Opinion ID: 1309329
Heading Depth: 4
Heading Rank: 2

Heading: Terms of Recommended Discipline

Text: (13) Petitioner's conduct, although it did not harm his clients, nonetheless warrants discipline. (See 1 Witkin, Cal. Procedure (3d ed. 1985) Attorneys, § 408, pp. 459-460, and cases cited.) It is clearly established that participation in a scheme to defraud a client's creditors is a crime and subjects an attorney to discipline. ( Allen v. State Bar (1977) 20 Cal.3d 172, 178 [141 Cal. Rptr. 808, 570 P.2d 1226]; Pen. Code, § 531.) In Townsend v. State Bar (1948) 32 Cal.2d 592 [197 P.2d 326], an attorney advised his client to make a conveyance of certain real property for the purpose of delaying and defrauding creditors. This conduct was found to violate sections 6103 and 6106 ( id., at pp. 595-596), and in light of the attorney's prior disciplinary record we ordered him actually suspended for three years. ( Id., at p. 598.) In Yokozeki v. State Bar (1974) 11 Cal.3d 436, 445, footnote 4 [113 Cal. Rptr. 602, 521 P.2d 858], we noted that the attorney participated in a scheme to defraud [a client's] potential judgment creditors, which is a crime (Pen. Code, § 531), and a proper subject for disciplinary action. (14) Petitioner urges, however, that the terms of the recommended discipline in his case are not justified because he did not intend to defraud the DeMerses, nor did he foresee any harm to them. It may be true that petitioner did not specifically intend to defraud the DeMerses, but it does not follow that the recommended discipline is too severe. As we have often repeated, in imposing discipline, we do not simply impose retribution and punishment, but seek to protect the public, to preserve public confidence in the legal profession, and to maintain and enforce the highest possible professional standards for members of the bar. ( Jackson v. State Bar, supra, 23 Cal.3d at p. 514.) When an attorney violates his professional duties, disciplinary measures may be appropriate even absent any intentional dishonesty. (E.g., Doyle, supra, 15 Cal.3d at p. 978.) As reviewed above, there is ample evidence to support the finding that petitioner's actions were both unprofessional and unethical. The recommended discipline is not excessive.
(15) Petitioner argues he should not be required to pay restitution because the examiner failed to prove that Pollock did not perform any services for the DeMerses that might entitle Pollock to keep part of the $10,000. This claim ignores the uncontradicted statement in James DeMers's declaration that Pollock had performed no services for the DeMerses. Petitioner submits no evidence to dispute the finding that Pollock did not earn any of the $10,000, and hence we reject this contention. Petitioner also argues restitution is inappropriate because he did not profit from his wrongful conduct. Restitution is routinely required, usually without discussion, in cases of misappropriation of client funds. (E.g., Mepham v. State Bar (1986) 42 Cal.3d 943 [232 Cal. Rptr. 152, 728 P.2d 222]; Waysman v. State Bar (1986) 41 Cal.3d 452 [224 Cal. Rptr. 101, 714 P.2d 1239]; Chasteen v. State Bar (1985) 40 Cal.3d 586 [220 Cal. Rptr. 842, 709 P.2d 861].) It does not follow, however, that restitution is appropriate only in such cases, or that, because petitioner in this case did not misappropriate client funds, he should not be required to pay restitution to the victims of his culpable acts. Although part of the rationale for requiring restitution may be to prevent an attorney from profiting from his wrongdoing, restitution is also intended to compensate the victim of the wrongdoing, and to discourage dishonest and unprofessional conduct. As we noted in Alberton, supra, this court should have the power to impose discipline which encourages attorneys to act honestly and with integrity. (37 Cal.3d at p. 7, fn. 4.) (See also Galardi, supra, 43 Cal.3d at pp. 694-695 [requiring $186,000 in restitution to attorney's coventurers, notwithstanding lack of any attorney-client relationship.]) In Bate v. State Bar (1983) 34 Cal.3d 920, 924 [196 Cal. Rptr. 209, 671 P.2d 360], where the attorney had misappropriated $2,221 of client funds, we held that the recommended discipline was inadequate because it does not require restitution. Citing our concern for the protection of the public and the maintenance of high standards of professional conduct, we added the requirement of restitution to the attorney's discipline. ( Id., at pp. 924-925.) Similarly, we believe that a requirement of restitution in this case will not only protect the public, but also serve to further the integrity of the profession and encourage high professional standards of conduct. We agree with the review department recommendation and find that restitution is an appropriate condition of probation.
(16) Petitioner argues he should not be actually suspended from practice for any period of time. He contends, without elaboration, that his conduct was less serious than that of attorneys in prior cases in which we did not order actual suspension. (E.g., Palomo, supra, 36 Cal.3d 785.) We are not convinced. As detailed above, petitioner participated in a client's scheme to defraud. In Palomo, by contrast, the attorney received a check payable to a client, indorsed the client's name without his consent, and failed to notify the client of his receipt of the check. The check was deposited in his firm's payroll account. When the client inquired about the money, the attorney forwarded him the funds plus interest within three weeks. We cautioned in Palomo that the recommended discipline of one year probation, with no actual suspension, was lenient, and that the attorney's conduct warrants at least  the discipline recommended. (36 Cal.3d at p. 797, italics added.) We adopted the recommendation, in part because of the attorney's payment of restitution before any State Bar involvement in the matter. ( Id., at p. 798.) Although the facts of the present case are unusual, we find that a 90-day term of actual suspension is not excessive, nor is it disproportionate compared with the discipline imposed in previous cases. (See, e.g., Brody v. State Bar (1974) 11 Cal.3d 347, 350 [113 Cal. Rptr. 371, 521 P.2d 107] [single incident of failure to maintain client trust account properly, commingling and misappropriation, with failure to make restitution despite inquiries from client; we ordered one year actual suspension]; Walter, supra, 2 Cal.3d at p. 891 [attorney who misappropriated client funds made voluntary restitution of the entire amount in question, but we nevertheless ordered two years probation with six months actual suspension]; Hallinan, supra, 33 Cal.2d 246 [approving three months actual suspension for attorney who had simulated client's signature, despite the fact that client did not object and no money was lost].)