Segal v. State Bar

• Decision Date: 31 March 1988
• Docket Number: No. S002014,S002014
• Citation: 245 Cal.Rptr. 404,751 P.2d 463,44 Cal.3d 1077
• Court: California Supreme Court
• Parties: , 751 P.2d 463 Lloyd Martin SEGAL, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

Page 404

245 Cal.Rptr. 404

44 Cal.3d 1077, 751 P.2d 463

Lloyd Martin SEGAL, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

No. S002014.

Supreme Court of California.

March 31, 1988.

Lloyd Martin Segal, in pro per, and Arthur Margolis, Los Angeles, for petitioner

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

BY THE COURT:

The Review Department of the State Bar Court recommends that petitioner Lloyd Martin Segal, who was admitted to practice in 1976, be suspended from the practice of law for a period of three years; that execution of the order be stayed; and that Segal be placed on probation for three years on conditions which include actual suspension for one year, various reporting provisions, passage of the Professional Responsibility Examination, supervision by a probation monitor referee, and compliance with rule 955, California Rules of Court.

The recommendation is based on the hearing panel's findings of fact and conclusions of law, adopted unanimously by the Review Department, that Segal in four matters (1) intentionally and/or with reckless disregard of his clients repeatedly failed to perform legal services for which he was retained and failed to return unearned fees; (2) failed to communicate promptly with his client and failed to keep his client advised of the progress of the matter for which he was retained; (3) issued checks on an account which he knew or reasonably should have known had insufficient funds. The Review

Department recommendation, adopted by a vote of ten to three, ¹ differed from the recommended discipline of three years' actual suspension adopted by the hearing panel.

Segal, who is in propria persona, contends that (1) the two matters involving client representation (the Community Meditation Center of Los Angeles and West Coast Ensemble matters) should be dismissed because he accepted them on a pro bono basis without charging a fee for the services and in any event he performed "substantial services ... in a reasonable time frame under the circumstances of his employment"; (2) the bad checks were written under mitigating circumstances; (3) the checks were written in Segal's capacity as principal of Regency Records, Inc. not in his practice of law; and (4) the discipline recommended by the State Bar Court of one year of actual suspension from the practice of law is excessive.

STANDARD OF REVIEW

We rely heavily on the findings, conclusions, and recommendations of the State Bar Court in disciplinary proceedings. (Guzzetta v. State Bar (1987) 43 Cal.3d 962, 968, 239 Cal.Rptr. 675, 741 P.2d 172.) However, the State Bar's findings are not binding on this court. In attorney discipline matters we must independently review the evidence, pass upon its sufficiency, and resolve all reasonable doubts in favor of the attorney. (Galardi v. State Bar (1987) 43 Cal.3d 683, 689, 238 Cal.Rptr. 774, 739 P.2d 134; Alberton v. State Bar (1984) 37 Cal.3d 1, 11, 206 Cal.Rptr. 373, 686 P.2d 1177.)

The burden to prove the findings of the State Bar are unsupported by the evidence lies with the petitioner. (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. [Citation.]' " ( Galardi v. State Bar, supra, 43 Cal.3d at 689, 238 Cal.Rptr. 774, 739 P.2d 134, citing Himmel v. State Bar (1971) 4 Cal.3d 786, 794, 94 Cal.Rptr. 825, 484 P.2d 993.) Segal has not met the requisite burden of proof. Accordingly, we adopt the discipline recommended by the Review Department.

DISCUSSION

West Coast Ensemble

and

Community Meditation Center of Los Angeles Matters

The Review Department found that in May 1982 Segal was retained and paid $275 to incorporate West Coast Ensemble as a nonprofit corporation. Because of Segal's poor performance, West Coast Ensemble had to process the documents for incorporation itself.

The record supports the Review Department's findings that Segal (1) failed to perform legal services for which he had been retained, namely handling West Coast Ensemble's incorporation with the State of California and its application for nonprofit tax-exempt status with the State of California Franchise Tax Board and the Internal Revenue Service; (2) failed to exercise reasonable diligence and his best judgment; and (3) failed promptly to refund legal fees, despite demand from his client.

Les Hanson, founder of West Coast Ensemble, testified that at his initial meeting with Segal he gave Segal the background information necessary for Segal to prepare the appropriate documents for filing, that he told Segal that West Coast Ensemble needed to be incorporated as a nonprofit, tax-exempt corporation in order to receive contributions and donations, and that Segal told him the nonprofit incorporation process could take 60 to 90 days.

Three months later Segal sent Hanson copies of the articles of incorporation and bylaws, which Segal had prepared. Hanson immediately executed and returned them to Segal. Segal testified that on September 13, 1982, he forwarded West Coast Ensemble's application to the office of the Secretary of State. When these documents reached the Secretary of State's office, and what happened to them between September and February when Segal stated they were returned to him unfiled, is a mystery. ²

In a letter to Segal dated January 28, 1983, Hanson outlined the course of events that resulted in his pro se filing of the application forms for West Coast Ensemble's incorporation: "We waited for what we thought was a normal amount of time for results on these applications. When there were no results our President, Artistic Director and Secretary called you at different times to inquire about the progress on these matters. When still no results were received an Advisory Board member called you in December and you promised him that the material you had received from the State of California would be forwarded to me, the president. When nothing was received I, myself, processed the necessary forms with the state and federal agencies, made the necessary payments and completed the task for which you had been hired." He further stated that Segal's "unprofessional manner has cost the West Coast Ensemble months of delay in moving forward as a non-profit corporation and certain loss of voluntary contribution [sic] ..." and he demanded return of the retainer. Segal did not return the fees until November 1983, 10 months after he received the request for refund and more than a month after the State Bar on October 21, 1983, notified Segal it was commencing formal proceedings against him.

With regard to the Community Meditation Center of Los Angeles (Center) matter, the Review Department found that in January 1983 Michael DeKoven retained Segal and paid him $300 to incorporate the Center as a nonprofit religious organization. The record supports the Review Department's findings that Segal (1) failed to perform the services for which he had been retained; (2) failed to communicate promptly with his client, keep him advised of the progress of the matter, or respond to inquiries from his client; (3) failed to refund legal fees despite demands from his client; (4) failed to exercise reasonable diligence and his best judgment; and (5) withdrew from employment without taking reasonable steps to avoid foreseeable prejudice to the rights of his client. We agree.

The evidence overwhelmingly demonstrates Segal's failure to communicate with DeKoven. A letter from DeKoven to Segal dated May 31, 1983, indicates that DeKoven attempted without result to have Segal send him evidence of the incorporation filing. In the same letter, DeKoven threatened to request a refund if the evidence was not forthcoming. Subsequent letters dated June 20, 1983, and September 8, 1983, requested Segal to communicate with DeKoven regarding the transaction and alluded to Segal's failure to return phone calls. There is no evidence that Segal responded.

On September 14, 1983, DeKoven demanded a refund. On September 21, 1983, he again demanded a refund and informed Segal he had requested forms to file a formal complaint with the State Bar of California. On September 12, 1983, incorporation documents for the Center were received in the office of the Secretary of State, submitted by Segal who was apparently still not communicating with his client. The documents were returned to Segal on September 19, 1983, because the articles of incorporation were not acknowledged and the fee payment was insufficient. On October 3, 1983, the documents were resubmitted by Segal. In October 1983 DeKoven retained another lawyer who promptly filed the required documents with the Secretary of State. In December 1983 the articles of incorporation submitted by Segal were returned to Segal unfiled, as the name Community Meditation Center of Los Angeles was taken, presumably as a result of the filing completed by Center's new attorney.

Following two requests by DeKoven, Segal refunded the Center's fees on September 27, 1983, one week after DeKoven informed Segal he intended to file a complaint with the State Bar.

Segal urges us to dismiss the complaints discussed above on the ground that he accepted the West Coast Ensemble and Center matters on a pro bono basis. He claims the $275 and $300 payments were not attorney fees but advances of refundable filing fees and costs of secretarial services. ³ Segal states that because he was spending most of his time on Regency Records, Inc. business, "he did not have the time to handle the pro bono matters in an expedited fashion."

Segal's argument presupposes that pro bono clients deserve less diligent service than paying clients, a proposition that undermines the integrity of the legal profession. An attorney's standard of professional conduct to a pro bono...