A Raisin In The Escrow
District of Columbia Disciplinary Counsel has filed a Specification of Charges that alleges, among other things, that an attorney had misappropriated substantial funds due to a client.
The client
Lion Farms, LLC, is a California limited liability company that produces raisins in Fresno and Madera Counties in the San Joaquin Valley, California.
The representation
Beginning in approximately 2000, Respondent consulted with Lion about legal matters, including litigation. In 2004 and 2005, Respondent was lead counsel for Lion in litigation against the federal government before the Court of Federal Claims and the United States Court of Appeals for the Federal Circuit. In the years that followed, Respondent continued to consult with Lion about legal matters.
Respondent did not charge for these consultations but then
In 2015, the Supreme Court decided Horne v. Department of Agriculture, 576 U.S. 350, 135 S. Ct. 2419 (2015), ruling that the reserve requirement imposed by the Raisin Administrative Committee, which was established and overseen by the Department of Agriculture, constituted a taking under the Fifth Amendment’s Taking Clause requiring the government to pay just compensation.
This representation led to a substantial settlement
In or around November 2019, the government agreed to settle Lion’s claims for $7,633,273.79.
It is alleged that Respondent did not advise the client that he had received that amount and misappropriated a portion of the proceeds
By July 2020, Lion had learned that the other raisin producers had received their settlement funds. Lion, on its own, contacted the government to ask about the status of its settlement funds. The government informed Lion that it already had sent the funds to Respondent’s account.
The client then inquired about the funds
Respondent did not respond to the emails. However, on or about July 20, 2020, Respondent sent Lion a check for $5,039,821.47 drawn on the Lion trust account. Respondent did not provide any explanation or records about when he had received the settlement funds and how he had calculated the amount he finally sent to Lion.
After receiving the check, Lion sent Respondent emails stating that it would pay him legal fees of $1,000,000 and asked him to send Lion the balance of the settlement funds. Respondent did not respond to Lion, nor did he provide Lion any additional funds from the settlement.
Respondent continued to pay himself from the settlement funds without informing Lion that he was doing so, and without Lion’s consent. Respondent made the following transfers from the Lion trust account to his personal account between October 2020 and December 2021…
The client filed a claim with the Attorney-Client Arbitration Board
On July 27, 2022, after receiving testimony and documentary evidence, the ACAB issued a decision and award ruling in favor of Lion and against Respondent. The ACAB awarded Lion $2,343,452.32, plus pre-award interest of $351,751, and directed Respondent to reimburse Lion the $1,000 ACAB filing fee. The ACAB directed Respondent to pay Lion these amounts by August 26, 2022. 37.
Respondent did not make any payment to Lion, and he did not respond to inquiries by Lion’s counsel.
The client then sued
On December 12, 2022, the court entered an order confirming the ACAB award, and ordering that judgment be entered in favor of Lion and against Respondent for $2,696,203.32 (the ACAB award of $2,343,452.32, interest of $351,751, and arbitration costs of $1,000), plus interest at 9% from the date of the judgment, and the court’s filing fee of $120.
The charges allege that he failed to respond to Disciplinary Counsel’s inquiries. (Mike Frisch)