Hatch v. State Bar of Cal.
| Decision Date | 06 January 1961 |
| Citation | 55 Cal.2d 127,357 P.2d 1064,9 Cal.Rptr. 808 |
| Court | California Supreme Court |
| Parties | , 357 P.2d 1064 Robert E. HATCH, Petitioner, v. STATE BAR OF CALIFORNIA, Respondent. S. F. 20494. . In Bank |
Robert E. Hatch, San Francisco, petitioner, in pro. per.
John J. Goldberg, San Francisco, for respondent.
This is a proceeding to review the recommendation of the Board of Governors of The State Bar of California (hereinafter referred to as 'the board') that petitioner be suspended from the practice of law for a period of one year.
The board found (1) that on or about November 19, 1953, petitioner and Lucille F. Athearn entered into an attorneys' retainer agreement with Gladyce C. Merola, and that thereafter, pursuant to said agreement, petitioner collected certain assets in which Mrs. Merola had an interest and commingled them with his own assets by placing them in the International Investment Co., Inc. (hereinafter referred to as 'the corporation'), wholly controlled by him, and failed and refused to account to Mrs. Merola for the receipt of the assets, and (2) that petitioner, pursuant to the retainer agreement, proceeded to collect, or caused to be collected, certain assets heretofore mentioned and appropriated and converted the same to his personal use and benefit without the knowledge and consent of Gladyce C. Merola.
Petitioner's sole contention is that the evidence does not support the foregoing findings.
This contention is devoid of merit. The burden is upon one seeking a review of a recommendation of the board to show that its findings are not supported by the evidence or that its recommendation is erroneous or unlawful. Sturr v. State Bar, 52 Cal.2d 125, 127(2), 338 P.2d 897.
In the present case, not only has petitioner failed to meet the requirements of the foregoing rule, but the record discloses that the findings of the board are fully sustained by the evidence.
Following the death of Mrs. Merola's husband, the judge of the probate court in which the administration of his estate was pending ordered Mrs. Merola to deliver certain assets to the executor. Because of this order, Mrs. Merola and Mrs. Athearn, who was representing her, became concerned and for that reason associated petitioner.
Petitioner agreed to be associated with Mrs. Athearn as an attorney for Mrs. Merola but only on a contingent fee basis. He thereupon prepared the retainer agreement. It provides for a fee of 25 per cent of whatever is recovered or received by Mrs. Merola or it is determined that she owns and is entitled to retain. The agreement was executed on November 19, 1953.
The attorneys thereafter filed the following complaints in the superior court in San Francisco: (1) On November 19, 1953, a complaint to quiet title by Mrs. Merola against the executor of the will of Mr. Merola and E. F. Hutton & Company, with whom a securities account had been established by Mr. and Mrs. Merola; (2) on December 22, 1953, a complaint by Mrs. Merola against California Western States Life Insurance Company on a policy of life insurance on the life of Mr. Merola in the face amount of $26,000, the beneficiary of which was Mrs. Merola; and (3) on November 29, 1954, a second complaint to quiet title by Mrs. Merola and the corporation against the executor of the will of Mr. Merola, covering shares of stock which had not been included in the property covered by the first quiet title action.
The first quiet title action resulted in a judgment rendered November 10, 1954 quieting the title of Mrs. Merola to (a) the E. F. Hutton & Company account, which was found to be in joint tenancy with right of survivorship, and to the securities therein contained, subject to the indebtness against the account, (b) most of the other securities claimed in the complaint, (c) a cashier's check issued by the Bank of America October 13, 1953, payable to Mrs. Merola in the amount of $4,285.29, and (d) $17,065.04 of the amounts contained in four savings and loan association accounts, the balance thereof to the executor, and certain United States Treasury bonds to the executor.
On July 2, 1954, several months before the above-mentioned judgment was rendered, Mrs. Merola, on petitioner's recommendation, transferred certain asserts to the corporation to be held by it as part of a trust then established. Included in the assets so transferred was the cashier's check for $4,285.29 above referred to.
One of the reasons given Mrs. Merola by petitioner in persuading her to transfer the assets to the corporation was that she had lost certain assets and improvidently converted some to her own use, placing her 'in a very dangerous civil and criminal position' if she should later be required to account to the court for such assets.
Nevertheless, on July 6, 1954, four days after receiving the check as trustee and while said quiet title action was still in litigation, the corporation cashed the check. On the same day, although the proceeds thereof constituted the only Merola funds held by the corporation, petitioner caused it to pay to Mrs. Athearn on account of fees the sum of $857.15, and also caused it to pay the sum of $857.15 to him on account of fees.
The next receipt of Merola funds by the corporation was on July 30, 1954. The action on the life insurance policy had terminated in a judgment in favor of Mrs. Merola on July 23, 1954, for the sum of $24,752.54, which sum had been deposited by the insurance company with the clerk of the court on March 11, 1954, and was paid by the clerk to the attorneys on the day the judgment was rendered. On July 30, 1954, this sum was paid over to the corporation, and two days later, on August 1, 1954, petitioner caused the corporation to pay to Mrs. Athearn and petitioner, in equal shares on account of fees, an aggregate of $9,901, more than 40 per cent of such judgment proceeds.
On October 13, 1954, the corporation received $2,000 in redemption of United States bonds which were the subject of the first quiet title action.
On October 26, 1954, prior to the receipt of any further Merola funds, except small sums as dividends on securities in litigation, petitioner caused the corporation to pay to Mrs. Athearn on account of fees the sum of $400 in one amount and the sum of $5,000 in another amount, and on November 1, 1954, petitioner caused the corporation to pay to himself on account of fees the sum of $5,400.
On November 15, 1954, the corporation received, in pursuance of the quiet title judgment hereinabove mentioned, Mrs. Merola's adjudicated share of Mr. Merola's savings and loan accounts in the sum of $17,065.04. On December 8, 1954, prior to receipt by the corporation of any further Merola funds, petitioner caused the corporation to pay to Mrs. Athearn the sum of $1,292.35 on account of fees and a like sum on account of fees to himself.
The only substantial sum thereafter received by the corporation during 1954 for the account of Mrs. Merola was $5,485.69, withdrawn from a joint tenancy savings account with the Hibernia Bank, title to which had been quieted in the first quiet title action.
In the second quiet title action, the executor filed disclaimers on December 15, 1954, pursuant to which the court on February 10, 1955, rendered judgment in favor of Mrs. Merola and International Investment Co., Inc.
Including dividends on Merola securities, the corporation during 1954 received a total in cash for the account of Mrs. Merola of $56,121.91. The aggregate of fees which petitioner caused to be paid to Mrs. Athearn and himself during 1954 was $25,000.
A statement of receipts and disbursements of the corporation in 1954 for the account of Mrs. Merola was furnished to Mrs. Merola early in 1955. In specifics the date of each receipt of funds and of each disbursement for the personal account of Mrs. Merola. Disbursements for the litigation account of Mrs. Merola are not dated. They show aggregate reimbursements to Mrs. Athearn and petitioner for sums advanced by them and two sums of $12,500 each paid to Mrs Athearn and petitioner. Neither the separate amounts making up such aggregate of $12,500 each nor the dates on which such amounts were paid are shown. A similar statement of receipts and disbursements was furnished by the corporation to Mrs. Merola following the end of each year for 1955, 1956 and 1957.
For all years mentioned, Merola funds received by the corporation aggregated $63,268.54. From this sum disbursements for litigation (exclusive of attorney's fees), income taxes and personal needs of Mrs. Merola aggregated $29,055.75. At the end of 1957 the corporation was holding in the Merola account, according to its own figures, $9,212.79 out of the aforesaid total of $63,268.54.
Under the original retainer agreement, according to both petitioner and Mrs. Athearn, they were not entitled to compensation for services until there was a final accounting of the results obtained from their services.
On July 2, 1954, petitioner worked out a 'new deal' with Mrs. Merola. He told her that it was for her own protection. Petitioner himself testified: (Italics added.)
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