Opinion ID: 1442161
Heading Depth: 2
Heading Rank: 1

Heading: The Nance matter

Text: Petitioner was employed by Benjamin and Margaret Nance to appeal a superior court judgment. He was paid $7,500 in attorney fees and $1,000 in advanced costs. Petitioner deposited the entire $8,500 into his savings account rather than into a client trust account, thus commingling the $1,000 in advanced costs with his own personal funds. A court reporter submitted to petitioner an estimate of costs to prepare the reporter's transcript on appeal. Two months later, the reporter had not received payment, and she contacted petitioner. He falsely told her that he had a cancelled check with her endorsement. She reviewed her records and again informed petitioner that she had not been paid. He sent her a check that was returned by the bank as being drawn against insufficient funds. When the reporter notified him of this, he again falsely stated the first check had been cashed, depleting his bank account and causing the second check to be returned. Petitioner wrote a certified check to the reporter. The referee concluded petitioner had violated rule 8-101(A) of the former Rules of Professional Conduct of the State Bar by failing to deposit the $1,000 advanced costs into a client trust account and by commingling them with his personal funds. [1] The referee also found a violation of rule 6-101 and Business and Professions Code section 6103 (willful violation of attorney's oath and duties) in petitioner's failure to make timely payment of the court reporter's fees and in his false statements to her. [2] The referee noted that court rules provide for nullification of a notice of appeal if a court reporter's cost estimate is not paid within 10 days after the estimate is given. Petitioner waited two months and then attempted payment with a bad check. The referee, however, found that petitioner did not act with moral turpitude and did not intend to defraud the reporter.
The review department made several additional findings of fact, which petitioner challenges. (1) The standard of review in this court is clear. The findings of the panel and review department must be given great weight and the burden is on petitioner to show that they are erroneous ... but that burden may be met by a demonstration that the charges of unprofessional conduct are not sustained by convincing proof to a reasonable certainty.  ( McCray v. State Bar (1985) 38 Cal.3d 257, 263 [211 Cal. Rptr. 691, 696 P.2d 83], italics added.) In connection with petitioner's dealings with the court reporter, the review department found that In fact, there was no `first check' and the only check which Respondent [petitioner here] had written was the one that failed to clear and was returned for insufficient funds. We reject this finding, which appears to be inadvertent. It was included in a paragraph copied from the referee's original decision. Petitioner, however, requested reconsideration by the referee on the ground that the question whether there was a first check had not been raised in the notice to show cause or at the hearing before the referee. (The narrow question presented to the referee was only whether petitioner falsely represented that the check had been cashed, not whether he falsely represented that it had been mailed.) The State Bar examiner did not object to petitioner's request, and the referee deleted the finding from his decision. Moreover, petitioner presented evidence in support of his reconsideration request that a first check had in fact been mailed. Nor is there convincing proof to support the review department's finding that petitioner intended to defraud the court reporter. Petitioner's statement that he had a cancelled check was false but does not necessarily show any intent to defraud. The reporter had not yet performed any services, and petitioner did pay her by certified check in a relatively short time after the payment problem arose. Nor is there any evidence he intentionally drew the check against insufficient funds. (2) The referee, who heard the testimony of both petitioner and the reporter, found no intent to defraud. We give great weight to a referee's finding as to intent. ( Franklin v. State Bar (1986) 41 Cal.3d 700, 708 [224 Cal. Rptr. 738, 715 P.2d 699]; Rules Proc. of State Bar, rule 452.) The review department also made several findings as to a fee dispute that arose after the appeal. The fee agreement provided that if the appeal were unsuccessful, which it was, petitioner would refund $2,000 of his fee. He contended his clients subsequently asked him to apply the refund to a different matter and that he did so. The clients disclaimed any such understanding. The evidence was sharply conflicting on this point, and the referee did not find misconduct. The referee was in a better position than the review department to decide this point. ( Blair v. State Bar (1989) 49 Cal.3d 762, 775 [224 Cal. Rptr. 738, 715 P.2d 699] [great weight given to referee's findings as to witness credibility].) (3) Moreover, we are troubled by the review department's findings on this point. The review department's decision states that petitioner took one year to advise the client that he had lost the appeal. This statement is wrong and misleading. The Court of Appeal filed its decision on December 31, 1984. Petitioner notified his client of the decision no later than the following month, January 1985. The change in calendar years does not support the finding that petitioner delayed notifying his clients for one year. The State Bar now acknowledges the correct dates but refuses to admit its error.
With regard to the Nance matter, we adopt the referee's findings and conclusions. The review department's additional findings and conclusions are not supported by convincing proof. (4) Petitioner violated rule 8-101(A) by failing to deposit the $1,000 advanced costs into a client trust account and by commingling them with his personal funds. Petitioner contends he did so to protect the client funds because both his former secretary and his wife, who was a compulsive gambler, had previously invaded his client trust account. This is not persuasive. Petitioner fails to explain why he did not open a client trust account as to which his secretary and wife would have had no knowledge or access. Doing so would have been simple. Petitioner also violated rule 6-101 and Business and Professions Code section 6103 by failing to make timely payment of the court reporter's fees and by falsely stating that he had in his possession a cancelled check for payment of her fees.