Moral Turpitude Or Fee Dispute?
A stayed one year suspension with 90 days of actual suspension was recommended by the California State Bar Court Review Department in a matter where the issue was whether the conduct involved a “fee dispute” or something worse.
The primary issue before us is whether Aldon Louis Bolanos’s improper handling of client monies constituted misappropriation involving moral turpitude or a fee dispute. After a three-day trial, the hearing judge dismissed the moral turpitude charge, characterizing the case as “a fee dispute that got out of control.” Giving great weight to the hearing judge’s factual findings, we agree.
Bolanos represented Victoria McCarthy and co-plaintiff Katherine Schmitt in their employment discrimination lawsuit against R. J. Reynolds Tobacco Company (Reynolds). The relationship between McCarthy and Bolanos deteriorated following her settlement on appeal with Reynolds. McCarthy filed a legal malpractice lawsuit against Bolanos and, ultimately, a State Bar complaint.
The hearing judge found that Bolanos committed misconduct when he: (1) represented clients with a potential conflict without their informed written consent; (2) failed to notify McCarthy promptly of the receipt of settlement funds; (3) improperly withdrew disputed funds from his client trust account (CTA); and (4) failed to promptly return McCarthy’s file at her request. Finding significant aggravation and significant mitigation, the hearing judge recommended discipline, including a 90-day actual suspension…
Balancing the serious aggravation with the significant mitigation, we agree with the hearing judge that a one-year suspension, stayed, a 90-day actual suspension, and a one-year probation period is appropriate discipline under the standards and the applicable case law.
The majority
Contrary to our colleague’s dissent, we have not “fashioned a defense to the moral turpitude charge” that would permit attorneys to unilaterally take their fees based on a belief in their entitlement to them. Rather, we have deferred to the hearing judge’s credibility determination, as we must under our rules and Supreme Court precedent, that Bolanos acted without moral turpitude when he held disputed fees outside of his CTA during the brief pendency of the dispute, given his ignorance of the governing rule and his honest belief that the fee modification was unenforceable.
As set forth in her detailed decision, the hearing judge found Bolanos’s conduct to be an example of aggravated mishandling of disputed fees based on a totality of the facts.
The dissent would impose “more significant discipline” for intentional misappropriation
the record in the instant matter belies Bolanos’s assertion that at the time he took the settlement funds from his CTA, he held an honest good faith belief that his agreement to reduce his fee was unenforceable. By his own admission, he took the additional fee: (1) before he advised McCarthy he was reneging on their agreement; (2) without telling her he had removed the funds; (3) without telling her he had co-signed her name to the settlement check; and (4) without even telling her he had received the funds. I thus find his after-the-fact assertion that he took the fees in reliance on the advice of an unnamed attorney, who told him that his agreement to reduce his fees was unenforceable, is pretextual at best.
The District of Columbia Court of Appeals reached a similar conclusion (albeit without reference to moral turpitude) in this 1997 decision. (Mike Frisch)