Burns v. State Bar

• Decision Date: 21 October 1955
• Citation: 288 P.2d 514,45 Cal.2d 296
• Parties: Emmett R. BURNS, Petitioner, v. The STATE BAR of California, Respondent. S. F. 19242.
• Court: California Supreme Court

Page 514

288 P.2d 514

45 Cal.2d 296

Emmett R. BURNS, Petitioner, v. The STATE BAR of California, Respondent.

S. F. 19242.

Supreme Court of California, In Bank.

Oct. 21, 1955.

Rehearing Denied Nov. 16, 1955.

As Modified Nov. 18, 1955.

Emmett R. Burns, Los Altos, in pro. per.

William E. Mussman and Garrett H. Elmore, San Francisco, for respondent.

PER CURIAM.

In response to a writ of review, the Board of Governors of the State Bar has presented the record of the proceeding which is the basis of its recommendation that Emmett R. Burns be disciplined by suspension from the practice of law for six months.

The charges of professional misconduct grow out of Burns' representation of John H. Crumley in a personal injury action. Crumley engaged as his attorney one Sibbett, who negotiated a settlement. Crumley rejected it and employed Burns, who agreed with Sibbett to divide equally with him the amount of the contingent fee after deduction of certain costs.

A settlement was reached and Crumley executed a release. Burns then received two checks in the aggregate amount of $16,400, made payable to 'John Crumley and Emmett R. Burns, his attorney.' Pursuant to contractual authority, Burns indorsed the check with both names. On the following day, the checks were deposited in a bank account to the credit of 'Alyce Burns or Emmett R. Burns Trustee Account.'

The record includes evidence tending to prove these facts:

Crumley was not notified by Burns of the settlement. He found out about it from another source about a month after the checks had been delivered. During that time he had tried unsuccessfully to find Burns at his office. He then went to the State Bar and the district attorney and, on the advice of the latter, sent a registered letter of inquiry to Burns. In it he stated that he had consulted the district attorney, that he had been advised that he should have been paid within a few days after he signed the release and, if payment were not made 'within the near future,' he would take legal action.

A few days later Burns talked with Crumley by telephone and said that the delay in payment was occasioned by the press of litigation in another city. Burns also told Crumley that he should not have gone to the district attorney.

By agreement Burns and Crumley later met and discussed the amount of the fee to be paid. Crumley then said that, according to his understanding of the agreements which had been made, Sibbett was entitled to one-fourth of the amount originally offered in settlement, Burns to receive one-third of the difference between that amount and the one ultimately accepted. According to Burns, Crumley insisted he was obligated to pay only one-third of the difference between these two amounts.

Burns rejected this proposal, stating that such an arrangement would be contrary to their written contract and also to the one he had made with Sibbett. Because he had recently moved his office, he told Crumley, his records were disarranged and he was unable to produce copies of the agreements. However, in Crumley's presence, he telephoned to Sibbett who read to them from his copy of his contract with Burns.

Burns and Crumley agreed to meet a week later at Sibbett's office but Burns did not appear. A day or two afterward, Crumley received a telephone call from Burns who set a date for a later meeting. At that meeting he accepted a postdated check of Burns for $12,000. However, before the date of this check, Burns called him by telephone and said that the check had been made out improperly. He asked Crumley to meet him a few days later to receive a different one. In the meantime, said Burns, he would try to get Sibbett to reduce his fee.

At their next meeting, Crumley accepted a postdated check for $12,500, in exchange for the one he then held. Burns told him that he would be notified when the money was in the bank. Before the date of this check, Crumley received another telephone call from Burns, who told him that their was some question about the validity of the check because it had been written on a Sunday and he should exchange it for another one. Crumley consulted the bank in which he had his account and was advised that the check would be honored if sufficient funds were on deposit. He placed it with the bank for collection and it was paid. This was exactly three months after Burns received the money.

Other testimony in more detail may be summarized as follows:

According to Burns, at their first meeting after the settlement was made, he offered to give Crumley his check for $16,400, less costs, but Crumley refused to accept it. Crumley denied that any such offer had been made to him. The record shows that on the day Burns claims to have made the offer, he had only $39.86 to his credit in the bank.

Burns told the local committee that he gave Crumley only one check, for $12,500, and it was not postdated. He recalled the date, he said, because Crumley had discussed with him a purchase of cattle from a livestock show which was then in progress. However, in the hearing before the Board of Governors, Burns was asked: 'If you had money available, why did you give a postdated check?' (Emphasis added.) He explained that it was because he had not yet cleared the matter of Sibbett's fee. 'That was the whole thing. And until that final point was settled I told him not to cash the check, not to put it through.' Again he was asked: 'Why did you on two occasions give him post-dated checks if you had money available?' '(Emphasis added.) He replied: 'Well, the checks were given by Mrs. Burns and signed by her. At the time when the checks were given to him the dispute with Sibbett had not been settled.' (Emphasis added.)

In his testimony, Sibbett described the substitution of attorneys and his fee arrangement with Burns and stated that he first learned of the settlement about one week after payment was made. He wrote to Burns about his share of the fee and inquired of him by telephone thereafter two or three times at intervals of 'a month or two.' When Burns asked if he would consent to a reduction in fee, he said that he would not be unreasonable. Later he and Burns each agreed to reduce the amount of the fee provided by their contract. Sibbett was paid by Burns in cash five months after the settlement was made.

Bank statements disclose that immediately prior to the deposit by Burns of the check for $16,400, the balance of the 'Alyce Burns or Emmett R. Burns Trustee Account' was $1,475.35. Within the next two and one-half months, some 30 checks drawn on the account were paid. On the day of the deposit, the bank paid checks totalling $4,350. Within a week withdrawals in excess of deposits had reduced the balance to $5,504.20, and about two months later it had fallen to $3.36. Shortly thereafter Burns made two deposits, one of $3,500 and another of $13,134. Burns told the Board of Governors that the latter one was in the form of a check, but he did not know whether it was 'a fee or repayment of a loan or something like that.'

Burns testified that the settlement checks were deposited by his wife, who acted as his bookkeeper and handled all of his financial transactions; she 'knew where to deposit them.' According to him, he had explained to his wife that the purpose of the trustee account was to receive settlement moneys, which he considered to be trust funds. He said that although he did not recall giving her specific instructions that the balance of the account should never fall below the aggregate of trust obligations, he directed her to use for their personal needs only money to which they were entitled.

However, Burns admitted that funds on deposit in his one bank account were never segregated as to personal moneys and trust funds or to his obligations to individual clients. Money from all sources was deposited in the account, and from it were withdrawn expenses of trial preparation, advances to clients and disbursements for personal expenses. No record was maintained which showed either aggregate or individual trust obligations.

Burns claims to have kept at either his office or his home a cash reserve fund of $5,000 or $6,000, 'in various denominations,' from which to advance costs of litigation and 'to be available for anything that might come up, any particular reason I would have to pay for anything.' At one time, he said, it had been kept in his office safe, but for the five or six years preceding the disciplinary hearings it was left at his home in a location described variously as 'in the cash box in the filing cabinet locked filing cabinet,' 'the file, into a drawer,' and 'in a room by itself. It's a room with a locked door. It's in the bathroom. I have a cabinet. It's a steel cabinet in a steel box, and it's behind a locked door.'

The local committee found that Burns was guilty of 'violations of Sections 6103, 6067, 6068, and 6106 of the Business and Professions Code' and Rule 9 of the Rules of Professional Conduct in that he appropriated for his own use funds belonging to Crumley and...