Opinion ID: 1309329
Heading Depth: 3
Heading Rank: 3

Heading: Appropriateness of Recommended Discipline

Text: (10a) Petitioner argues that the discipline recommended by the review department was unwarranted in light of the findings of 7 factors in mitigation. (11) Although we have the ultimate responsibility for determining the appropriate discipline, we attach great weight to the review department's disciplinary recommendation. [Citation.] Petitioner bears the burden of proving that this recommendation is erroneous. [Citation]. ( Rosenthal (M.B.) v. State Bar (1987) 43 Cal.3d 658, 661-662 [238 Cal. Rptr. 394 [738 P.2d 740].) In addition, [a]s we have frequently noted, the department's proposal of discipline is entitled to greater weight than that of the panel. [Citations.] ( Galardi, supra, 43 Cal.3d at pp. 693-694.) As we shall explain, petitioner has failed to show the review department's recommendation to be erroneous.
(12) Petitioner attached to his brief before this court a letter from his psychiatrist, in which the psychiatrist states, [petitioner] has advised me that he would be willing to cooperate with the State Bar during his probation, and declares that he is confident that the public will be protected since, on his own, [petitioner] has been involved in therapy and has been stabilized on Lithium since October 1981. Petitioner submits the letter to support his contention that the recommended discipline is excessive. The letter was not presented in the proceedings below, however, and we therefore conclude it is not properly before us for this purpose. [6] This court has on occasion considered matters extrinsic to the record which are relevant to an attorney's fitness to practice law. [Citations.] However, the strong preference is for such matters to be submitted to the hearing panel, which is better suited to determine what weight to give them. This preference is particularly strong where, as here, the extrinsic evidence consists of opinions about petitioner's mental attitude, and is based largely on petitioner's own out-of-court statements. Such evidence is virtually impossible to evaluate in the absence of cross-examination. ( In re Possino (1984) 37 Cal.3d 163, 171 [207 Cal. Rptr. 543, 689 P.2d 115], fn. omitted, italics added; but see, e.g., Doyle v. State Bar (1976) 15 Cal.3d 973, 980, fn. 2 [126 Cal. Rptr. 801, 544 P.2d 937] [although not part of record in proceedings below, psychiatrist's declaration stating petitioner would benefit from planned psychotherapy may be considered in determining petitioner's fitness to practice.].) We also noted in Possino that in any event the new evidence would not compel a lesser discipline than that recommended. (37 Cal.3d at p. 171.) In Rosenthal (M.B.), supra, 43 Cal.3d 658, we discussed evidence similar to the letter submitted by petitioner, which also was not included in the record below, and was offered by the attorney to support his contention that the recommended discipline was too severe. There, the attorney asked us to consider psychiatric evaluations and letters which he said demonstrated his efforts at rehabilitation. We stated, In general, this court does not consider evidence which was not presented to the State Bar during its review process. ( Id., at p. 663.) Following Possino, supra, 37 Cal.3d 163, we concluded, Petitioner's documents are inherently unreliable.... The letters and reports merely reflect personal beliefs in petitioner's continued recovery, and are based exclusively upon conversations or interviews with him. (43 Cal.3d 658, 663.) In Rosenthal, as in Possino, we also noted that in any event the new evidence would not compel a lesser discipline. ( Ibid. ) Thus, we generally do not consider evidence outside the record when determining the appropriate discipline, especially if the extrinsic evidence consists of statements of opinions about the petitioner's mental attitude. Following Rosenthal (M.B.), supra, 43 Cal.3d 658, and Possino, supra, 37 Cal.3d 163, we will not consider petitioner's letter here. Even if we were to consider it, however, it would not significantly affect our evaluation of the appropriate discipline.
(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].)
(10b) Petitioner argues the mitigating factors, as listed by the hearing panel, compel less severe discipline than that recommended. We discuss each of the asserted mitigating factors in turn. The panel found petitioner had no prior record of discipline. (17a) This may constitute a mitigating factor in an appropriate case. If an attorney has practiced law only a short time, however, lack of a prior record is not a strong mitigating factor. ( Smith v. State Bar (1985) 38 Cal.3d 525, 540 [213 Cal. Rptr. 236, 698 P.2d 139].) In Smith, lack of prior discipline did not greatly influence our review, because petitioner had been in practice only six years at the time of the misconduct. ( Ibid. ; see also Rosenthal, supra, 43 Cal.3d at p. 664.) (10c), (17b) In the present case, petitioner opened the trust account at issue only three years and three months after he was admitted to the bar. His lack of prior discipline therefore is not entitled to great weight. (10d), (18) The hearing panel also found petitioner's emotional difficulties to be a factor in mitigation. Yet emotional or psychological disability, while it may ameliorate the moral culpability of an attorney's misconduct, does not immunize him from disciplinary measures necessary to protect the public. ( Palomo, supra, 36 Cal.3d at p. 797.) We have held, Psychoneurotic problems are not a mitigating factor in bar disciplinary proceedings, where the goal is protection of the public. ( In re Vaughn (1985) 38 Cal.3d 614, 619 [213 Cal. Rptr. 583, 698 P.2d 651].) (10e) The panel listed lack of harm to petitioner's clients as a mitigating factor, but as we have noted, an attorney has an ethical responsibility to the public, including his clients' creditors, as well as to his clients. In light of our goals of protecting the public, and promoting the integrity of the profession, we cannot attach great weight to this factor. Petitioner's good faith is asserted as a factor in mitigation, but because he admittedly knew Pollock intended to use the trust account to conceal funds from creditors, and knowingly relinquished total control of the account to Pollock, we find this factor unpersuasive. Similarly, considering the avowed purpose of the account, we do not give great weight to the panel's finding of petitioner's good character, especially in light of the lack of any references attesting to said good character or any other supporting evidence in the record. Finally, petitioner's cooperation with the State Bar, and his stated remorse, are both factors in mitigation here, but in light of all the circumstances of this case, we find that the recommended discipline is not excessive. Indeed, three review department referees deemed the recommended degree of discipline insufficient. We conclude the mitigating factors do not warrant reducing the discipline to less than that recommended by the review department.