Opinion ID: 1158402
Heading Depth: 2
Heading Rank: 3

Heading: State Bar proceeding

Text: While the civil enforcement action was pending, Morse also was subject to the present State Bar disciplinary proceeding. The Office of the Chief Trial Counsel filed in June 1991 a six-count notice to show cause, which charged Morse with violating section 6068, subdivision (a), which requires an attorney to support the law, and with violating rule 1-400(D) of the Rules of Professional Conduct, which prohibits misleading advertisements. [3] Hearings were held in October and December 1992. The hearing judge filed a 48-page decision that recommended a 1-year stayed suspension and 3 years of probation, conditioned on 15 days of actual suspension and other requirements. Morse sought review by the review department, and raised before it the same constitutional arguments he was then raising before the Court of Appeal in the civil enforcement action. At Morse's request, the review department abated the disciplinary proceeding until February 1994 to allow the Court of Appeal to decide the constitutional issues. The review department resumed its proceedings after the Court of Appeal rendered its decision in December 1993. The review department independently reviewed the record to determine if clear and convincing evidence supported the findings of Morse's culpability and the aggravating and mitigating circumstances. Briefly summarized, the review department's findings and conclusions regarding the six counts of alleged misconduct are as follows: Counts 1 and 2  Section 6068, subdivision (a) requires an attorney [t]o support the Constitution and laws of the United States and of this state. Section 17537.6, subdivision (b) requires specified disclosures by a person offering to prepare a homestead declaration. Subdivision (c) of section 17537.6 requires the preparer promptly to file the declaration and to pay notarization and recordation fees; subdivision (d) limits the preparer's total fee to no more than $25. Morse failed to comply with these requirements. The review department stated that [h]is original failure to do so was grossly negligent and could be characterized as reckless or intentional after he disregarded the later request from the Attorney General's Office that he stop mailing unlawful advertisements. Thus, his violations of section 17537.6 are disciplinable under section 6068(a). Count 3  Morse willfully violated rule 1-400(D)(2), which states that an advertisement shall not [c]ontain any matter, or present or arrange any matter in a manner or format which is false, deceptive, or which tends to confuse, deceive, or mislead the public. As the review department noted, in each envelope that Morse sent to a prospective customer, the inserted material was arranged so that [t]he recipient could read only the name of the [recipient's] lender, the phrase `PRIORITY ADVERTISMENT [ sic ]' underneath the lender's name, and then the recipient's own name and address. Because the arrangement of materials tended to mislead the recipient into believing that the letter came from the recipient's lender, respondent [Morse] wilfully violated rule 1-400(D)(2). Count 4  Rule 1-400(A) defines a communication to be ... any message or offer made by or on behalf of a member concerning the availability for professional employment of a member or a law firm directed to any former, present, or prospective client.... Rule 1-400(D)(4) requires that a communication shall not [f]ail to indicate clearly, expressly, or by context, that it is a communication or solicitation, as the case may be. According to the review department, Morse did not violate Rule 1-400(D)(4) because, [t]he insert visible through the plastic window of the envelopes sent out by [Morse] expressly stated `PRIORITY ADVERTISMENT [ sic ].' Also, the `homestead information sheet' and the `retainer/information form' showed that [Morse] was available for employment in preparing a homestead declaration. Count 5  As noted above, rule 1-400(D)(2) proscribes misleading advertisements by an attorney. Rule 1-400(D)(3) also provides that an advertisement must state every fact ... necessary to make the statements made, in the light of circumstances under which they are made, not misleading to the public. Morse willfully violated these rules. The review department found that the homestead information sheet included in Morse's mass mailings ... failed to explain that California law establishes an automatic homestead exemption (see Code Civ. Proc., §§ 704.710-704.850), as well as allowing a homeowner to record a declared homestead (see Code Civ. Proc., §§ 704.910-704.995), and that the benefits of the automatic homestead exemption are available to a homeowner who does not record a declared homestead. By omitting this information, and by using the terms `homestead exemption' and `homestead declaration' as if they were interchangeable, [Morse's] materials tended misleadingly to suggest that a homestead exemption applied only if a homeowner recorded a homestead declaration. (See People v. Morse, supra, 21 Cal. App.4th at pp. 266-267.) Also, the materials tended to mislead recipients by failing to explain that a creditor may force the sale of a home even if a homeowner records a homestead declaration. (See id. at pp. 267-268.) Count 6  The review department explained that Morse also violated rules 1-400(D)(2) and 1-400(D)(3) in another respect: The back side of the `homestead information sheet' contained a section entitled `SOME ADDITIONAL BENEFITS OF RECORDING A DECLARATION OF HOMESTEAD.' The third paragraph of this section stated: `If a creditor tries to force a sale of your home, with a Declaration of Homestead you'll have an important advantage over him in court. The creditor has the burden of proof to show why you should not be allowed the Homestead Exemption. Otherwise, the court will take your Declaration at its face value and grant you the exemption.' Morse willfully violated rules 1-400(D)(2) and 1-400(D)(3), insofar as the paragraph stressed the benefits of a homestead declaration without providing any information about the automatic homestead exemption. The review department found that [b]y omitting such information, [Morse] tended misleadingly to suggest that a debtor had to record a homestead declaration to obtain the homestead exemption. [Moreover,] ... the paragraph misleadingly implied that a debtor who has not recorded a homestead declaration in the office of the county recorder bears the burden of proving that the dwelling is a homestead. The review department also considered the aggravating and mitigating circumstances. Briefly stated, its findings and conclusions in that regard are as follows: