Bledsoe v. State Bar

Opinion THE COURT. We review the recommendation of the State Bar that petitioner James Bledsoe III be disbarred from the practice of law. The — 1076 — recommendation is based on findings of professional misconduct in four matters. After considering the record and the arguments of petitioner and the State Bar, we conclude the recommended discipline is too severe. We therefore suspend petitioner from the practice of law for five years, stay his suspension, and place him on probation for five years on conditions including actual suspension for two years and restitution to his clients. I. Facts and Proceedings Before the State Bar Court Petitioner was admitted to the practice of law in this state on June 2, 1972. He has no record of prior discipline. On October 17, 1988, the Office of Trial Counsel of the State Bar (Office) served on petitioner1 a notice to show cause charging him with five counts of professional misconduct. The notice advised him that a default could be entered if he failed to file a written answer to the notice within 20 days. The notice also advised him that an entry of default could result in an admission of the charged misconduct and constitute a bar to further participation in the proceedings. Petitioner failed to answer the notice. On November 16, 1988, the Office served petitioner with a notice of application to enter default. The notice contained the same warning as the notice to show cause. Petitioner again failed to answer the notice. On December 13, 1988, the Office served petitioner with a notice of entry of default. The notice stated that default had been entered for failure to file a written answer to the notice to show cause; the misconduct charged had been deemed admitted and discipline could be recommended or imposed; and further participation was prohibited unless and until the default was set aside by a timely and sufficient motion. After receiving the default notice, petitioner retained counsel. Under the State Bar Rules of Procedure, rule 555.1(b),2 a petitioner may seek relief from default within 75 days after entry of default. Before the expiration of this period, however, and without petitioner’s knowledge, the State Bar held a default hearing. The referee’s findings and conclusions after that hearing are as follows. As to count 1, in January 1979 Dorothy Paul employed petitioner to represent her son in a personal injury matter. Although petitioner filed a complaint in January 1982, he thereafter failed to further perform services — 1077 — or communicate with his client. In addition, he withdrew from employment without giving due notice or delivering to his client the necessary papers. As a result, the case was dismissed for lack of prosecution. As to count 2, in March 1987 Josephine McFarland employed petitioner to represent her in a civil matter against LaVerne University in a dispute involving her degree. Petitioner failed to perform the required services, failed to communicate with his client, and failed to refund $800 in advance legal fees. As a result of Ms. McFarland’s loss of her $800, she has been unable to pursue her claim. As to count 3, in February 1986 Rochelle Garrison employed petitioner to probate her mother’s estate and advanced $300 for costs. Although petitioner told Ms. Garrison the estate was finalized and requested additional payment, he in fact failed to complete performance of the required services. As a result, the estate incurred additional costs. As to count 4, in January 1985 Jessica Patton employed petitioner to represent her in a marital dissolution action. She paid him $300 in advances attorney fees. Petitioner failed to perform the required services, failed to communicate with his client, and failed to refund the unearned fees. Finally, as to count 5, which concerned the State Bar investigation, petitioner failed to respond to letters regarding the allegations in counts 2 and 4 or otherwise cooperate with the State Bar. The referee concluded petitioner had wilfully and as a pattern of conduct abandoned his clients, violated his oath, failed to perform services, and wrongfully withdrew from representation. He also concluded petitioner’s conduct reflected acts constituting moral turpitude and affirmative misrepresentation to his clients regarding the status of their cases. The referee noted petitioner’s lack of prior discipline but believed this mitigating circumstance was outweighed by “his failure to be here or to involve himself with this proceeding which he had apparent knowledge of. . . .” Relying on the Standards for Attorney Sanctions for Professional Misconduct, Rules of Procedure of the State Bar, division V, standards 2.3 and 2.4(a), the referee recommended petitioner be disbarred.3 — 1078 — On February 21, 1989, without knowledge of the referee’s decision, petitioner filed a motion to set aside the default. He alleged the default was taken as a result of mistake, inadvertence, surprise or excusable neglect because he was in the process of changing his business address; his brother was supposed to deliver his correspondence; he was engaged almost continuously in criminal trials; for reasons unknown, he did not receive the State Bar correspondence; and he was short of funds and thus did not employ an attorney until January 1989. After hearing the motion and the State Bar’s opposition, the referee denied the motion. On May 5, 1989, petitioner attempted to file a motion to reconsider the denial of his motion to set aside the default. This motion was not filed, however, because rule 552.1(c) prohibits further participation in State Bar proceedings by an attorney whose default has been taken. On August 31, 1989, the Review Department of the State Bar Court held a hearing on two issues: whether it had the authority to relieve petitioner from the default and whether the degree of discipline recommended was excessive. During the hearing, the chairman of the review department expressed concern that there was an insufficient factual basis to recommend disbarment because of the default. Nevertheless, on October 30, 1989, by a vote of eleven to two with one abstention, the review department voted to adopt the hearing panel’s recommendation. Five members of the majority, however, voted to adopt the recommendation solely on the ground that the review department lacked jurisdiction to overrule the denial of the motion to set aside the default.4 II. Discussion “The object of disciplinary proceedings is to protect the public and the courts, and to preserve confidence in the legal profession. In deciding the proper sanctions, the court considers all relevant factors and mitigating circumstances on a case-by-case basis. [Citation.] Our duty is to examine the record, weigh the evidence, and make an independent assessment — 1079 — whether the review department’s recommendations should be upheld. [Citation.] The burden is on petitioner to demonstrate that the review department’s decision should not be followed.” (Young v. State Bar (1990) 50 Cal.3d 1204, 1215-1216 [270 Cal.Rptr. 315, 791 P.2d 994].) Petitioner concedes that his default resulted in an admission of the charges against him and that some discipline is in order. Nevertheless, he contends the recommended discipline is excessive. He argues that his conduct did not amount to a pattern of misconduct justifying disbarment under standard 2.4(a). Instead, he submits the appropriate classification of his conduct would place it under standard 2.4(b), which provides that a member’s wilful failure to perform services in matters not demonstrating a pattern of misconduct shall result in reproval or suspension. The contention has merit. Although a habitual disregard for clients’ interests and the failure to communicate with clients may justify disbarment, decisions that have resulted in disbarment generally involve “serious instances of repeated misconduct over a prolonged period of time.” (Young v. State Bar, supra, 50 Cal.3d at p. 1217.) Thus, in Kent v. State Bar (1987) 43 Cal.3d 729 [239 Cal.Rptr. 77, 739 P.2d 1244], we held disbarment was the appropriate penalty because the attorney’s abandonment of the legal interests of his client resulted in a $330,000 malpractice judgment, he was publicly reproved on two prior occasions for similar misconduct, he was previously suspended for similar failures to perform promised legal services, and in some instances he actively deceived his clients by misrepresenting that he was properly rendering the services for which he had been employed. In Slaten v. State Bar (1988) 46 Cal.3d 48 [249 Cal.Rptr. 289, 757 P.2d 1], we also imposed disbarment because the attorney wilfully failed to perform services for seven clients, commingled a client’s funds with his own, advised a client to act in violation of the law, and had an extensive discipline record. (See also McMorris v. State Bar (1983) 35 Cal.3d 77 [196 Cal.Rpt. 841, 672 P.2d 431] [wilful failure to perform services in seven matters involving five clients, with three prior suspensions from practice for various acts of misconduct including failure to perform services for his clients]; Bowles v. State Bar (1989) 48 Cal.3d 100 [255 Cal.Rptr. 846, 768 P.2d 65] [wilful abandonment of clients in five separate matters, insufficient funds to cover a check drawn on a client trust account, failure to cooperate in the State Bar investigation, two prior suspensions for failure to pay State Bar fees, and a record devoid of mitigating factors].) In contrast, here petitioner’s misconduct involved four clients in seventeen years of practice; although we in no way condone petitioner’s actions, — 1080 — we find no extended “pattern” of wilfully failing to perform services. Petitioner also has no disciplinary record. Although the referee found this factor in mitigation was outweighed by petitioner’s lack of cooperation with the State Bar, the referee was influenced by petitioner’s failure to appear at the hearing. Yet, because of petitioner’s default he received no notice of the time or place of the hearing. While petitioner must certainly bear all adverse consequences of his noncooperation with the State Bar, i.e., admission of the charged misconduct and exclusion from the proceedings, we do not believe he should be doubly penalized for not attending a hearing of which he was not given notice. Therefore, we conclude that the penalty of disbarment appears too severe under the circumstances of this case. Our next task is to determine what discipline should be imposed. Petitioner, relying on Gold v. State Bar (1989) 49 Cal.3d 908 [264 Cal.Rptr. 125, 782 P.2d 264], suggests the proper discipline for his misconduct is a one-year suspension, stayed, probation for one year, and restitution to his clients. His reliance is misplaced. In Gold, the attorney’s misconduct involved only two clients and Gold reimbursed his clients on his own initiative. Here, petitioner’s misconduct is unquestionably more serious. He not only wilfully failed to perform services, failed to communicate with his clients, and failed to refund unearned fees, but he also failed to cooperate or participate in the beginning stages of the State Bar investigation. (See Chang v. State Bar (1989) 49 Cal.3d 114, 128 [260 Cal.Rptr. 280, 775 P.2d 1049] [wilful failure to cooperate or participate in disciplinary investigations itself supports discipline].) Therefore, substantial discipline is required. Accordingly, it is ordered that James Bledsoe III be suspended from the practice of law for five years. Execution of the order of suspension is stayed and petitioner is placed on probation for five years, with a probation monitor referee to be assigned pursuant to rules 610 and 611, subject to the following conditions: (1) During the first two years of probation, he is placed on actual suspension from the practice of law. (2) During the first year of probation, he shall make restitution to his clients. (3) During the period of probation, he shall comply with the provisions of the State Bar Act and Rules of Professional Conduct of the State Bar of California. (4) During the period of probation, he shall file with the State Bar Court reports concerning his compliance with the conditions of probation as directed by the probation monitor referee. — 1081 — (5) Before the expiration of his period of actual suspension, petitioner shall take and pass the Professional Responsibility Examination. (6) Petitioner shall comply with rule 955 of the California Rules of Court, including subdivision (a), within 30 days of the effective date of the decision of this court, and petitioner shall file the affidavit required by California Rules of Court, rule 955(c), within 40 days of the effective date of this decision. This order is effective upon the finality of this decision in this court. (See Cal. Rules of Court, rule 953(a).) Footnotes [1] The Office served all notices by certified mail to petitioner’s address of record. [2] All further references herein to rules are to the State Bar Rules of Procedure. [3] Standard 2.3 provides, “[c]ulpability of a member of an act of moral turpitude, fraud, or intentional dishonesty toward a . . . client. . . shall result in actual suspension or disbarment.” Standard 2.4(a) provides, “[c]ulpability of a member of a pattern of wilfully failing to perform services demonstrating the member’s abandonment of the causes in which he or she was retained shall result in disbarment.” All further references herein to standards are to the Standards for Attorney Sanctions for Professional Misconduct. [4] Petitioner asks our guidance to clarify the review department’s authority to set aside a default. Yet, even assuming the review department had the authority, after reviewing the record we do not believe petitioner is entitled to a remand on this ground. Rule 555.1 provides that a petitioner may seek relief from default on the grounds of mistake, inadvertence, surprise or excusable neglect. Here, petitioner stated he was entitled to relief on each of these grounds because he did not receive the State Bar correspondence. He is mistaken. Actual notice is not a necessary element in disciplinary proceedings. (Lydon v. State Bar (1988) 45 Cal.3d 1181, 1186 [248 Cal.Rptr. 830, 756 P.2d 217].) Notices are deemed served at the time of the mailing regardless of whether they are actually received by the attorney. (Ibid.) Because the State Bar properly mailed the notices, petitioner failed to meet the standards for relief from default.