Opinion ID: 1452154
Heading Depth: 1
Heading Rank: 2

Heading: Shehorn Matter.

Text: Petitioner was retained by Mr. and Mrs. Shehorn to prosecute a claim for damages on behalf of their minor daughter, Janis. Settlement was reached in January 1969 in favor of the Shehorns in the sum of $9,750. On January 30 the court approved compromise of the minor's claim; allowed $2,000 attorney's fee to petitioner and $1,217.25 to a doctor; and ordered that the net proceeds, $6,532.75, when received should be deposited in a savings account in a named bank, that petitioner act as trustee of the account, and that no withdrawals be made without prior court order. Petitioner told his clients at that time that the money could be expected in about three weeks. On February 7 the insurance company sent petitioner a settlement check for $9,750, asked that he have the release signed before passing on the check and asked that he return a filed copy of the dismissal with prejudice to the company. Petitioner had the Shehorns sign the release and endorse the check on February 9. That same day he deposited it in his trustee account, in which there was then a balance of $49.99, and he wrote a check on this account payable to himself in the sum of $1,450. On February 10 he wrote a check payable to Anwright Corporation in the sum of $2,500 and one payable to Coast Pump Company in the sum of $5,800. By February 11 all three checks had cleared his trust account, leaving the balance again at $49.99. Anwright was a financially failing corporation in which petitioner had a 20 percent interest and in which he had continuing financial obligations of a substantial amount. Coast Pump was owned by the persons who owned the 80 percent interest in Anwright and they were pressuring him to pay up his share of the Anwright obligations. The $5,800 to Coast Pump represented part of his remaining investment obligation in Anwright. At that time petitioner knew the precarious financial condition of Anwright and of himself, he had large unpaid debts, and he intended to use the Shehorns' settlement proceeds for his own benefit. Petitioner did not inform his clients or the court of his disposition of the proceeds. He evaded the inquiries of his clients and he falsely represented to them that the bank or insurance companies had lost the papers and caused some delay. On June 6 his clients wrote to Judge Cooney, who had approved the settlement; the judge contacted the insurance company and discovered that the check had been promptly issued and forwarded to petitioner; and the judge telephoned petitioner for an explanation. Petitioner falsely told him that he had not received the check. It was not until late June that petitioner admitted to his clients or to the judge that he had to borrow the money because of personal financial problems and that he had used the trust moneys in a personal business venture. The only justification made by him was that he had been anticipating momentarily the receipt of legal fees in another matter which had been unforeseeably delayed. At the time of these admissions he was under the threat of disciplinary and criminal proceedings. (3) He promised to make restitution and he did  but with funds misappropriated from another client. Such restitution entitles him to no indulgence. ( Tardiff v. State Bar (1971) 3 Cal.3d 903 [92 Cal. Rptr. 301, 479 P.2d 661].) Thereafter he was charged with grand theft based on misappropriation of the Shehorn settlement proceeds. At the trial he testified that when he deposited the proceeds in his trust account his account was already subject to large overdrafts, and that he hoped he could obtain money from an unrelated case to enable him to make good the misappropriation of the Shehorn settlement. On appeal it was held that the evidence amply supported every element of the crime of grand theft (embezzlement).