Opinion ID: 1377201
Heading Depth: 1
Heading Rank: 4

Heading: Evidence of Misconduct in the Bad Faith Matter

Text: (1) This incident gives rise to the most serious charges against petitioner, all of which are supported by the evidence. Vanderleelie's uncontroverted testimony indicates that petitioner failed to file a bad faith suit which he had been retained to handle in October 1975. During the initial consultation, petitioner reviewed various documents which Vanderleelie felt supported his claim that an insurer had wrongfully denied medical insurance benefits. Petitioner stated that Vanderleelie had a good case, and agreed to take it on a contingency basis (33 percent of any pretrial settlement or 40 percent of any posttrial recovery). Petitioner accepted a $325 check from Vanderleelie, representing a $300 advance for legal services and a $25 filing fee. Petitioner asked Vanderleelie to sign a medical-records release form, which petitioner stated he would use in preparing the case. Petitioner not only failed to file the suit, but led Vanderleelie to believe that the opposite was true. According to Vanderleelie, he began calling petitioner about the case a few months after the initial consultation. He thereafter inquired on a regular basis, calling every one or two months. On the few occasions that petitioner actually returned these calls, he consistently responded that the action was awaiting a trial date. In April 1983, after more than seven years of total inactivity on the case, Vanderleelie searched local courthouse records and discovered that no complaint had ever been filed. During the same time period, Vanderleelie also requested that petitioner return the file. Two more years passed before petitioner actually did so. However, he never refunded or accounted for the $325 in fees. Petitioner conceded at the hearing below and in oral argument here that the foregoing chain of events was true. The only services he remembered performing on the case occurred within a month after the first meeting, when he used the medical authorization form to obtain some of Vanderleelie's records. Petitioner claimed that he had decided not to file suit because the records indicated that the claim lacked merit. However, he admitted failing to inform the client of this fact, and falsely telling him several times that the action was awaiting a trial date. Petitioner could not recall the circumstances which caused him to make the admittedly false statements. He testified that he probably had forgotten what services had been performed on the case, and therefore simply assumed that it had been filed. He also admitted possessing the file for nearly 10 years, saying that it had been misplaced the entire time at home. Petitioner also insisted that he had earned the entire $325 in prepaid fees. However, he did not produce any time sheets to corroborate this claim, nor could he otherwise identify the specific services on which he based this conclusion. Petitioner's behavior unquestionably amounts to wilful neglect, noncommunication and abandonment. By all accounts, Vanderleelie diligently sought to keep abreast of his case. In the face of such persistency over such an extraordinarily long period of time, petitioner's failure to perform any services involved a conscious disregard of the requirements of reasonable diligence and good judgment and cannot be said to have resulted from mere inadvertence or mistake. ( Arden v. State Bar (1987) 43 Cal.3d 713, 726 [239 Cal. Rptr. 68, 739 P.2d 1236].) Having decided almost immediately that he did not intend to perform the service for which he had been hired, petitioner should have diligently communicated that fact, returned the files, and either refunded any unearned portion of the fee or accounted for its expenditure. (See, e.g., Rosenthal v. State Bar (1987) 43 Cal.3d 612, 621-622 [238 Cal. Rptr. 377, 738 P.2d 723].) Instead, he actively hid the truth and compelled Vanderleelie to undergo the inconvenience of discovering it on his own. The prolonged period of neglect also indicates that the misrepresentations were knowingly made. By his own admission, petitioner had no facts in his possession at the time the misstatements were made from which to conclude that a complaint had been filed. He also admitted that he continued to make the false assertions without ever once bothering to check their accuracy. Since this conceded conduct deviates so drastically from an attorney's obligation to serve the client in an honest, forthright matter, petitioner's half-hearted claim of negligence is patently unmeritorious. (See, e.g., Kent v. State Bar (1987) 43 Cal.3d 729, 735 [239 Cal. Rptr. 77, 739 P.2d 1244].) In short, all of the charges arising out of the bad faith matter were adequately sustained at the hearing.