Linnick v. State Bar

• Decision Date: 05 November 1964
• Citation: 396 P.2d 33,41 Cal.Rptr. 1,62 Cal.2d 17
• Court: California Supreme Court
• Parties: , 396 P.2d 33 Albert R. LINNICK, Petitioner, v. The STATE BAR of California, Respondent. L.A. 27925.

Page 1

41 Cal.Rptr. 1

62 Cal.2d 17, 396 P.2d 33

Albert R. LINNICK, Petitioner, v. The STATE BAR of California, Respondent.

L.A. 27925.

Supreme Court of California.

Nov. 5, 1964.

Isaac Pacht and Harvey M. Grossman, Los Angeles, for petitioner.

Garrett H. Elmore, San Francisco, and Herbert M. Rosenthal, Los Angeles, for respondent

PER CURIAM.

Petitioner was charged by a local administrative committee with five counts of professional misconduct, three of which were subsequently dismissed. The other two counts charged that during the period from April 30, 1958, through December 1960, petitioner, pursuant to agreement, compensated Sam Williams and Donald Cooksey for soliciting professional employment for him. These counts charged violations of the provision of rule 3 of the Rules of Professional Conduct that 'A member of the State Bar shall not * * * remunerate another for soliciting or obtaining, professional employment for him; * * *.' After finding against petitioner on these counts (plus a count charging the commingling of funds) the local committee recommended a three-month suspension. The Board of Governors dismissed the charge of commingling but recommended suspension for two years on the basis of the two remaining counts.

Petitioner contends that the evidence is insufficient to support the finding of the Board of Governors that, pursuant to an understanding, petitioner compensated Williams and Cooksey for referring to him persons having claims for personal injuries and other legal problems. Although the board's 'findings are not binding on this court, which will itself pass upon the sufficiency and weight of the evidence * * * petitioner has the burden of showing wherein the decision of the board is erroneous or unlawful.' (Higgins v. State Bar, 46 Cal.2d 241, 242, 293 P.2d 455.) We have concluded that he has met this burden as to his dealings with Cooksey but not as to those with Williams.

The Williams Transactions

Williams was not called as a witness by either side. Petitioner testified that he met Williams in 1956 while doing legal work in connection with a partnership between Williams and another. Between April 30, 1958, and December 1960, Williams referred at least five personal injury cases to him. Although there is no evidence that Williams ever requested or that petitioner ever gave compensation for a specific referral, petitioner admits issuing 13 checks to Williams for a total of $905.20. Four of these checks represent $236.20 collected for him in connection with his partnership. The other checks were issued at times when Williams expressed to petitioner an urgent need for money. Although petitioner frequently refused to give him money, he granted Williams' requests for a total of $669, and he testified that in some instances he authorized his secretary to make specific payments to Williams.

Petitioner's assertion that these payments to Williams were only good faith loans similar to those he made to others not connected with his practice, is contrary to his initial testimony before the local committee, where he candidly admitted, 'It is customary in my office for me to make loans and give money * * * to various people, friends especially, and not to expect repayments. That is one way to build up a fairly successful practice. * * *' In Williams' case, '* * *' my secondary motivation was obviously because he had done things for me such as referred cases to me. * * * ' Petitioner also frankly testified that he responded to Williams' financial need to 'Keep him happy, yes. I wanted him to keep sending in the cases, yes.'

None of these loans was evidenced by a promissory note, and petitioner admitted 'never really considering pressing (Williams) for repayment.' Williams, apparently voluntarily, repaid $175. It is true that, at a later hearing, petitioner claimed that he had refreshed his memory going over the records and that he always intended to secure repayment. Since these records were available to him before his initial testimony, however, this subsequent retraction is unconvincing. (Cf. Higgins v. State Bar, 46 Cal.2d 241, 246, 293 P.2d 455.) Moreover, petitioner now attempts to explain away the contradiction by urging that when he spoke of not expecting to be repaid, he was merely indicating his lack of confidence in Williams' financial integrity. Before the local committee, however, when asked if he considered Williams a good credit risk, he answered, 'No, not particularly,' but then added, 'To me I knew he would repay if I insisted on it, yes.'

Petitioner contends that the absence of a correlation between specific payments and specific referrals demonstrates that he had no understanding with Williams. In his initial testimony, however, he acknowledged that Williams 'didn't ask for (payments) in words, but because he recognized the fact that he was referring cases to me * * * he again wasn't doing anything for nothing, or at least if I was getting benefit he would like to be benefited.' This testimony and petitioner's admission that he compensated Williams for 'the favors he was doing by referring cases to me * * *' establish that there was at least a tacit working arrangement between them.

Since there is no evidence that Williams solicited the cases he referred, petitioner contends that even if he compensated Williams to maintain a stream of referrals, such conduct is not a basis for discipline. Rule 3 of the Rules of Professional Conduct, however, prohibits an attorney from remunerating another for either 'soliciting' or 'obtaining' employment for him. Whether or not a lay intermediary solicits the business referred, he may not keep the best interests of the clients paramount when he profits from his referrals. He is likely to refer claimants, not to the most competent attorney, but to the one who is compensating him. (See Hildebrand v. State Bar, 36 Cal.2d 504, 521, 523, 225 P.2d 508 (concurring opinion by Traynor, J.); Guides to Professional Conduct for the New California Practitioner, 36 State Bar J. 1013, 1020-1021; Ambulance Chasing and Related Evils, 7 State Bar J. 22, 23.) Hence, although there is no evidence that Williams solicited strangers, or that he was paid for specific referrals, the relationship between Williams and petitioner created the risk that rule 3 is designed to prevent.

The Cooksey Transactions

When the State Bar called Cooksey as a witness he successfully invoked the privilege against self-incrimination. Petitioner testified that Williams introduced him to Cooksey, a member of the California Highway Patrol, in 1957. Cooksey referred his first case in 1958 or 1959 and was responsible for at least ten direct referrals. Other patrolmen, introduced by Cooksey to petitioner, referred another twenty to thirty cases. At the preliminary hearing and before the local committee, in contrast with his testimony with respect to Williams, petitioner flatly denied compensating Cooksey for these referrals in any manner. He suggested that Cooksey referred cases because he enjoyed the reflected glory of association with a prosperous lawyer and hoped to learn of money-making business deals from him.

With regard to four checks for a total of $1125 issued to Cooksey in 1960, petitioner testified that one, for $125, represented the proceeds from...