Giovanazzi v. State Bar

• Decision Date: 11 December 1980
• Docket Number: S.F. 24161
• Citation: 619 P.2d 1005,169 Cal.Rptr. 581,28 Cal.3d 465
• Court: California Supreme Court
• Parties: , 619 P.2d 1005 Joseph GIOVANAZZI, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

Page 581

169 Cal.Rptr. 581

28 Cal.3d 465, 619 P.2d 1005

Joseph GIOVANAZZI, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

S.F. 24161.

Supreme Court of California, In Bank.

Dec. 11, 1980.

Richard K. Critchlow, Sausalito, for petitioner.

Herbert M. Rosenthal, Truitt A. Richey, Jr., and Gael T. Infande, San Francisco, for respondent.

BY THE COURT.

Review of recommendation of the State Bar Disciplinary Board that petitioner Joseph Giovanazzi be suspended from the practice of law for three years, that execution of suspension be stayed, and that petitioner be placed on probation on conditions including no actual suspension. We adopt the board's recommendation with the added condition of probation that he be actually suspended from the practice of law for 30 days. ¹

Petitioner, admitted to practice in 1969, is 39 years of age. He has no prior disciplinary record.

Petitioner was charged in the instant proceeding in two separate matters with violating his oath and duties as an attorney (Bus. & Prof.Code, §§ 6103, 6067, 6068) and commission of acts involving moral turpitude and dishonesty (Bus. & Prof.Code, § 6106). He was also charged with wilfully violating the following rules of professional conduct: Misleading the court by false pleading (rule 7-105), misappropriating a client's funds (rule 8-101), and involving a client in business transactions adverse to the client's best interests (rule 5-101). (West Ann.Bus. & Prof.Code, foll. § 6076.)

Petitioner and the board have formally stipulated to facts supporting the charges, to mitigating circumstances and to recommended discipline. Relevant facts disclose two separate incidents of professional misconduct-the Brian Kelly and the Marion Tatum matters.

In the Brian Kelly matter petitioner had represented Kelly in recovering a $750,000 claim for personal injuries. Petitioner's fee was $250,000. Less than a year later, while Kelly was still petitioner's client, petitioner negotiated a $100,000 loan from Kelly for purposes of making an investment. Petitioner did not advise Kelly that he should seek independent legal counsel, that the interest rate for the loan was usurious and could have legal consequences adverse to Kelly, or that Kelly should undertake particular action necessary to perfect Kelly's security interest in property offered by petitioner as collateral for the loan.

Petitioner executed "A Promissory Note and Assignment" in favor of Kelly providing for 24 successive monthly principal payments of $4,166 each and prepaid interest in the amount of $12,500 at the beginning of each year of the two-year note.

The document also provides that petitioner "agrees" to "(s)ecure this promissory note with an assignment" of petitioner's interest in described real property, and to give Kelly "a lien on the income from (petitioner's) law practice" should the assignment of real property be insufficient security. For purposes of finalizing the loan transaction petitioner designated an associate, Eugene Alkana, as his agent and gave Alkana power of attorney. Petitioner negotiated the $100,000 cashier check delivered to him from Kelly through Alkana. Petitioner made the first interest and eight principal payments on the note, and thereafter defaulted.

Kelly commenced a civil action on the note. After petitioner's default was taken for failure to timely file a responsive pleading, he moved to vacate the default and attached to his moving papers a "Proposed Demurrer to Complaint." He alleged in the demurrer that he was unaware of any agency relationship between himself and Alkana, that he had no knowledge of any powers of attorney executed by him in favor of Alkana, and that he did not ratify any of Alkana's actions.

After these disciplinary proceedings were commenced, petitioner paid the Kelly obligation in full.

In the Marion Tatum matter, petitioner received funds in settlement of clients' claims and withheld the sum of $2,451.85 to cover fees charged by Tatum, an investigator who had furnished services in connection with the claims. The $2,451.85 was deposited in petitioner's "Client's Trust Account." No portion of the $2,451.85 was paid to Tatum nor was any portion of this sum refunded to petitioner's clients. During a three-year period following retention of the Tatum fund, the balance in petitioner's trust account dropped to an amount $344.94 less than the amount he purportedly held in trust for the investigative fee.

The formal stipulation of facts, mitigating circumstances and recommendation has been approved by order of the board, thereby terminating proceedings before the board. (Former rule 25.40, Rules of Procedure of State Bar, now rule 407, West Ann.Bus. & Prof.Code, foll. § 6087.) Petitioner has thus admitted the foregoing facts underlying charges against him and has concurred in recommended discipline based in part on stipulated mitigating circumstances as hereinafter appear. He did not seek judicial review until informed that this court might consider imposition of more severe sanctions than recommended. He urges the court to adopt the recommended discipline. Alternatively, if the court deems a more severe discipline be imposed, he requests the cause be remanded to the board for an evidentiary hearing limited to a fuller exposition of factors in mitigation of his misconduct. He does not challenge the accuracy of any fact to which he has stipulated.

This court stated in Inniss v. State Bar (1978) 20 Cal.3d 552, 143 Cal.Rptr. 408, 573 P.2d 852, that an attorney is bound by factual recitals in a stipulation even when the court considers imposition of harsher sanctions than those stipulated to by the attorney and the board. "(T)he stipulated facts may not be contradicted; otherwise, the stipulation procedure would serve little or no purpose, requiring a remand for further evidentiary hearings whenever an attorney deems it advisable to challenge factual recitals." (Id., at p. 555, 143 Cal.Rptr. 408, 573 P.2d 852.) However, an exception to the general rule was expressly recognized in Inniss. "On the other hand, fundamental fairness seems to require us to relieve an attorney from the legal conclusions to which he may have agreed solely because the recommended punishment seemed to him fair and reasonable." (Id.) The stipulation includes matters best described as legal conclusions as, for instance, it is stipulated that petitioner "may be deemed to have had the responsibilities of a fiduciary to Brian J. Kelly," and that petitioner's conduct "is in violation of Business and Professions Code Section(s) 6067, 6065, and 6103, and Rules 5-101 and 7-105 of the Rules of Professional Conduct." While petitioner does not expressly complain of these and other legal conclusions, we do not deem that he is bound to them under Inniss. We hereinafter independently consider the legal effect of the purely factual matters stipulated to, and draw our independent conclusions thereon.

Petitioner complains only that he is prejudiced by the finality of the stipulation insofar as it forecloses his right to submit additional mitigating materials relative to discipline. He contends that implicit in the stipulation process are assurances as to the final disposition of the cause in exchange for relinquishment of procedural rights. He states he will be deprived of rights to procedural and administrative due process if he is subjected to harsher than bargained-for discipline without benefit of a hearing.

Petitioner's argument presupposes that the stipulation process-involving not only an agreed factual statement of an attorney's misconduct and other relevant matters, but also a mutually arrived at conclusion as to sanctions warranted by that misconduct-results in a bargained-for commitment. If in a very broad sense that were true and the bargaining parties are each bound to some commitment, it is immediately clear that the only commitment the board can make is to recommend the particular discipline. This court has repeatedly held that it is for it and not the board to fix the discipline in any particular case. (See, e.g., Martin v. State Bar (1978) 20 Cal.3d 717, 723, 144 Cal.Rptr. 214, 575 P.2d 757; Lester v. State Bar (1976) 17 Cal.3d 547, 552, 131 Cal.Rptr. 225, 551 P.2d 841; Silver v. State Bar (1974) 13 Cal.3d 134, 147, 117 Cal.Rptr. 821, 528 P.2d 1157; Fielding v. State Bar (1973) 9 Cal.3d 446, 452, 107 Cal.Rptr. 561, 509 P.2d 193; Glickman v. State Bar (1973) 9 Cal.3d 179, 184, 107 Cal.Rptr. 65, 507 P.2d 953; Sturr v. State Bar (1959) 52 Cal.2d 125, 127, 338 P.2d 897; Burns v. State Bar (1955) 45 Cal.2d 296, 303, 288 P.2d 514.) Petitioner, as a member of the bar, must be deemed to have entered upon the stipulation with knowledge that this court would exercise an independent judgment, and he does not contend he was unaware. ²

It further appears that the authorities on which petitioner relies in support of his contention of deprivation of due process, do not aid him. (See North Carolina v. Alford (1970) 400 U.S. 25, 91 S.Ct. 160, 27 L.Ed.2d 162; People v. West (1970) 3 Cal.3d 595, 91 Cal.Rptr. 385, 477 P.2d 409; Pen.Code, § 1192.5.) Those cases and statutory law relate to pleas in criminal cases. It is settled that bar proceedings are not criminal in nature. (Lewis v. State Bar (1973) 9 Cal.3d 704, 713-714, 108 Cal.Rptr. 821, 511 P.2d 1173.) The principal objective in disciplinary proceedings is to protect the public, the courts, and the legal profession from persons unfit to practice, rather than to penalize the individual attorney. (Black v. State Bar (1972) 7 Cal.3d 676, 688, 103 Cal.Rptr. 288, 499 P.2d 968.) Accordingly, particular procedural safeguards applicable in criminal and civil litigation are not required in disciplinary proceedings to insure a right to due process. (Emslie v. State Bar (1974) 11 Cal.3d 210, 229, 113 Cal.Rptr. 175, 520 P.2d 991.)

Since Innis, this court has consistently imposed-when warranted-harsher discipline than that...