Reciprocal Sanction Reduced

The District of Columbia Court of Appeals reduced a California disbarment to a 30-day suspension with a fitness requirement

The Supreme Court of California disbarred the respondent on September 23, 2015, for defaulting in a disciplinary proceeding in which he was found to have admitted charging an unreasonable fee and failing to update his membership address. In the reciprocal discipline case before us, the Board on Professional Responsibility recommends only an informal admonition as the disciplinary sanction in the District of Columbia. The respondent and Disciplinary Counsel each urge us to reject the Report and Recommendation of the Board on Professional Responsibility (hereinafter “Report”), albeit for very different reasons. The respondent contends that there is no justification for disbarment in our jurisdiction, despite that result in California. Disciplinary Counsel challenges the propriety of the Board’s sua sponte application of a recognized exception to reciprocal discipline, as set forth in the Rules of the District of Columbia Bar. That particular exception was the basis of the Board’s rejection of disbarment as the appropriate discipline, even though the respondent never relied upon that exception. Additionally, Disciplinary Counsel urges us to disbar the respondent based upon a third charge that the California Bar Court had explicitly rejected as a basis for its disbarment, i.e., “failure to refund unearned fees.” The Bar Court determined that the failure to return the unearned fee was not adequately supported by the particular allegations that Naegele was deemed to have admitted. Disciplinary Counsel contends that the behavior underlying this charge was effectively an episode of misappropriation of client funds, presumptively requiring disbarment.

Based upon the following analysis, we exercise our discretion to accept in part the Report only insofar as the Board concludes that a recognized exception to reciprocal discipline precludes an order of disbarment. We conclude, however,  that no reciprocal discipline can be imposed for failing to maintain an updated address in the records of the California Bar because such an infraction is not actionable for any discipline in the District of Columbia. We further hold that the Board acted within its authority to recommend against disbarment based upon its sua sponte application of an exception to reciprocal discipline. We are persuaded that this exception must be enforced.

Where the exact choice of discipline is concerned, we conclude that the factual allegations deemed to have been admitted by the respondent, combined with the respondent’s failure to cooperate in the California proceedings, are sufficient to support a 30-day suspension, with a fitness requirement, based upon respondent’s admitted failure to cooperate in the disciplinary proceedings. Such discipline is typically what we would impose for similar conduct in the District of Columbia.

The California bar matter involved a lawsuit filed by the attorney on behalf of his clients. Pre- suit investigation would have revealed that the clients lacked standing to bring the action.

They invoked the bar’s arbitration process and secured an award for fees paid after the failure to discover the standing issue.

The Los Angeles County Superior Court granted the Alberses’ petition to confirm the arbitration award and on February 24, 2012, entered a judgment against the respondent in the total amount of $731,831.25 (inclusive of final arbitration and court costs). The respondent appealed this judgment, but the Court of Appeal of California affirmed the judgment in a detailed opinion of November 6, 2013. In the record before us, it is uncontested that the respondent has never satisfied the money judgment.

Much of the dispute between the parties and the board involved translating the default findings into D.C. Rule violations.

Disciplinary Counsel contended that the failure to pay the award amounted to a misappropriation. 

The court disagreed but did not leave it there

Our decision to accept the Report of the Board does not mean that the respondent is permanently shielded from disbarment. We do not ignore the troubling nature of what the respondent allegedly charged his clients. However, what is important at this point is specifying the correct and efficient legal process by which the facts can be verified with due process for the respondent.

For two pivotal reasons, we conclude that a remand is necessary, and we will order a remand pursuant to our authority under Rule XI, § 9(j). First, we are not a trial court. Fact finding should not originate in the highest court of a jurisdiction. Thus, for reasons of judicial efficiency, we are best able to perform our proper role when we have the benefit of detailed recommendations of the Board, based upon the assessment of evidence and witness credibility by a Hearing Committee. This is precisely what is required under our own Rules.

However, Disciplinary Counsel urges us to ignore and overrule the explicit rejection by the California Bar Court of the “failure to return unearned fee” charge – and to convert that charge into an allegation of misappropriation – and to do so for the first time on appeal. Thus, Disciplinary Counsel plainly seeks to litigate before us the factual sufficiency for a misappropriation charge that has never been petitioned before the Board on Professional Responsibility.  This is impermissible in the realm of what is truly “reciprocal.” A remand, however, would provide Disciplinary Counsel with a fresh and fair opportunity to create a sound factual record in support of any charge that would normally justify disbarment.

The division of the court consisted of BECKWITH and MCLEESE, Associate Judges, and LONG, Senior Judge, Superior Court of the District of Columbia.

The opinion is per curiam. 

Judge Long and I are Georgetown Law classmates. (Mike Frisch)