had made appearances in estate matters for a former associate.
With respect to the scope of our review we recently stated in Himmel v. State Bar, 4 Cal. 3d 786, 793-794 [94 Cal. Rptr. 825, 484 P.2d 993], "Findings by the local committee and the Disciplinary Board are not binding on this court, and we will weigh the evidence and pass upon its sufficiency. All reasonable doubts will be resolved in favor of the accused and if equally reasonable inferences may be drawn from a proven fact, the inference which leads to a conclusion of innocence rather than one leading to a conclusion of guilt will be accepted. [Citations.] [7 Cal. 3d 684]
[1] Here petitioner contends, without elaboration, that "The findings ... are not supported by but are contrary to the evidence." This allegation does not sustain his burden of showing that the action of the board is erroneous or unlawful. (Bus. & Prof. Code, § 6083, subd. (c); Simmons v. State Bar, 70 Cal. 2d 361, 364-365 [74 Cal. Rptr. 915, 450 P.2d 291]; Hyland v. State Bar, 59 Cal. 2d 765, 767 [31 Cal. Rptr. 329, 382 P.2d 369].)
Petitioner contends that at the State Bar proceedings his privilege against self-incrimination was violated. (U.S. Const., Amends. 5 & 14; Cal. Const., art. I, § 13.) At the local committee hearing the State Bar called him as a witness. Immediately after he was sworn the committee chairman told him "... if you have any reason to raise any constitutional or other objections about testifying ... we would entertain that, otherwise we would be happy to have your testimony." Petitioner replied, "I have nothing to hide," and his attorney stated "No objections." Petitioner then proceeded to testify to his version of the facts. Later during the hearing the State Bar indicated it wanted to recall him as a witness. Petitioner objected on the ground that the State Bar "has not rested [its] case" and that the State Bar's "seesawing back and forth between one of [its] witnesses" and the "opposition" was denying him a fair trial. The objection was overruled, and he was told he would "be called to the stand unless he wishe[d] to invoke some type of privilege." He thereupon proceeded to testify and did not object to any question on the ground his answer would tend to incriminate him. At the[7 Cal. 3d 685] proceeding before the board after the local committee made its findings, which were unfavorable to him, he argued, as he does now, that there was a violation of his privilege against self-incrimination.
The Fifth Amendment of the federal Constitution provides: "No person ... shall be compelled in any criminal case to be a witness against himself, ..." (Italics added.) This provision is made applicable to the states by the Fourteenth Amendment. (Malloy v. Hogan, 378 U.S. 1 [12 L. Ed. 2d 653, 84 S. Ct. 1489].) Article I, section 13, of the California Constitution contains a substantially identical provision.
The availability of the privilege, of course, "does not turn upon the type proceeding in which its protection is invoked, but upon the nature of the statement or admission and the exposure it invites." (In re Gault, 387 U.S. 1, 49 [18 L. Ed. 2d 527, 558, 87 S. Ct. 1428]; in accord, Ex parte Clarke, 103 Cal. 352, 354 [37 P. 230].) "'The privilege can be claimed in any proceeding, be it criminal or civil, administrative or judicial, investigatory or adjudicatory ... it protects any disclosures which the witness may reasonably apprehend could be used in a criminal prosecution or which could lead to other evidence that might be so used.' [Fn. omitted.] (Emphasis added.)" (In re Gault, supra, at pp. 47-48 [18 L.Ed.2d at pp. 557-558], quoting from conc. opn. by Justice White in Murphy v. Waterfront Comm'n., 378 U.S. 52, 94 [12 L. Ed. 2d 678, 704, 84 S. Ct. 1594].)
[3] The privilege protects an accused in a criminal case from being called to the stand as a witness and testifying (United States v. Echeles, 352 F.2d 892, 897; United States v. Housing Foundation of America, 176 F.2d 665, 666; People v. Whelchel, 255 Cal. App. 2d 455, 460 [63 Cal. Rptr. 258]; Killpatrick v. Superior Court, 153 Cal. App. 2d 146, 149-150 [314 P.2d 164]; see Evid. Code, § 930), and any person from being required to give answers that will subject him to criminal prosecution (Malloy v. Hogan, supra, 378 U.S. 1, 11-14 [12 L. Ed. 2d 653, 661-663]; Counselman v. Hitchcock, 142 U.S. 547, 562 [35 L. Ed. 1110, 1113-1114, 12 [7 Cal. 3d 686] S.Ct. 195]; Ex parte Clarke, supra, 103 Cal. 352, 354; see Evid. Code, § 940; Witkin, Cal. Evidence (2d ed. 1966) p. 828). fn. 11
With respect to our state constitutional privilege against self-incrimination, it has been held that an attorney against whom a disciplinary proceeding is brought does not have the complete immunity from testifying of the defendant in a criminal case; he may be compelled to testify but may refuse to answer questions on the ground that his testimony would "tend to incriminate him." (Fish v. The State Bar, 214 Cal. 215, 222-223 [4 P.2d 937]; McIntosh v. The State Bar, 211 Cal. 261, 262-263 [294 P. 1067]; In re Vaughan, 189 Cal. 491, 496-497 [209 P. 353, 24 A.L.R. 858]; see Witkin, Cal. Evidence, supra, p. 836.) By the quoted phrase the court evidently meant "tend to establish criminal liability." In Johnson v. State Bar, 4 Cal. 2d 744, 752 [52 P.2d 928] this court stated, "It has frequently been held that a member of the profession may be called upon to testify, even though such testimony may establish his violation of his oath of office and his duty as an attorney at law." (See also McCormick on Evidence (1954) p. 268, fn. 4 ; 8 Wigmore on Evidence (1961) § 2257.)
In Spevack v. Klein, 385 U.S. 511 [17 L. Ed. 2d 574, 87 S. Ct. 625], an attorney in a disciplinary proceeding refused to honor a subpoena duces tecum by refusing to produce the demanded financial records and by refusing to testify at the judicial inquiry. His defense was that the production [7 Cal. 3d 687] of the records and his testimony would tend to incriminate him. The state court ordered him disbarred for his refusal, but the United States Supreme Court reversed, holding that an attorney may not be disbarred for claiming his privilege against self-incrimination. Spevack overruled Cohen v. Hurley, 366 U.S. 117 [6 L. Ed. 2d 156, 81 S. Ct. 954], wherein an attorney, relying on his privilege against self-incrimination, refused to testify and was disbarred for his refusal, and it was held that the self-incrimination clause of the Fifth Amendment was inapplicable to the states.
Although Spevack suggests to at least one commentator that the United States Supreme Court would now regard a disciplinary proceeding as criminal for purposes of the Fifth Amendment privilege against self-incrimination (see 53 A.B.A.J. 631), courts and other commentators have expressly or impliedly rejected that view (State Bar of Michigan v. Block, 383 Mich. 384 [175 N.W.2d 769, 771 et seq.]; In re Klebanoff, 21 N.Y.2d 920 [289 N.Y.S.2d 755, 237 N.E.2d 75] [cert. den. 393 U.S. 840 (21 L. Ed. 2d 110, 89 S.Ct. 118)]; Zuckerman v. Greason, 20 N.Y.2d 430 [285 N.Y.S.2d 1, 231 N.E.2d 718, 721] [cert. den. 390 U.S. 925 (19 L. Ed. 2d 985, 88 S.Ct. 856); rehg. den. 390 U.S. 975 (19 L. Ed. 2d 1196, 88 S.Ct. 1031)]; see In re Selig, 32 App.Div.2d 213 [302 N.Y.S.2d 94, 95-96]; The Myth of Spevack v. Klein by Michael Franck, 54 A.B.A.J. 970, 971-972; Spevack v. Klein: Milestone or Millstone in Bar Discipline? by Russell Niles and Judith Kaye, 53 A.B.A.J. 1121, 1124.) Zuckerman, for example, held that the sustaining of misconduct charges against two attorneys on the basis of testimony given by them allegedly under the compulsion of Cohen v. Hurley, supra, 366 U.S. 117, was not unconstitutional. Zuckerman stated that a disbarment proceeding is not a criminal case and that "The evidence which [the attorneys] produced ... cannot be used against them in any criminal proceeding. They had no privilege against making disclosure usable only in a disciplinary proceeding." (P. 721.)
Neither In re Ruffalo, 390 U.S. 544, 550-551 [20 L. Ed. 2d 117, 121-123, 88 S. Ct. 1222], nor In re Gault, supra, 387 U.S. 1, requires our holding that a disciplinary proceeding against an attorney is criminal for purposes of the federal constitutional privilege against self-incrimination. Ruffalo, in concluding that an attorney in a disciplinary proceeding is entitled to fair notice of the charge, states that such proceedings are of a "quasi-criminal nature. Cf. In re Gault, [supra] 387 U.S. 1, 33" and that "disbarment designed to protect the public, is a punishment or penalty imposed on the lawyer. (Ex parte Garland, 4 Wall. 333, 380; Spevack v. Klein, [supra] 385 U.S. 511, 515.)" However, Ruffalo "hardly stands for an equation of criminal and disciplinary proceedings, a most unlikely view." (Kelly v. Greason, 23 N.Y.2d 368 [296 N.Y.S.2d 937, 244 N.E.2d 456, 466]. [7 Cal. 3d 688]
In re Gault, supra, 387 U.S. 1, 49, declared that "juvenile proceedings to determine 'delinquency,' which may lead to commitment to a state institution, must be regarded as 'criminal' for purposes of the privilege against self-incrimination. To hold otherwise would be to disregard substance because of the feeble enticement of the 'civil' label of convenience which has been attached to juvenile court proceedings." Disciplinary proceedings, however, unlike juvenile court proceedings, cannot result in incarceration, and, although they may result in disbarment, suspension, or censure, such a penalty is designed to protect the court and public from the official ministration of persons unfit to practice. (See In re Echeles, 430 F.2d 347, 349; Zitny v. State Bar, 64 Cal. 2d 787, 790-791, fn. 1 [51 Cal. Rptr. 825, 415 P.2d 521]; In re Vaughan, supra, 189 Cal. 491, 496-497.)
[4] We conclude that an attorney against whom a disciplinary proceeding is brought does not have the complete immunity from testifying of a defendant in a criminal case; fn. 12 he may be called upon to testify but may decline to answer questions on the ground that his testimony would tend to incriminate him. [5] Here, by testifying fully without objecting to any question on the ground of the privilege against self-incrimination, petitioner waived it. (United States v. Kordel, 397 U.S. 1, 10 [25 L. Ed. 2d 1, 9, 90 S. Ct. 763]; Rogers v. United States, 340 U.S. 367, 370-371 [95 L. Ed. 344, 347-348, 71 S. Ct. 438, 19 A.L.R.2d 378]; Vajtauer v. Comm'r of Immigration, 273 U.S. 103, 113 [71 L. Ed. 560, 566, 47 S. Ct. 302]; Steinmetz v. Cal. State Board of Education, 44 Cal. 2d 816, 824 [285 P.2d 617] [cert. den. 351 U.S. 915 (100 L. Ed. 1448, 76 S.Ct. 708)]; see also The Florida Bar v. Curry (Fla.) 211 So. 2d 169, 172 [cert. den. 393 U.S. 981 (21 L. Ed. 2d 442, 89 S.Ct. 451)].)
[6] Petitioner has cited no authority, and we have found none, requiring that in a disciplinary proceeding the State Bar give admonitions regarding the privilege against self-incrimination to an attorney represented by counsel. Under some circumstances admonitions must be given regarding the privilege against self-incrimination (e.g., Miranda v. Arizona, 384 U.S. 436, 467-469 [16 L. Ed. 2d 694, 719-721, 86 S. Ct. 1602, 10 A.L.R. 3d 974] [to a defendant before custodial interrogation]; In re Tahl, 1 Cal. 3d 122 [81 Cal. Rptr. 577, 460 P.2d 449] [cert. den. 398 U.S. 911 (26 L. Ed. 2d 72, 90 S.Ct. 1708)] [to a defendant who is pleading guilty]; Killpatrick v. Superior Court, supra, 153 Cal. App. 2d 146, 149 [to unrepresented defendant in a criminal case]). However, the circumstances here differ substantially from those in the cited cases. [7 Cal. 3d 689]
Petitioner, when asked what caused the delay in Mrs. Brown's receiving her money, testified: The draft was on an out-of-state bank, and he instructed his "girl" to tell him when it "would clear." He was a sole practitioner, had moved his office the prior summer, and had one "girl" after another. During the period in question he had three part-time secretaries. One secretary told him that the "draft would be cleared on the date that I made out the check to Mrs. Brown," which date he guessed was April 3, 1969. After writing the check he had to go to Palm Springs concerning a "disturbance" there. He was away several days and when he returned he "found that one girl had left, and she did not make deposits on some things, and on other things the checks that I had signed she had made out to various individuals whose deposits wasn't [sic] in the bank, plus ... she left with about $900 of cash ... [that] belonged to another client ... [7 Cal. 3d 690] and so when Mrs. Brown called ... I just ... drew out monies of my own and put them in the account because I had been told ... that in my absence Mrs. Brown had come in with a ... tough looking guy, and said something to the effect she was going to shoot me ... if Mrs. Brown didn't get her money .... [W]hen I started investigating I just couldn't make heads or tails out of what had gone on in my absence."
[7] Petitioner asserts, without elaboration, that the finding that he wrongfully converted $817 belonging to Mrs. Brown is not supported by the evidence. This assertion does not sustain his burden of showing that the board's action is erroneous or unlawful. (Cf. Simmons v. State Bar, supra, 70 Cal. 2d 361, 364-365.)
[8] Furthermore, the recited evidence supports the finding that petitioner [7 Cal. 3d 691] wrongfully converted funds of Mrs. Brown. fn. 13 It indisputably appears that the trust account into which petitioner deposited the draft (of which Mrs. Brown's share was $817) fell below $817 on March 20, 1969, and remained below that amount until April 7, 1969. Bank records show that the account was in the name of "Arthur S. Black Tr. Acct.," and no evidence was presented that an authorization was on file with the bank for anyone but petitioner to issue checks on the account. Although petitioner claimed he signed an authorization card so that his secretaries' names could be filled in and the card filed with the bank in an emergency, he did not testify that the card was ever filed with the bank, nor did he claim that anyone other than himself signed checks on the account.
Furthermore, even if petitioner's employees were in some manner responsible [7 Cal. 3d 692] for the account's containing insufficient funds to pay the amount owed Mrs. Brown and he did not know at the time he improperly withdrew her funds that he was misappropriating them, these facts would not exonerate him.
[10] The requirement of rule 9, Rules of Professional Conduct, that unless the client otherwise directs in writing the client's funds be deposited in a trust account manifestly contemplates that they be retained therein. This rule is binding upon attorneys -- not lay personnel -- and necessitates reasonable supervision by an attorney of his staff in handling matters relating to a trust account. As we recently stated in Vaughn v. State Bar, 6 Cal. 3d 847, 857 [100 Cal. Rptr. 713, 494 P.2d 1257], in the context of the misconduct there involved, "even though an attorney cannot be held responsible for every detail of office procedure, he must accept responsibility to supervise the work of his staff."
In addition, as we have seen, there was clear and convincing proof that before he issued the check to Mrs. Brown he knew of his failure to keep her trust funds inviolate, and he nevertheless failed to deposit sufficient funds in the account to cover the check on the date appearing thereon. When she advised him the check had been dishonored, he blamed the bank and told her the funds "should be" there the next day, and he again failed to deposit the funds on that day and did not do so until several days later. The foregoing, together with the proof that he changed his story as to when she would receive her share of the settlement and that before she tried to negotiate his check he concealed from her his failure to hold her trust funds inviolate, warrants the conclusion that he was not acting in good faith and was guilty of gross negligence amounting to moral turpitude and a violation of his oath to discharge his duties as an attorney to the best of his knowledge and ability (Bus. & Prof. Code, §§ 6067, 6103, & 6106; see Vaughn v. State Bar, supra, 6 Cal. 3d 847, 857-859; Moore v. State Bar, 62 Cal. 2d 74, 81 [41 Cal. Rptr. 161, 396 P.2d 577]; Call v. State Bar, 45 Cal. 2d 104, 110 [287 P.2d 761]). [12] As observed in Call (at p. 111), "The good faith of an attorney is a matter to be considered in determining whether discipline should be imposed for acts done through ignorance or mistake." [7 Cal. 3d 693]
[14] Petitioner next contends that "The proceedings are void ... in that pursuant to a demand ... upon petitioner to appear before [the local committee], he did so appear and was interrogated by said committee without receiving an admonition that he had a ... right under Article I, section 13 of the California Constitution, and under the Fifth Amendment as incorporated in the Fourteenth Amendment of the United States Constitution to refuse to be interrogated." He does not identify the nature of the asserted "demand." The record shows that petitioner, who was represented by counsel, took the stand in his own behalf in the instant proceeding. Following his direct testimony he was asked several questions by the committee, and he responded without objecting to any question on the ground of the privilege against self-incrimination. Under the circumstances he waived that privilege. (United States v. Kordel, supra, 397 U.S. 1, 10; Rogers v. United States, supra, 340 U.S. 367, 370-371; Vajtauer v. Comm'r of Immigration, supra, 273 U.S. 103, 113; Steinmetz v. Cal. State Board of Education, supra, 44 Cal. 2d 816, 824 [cert. den. 351 U.S. 915]; see also The Florida Bar v. Curry, supra, 211 So. 2d 169, 172.) In this proceeding, as in L.A. 29855, he has cited no authority requiring that in a disciplinary proceeding the State Bar give admonitions regarding the privilege against self-incrimination to an attorney represented by counsel.
[15] Petitioner further contends, without citation of authority, that it was a violation of due process to consolidate for hearing two "unrelated accusations." Two proceedings against petitioner (L.A. 1944 [in which Mrs. Brown was the complaining witness] and L.A. 1962 [in which a Mrs. Heard [7 Cal. 3d 694] was the complaining witness]) were consolidated for hearing pursuant to rule 27, Rules of Procedure of the State Bar. After evidence was received, the local committee recommended dismissal of L.A. 1962, and the board dismissed it. Under the circumstances it does not appear that petitioner was prejudiced by the consolidation.
FN 1. Eleven members so recommended. One voted "No" on the ground that the discipline was too severe. The local committee recommended two years' suspension.
FN 2. Nine members so recommended. Two voted "No" on the ground that the discipline was insufficient. The local committee recommended public reproval.
FN 3. Rule 9 provides: "... Unless the client otherwise directs in writing, [a member of the State Bar] shall promptly deposit his client's funds in ... a bank account separate from his own account and clearly designated as 'Clients' Funds Account' or 'Trust Funds Account', or words of similar import. ..."
FN 4. Rule 7 provides: "A member of the State Bar shall not represent conflicting interests, except with the consent of all parties concerned."
FN 5. The facts are shown by evidence, stipulations, or the superior court record in the Turrentine estate matter, of which we may take judicial notice (Evid. Code, §§ 452 & 459; see Lee v. State Bar, 2 Cal. 3d 927, 941 [88 Cal. Rptr. 361, 472 P.2d 449]).
FN 6. According to Goldberg, he could not borrow from a bank because his credit was not good.
FN 7. Petitioner testified that he prepared three confessions of judgment in favor of the estate relating to the loan transactions, which documents he signed and kept in his files, but that he destroyed one of the documents in 1968 and the other two "Before April 10, 1969 ... somewhere around there." He was served with the notice to show cause in the instant proceeding in February 1969. He stated that he also kept "sort of a running sheet with Goldberg" showing the amounts paid out and received, and Goldberg testified that petitioner kept a record of the payments, which they would both initial. According to petitioner, that record was also destroyed.
FN 8. Her testimony reflected uncertainty as to the date of the conversation. She testified that the conversation was in the "Spring of '67," thereafter stated it was "[b]etween August and November of '67," and later stated it was in the "Fall of '66."
FN 9. Mrs. Washington testified that she discussed legal matters involving Utah property with the petitioner in 1967 and that she did not remember him telling her the legal fee would usually be one-third but that he could have done so.
FN 10. The petition for letters of administration filed in July 1966 lists as the decedent's immediate beneficiaries not only his sister, Mrs. Washington, but also a brother, whose address was unknown.
FN 11. Evidence Code section 930 provides: "To the extent that such privilege exists under the Constitution of the United States or the State of California, a defendant in a criminal case has a privilege not to be called as a witness and not to testify."
FN 12. We have also in other contexts regarded a disciplinary proceeding as not a criminal action. (See Eschwig v. State Bar, 1 Cal. 3d 8, 18 [81 Cal. Rptr. 352, 459 P.2d 904, 35 A.L.R.3d 662]; Best v. State Bar, 57 Cal. 2d 633, 637 [21 Cal. Rptr. 589, 371 P.2d 325].)
FN 13. Since the account never fell below $168.61, he may not have converted the entire $817, but whether he converted the entire sum or only a substantial portion thereof is not of great importance.
FN 14. As we have seen, the board and local committee found that on April 2, 1969, petitioner issued to Mrs. Brown a check dated April 3, 1969. This finding is not challenged by petitioner and is supported by (1) Mrs. Brown's testimony that petitioner told her he would give her a check postdated for "the 3rd" and that he did so on April 1 or 2, 1969, and (2) two exhibits -- the check dated April 3, 1969, and a note to her from petitioner dated April 2, 1969, stating that the check is enclosed. The foregoing evidence shows that the postdating was intentional.