Kapelus v. State Bar

• Decision Date: 10 December 1987
• Court: California Supreme Court
• Parties: , 745 P.2d 917 Marvin B. KAPELUS, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent. L.A. 32207.

Page 196

242 Cal.Rptr. 196

44 Cal.3d 179, 745 P.2d 917

Marvin B. KAPELUS, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

L.A. 32207.

Supreme Court of California.

Dec. 10, 1987.

As Modified on Denial of Rehearing Jan. 28, 1988.

Otto M. Kaus, Dan Marmalefsky and Hufstedler, Miller, Carlson & Beardsley, Los Angeles, for petitioner.

Herbert M. Rosenthal, Truitt A. Richey, Jr., Richard J. Zanassi and Vida M. Holquin, San Francisco, for respondent.

BY THE COURT: ^*

This is a proceeding to review the unanimous recommendation of the Review Department of the State Bar Court that petitioner Marvin B. Kapelus be disbarred. The recommendation is based on findings in two separate matters, one involving petitioner's alleged misconduct in the representation of a client in an employment dispute (the Hammer matter), and the other involving alleged conflicts of interest arising from petitioner's personal participation, and representation of multiple parties, in a tax reduction plan (the LAPSC matter). After a consolidated hearing, the State Bar hearing panel issued detailed findings which are described below, and unanimously recommended that disciplinary sanctions, including an actual suspension of 60 days, be imposed. The review department largely adopted the hearing panel's findings, but not its recommended discipline, recommending instead that petitioner be disbarred in view of (1) the misconduct at issue here, (2) his lack of remorse and (3) his record of two prior disciplinary sanctions. As explained below, we conclude that we should adopt the review department's recommendation of disbarment.

I.

Because petitioner challenges many of the State Bar's findings, we begin with a brief review of the principles which govern this court's role in State Bar disciplinary proceedings. It is well established that the State Bar's findings are not binding on this court. Instead, this court must independently review the evidence, pass upon its sufficiency, and resolve all reasonable doubts in favor of the attorney. (Alberton v. State Bar (1984) 37 Cal.3d 1, 12, 206 Cal.Rptr. 373, 686 P.2d 1177.) The findings, however, must be given great weight, and "[w]hen the findings ... rest primarily on testimonialevidence, we are reluctant to reverse the decision of the local administrative committee, which was in a better position to evaluate conflicting statements after observing the demeanor of the witnesses and the character of their testimony...." (Vaughn v. State Bar (1972) 6 Cal.3d 847, 852, 100 Cal.Rptr. 713, 494 P.2d 1257; Chefsky v. State Bar (1984) 36 Cal.3d 116, 121, 202 Cal.Rptr. 349, 680 P.2d 82.) Moreover, petitioner bears the burden of showing that the findings of the State Bar are not supported by the evidence. (Trousil v. State Bar (1985) 38 Cal.3d 337, 341, 211 Cal.Rptr. 525, 695 P.2d 1066.) "In meeting this burden, the petitioner must demonstrate that the charges of unprofessional conduct are not sustained by convincing proof and to a reasonable certainty." (Himmel v. State Bar (1971) 4 Cal.3d 786, 794, 94 Cal.Rptr. 825, 484 P.2d 993; Chefsky v. State Bar (1984) 36 Cal.3d 116, 121, 202 Cal.Rptr. 349, 680 P.2d 82). ¹

II. The Hammer Matter

In August 1977 and March 1978, Robert Hammer met with petitioner to discuss an appeal that Hammer was then pursuing before the United States Merit Systems Protection Board relating to his discharge from employment with the federal government. Petitioner testified that he agreed to assist Hammer's nonattorney representative of record, William Shoates, by writing a supplemental letter in Hammer's defense to the appeals board in Washington. Petitioner also acknowledged that he and Hammer discussed petitioner's filing a lawsuit on Hammer's behalf against the government in federal court at the conclusion of Hammer's appeal, although petitioner maintains that he said he would file the action only if Hammer won the administrative appeal, while Hammer testified that petitioner agreed to file the action regardless of the appeal's disposition. ² Shortly after the August 1977 meeting, petitioner asked for and received $600 from Hammer, which Hammer thought was a retainer for the post-appeal suit. Petitioner testified that the $600 was his fee for reviewing the administrative record and writing the letter to the appeals board. (Hammer has since recovered the fee in small claims court.)

Petitioner wrote the supplemental letter, a three-page legal defense of Hammer, and sent it to the appeals board on March 28, 1978. Although Shoates continued to be Hammer's representative of record for the appeal, petitioner wrote the letter on his attorney letterhead and signed his name as attorney for Hammer. Petitioner testified that his signing as Hammer's attorney was inadvertent.

The appeals board resolved the appeal against Hammer in the beginning of February 1980. On February 6, 1980, the board sent one copy of the letter of denial to Hammer in care of petitioner at petitioner's address; a second copy was sent to Shoates. Although the copy of the letter delivered to petitioner was clearly addressed to Hammer, the letter never reached him and Hammer did not learn that his appeal had been denied until June 1980, when he independently contacted the appeals board and, on June 24, was sent a copy of the denial letter.

On June 27, 1980, Hammer tried several times to reach petitioner by phone. He was told by petitioner's secretary that petitioner was either unavailable or out of the office. Suspecting that petitioner was avoiding his calls, Hammer devised a ruse and succeeded in speaking directly to petitioner. At that point, petitioner confirmed that Hammer's appeal had been denied and told Hammer he had attempted to reach him by phone on a number of occasions and had sent several letters to Hammer which had been returned as undeliverable and had been placed in Hammer's file. Hammer asked for his file and petitioner promised to send it to him.

When he did not receive the file, Hammer called petitioner twice and sent him a registered letter asking for the file, but petitioner neither replied nor sent the file. In August 1980, Hammer consulted another attorney, Donald Townley, who sent petitioner a letter on September 26, 1980, requesting Hammer's file. The file was picked up by Townley's service on November 11, 1980, but the transcript of the initial administrative hearing was not in the file and there were no letters in the file addressed to Hammer which had been returned to petitioner as undeliverable. Townley subsequently asked petitioner on several occasions to forward the administrative transcript to him, but petitioner never responded to the requests. At the State Bar hearing, petitioner testified that he had earlier returned the transcript to Shoates, but although Shoates did not testify at the hearing, it was stipulated that he would have testified that he never received the transcript back from petitioner. Townley eventually sent for a copy of the transcript from the appeals board.

On the basis of the above evidence, the hearing panel found, inter alia, that petitioner willfully withdrew from employment without taking reasonable steps to avoid foreseeable prejudice to his client in violation of rule 2-111 of the Rules of Professional Conduct, ³ and willfully failed to use reasonable diligence in performing legal services by failing to communicate with Hammer regarding the status of his case in violation of former rule 6-101. ⁴ Although petitioner challenges both findings, we conclude that they should be sustained.

A. Withdrawal from employment

Petitioner contends initially that the evidence fails to support the finding that he willfully withdrew from employment without taking reasonable steps to avoid foreseeable prejudice to his client's interest. He asserts, first, that the evidence does not demonstrate that he ever entered into an attorney-client relationship with Hammer, and, second, that even if he did enter into such a relationship, the objective of the representation was never clearly established.

Hammer testified quite emphatically, however, that petitioner agreed to represent him in a post-administrative appeal suit against the federal government, and the hearing panel--which observed the testimony of both Hammer and petitioner--found Hammer's testimony credible; we find no basis for rejecting that assessment. In addition, the $600 payment which petitioner received from Hammer provides additional support for the conclusion that petitioner had been retained at that point to represent Hammer in a legal capacity.

Although the record leaves some question as to the exact terms of the agreement between petitioner and Hammer--i.e., whether petitioner was to file a federal Bivens action (see p. 198, fn. 2, of 242 Cal.Rptr., at p. 919 fn. 2 of 745 P.2d, ante ) regardless of the outcome of the administrative appeal or whether he was to file such an action only if Hammer won the appeal--in either case the evidence supports the conclusion that petitioner improperly withdrew from employment without taking reasonable steps to avoid prejudice to his client. When petitioner received notice in February 1980 that Hammer's appeal had been denied by the appeals review board, he should have recognized that under federal law the appeals board decision was not final but was subject to judicial review if a petition were filed in federal court within 30 days of receipt of the appeals board decision. (5 U.S.C. § 7703(a)(1).) By failing to notify Hammer of the adverse decision and failing to ascertain whether Hammer wanted to seek judicial review, petitioner foreclosed any opportunity Hammer had to prevail in the administrative appeal and, perhaps, in any subsequent Bivens action. Because petitioner failed to act at that point, and did not even speak to Hammer until Hammer--through a ruse--was finally able to reach him by phone several months later, we conclude that the evidence supports the...