Greenbaum v. State Bar

• Citation: 43 Cal.3d 543,237 Cal.Rptr. 168,736 P.2d 754
• Court: United States State Supreme Court (California)
• Decision Date: 04 June 1987
• Parties: , 736 P.2d 754 Russell G. GREENBAUM, Petitioner, v. STATE BAR OF CALIFORNIA, Respondent. L.A. 32266.

Page 168

237 Cal.Rptr. 168

43 Cal.3d 543, 736 P.2d 754

Russell G. GREENBAUM, Petitioner, v. STATE BAR OF CALIFORNIA, Respondent.

L.A. 32266.

Supreme Court of California.

June 4, 1987.

As Modified on Denial of Rehearing July 16, 1987.

Russell G. Greenbaum, San Diego, in pro. per.

Herbert M. Rosenthal, Truitt A. Richey, Jr., Richard J. Zanassi, San Francisco, and Erica Tabachnick, Los Angeles, for respondent.

THE COURT:

The Review Department of the State Bar Court has recommended by an 11-2 vote that petitioner Russell G. Greenbaum, who was licensed to practice law in this state in 1968, be disbarred. The hearing panel had proposed the more lenient sanction of suspension and probation. Petitioner contends that the findings of the Review Department are not supported by the record, and that the discipline is excessive. We conclude, based upon our independent review of the record, that disbarment is appropriate.

I. FACTS

1. The Leach Matter

In 1970, on petitioner's advice Mr. and Mrs. Leach gave petitioner $40,000 for deposit in an attorney's trust fund account. The money "was to be used strictly for the construction of their new home." Petitioner opened three separate trust accounts; two for $15,000 and one for $10,000. The passbooks remained in petitioner's possession and he was the only signatory on the accounts. Over the next several months, the Leaches authorized withdrawals totaling $30,000. In June 1971, the Leaches requested an additional $10,000 but were informed that no funds remained in the trust accounts. The Leaches requested and received an accounting, disclosing three withdrawals which were made "without their authorization, knowledge or consent." Petitioner admitted that he made the withdrawals but insisted that they were authorized. ¹

In 1976, the State Bar found that "without prior authorization, [petitioner] withdrew client funds, totalling $11,000 from trust accounts and appropriated them to his own use." Petitioner was placed on probation for four years on conditions which included 3 months actual suspension.

2. Extension of Probation

In 1980 petitioner's probation was first revoked and then reinstated and continued for an additional two years, and additional sanctions imposed, because "he commingled with his personal funds $1,200 belonging to [one client] and $35 belonging to [another client]."

3. The Nish Matter

On January 8, 1977, Sarah Nish met with petitioner; her husband, Walter Nish, had died the day before and she wished legal advice. Also present at the meeting was Walter's son, William Nish, the executor of Walter's estate. Petitioner was retained to represent Sarah (individually) and William (as executor of the estate). Pursuant to petitioner's instructions, they transferred nearly $33,000 to him. Following the funeral on January 11, William returned to his home in Georgia, relying upon petitioner to settle the estate.

Almost one year later, William received a letter from petitioner which stated, in part, "I am in the process of preparing an accounting which will include distribution of all funds which I had on deposit or expect to receive...." Six months later, William telephoned petitioner and inquired about the final accounting; petitioner responded that it was being completed but would take more time.

In September 1978 petitioner again wrote William. He requested 3 checks, totalling nearly $3,000, to cover certain costs. William again contacted petitioner, who explained that, although he did have funds from the January 1977 transfers, Sarah had withdrawn $7,500 from the account. Petitioner also explained that the costs detailed in his letter should be paid by the executor of the estate. William complied.

In December 1978 William wrote petitioner and requested an accounting and an explanation for certain expenditures. He received no response and no accounting. William wrote petitioner again in July 1979 and again requested the final accounting. Petitioner replied the following month, saying that he was preparing the final accounting but that he was "having some difficulty in identifying specific withdrawals due to the fact that the secretary-accountant who made certain entries did not sufficiently indicate what the deductions were for." The letter concluded, "payment of administrative fees, outside accounting services, petition preparations, statutory attorney's fees, and other necessary expenditures on behalf of the estate have used most, if not all, of the funds on deposit. This accounting will be forwarded when completed." (Italics added.) No accounting was forthcoming.

William immediately wrote petitioner again and requested that the accounting encompass all funds received and spent. Petitioner replied one month later, saying that all relevant documents had been turned over to Harold Hancock, a CPA, and that the complete records would be sent to William "as soon as possible." Again, no accounting was forthcoming.

In May 1980 William again wrote petitioner, complaining of the delays and requesting an accounting. In July, after receiving no response, William telephoned Hancock, who informed William that the accounting had been completed and promised to forward a copy. William telephoned Hancock again in August because he had not received the accounting. Hancock said he was surprised because, following their previous conversation, he telephoned petitioner who promised to send William the accounting immediately. Hancock then told William he would send him the accounting. Still no accounting was forthcoming.

Finally, William consulted an attorney in Georgia. In December 1980 the attorney wrote petitioner and demanded an accounting. She added, "I have advised Mr. Nish that if you have not communicated with me within two weeks from the receipt of this letter then he should take appropriate action, to-wit: either by procuring an attorney to determine whether or not legal action should be taken against you or by taking the matter up with the California State Bar Association." Petitioner telephoned William's attorney and told her that William must be confused because no such accounting existed. The attorney advised William to file a formal complaint with the California State Bar, which he did in January 1981.

The State Bar charged petitioner with violating rule 8-101 of the Rules of Professional Conduct (commingling) and section 6106 of the Business and Professions Code (willful misappropriation).

In November 1985 William testified before the State Bar Court. He presented the facts set forth above, and added that, as of the present date, he had not received an accounting and had not received any of the money he had given petitioner in January 1977.

Sarah's daughter, Maria Annette Baxter (Ann), also testified before the State Bar Court. (Sarah had passed away prior to the commencement of hearings.) Ann testified that she had assisted Sarah in her financial matters and was thus aware of all of Sarah's financial transactions with petitioner. She testified that Sarah received $1,000 from petitioner on January 17, 1977, an additional $1,000 on January 28, 1977, and another $1,000 on June 24, 1977. Ann also testified that petitioner gave Sarah a check for $2,000 so that Sarah could lend the money to Ann. Finally, according to Ann, petitioner paid the $750 balance due on new hearing aids for Ann. Thus, the total amount Sarah received from petitioner was $5,750.

Petitioner testified before the State Bar Court and admitted receiving $32,808.79 from the Nishes. He claimed that he had possessed a ledger card which detailed what happened to this money, and that he allowed an investigator from the State Bar to copy the ledger card in 1981. According to petitioner, the investigator returned the original, but petitioner could no longer find that original or a copy. Nonetheless, petitioner presented a document, which he had compiled a few days earlier, purporting to explain where the money went. Specifically, petitioner alleged he had disbursed $3,750 to Sarah, $4,000 to Ann, and $7,692.28 to William; he had no record of Sarah withdrawing $7,500 from the account. Petitioner also claimed that he thought William had received a final accounting, and testified that he himself had never received a copy of Hancock's accounting.

Petitioner continued his testimony before the State Bar Court in January 1986. At that time, he admitted that the $7,692.28 he claimed went to William had actually been deposited into petitioner's general account in August 1977, but petitioner denied using the funds for personal purposes.

The hearing panel, believing the key issue to be whether petitioner failed or refused to provide William with an accounting of the client trust funds, concluded that such an accounting was never provided. The hearing panel also determined that petitioner commingled funds in violation of Rule 8-101, but did not find willful misappropriation. The State Bar hearing examiner urged the panel to recommend that petitioner be disbarred. The examiner based her request on standard 1.7 of the new Standards for Attorney Sanctions for Professional Misconduct (effective January 1, 1986), which provides that if an attorney has been disciplined on two prior occasions then disbarment is appropriate unless "the most compelling mitigating circumstances clearly predominate." ² The hearing panel recommended that petitioner be suspended from practicing law for three years, with certain conditions including one year of actual suspension.

The State Bar examiner sought review of the hearing panel's decision "on the grounds that the discipline imposed is insufficient and that the Findings of Fact do not accurately reflect the record in this matter." Petitioner also sought review, arguing that the State Bar should be precluded from prosecuting him because it did not act diligently, and challenging the sufficiency of the evidence to support the findings and the discipline imposed. Petitioner...