Not Quite A Get Out Of Jail Free Card

The California State Bar Court Review Department approved the imposition of an admonition

RESPONDENT DD (Respondent) has been a licensed California attorney since June 1992. In his first disciplinary matter, the hearing judge found Respondent culpable of a single count of commingling by writing 14 checks from his trust account for personal and business expenses during the first 16 months of the COVID-19 pandemic. The judge dismissed the remaining four counts. No harm occurred to any client and the judge declined to impose discipline; instead, she ordered an admonition. On review, OCTC challenges the judge’s issuance of an admonition and maintains that discipline is warranted.

Upon our independent review (Cal. Rules of Court, rule 9.12), we find Respondent culpable for a single violation of rule 1.15(c) of the Rules of Professional Conduct. We affirm the hearing judge’s conclusion that discipline is not warranted and an admonition is appropriate. We publish this case to clarify that the existence of aggravating circumstances does not automatically preclude a finding that admonition is an appropriate alternative to discipline. However, we caution that our findings are based on the particular facts of this case, which include extensive mitigating circumstances.

Respondent’s background

The first in his family to receive a higher education, Respondent became a licensed attorney in Maryland and Pennsylvania in 1988 or 1989, after graduating from Howard University School of Law. For the first three and a half years of his career, Respondent was employed by a Maryland law firm where he did appellate work and handled legal matters for a professional baseball team. After moving to California, but before passing the California bar exam, Respondent worked for Immigration Legal Resource Center, a non-profit organization, where he practiced immigration law, which did not require him to be licensed in California. When Respondent became a member of the California bar in 1992, he continued handling immigration asylum matters and began advising boxing promotion companies on immigration issues pertaining to international boxers, later expanding his practice to include negotiating boxing match contracts on behalf of a paid television network company. After successfully assisting a friend with a bankruptcy matter in 2013 or 2014, Respondent segued into a bankruptcy law practice. Since 2016, Respondent’s solo practice has consisted primarily of representing small businesses and individuals concerning a variety of legal issues, with a mixture of contingency fee matters and those he bills hourly.

Violations

From March 3, 2020, through June 23, 2021, Respondent issued 14 checks to various individuals and companies from his CTA to pay non-client related expenses. The total amount was $30,366.97. The CTA held Respondent’s earned and undisputed fees, which was sufficient to cover all 14 checks, as well as client funds. Ten of the CTA checks were payments to Respondent’s credit card, which he had used to pay operational expenses, and one check was to repay the W.H. loan. At the time he wrote the CTA checks, Respondent did not understand it was a violation to pay these expenses directly from that account, as he had sufficient earned fees in the CTA.

Mitigation

OCTC argues that Respondent did not establish that his stressful life events―the COVID-19 pandemic, R.P.’s health issues and absence, his father’s death, his mother’s stroke, and his own hospitalization―were directly responsible for his misconduct because his misconduct was caused by his unawareness of the rule. While the health issues of Respondent and his mother, as well as his father’s death, are naturally extremely stressful circumstances, we agree with OCTC that he did not prove they were responsible for his misconduct. But we find the other personal challenges were responsible, in part, for his misconduct. The only reason Respondent was unexpectedly placed in the position of having to write checks for expenses and did so is because of an unprecedented pandemic and the sudden absence of his accountant (due to her part-time status as well as the fact that she was periodically hospitalized). We also do not ignore the other complications compounded by the pandemic and shutdown that played a role in the commingling violation, such as Respondent’s inability to conduct online banking with his CTA, the lack of physical access to Bank of the West, and his only access to physical checks were from his CTA. We further find that it is unlikely a subsequent pandemic with widespread business closures will occur during the remainder of Respondent’s career, especially because he testified that he was 64 years of age and nearing retirement. If it does happen, we are confident it will not pose a risk due to the changes Respondent and his accountant made to the accounting side of his law practice and their education of the rules governing trust accounts. Under the circumstances of this case, we agree with the hearing judge that moderate weight is warranted.

Conclusion

We recognize that this is a close case but find the requirements of rule 5.126 of the Rules of Procedure of the State Bar are satisfied, and that discipline is not necessary to protect the public, the courts, or the legal profession. Given Respondent’s and his accountant’s completion of CTA School, and the changes they implemented in his law office’s accounting practices, we find the risk that Respondent would reoffend to be particularly remote.

While we resolve this matter by admonition instead of discipline, it is not quite a “Get Out of Jail Free Card,” as OCTC would have us believe. Respondent’s disciplinary proceeding and the facts underlying his culpability are a matter of public record, and, if within two years of the effective date of the admonition Respondent commits misconduct resulting in another disciplinary proceeding, OCTC may request this matter be reopened. (Rules Proc. of State Bar, rule 5.126(D), (F).) We find this exposure is sufficient to impress upon Respondent the need to be scrupulous in meeting his professional and ethical obligations through the remainder of his legal career.

(Mike Frisch)