Sodikoff v. State Bar

• Decision Date: 28 May 1975
• Citation: 14 Cal.3d 422,121 Cal.Rptr. 467,535 P.2d 331
• Court: California Supreme Court
• Parties: , 535 P.2d 331 Gary J. SODIKOFF, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent. L.A. 30391.

Page 467

121 Cal.Rptr. 467

14 Cal.3d 422, 535 P.2d 331

Gary J. SODIKOFF, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

L.A. 30391.

Supreme Court of California,

In Bank.

May 28, 1975.

Aitken, Bradshaw & Andres and Wylie A. Aitken, Santa Ana, for petitioner.

Herbert M. Rosenthal, Garrett H. Elmore and Arthur L. Margolis, San Francisco, for respondent.

BY THE COURT.

This is a proceeding to review a recommendation of the Disciplinary Board of the State Bar of California that petitioner be suspended for one month. Petitioner was admitted to practice in California in 1964. He has no prior record of discipline.

James McCawley, a resident of Orange County, died in November 1969. At the time of his death he owned two parcels of real property in the City of San Clemente. One parcel was a single lot on Avenida Palizada, and the other comprised two adjoining lots on West Marquita Street. Mr. McCawley held title to this property in joint tenancy with one of his nephews, Anthony J. Wehrley, who was a residuary beneficiary of his will. Mr. Wehrley was an elderly man, and lived in England.

Petitioner was counsel of record for the administrator with the will annexed of Mr. McCawley's estate. A question arose as to the ownership of the two parcels, and on December 8, 1970, the court quieted title in Mr. Wehrley. On December 24, 1970, petitioner wrote to Mr. Wehrley on his firm's stationery, advising him of the judgment in his favor. Petitioner further explained that his office has thus far been managing the property, but suggested that it be sold and asked if Mr. Wehrley 'would like us to obtain offers from some of our clients . . ..' ¹ Mr. Wehrley replied by letter dated January 7, 1971, stating, 'As you say--Seeing that I am living in England I would not be able to look after the property, also I do not want to be troubled with the tax payments and consequences. I am in complete agreement with what you suggest as regards disposal of (the) property, so please put the necessary machinery in motion for its disposal. Re management of (the) property, I would like you to continue on as you have done up to this.'

Thereafter, but evidently before March 30, 1971, petitioner sent an undated letter to Mr. Wehrley, again on his firm's stationery, asserting that 'One of our clients by the name of Acquistate, a California Corporation,' had made an offer to buy the two parcels for a total of $20,000. In the letter petitioner recited that 'I have explained to Acquistate' that Mr. Wehrley would not be responsible for the commission or certain closing costs, and added that the deeds could be prepared 'in our office' and sent to England to be executed. ² Mr. Wehrley accepted the offer by letter of March 30, 1971.

Petitioner failed to disclose to Mr. Wehrley, however, that 'Acquistate' was in fact not a client of petitioner's law firm but an Alter ego of petitioner individually. It was a closed corporation owned and controlled by petitioner; its incorporators were petitioner, his secretary, and his accountant. Indeed, Acquistate was not actually incorporated until April 7, 1971, i.e., After petitioner told Mr. Wehrley that 'Acquistate, a California Corporation' had made the offer.

Petitioner further failed to disclose to Mr. Wehrley that on February 16, 1971, i.e., six weeks Before Mr. Wehrley's acceptance of the offer to buy the property for $20,000, petitioner wrote a letter to the inheritance tax appraiser handling the McCawley estate, acknowledging that the property in question had been valued at a total of $46,500 and doubting there had been any recent change in that value. ³

In mid-April 1971 petitioner's law associate and his former law partner learned of the matter and advised Mr. Wehrley not to proceed with the transaction. The sale of the property was never consummated.

Petitioner declined to testify in his own behalf in the proceedings below. The disciplinary board made findings essentially in accord with the foregoing facts, and in particular found that at all relevant times a fiduciary relationship existed between petitioner and Mr. Wehrley; that petitioner knowingly made false statements to Mr. Wehrley when he advised him that Acquistate was a client of petitioner's firm which had entered a bid to buy the property for $20,000; and that petitioner knew the value of the property in question was substantially in excess of the amount offered. The board concluded that petitioner was guilty of professional misconduct warranting suspension from practice for a period of one month.

Petitioner first complains that various items of documentary evidence were admitted without proper foundation. We find it unnecessary to rely on a number of the challenged items in our appraisal of the case. Of the remaining matters objected to, clearly the most important is petitioner's undated letter to Mr. Wehrley asserting that Acquistate was a client of his firm and had offered to buy the property for $20,000. (Fn. 2, Ante.) Petitioner does not claim that he did not write that letter, ⁴ but contends only there was no testimony showing the letter was in fact received by Mr. Wehrley. The point is not well taken. Grant R. Bertelot, an investigator for the Orange County District Attorney's office, testified that on May 4, 1971, pursuant to an inquiry he was conducting into the case, he wrote to Mr. Wehrley in England asking him to forward all 'documentation you have in this matter,' including all correspondence received from petitioner. The witness further testified that approximately two weeks later be received a reply from Mr. Wehrley dated May 12, 1971, enclosing a number of documents which included the undated letter from petitioner here in question. Petitioner stipulated to the subsequent chain of custody of the letter.

Petitioner does not dispute the genuineness of Mr. Wehrley's reply of May 12, 1971, to Mr. Bertelot (cf. Evid.Code, § 1420), but argues that the language of the cover note--'enclosed please find all the correspondence asked for'--is hearsay. The argument misses the mark. The fact that Mr. Wehrley actually received the undated letter of offer from petitioner is not shown by any explanation in the cover note but simply by the circumstance that petitioner's letter was physically enclosed in the reply of Mr. Wehrley to Mr. Bertelot's request for all correspondence received from petitioner. Manifestly Mr. Wehrley could not have enclosed that letter unless he had first received it, and it would therefore have been admissible even if there had been no cover note at all.

Petitioner next questions various findings of fact, and argues generally that the case of the State Bar is 'speculative.' In these proceedings, of course, petitioner has the burden of showing that the findings of the board are unsupported by substantial evidence. (Caldwell v. State Bar (1975) 13 Cal.3d 488, 495, 119 Cal.Rptr. 217, 531 P.2d 785.) He fails to meet that burden.

Petitioner contends there was no proof of a fiduciary relationship between himself and Mr. Wehrley at any time: although he was the attorney for the McCawley estate and Mr. Wehrley was a beneficiary of that estate, petitioner emphasizes (1) that the probate court authorized him to file the quiet title action Against Mr. Wehrley and (2) that the property in question was held in joint tenancy and hence was not a probate asset. These are irrelevant distinctions. Mr. Wehrley was essentially a nominal defendant in the quiet title action; although he made no appearance therein, judgment was entered in his favor. Moreover, even though the property was a non-probate asset, it was by reason of Mr. McCawley's death that sole ownership thereof devolved upon Mr. Wehrley.

In any event, the fiduciary relationship here arose largely after the termination of the quiet title suit and any potential conflict of interest ensuing therefrom. Its origin was primarily petitioner's letter of December 24, 1970, to Mr. Wehrley, in which he advised the latter that he was 'managing the property on your behalf' and inquired 'if you would like us to obtain offers from some of our clients' for the purchase of the property. (Fn. 1, Ante.) The tone of the letter, taken as a whole, clearly implied that the petitioner or his law firm would, as Mr. Wehrley desired, either continue to manage the property for his account or act as his agent in finding a purchaser. Each is a service often rendered by an attorney for his client. We also take into consideration the fact that Mr. Wehrley knew petitioner was an attorney, and conversely, that petitioner knew Mr. Wehrley was an elderly man living thousands of miles away. Petitioner must therefore have known that Mr. Wehrley would be likely to rely on him, as the attorney for his benefactor's estate, for guidance and assistance in dealing with property that he could not personally dispose of or manage. Thus even if no formal attorney-client relationship existed, petitioner voluntarily assumed a position of trust and confidence vis-a -vis Mr. Wehrley with respect to the property in issue. (Cf. Civ.Code, § 2219.) In such circumstances petitioner should be held to similar high standards of conduct: 'When an attorney assumes a fiduciary relationship and violates his duty in a manner that would justify disciplinary action if the relationship had been that of attorney and client, he may properly be disciplined for his misconduct.' (Clark v. State Bar (1952) 39 Cal.2d 161, 166, 246 P.2d 1, 3, and cases cited; accord, Lewis v. State Bar (1973) 9 Cal.3d 704, 713, 108 Cal.Rptr. 821, 511 P.2d 1173.)

Petitioner next alleges a total lack of evidence to support the finding that the value of the property was substantially in excess of $20,000. He emphasizes that the only testimony given on the issue was that of his own witness Bruce Swartout, who opined the property was worth $18,000 to $20,000. But Mr. Swartout was not a totally disinterested witness. He was a local real estate...