Ambrose v. State Bar

• Decision Date: 19 April 1982
• Citation: 181 Cal.Rptr. 903,31 Cal.3d 184
• Court: California Supreme Court
• Parties: , 643 P.2d 486 John Joseph AMBROSE, Jr., Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent. In re John Joseph AMBROSE, Jr. on Suspension. L.A. 31438. Bar Misc. 4198.

Page 903

181 Cal.Rptr. 903

31 Cal.3d 184, 643 P.2d 486

John Joseph AMBROSE, Jr., Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent In re John Joseph AMBROSE, Jr. on Suspension.

L.A. 31438.

Bar Misc. 4198.

Supreme Court of California,

In Bank.

April 19, 1982.

John Joseph Ambrose, Jr., in pro. per.

Herbert M. Rosenthal, Truitt A. Richey, Jr., and Magdalene Y. O'Rourke, San Francisco, for respondent.

BY THE COURT.

This is a proceeding to review the recommendations of the State Bar Court in two actions. In the first, the State Bar Court recommended that petitioner be disbarred. In the second, the State Bar Court recommended that he be suspended from the practice of law for five years on conditions of probation, including actual suspension of three years. Although the two matters were argued separately before the State Bar Court, it is appropriate to consider them together. ¹ (Fitzpatrick v. State Bar (1977) 20 Cal.3d 73, 78, 141 Cal.Rptr. 169, 569 P.2d 763, and cases there cited.)

I.

Petitioner was admitted to the practice of law in California in June of 1967. He had no prior disciplinary action brought against him.

L.A. 31438

In the first action, the State Bar Court found that petitioner had engaged in misconduct as detailed in the following facts.

In July of 1976, petitioner agreed to represent Joseph Canchola on behalf of his minor son, Gilbert, in an action for personal injuries. Petitioner settled the action for $15,000 and received a settlement draft for that amount in November of 1976. He deposited the proceeds in his clients' trust account and withdrew $5,000 as his fee. However, he failed to pay the remainder to the Cancholas.

In March of 1977, petitioner issued a $10,000 check to the Cancholas. He asked the Cancholas not to cash it, informing them that it would be improper to pay them the funds before Gilbert's 18th birthday without a court proceeding. Petitioner promised to hold the $10,000 in an interest-bearing account until Gilbert reached majority age. He had no intention of fulfilling this promise. Beginning in March of 1977, petitioner misappropriated the Cancholas' funds and commingled them with his own.

Gilbert turned 18 years of age in September of 1977. Thereafter, petitioner issued a check for $10,300 to the Cancholas. The check included an endorsement condition stating, "Settlement including damages suffered due to tardy receipt of funds." In so doing, petitioner attempted to exonerate himself from and limit his liability for malpractice. He knew his account did not contain sufficient funds to pay the check, which was dishonored.

When the Cancholas inquired about their money, petitioner falsely told them that the reason for the delay in payment was that the settlement draft had not cleared. In fact, he had negotiated the draft in November of 1976. The Cancholas stated that they would complain to the State Bar or resort to their legal remedies. In order to prevent or stall the Cancholas' complaints, petitioner falsely told them in January of 1978 that they would receive their money in three days. He did not make restitution to them until the disciplinary and criminal proceedings were well under way.

In a matter involving a second client, petitioner agreed to represent Virginia Murphy in a civil cause of action. He settled the case, and in December of 1977 he received a settlement check for $7,000. He deposited the check in his clients' trust account and received $2,500 in cash. He did not tell Murphy that he had received the check and he misappropriated and commingled a substantial portion of the funds. As in the Canchola matter, petitioner did not make restitution until the disciplinary and criminal proceedings had begun.

A third course of misconduct involved Joy Smithwick, who retained petitioner to represent her in an action for personal injuries. Petitioner was to receive one-third of any recovery. He filed a complaint in 1975. In April of 1976, the State Compensation Insurance Fund (Fund) intervened in the action. The Fund alleged that Smithwick's injuries arose from her municipal employment and that the Fund was entitled to recover benefits it was required to pay her. In August of 1976, without Smithwick's knowledge, petitioner agreed to represent the Fund for one-third of any amounts the Fund recovered. Petitioner's representation of the Fund was adverse to Smithwick's interests, since the amount she could recover might be reduced by what the Fund received.

After a trial, judgment for $35,000 was entered in Smithwick's favor. In October of 1976 and January of 1977, petitioner received drafts totalling about $35,760 in satisfaction of the judgment. Petitioner caused someone to endorse the drafts on Smithwick's behalf without her knowledge. Petitioner presented these drafts for payment with the knowledge that the endorsements were unauthorized. Smithwick and the Fund were not paid and petitioner misappropriated and commingled all or a substantial portion of the $35,760 he received.

In February of 1977, petitioner paid Smithwick $10,000, but told her that the remainder of the judgment proceeds had to be held in his trust account until resolution of certain claims by the Fund and the state pension system. Petitioner failed to work on resolving those claims despite Smithwick's request that he do so. In August of 1977, Smithwick asked petitioner for a written accounting of the judgment proceeds he had received. Petitioner failed to provide this accounting.

In May and November of 1977, petitioner misappropriated about $3,600 and $500 in settlement proceeds belonging to two other clients. As in the other instances of misappropriation, petitioner caused his clients' names to be signed on the settlement drafts without their knowledge, and he negotiated the drafts knowing that the endorsements were not authorized. In one of these cases, petitioner also misappropriated $800 which he had received on behalf of an insurance company.

In matters involving six other clients, petitioner failed to communicate with his clients, perform services, and return clients' files upon demand. In one of these matters, petitioner also filed an application for extension of time to file a tax return on behalf of a client without the client's knowledge. He thereby acted as her attorney without authority. In two cases, sanctions were imposed against petitioner's clients in their civil actions as a result of his failure to render services to them. Most of this misconduct occurred between November of 1976 and July of 1978. However, in one case, petitioner's failure to perform services began in May of 1973.

Petitioner also wrote a dishonored check for $500 to a client in December of 1977. He knew his funds were insufficient to cover the check. In January and April of 1978, he knowingly wrote two more dishonored checks for $30 and $54 in payment of clients' filing fees. He testified that he was able to write checks on insufficient funds because he had an informal arrangement with his bank that his checks would be honored and he would be told to deposit more money in his account. The hearing panel of the State Bar Court found petitioner's testimony to be contradicted by evidence of a pattern of issuing checks without sufficient funds, the nonpayment of some overdrafts, and the demeanor of petitioner when he testified.

Finally, petitioner became involved in a dispute with Don Lowry, the owner of the building where petitioner had his office. Petitioner agreed to vacate the office by January 31, 1978. Lowry then leased the space to another person as of February 1, 1978. On February 10th, petitioner was still on the premises. Petitioner promised to leave by February 14th and wrote a $360 check to Lowry. There were insufficient funds in his account to cover that check.

Petitioner did not vacate the office until March 2, 1978. He testified that he delayed the move because someone had been appointed by a court to take possession of certain property in the office, and, therefore, petitioner was prevented from entering the premises. However, the hearing panel found that petitioner's promise to vacate the office was false when made because he knew of the possibility that a keeper would be appointed. The panel also found that petitioner could have fulfilled his promise in spite of the presence of the keeper.

Petitioner and many other witnesses testified that petitioner had been an alcoholic when he engaged in this misconduct. Further, he had domestic and financial problems. His first wife left him and their four children in 1971, and he had to raise them alone. He developed a drinking problem in 1973 or 1974. In 1976, the attorney who had been his partner in his law practice joined Synanon and left the office, taking half the library, furniture, and many case files with him. Petitioner's financial problems increased, and his alcoholism grew worse until he paid little attention to his practice. He began to "borrow" money from his clients' trust account, intending to return the funds when he received fees in other cases. As his fees declined, petitioner relied more heavily on the trust account to support his practice.

Petitioner stopped drinking completely in August of 1979. He attended weekly meetings of the State Bar program on alcohol abuse. He testified that he recognized that his alcoholism had harmed himself, his family and his clients, and that he is determined not to allow that to reoccur. He expressed remorse over his conduct and a desire to make restitution to all of the persons he victimized.

Several witnesses testified that petitioner's misconduct was an aberration caused solely by his alcoholism. He was described as an honest person and a capable lawyer. The witnesses also believed that petitioner would not get into trouble again because he was no longer drinking. Moreover, petitioner's family life had stabilized since he married his second wife in July of 1979.

Petitioner...