Dixon v. State Bar

• Decision Date: 18 November 1982
• Docket Number: S.F. 24357
• Court: California Supreme Court
• Parties: , 653 P.2d 321 Claude E. DIXON, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

Page 30

187 Cal.Rptr. 30

32 Cal.3d 728, 653 P.2d 321

Claude E. DIXON, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

S.F. 24357.

Supreme Court of California In Bank.

Nov. 18, 1982.

[32 Cal.3d 731] [653 P.2d 323] Claude E. Dixon, in pro. per.

Herbert M. Rosenthal, Truitt A. Richey, Jr., and Marie M. Moffat, San Francisco, for respondent.

BY [32 Cal.3d 732] THE COURT ^*:

We review a recommendation of the State Bar Court that petitioner, Claude E. Dixon, be suspended for one year, with execution stayed, and that he be placed on probation for two years on conditions including three months' actual suspension, passage of the Professional Responsibility Examination, and compliance with various reporting requirements. That recommendation represented a modification by the State Bar Court's review department of the unanimous recommendation of disbarment made by that court's hearing panel. (See Rules Proc. of State Bar, rule 452.) Petitioner was informed that we were considering the imposition of more substantial discipline, and he thereupon filed a petition for review which we now consider.

Petitioner contends that (1) the findings of fact are not supported by substantial evidence, (2) the hearing panel erred in not granting petitioner a continuance in order to allow his attorney to be present at the hearing, (3) both the hearing panel and review department failed to consider the "spite" motivation of one complainant, (4) the bar examiner's misconduct before the hearing panel denied petitioner a fair trial, (5) the hearing panel did not properly rule on several issues of law, (6) he was denied an opportunity to prepare his defense, and (7) the hearing panel was "negligent" in not recognizing the falsity of one witness' testimony. We conclude that each of petitioner's contentions lacks merit and that his conduct warrants greater discipline than that ultimately recommended by the State Bar.

Petitioner was admitted to the practice of law in January 1964 and has no prior discipline. On May 5, 1981, formal proceedings were instituted against him by a notice to show cause charging him with 12 counts of misconduct. After the hearing, the bar court dismissed six counts. In the remaining six counts, the court found (1) multiple violations of statutory and rule provisions including rule 5-101 of the Rules of Professional Conduct, which requires that any business relationships with clients be on terms that are fair and reasonable, with the client's written consent and with the client being informed of a right to independent counsel, (2) rule 6-101 (knowingly performing legal services without the requisite skill), (3) Business and Professions Code section

6068, subdivision (d) (misleading a court by preparing and filing false declarations of himself and his client), (4) section 6128 (deceit or collusion with intent to mislead the court and opposing counsel), (5) section 6106 (commission of an act of dishonesty), (6) section 6068, subdivision (e) (failure to preserve the inviolate nature of confidential client communications), (7) section[653 P.2d 324] 6068, subdivision[32 Cal.3d 733] (f), (unnecessarily advancing a fact prejudicial to the honor or reputation of a party or witness), and (8) section 6103 (wilful disobedience or violation of a court order). These several violations arose in five separate matters involving three different clients, which we now describe. (The disparity between the number of violations found (10) and the number of counts remaining in the order to show cause after six were dismissed (6) apparently reflects the fact that the same conduct of petitioner was found to have violated more than one statute or rule.)

1. THE "A" MATTER

In November 1976, petitioner was retained as attorney by A. In 1978, petitioner and his wife borrowed $10,000 from A, the debt being evidenced by a promissory note. At that time although A was aware of petitioner's financial condition and was given a reasonable opportunity to seek the advice of independent counsel, A was not advised of his right to such outside counsel. Although the transaction was fair and reasonable as to A, he did not give his written consent.

The State Bar Court found that petitioner had committed a technical violation of rule 5-101 by acquiring an interest adverse to his client without obtaining the client's consent in writing.

2. THE "B" MATTER

In 1977 petitioner was retained by Mrs. B and shortly thereafter while still representing her, petitioner offered to buy the equity of Mr. and Mrs. B in a residence being purchased by them. Petitioner and his wife executed and delivered to the Bs two promissory notes in the aggregate sum of $13,000 without disclosing petitioner's uncertain financial condition to Mrs. B, who was unaware of that condition, or informing her of her right to seek the advice of independent counsel. The State Bar Court found petitioner had violated rule 5-101 in acquiring an interest adverse to his client, Mrs. B.

3. THE "C" MATTER

A. Purchase of Residence--In September 1977, petitioner was retained by Mrs. C to collect a promissory note held by her which was then in default. Two months later, while still representing both Mrs. B and C, petitioner negotiated an agreement whereby he and his wife were substituted for the Bs as the purchasers of C's home, thereby releasing the Bs from any further obligation to C.

The State Bar Court found that C, a woman unlearned in real estate matters, reposed great trust and confidence in petitioner as her attorney. Apparently she thought she would receive a deed of trust as security when selling her home to petitioner; the document she actually signed was a land sale contract. Petitioner did not disclose his financial condition to C and did not inform her of her right to seek independent counsel; nor did C have a reasonable opportunity to seek such outside counsel. It was specifically found that the terms of the contract were not explained to her in such a way as to allow her reasonably to understand them and that, as to her, the transaction was not fair and reasonable. Based on these findings, the State Bar Court found that petitioner had violated rule 5-101.

The State Bar Court also found that petitioner knew that in drafting the instrument in question he lacked the learning and skill ordinarily possessed by lawyers in good standing who perform, but do not specialize in, similar services practicing in the same locality under similar circumstances. By reason of petitioner's lack of skill, C was caused unnecessary expense in pursuing her legal remedies against petitioner following his failure to perform his obligations under the contract. Thus, the State Bar Court Contrary to the agreement, petitioner failed to pay the property taxes then due on the house for the taxable year 1977-1978, or any property taxes at all until 1980.

found petitioner had failed to act competently, a violation of rule 6-101.

Further, petitioner has not offered to rescind the contract and has, in fact, rejected an offer of rescission made by C's current counsel. He continued, at the time of the bar court's decision, to require that C pursue her legal remedies occasioned by his failure to perform his obligations under rules 5-101 and 6-101.

B. False Declarations to the Court; Attorney Substitution. While representing C in the note collection proceeding, petitioner filed his "declaration in support of request to set aside [an] order" vacating the default. In the declaration petitioner stated that "I know something of the financial condition of [C] at the present time from talking with her and her accountant and from personal observations. I know that this judgment is the major source and only substantial asset that she is relying on to support herself and her mentally retarded daughter. I further know that she has an outstanding obligation in the amount of $25,000 to pay by April 15, 1978." In addition, petitioner prepared and filed a declaration of C in which she stated that she was presently living on borrowed funds and that the judgment was the substantial part of her assets at the time. The facts known by petitioner at the time of his preparation of the declarations were that the judgment was not C's major asset, nor was she relying on it to support herself and her daughter, nor was she living on borrowed funds, nor did she have any obligation due on April 15, 1978.

The bar court found that both declarations involved dishonesty in the intentional filing of false documents with the court, that such filing was misleading to the court and opposing party, and intentionally so. Based on these findings, the bar court found that petitioner violated sections 6068, subdivision (d), 6106, and 6128 of the Business and Professions Code.

After pursuing the note collection for some time, C discharged petitioner and substituted Robert Eli as her attorney. Petitioner thereupon pursued a course of deliberate noncooperation. He refused to sign the form of substitution of attorneys and also failed to inform Eli that he would not oppose the motion for substitution, thereby causing C to incur unnecessary expense in connection with preparation for hearing on the motion. Furthermore, petitioner refused to turn over the files pertaining to the litigation, despite repeated requests to do so. As a result, C was forced to secure a court order on March 21, 1979, compelling their delivery. Petitioner ignored the court order and did not deliver the files until May 25, 1979, after C and Eli were forced to make three separate court appearances and to file contempt of court proceedings against him. C incurred an additional $900 in attorney's fees in order to secure her rightful possession of the files. The bar court found that petitioner purposely delayed the return of the files in order to discourage his client from retaining new counsel of her choice.

Based on these findings the bar court found that defendant had violated...