Yokozeki v. State Bar

Decision Date06 May 1974
Citation521 P.2d 858,11 Cal.3d 436,113 Cal.Rptr. 602
Parties, 521 P.2d 858 David T. YOKOZEKI, Petitioner, v. The STATE BAR of California, Respondent. L.A. 30194.
CourtCalifornia Supreme Court

Garry, Dreyfus, McTernan & Brotsky and Benjamin Dreyfus, San Francisco, for petitioner.

Herbert M. Rosenthal and Ronald W. Stovitz, San Francisco, for respondent.


This is a proceeding to review a recommendation of the Disciplinary Board of the State Bar (Board) that petitioner, a member of the State Bar, be disbarred from the further practice of law. The Board's recommendation is based on findings by a local administrative committee of the State Bar that petitioner converted to his own use an apartment building and a note secured by a trust deed on the residence of a client, contrary to the purposes for which these assets had been transferred from the client to petitioner. 1 Although the committee's findings were adopted in substance by the Board, its recommendation of disbarment is harsher than the committee's recommendation that petitioner be suspended from the preactice of law for a five-year period.

Petitioner contends that: (1) the evidence is insufficient to support the findings; (2) he was denied a reasonable opportunity to present his case before the Board; (3) he was prejudiced by his former client's seven-year delay in the filing of the complaint with the State Bar and thereafter by the tardiness of the State Bar in processing the complaint; and (4) disbarment is an inappropriate sanction under the circumstances.

We reject the first three of these contentions. We decline, however, to follow the Board's recommendation of disbarment. Instead, we order that petitioner make restitution to his former client and that he be suspended from the practice of law for five years or until he has made full restitution, whichever is the greater period.

Petitioner was admitted to practice in California in 1952. He has no prior record of discipline. In early 1962 Dr. Chang Ha Kim consulted petitioner in connection with a medical malpractice suit which possibly exposed the client to personal liability beyond any insurance coverage. Petitioner accepted a $2,000 retainer, filed pleadings in a separate declaratory relief action, 2 and suggested that Kim protect his assets by transferring the same to To-Yo, Incorporated, a corporation controlled by petitioner, to be held pending the outcome of the malpractice suit. Kim and petitioner agreed to the transfers and in order to give the transaction the appearance of propriety Kim was to receive from To-Yo, in exchange for his assets, certain film rights which both he and petitioner knew were worthless. Accordingly, on February 12, 1963, Kim conveyed to the corporation his interest in an apartment building and delivered a promissory note in the amount of $65,000, which note was secured by a deed of trust to Kim's personal residence. Petitioner, on behalf of the corporation, executed a separate writing which contained a promise to return the real estate and the note secured by the deed of trust to Kim on an unspecified date in 1963.

In early 1963 petitioner, without Kim's knowledge or consent, caused To-Yo to execute and deliver to the Bank of Tokyo a deed of trust to Kim's apartment building and an assignment of the note and deed of trust to Kim's residential property. The documents were delivered to the bank in order to secure pre-existing notes on which the corporation and petitioner were obligated.

In early 1964 the Bank of Tokyo attempted to collect the note and threatened to foreclose on Kim's home. Kim confronted petitioner who requested additional time to 'clear the matter up.' After petitioner failed to act, Kim consulted another attorney who demanded an explanation from petitioner. Petitioner then acknowledged that he had assigned Kim's note and its security, and had delivered a deed of trust to the apartment building as collateral for bank loans to the financially distressed To-Yo. Petitioner promised to repay the loans to the bank and did in fact discharge part of the obligation, resulting in the retransfer of the interest in the apartment building to Kim late in 1964. However, petitioner failed to liquidate his remaining obligations or to induce the bank to return Kim's note and reconvey the deed of trust to Kim's home.

Kim sued petitioner and the Bank of Tokyo in early 1965 demanding cancellation of the note and reconveyance of the deed of trust securing the note. Kim's verified complaint alleged that petitioner had fraudulently induced him to transfer the properties and note by falsely promising to return them.

Petitioner filed an unverified answer denying the allegations of the complaint. Discovery proceeded through 1966. In 1968 Kim settled his differences with the bank whereby he paid the bank $14,000 in exchange for the return of the note and the reconveyance of the security interest to him.

Petitioner discontinued the practice of law in California and moved to Japan in October 1969. Two months later, in December, a default judgment in the amount of $14,000 was entered in favor of Kim against petitioner. The judgment has not been satisfied.

Petitioner failed to appear or submit any testimony at hearings scheduled by the local administrative committee. Explanations of his conduct are gleaned from an affirmative defense asserted in his answer to the complaint and from his othre communications to the State Bar. He claimed that there was no attorney-client relationship between him and Kim in connection with the transactions involving Kim's assets; that other attorneys represented Kim in the malpractic suit; that the transfer of assets was made pursuant to an investment by Kim in the To-Yo Corporation; and that Kim consented to the subsequent assignments for security purposes to the Bank of Tokyo. Petitioner was unclear as to the nature of the consideration received by Kim for this 'investment.' In his answer petitioner claimed that Kim was to receive film rights of a value equal to the value of the interests transferred to To-Yo. In one letter petitioner claimed that Kim was to receive a portion of the profits of the enterprise and at a later time asserted that Kim was given an assignment of film rights. Petitioner claimed that the venture failed due to a breach of a distribution agreement on the part of a third party and other defaults not attributable to him.

Petitioner conceded that he held some of Kim's assets until the malpractice suit was settled but claimed that the properties thus involved were certain contractual rights to purchase tracts of desert lands. According to petitioner these assets were transferred to him, were held only upon the request of Kim without any charge or fee, and were retransferred upon Kim's request.

The committee made and the Board adopted findings that petitioner had misappropriated the deed to the apartment house, the note and the deed of trust covering Kim's personal residence. 3

Sufficiency of Evidence

Petitioner initially contends that the evidence was insufficient to support the findings. Although we are not bound by the findings of the State Bar and must exercise our independent judgment on the weight and sufficiency of the evidence (Glickman v. State Bar (1973) 9 Cal.3d 179, 184, 107 Cal.Rptr. 65, 507 P.2d 953; In re Fahey (1973) 8 Cal.3d 842, 845, 106 Cal.Rptr. 313, 505 P.2d 1369; Bernstein v. State Bar (1972) 6 Cal.3d 909, 916, 101 Cal.Rptr. 369, 495 P.2d 1289), the findings nevertheless are entitled to great weight and petitioner has the burden of showing, in support of his contention, that they are not supported by substantial evidence (Schullman v. State Bar (1973) 10 Cal.3d 526, 529, 111 Cal.Rptr. 161, 516 P.2d 865; In re Wright (1973) 10 Cal.3d 374, 377, 110 Cal.Rptr. 348, 515 P.2d 292; In re Higbie (1972) 6 Cal.3d 562, 569, 99 Cal.Rptr. 865, 493 P.2d 97). Petitioner fails to sustain this burden.

The record amply demonstrates petitioner misused the properties entrusted to him. Kim's testimony, particularly with respect to petitioner's proposal to hold Kim's properties until the malpractice suit was settled and also with respect to petitioner's guilty knowledge of the impropriety of the transfers to the bank, was corroborated by other witnesses. Additionally, the whole course of improper conduct is well demonstrated by documentary evidence. Petitioner's explanations, on the other hand, are implausible. His assertion that there was no attorney-client relationship between him and Dr. Kim when the transfers occurred is contradicted by the $2,000 check from Kim to petitioner 'for retainer in the malpractice action' as well as by petitioner's signature as the attorney of record on the pleadings in the declaratory relief action. Petitioner's contention that the transfer of assets represented nothing more than an investment in the To-Yo Corporation is undermined by his conflicting explanations of Kim's participation as an investor. Petitioner's claim that Kim consented to the transfers of the properties to the Bank of Tokyo is rebutted by evidence relating to transactions in which the bank was involved.

Finally, petitioner appeared to be unwilling to have his credibility tested. He made no statement under oath in the civil suit against him commenced by Kim and suffered a default judgment rather than proceeding to trial. Although findings in a civil fraud suit are not binding on us in this proceeding (In re Wright, supra, 10 Cal.3d 374, 377, 110 Cal.Rptr. 348, 515 P.2d 292), we can take judicial notice of matters in a civil action which arise out of a course of conduct underlying the charges against an attorney in disbarment proceedings (Lee v. State Bar (1970) 2 Cal.3d 927, 941, 88 Cal.Rptr. 361, 472 P.2d 449; see Eschwig v. State Bar (1969) 1 Cal.3d 8, 18, 81 Cal.Rptr. 352, 459 P.2d 904). We note also that petitioner did not testify or subject himself to cross-examination in these...

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