Kwasnik v. State Bar

Decision Date31 May 1990
Docket NumberNo. S010199,S010199
Citation50 Cal.3d 1061,791 P.2d 319,269 Cal.Rptr. 749
CourtCalifornia Supreme Court
Parties, 791 P.2d 319 Richard E. KWASNIK, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

Diane Yu, Office of Gen. Counsel, State Bar of Cal., San Francisco, for respondent.

BY THE COURT:

Petitioner Richard E. Kwasnik seeks review of the refusal of the State Bar to certify him to this court for admission to the bar on the ground that he lacks the requisite good moral character. (Bus. & Prof.Code, § 6066; Cal.Rules of Court, rule 952(c); Rules Regulating Admission to Practice Law, rule I, § 11.) 1 For the reasons set forth below, we conclude petitioner should be admitted to the bar.

FACTS

Petitioner graduated from Brooklyn Law School in June 1966. He was admitted to the practice of law in New York in 1967.

In November 1970 petitioner was involved in an automobile accident that resulted in the death of Steven Smilanich, a husband and father of three children. Although a grand jury investigated the accident, no criminal charges were filed. Petitioner pleaded guilty to "driving while impaired," a traffic infraction, and was fined $50.

The decedent's widow (hereafter Smilanich) and decedent's three minor children filed a wrongful death action against petitioner in a New York court, which resulted in a judgment against him in the amount of $232,234.16 in July 1974. Petitioner's automobile insurance carrier paid the policy limit of $10,000 to Smilanich. In 1975 Smilanich filed attachment proceedings against petitioner to enforce the judgment by garnishing his wages; he previously had made no payments on the judgment. Once he received a notice of levy, petitioner began making payments of approximately $42 every two weeks. Between 1975 and January 1980, petitioner paid $4,649. He has paid nothing since January 1980.

In November 1980, after Smilanich's attorney rejected a settlement offer of $15,000 A. Florida Bar Proceedings

                [791 P.2d 321]  petitioner filed a petition for bankruptcy in the United States Bankruptcy Court for the Southern District of Florida.  (See Florida Board of Bar Examiners Re:  Kwasnik (Fla.1987) 508 So.2d 338, 339 (hereafter Kwasnik ).)   The only debt scheduled for discharge in the bankruptcy petition was the Smilanich judgment;  petitioner listed none of his other then-existing debts.  The Smilanich judgment was discharged by the bankruptcy court in March 1981
                

In response to petitioner's 1979 application to the Florida State Bar, the Florida Bar Examiners (Florida Bar) found that he failed to meet the standards of conduct and fitness and concluded that he should be denied admission. In a 1980 hearing regarding petitioner's admission to the Florida State Bar, he was charged with three instances of wrongful conduct that he does not dispute. First, in a deposition taken during the wrongful death suit, petitioner testified falsely that he had no joint interest in any checking account or other item of personal property. In fact, he was a signatory on a joint account with his wife at the time. Second, in his Florida State Bar application petitioner stated that following the wrongful death judgment $10,000 was paid to Smilanich, "which represented all the assets available," and that he paid approximately $1,200 per year toward the judgment. He concluded, "I fully intend to continue all payments in the future." Actually, petitioner paid as much as $1,200 only in 1979, and completely stopped payment in January 1980, five months after filing the application. In addition, the record suggests that other assets were available to petitioner. Third, after petitioner moved to Florida in February 1980 he earned $27,000 per year, yet refused to make any further payments under the judgment after January 1980. The record suggests that petitioner discontinued the payments because of a Florida statute that exempts salaries from garnishment. Petitioner was denied admission to the Florida Bar in 1980. In February 1981 the Florida Supreme Court denied his petition for review.

In March 1983, petitioner applied for reevaluation. Because he did not pay the required deposit until April 1986, it was not until January 1987 that the Florida Bar again found that petitioner failed to meet the moral character requirements. In June 1987, however, the Florida Supreme Court rejected the Florida Bar's recommendation, holding that petitioner met the moral character requirements and ordering that he be admitted on passing the Florida Bar Examination. The court noted that he had already been denied admission because of the aforementioned three instances of misconduct. (Kwasnik, supra, 508 So.2d at p. 339.) Accordingly, it focused on whether the Florida Bar could deny petitioner admission for failing to make any effort after bankruptcy to provide assistance to the Smilanich family, although he had no legal obligation to do so. (Ibid.) It held that because the bankruptcy laws were designed to provide a fresh start for those who are overburdened with debt, it could not allow any continuing moral obligation to the Smilanich family to be considered in his petition for admission to the Florida State Bar. (Ibid.) The court further noted that petitioner had performed as a "competent" lawyer working at modest pay for the New York Legal Aid Society and otherwise had led an "exemplary life" since his first application in Florida. Accordingly, the court held he had demonstrated sufficient rehabilitation to qualify for admission. (Id. at p. 340.) In May 1988 petitioner was admitted to the practice of law in Florida.

B. California Bar Proceedings

In July 1987 petitioner passed the Attorney's Examination of the California Bar Examination. His certification to practice was delayed, however, pending a moral character investigation. In June 1988 a formal hearing was held before a three-member hearing panel of the State Bar Court. Prior to the hearing petitioner entered a stipulation of facts with the State Bar. The hearing panel found that he had sustained his burden of proof that he is of Pursuant to a request for reconsideration, the hearing panel again recommended that he be admitted to the practice of law and issued a finding of facts that closely tracked the stipulation between the parties. First, it concluded that petitioner's description on his California Bar application of the disposition of the Smilanich suit as a "verdict for defendant" was not an intentional misstatement made to deceive. Second, it found that he accepted full responsibility for the three acts considered by the Florida Bar. Third, it concluded that the discharge of the Smilanich judgment in bankruptcy discharged both the legal and moral obligations of petitioner. Finally, it noted that except for the Smilanich matter petitioner's record is unblemished; that his conduct, as evidenced by the testimonial letters he submitted, established he is of a good moral character; and that he has an excellent reputation in the community for honesty, reliability, fairness and integrity. The hearing panel concluded that if he were admitted to the practice of law petitioner would be able to meet the professional and fiduciary duties of his practice.

[791 P.2d 322] good moral character and recommended that he be admitted to the California Bar.

The Review Department of the State Bar Court (hereafter the review department), however, made its own findings and disagreed with the hearing panel's conclusions. First, the review department detailed certain circumstances attendant on petitioner's bankruptcy: (1) between 1975 and 1979, when Kwasnik made payments only pursuant to garnishment proceedings, he earned an annual salary of between $15,000 and $32,000, totaling at least $100,000, while living rent-free at his mother's home and putting his wife through five years of college; and (2) petitioner misled Smilanich's attorney in 1980 by expressing an intention to take a one-year leave of absence when he had already accepted a new job in Florida.

Second, the review department cited a report issued by the Florida Bar after a formal rehabilitation hearing held in November 1986 on petitioner's application for reevaluation. The Florida Bar found that petitioner had taken no steps to fulfill his moral obligation to Smilanich since 1980. It noted that he had neither contacted the survivors nor made any further payment to them, despite the fact that he and his wife earned a combined income of $90,000 and owned $225,000 of equity in a home valued at $250,000. In addition, the review department noted that the Florida Bar found petitioner to be less than candid at the rehabilitation hearing, especially when asked why his New York home was in his wife's name.

Finally, the review department concluded that petitioner had demonstrated a lack of good moral character by failing to accept "any responsibility whatsoever for the Smilanich family which was victimized by his drunken driving." It found he ignored the rights of the Smilanich family under the wrongful death judgment until after garnishment proceedings were instituted, and then paid only the minimum in order to avoid the wage garnishment. Accordingly, in March 1989 the review department, by a vote of 11 to 4, found that petitioner did not possess the requisite good moral character and recommended that he not be admitted to the practice of law in California. The four members voting for petitioner's admission noted that the finding of lack of good moral character was based entirely on his failure to honor a moral obligation to pay a wrongful death judgment discharged in bankruptcy. They concluded petitioner should be admitted because he had successfully established his good moral character by his practice of law in sister jurisdictions and the attestations of judges and lawyers.

DISCUSSION

This court may admit to the practice of law any applicant...

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