Case Number(s): 04-O-14239
In the Matter of: Karla D. Henderlong, Bar # 100899, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Susan I. Kagan, Bar # 214209
Counsel for Respondent: Matthew P. Guichard, Bar # 107450
Submitted to: Settlement Judge State Bar Court Clerk’s Office San Francisco
<<not>> checked. PREVIOUS STIPULATION REJECTED
Note: All information required by this form and any additional information which cannot be provided in the space provided, must be set forth in an attachment to this stipulation under specific headings, e.g., "Facts," "Dismissals," "Conclusions of Law," "Supporting Authority," etc.
1. Respondent is a member of the State Bar of California, admitted 12/01/81.
2. The parties agree to be bound by the factual stipulations contained herein even if conclusions of law or disposition are rejected or changed by the Supreme Court.
3. All investigations or proceedings listed by case number in the caption of this stipulation are entirely resolved by this stipulation and are deemed consolidated. Dismissed charge(s)/count(s) are listed under "Dismissals." The stipulation consists of 13 pages, not including the order.
4. A statement of acts or omissions acknowledged by Respondent as cause or causes for discipline is included under "Facts."
5. Conclusions of law, drawn from and specifically referring to the facts are also included under "Conclusions of Law".
6. The parties must include supporting authority for the recommended level of discipline under the heading "Supporting Authority."
7. No more than 30 days prior to the filing of this stipulation, Respondent has been advised in writing of any pending investigation/proceeding not resolved by this stipulation, except for criminal investigations.
8. Payment of Disciplinary Costs-Respondent acknowledges the provisions of Bus. & Prof. Code §§6086.10 & 6140.7. (Check one option only):
checked. until costs are paid in full, Respondent will remain actually suspended from the practice of law unless relief is obtained per rule 284, Rules of Procedure.
<<not>> checked. costs to be paid in equal amounts prior to February 1 for the following membership years: . (hardship, special circumstances or other good cause per rule 284, Rules of Procedure
<<not>> checked. costs waived in part as set forth in a separate attachment entitled "Partial Waiver of Costs".
<<not>> checked. costs entirely waived.
FACTS AND CONCLUSIONS OF LAW
Facts
1. At all times mentioned, respondent maintained a client trust funds account at Wells Fargo Bank (Account No. 0369578265; hereinafter "the trust account").
2. Respondent repeatedly used her trust account for personal purposes by issuing over 50 checks to satisfy her personal, non-client obligations.
3. These checks were paid either using non-client funds that respondent had left in her trust account after they were earned or using non-client funds that respondent had improperly deposited into her trust account.
4. Respondent repeatedly deposited non-client funds into her trust account, thereby commingling these funds into her trust account.
5. Respondent issued a check on the trust account when she knew or reasonably should have known that there were insufficient funds in the account to satisfy the charge against the account. As a result, the check was either returned by the bank or was paid against insufficient funds or was paid against uncollected deposits.
6. On May 14, 2004, the State Bar opened an investigation in this matter pursuant to notification from Wells Fargo Bank of insufficient funds activity in respondent’s client trust account.
7. On June 17, 2004, State Bar Paralegal, Lisa McGeo ("McGeo"), sent respondent a letter regarding the insufficient funds activity in her client trust account. Respondent received a copy of this letter in the ordinary course of the mail.
8. McGeo’s letter of June 17, 2004, requested respondent to respond in writing to the specified allegations of misconduct being investigated by the State Bar in relation to a negative balance of $121.65 in her client trust account following the presentation to the bank on May 10, 2004, of check number 988 in the amount of $129.16. Respondent did not respond to McGeo’s letter of June 17, 2004.
9. On July 21, 2004, McGeo sent respondent a second letter regarding the insufficient funds activity in her client trust account. Respondent received a copy of this letter in the ordinary course of the mail.
10. McGeo’s letter of July 21, 2004, again requested respondent to respond in writing to the specified allegations of misconduct being investigated by the State Bar in relation to the insufficient funds activity in her client trust account. A copy of the June 17, 2004 letter was enclosed with the July 21, 2004 letter. Respondent did not respond to McGeo’s letter of July 21, 2004.
11. On September 21, 2004, State Bar Investigator, Michal Gilbert ("Gilbert"), sent respondent a letter regarding the insufficient funds activity in her client trust account. Respondent received a copy of this letter in the ordinary course of the mail.
12. Gilbert’s letter of September 21, 2004, requested respondent to respond in writing to the specified allegations of misconduct being investigated by the State Bar in relation to check number 988 in the amount of $129.16 which was returned to respondent due to non-sufficient funds or was paid against non-sufficient funds in her client trust account. Respondent did not respond to Gilbert’s letter of September 21, 2004.
13. On December 15, 2004, Gilbert sent respondent a second letter in relation to the insufficient funds activity in her client trust account. Respondent received a copy of this letter in the ordinary course of the mail.
14. Gilbert’s letter of December 15, 2004, again requested respondent to respond in writing to the specified allegations of misconduct being investigated by the State Bar in relation to the insufficient funds activity in her client trust account. A copy of the September 21, 2004 letter was enclosed with the December 15, 2004 letter. Respondent did not respond to Gilbert’s letter of December 15, 2004.
15. On May 9, 2005, Gilbert had a telephone conversation with respondent wherein respondent provided a current telephone number and requested that mail be forwarded to an address different from her official membership records address.
16. On May 10, 2005, Gilbert sent a letter memorializing the telephone conversation on May 9, 2005. The letter was sent to the new address provided by respondent. Respondent received a copy of this letter in the ordinary course of the mail.
17. Gilbert’s letter of May 10, 2005 contained copies of the letters, dated September 21 and December 15, 2004, previously sent to respondent. In the letter, Gilbert again requested that respondent provide a written response to the State Bar allegations. Respondent did not respond to Gilbert’s letter of May 10, 2005.
Conclusions of Law
1. By depositing and commingling funds belonging to respondent in her client trust account, respondent wilfully violated Rules of Professional Conduct, rule 4-100(A).
2. By failing to respond to five different letters from the State Bar and by failing to provide a written response to the allegations of misconduct in relation to the insufficient funds activity in her client trust account, respondent failed to cooperate or participate in the disciplinary investigation against her.
WAIVE OF VARIANCE BETWEEN NOTICE OF DISCIPLINARY CHARGES AND STIPULATED FACTS AND CULPABILITY
The parties waive any variance between the Notice of Disciplinary Charges filed on March 1, 2006, and the facts and/or conclusions of law contained in this stipulation. Additionally, the parties waive the issuance of an amended Notice of Disciplinary Charges. The parties further waive the right to the filing of a Notice of Disciplinary Charges and to a formal hearing on any charge not included in the pending Notice of Disciplinary Charges.
PENDING PROCEEDINGS
The disclosure date referred to on page two, paragraph A (7) was July 17, 2006.
STATE BAR ETHICS SCHOOL & CLIENT TRUST ACCOUNTING SCHOOL
Because respondent has agreed to attend State Bar Ethics School and Client Trust Accounting School as part of this stipulation, respondent may receive Minimum Continuing Legal Education credit upon the satisfactory completion of State Bar Ethics School and Client Trust Accounting School.
FACTS SUPPORTING AGGRAVATING AND MITIGATING CIRCUMSTANCES
AGGRAVATING CIRCUMSTANCES
Standard 1.2(b)(ii). Respondent’s issuance of over 50 checks from her client trust account to pay personal expenses represents multiple acts of wrongdoing.
MITIGATING CIRCUMSTANCES
Standard 1.2(e)(iii). No client funds were in respondent’s client trust account at the time of her misconduct.
Standard 1.2(e)(iv). Respondent represents that she suffered extreme emotional difficulties/physical disabilities which expert testimony would establish were directly responsible for the misconduct and have since been resolved.
In 1998, respondent was diagnosed with adult deficit disorder. Respondent submitted a report from her treating physician indicating that the disorder, which was directly responsible for respondent’s misconduct, is controlled with treatment and medication.
SUPPORTING AUTHORITY
Standard 1.7(a) provides that if a member is found culpable of professional misconduct in any proceeding which discipline may be imposed and the member has a record of one prior imposition of discipline as defined by standard 1.2(f), the degree of discipline imposed in the current proceeding shall be greater than that imposed in the prior proceeding unless the prior proceeding was so remote in time to the current proceeding and the offense for which it was imposed was so minimal in severity that imposing greater discipline in the current proceeding would be manifestly unjust.
Standard 2.2(b) suggests at least a three-month actual suspension for a violation of rule 4-100, irrespective of mitigating circumstances.
Standard 2.6(a) suggests that a violation of Business and Professions Code section 6068 shall result in disbarment or suspension depending on the gravity of the harm, if any, to the victim, with due regard to the purpose of imposing discipline set forth in Standard 1.3.
In accordance with the standards, a three-month actual suspension is the proper discipline for respondent’s willful violation of rule 4-100 of the Rules of Professional Conduct. (See/n the Matter of Koehler (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 615; In the Matter of Doran (Review Dept. 1998) 3 Cal. State Bar Ct. Rptr. 871 .)
Case Number(s): 04-O-14239
In the Matter of: Karla D. Henderlong A Member of the State Bar
a. Restitution
<<not>> checked. Respondent must pay restitution (including the principal amount, plus interest of 10% per annum) to the payee(s) listed below. If the Client Security Fund (“CSF”) has reimbursed one or more of the payee(s) for all or any portion of the principal amount(s) listed below, Respondent must also pay restitution to CSF in the amount(s) paid, plus applicable interest and costs.
1. Payee:
Principal Amount:
Interest Accrues From:
2. Payee:
Principal Amount:
Interest Accrues From:
3. Payee:
Principal Amount:
Interest Accrues From:
4. Payee:
Principal Amount:
Interest Accrues From:
<<not>> checked. Respondent must pay above-referenced restitution and provide satisfactory proof of payment to the Office of Probation not later than .
<<not>> checked. Respondent must pay the above-referenced restitution on the payment schedule set forth below. Respondent must provide satisfactory proof of payment to the Office of Probation with each quarterly probation report, or as otherwise directed by the Office of Probation. No later than 30 days prior to the expiration of the period of probation (or period of reproval), Respondent must make any necessary final payment(s) in order to complete the payment of restitution, including interest, in full.
1. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
2. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
3. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
4. Payee/CSF (as applicable)
Minimum Payment Amount
Payment Frequency
<<not>> checked. If Respondent fails to pay any installment as described above, or as may be modified by the State Bar Court, the remaining balance is due and payable immediately.
checked.
1. If Respondent possesses client funds at any time during the period covered by a required quarterly report, Respondent must file with each required report a certificate from Respondent and/or a certified public accountant or other financial professional approved by the Office of Probation, certifying that:
a. Respondent has maintained a bank account in a bank authorized to do business in the State of California, at a branch located within the State of California, and that such account is designated as a “Trust Account” or “Clients’ Funds Account”;
b. Respondent has kept and maintained the following:
i. A written ledger for each client on whose behalf funds are held that sets forth:
1. the name of such client;
2. the date, amount and source of all funds received on behalf of such client;
3. the date, amount, payee and purpose of each disbursement made on behalf of such client; and,
4. the current balance for such client.
ii. a written journal for each client trust fund account that sets forth:
1. the name of such account;
2. the date, amount and client affected by each debit and credit; and,
3. the current balance in such account.
iii. all bank statements and cancelled checks for each client trust account; and,
iv. each monthly reconciliation (balancing) of (i), (ii), and (iii), above, and if there are any differences between the monthly total balances reflected in (i), (ii), and (iii), above, the reasons for the differences.
c. Respondent has maintained a written journal of securities or other properties held for clients that specifies:
i. each item of security and property held;
ii. the person on whose behalf the security or property is held;
iii. the date of receipt of the security or property;
iv. the date of distribution of the security or property; and,
v. the person to whom the security or property was distributed.
2. If Respondent does not possess any client funds, property or securities during the entire period covered by a report, Respondent must so state under penalty of perjury in the report filed with the Office of Probation for that reporting period. In this circumstance, Respondent need not file the accountant’s certificate described above.
3.
The requirements
of this condition are in addition to those set forth in rule 4-100, Rules of
Professional Conduct.
checked. Within one (1) year of the effective date of the discipline herein, Respondent must supply to the Office of Probation satisfactory proof of attendance at a session of the Ethics School Client Trust Accounting School, within the same period of time, and passage of the test given at the end of that session.
Case Number(s): 04-O-14239
In the Matter of: Karla D. Henderlong
<<not>> checked. a. Unless Respondent has been terminated from the Lawyer Assistance Program (“LAP”) prior to respondent’s successful completion of the LAP, respondent must comply with all provisions and conditions of respondent’s Participation Agreement with the LAP and must provide an appropriate waiver authorizing the LAP to provide the Office of Probation and this court with information regarding the terms and conditions of respondent’s participation in the LAP and respondent’s compliance or non-compliance with LAP requirements. Revocation of the written waiver for release of LAP information is a violation of this condition. However, if respondent has successfully completed the LAP, respondent need not comply with this condition.
checked. b. Respondent must obtain psychiatric or psychological help/treatment from a duly licensed psychiatrist, psychologist, or clinical social worker at respondent’s own expense a minimum of one (1) time every two months per month and must furnish evidence to the Office of Probation that respondent is so complying with each quarterly report. Help/treatment should commence immediately, and in any event, no later than thirty (30) days after the effective date of the discipline in this matter. Treatment must continue for days or months or years or, the period of probation or until a motion to modify this condition is granted and that ruling becomes final.
If the treating psychiatrist, psychologist, or clinical social worker
determines that there has been a substantial change in respondent’s condition,
respondent or Office of the Chief Trial Counsel may file a motion for
modification of this condition with the Hearing Department of the State Bar
Court, pursuant to rule 5.300 of the Rules of Procedure of the State Bar. The
motion must be supported by a written statement from the psychiatrist,
psychologist, or clinical social worker, by affidavit or under penalty of
perjury, in support of the proposed modification.
<<not>> checked. c. Upon the request of the Office of Probation, respondent must provide the Office of Probation with medical waivers and access to all of respondent’s medical records. Revocation of any medical waiver is a violation of this condition. Any medical records obtained by the Office of Probation are confidential and no information concerning them or their contents will be given to anyone except members of the Office of Probation, Office of the Chief Trial Counsel, and the State Bar Court, who are directly involved with maintaining, enforcing or adjudicating this condition.
Other:
SIGNATURE OF THE PARTIES
Case Number(s): 04-O-14239
In the Matter of: Karla D. Henderlong
By their signatures below, the parties and their counsel, as applicable, signify their agreement with each of the recitation and each of the terms and conditions of this Stipulation Re Facts, Conclusions of Law and Disposition.
Signed by:
Respondent: Karla D. Henderlong
Date: 8/23/06
Respondent’s Counsel: Matthew P. Guichard
Date: 8/23/06
Deputy Trial Counsel: Susan I. Kagan
Date: 8/24/06
Case Number(s): 04-O-14239
In the Matter of: Karla D. Henderlong
Finding the stipulation to be fair to the parties and that it adequately protects the public, IT IS ORDERED that the requested dismissal of counts/charges, if any is GRANTED without prejudice, and:
<<not>> checked. The stipulated facts and disposition are APPROVED and the DISCIPLINE RECOMMENDED to the Supreme Court.
checked. The stipulated facts and disposition are APPROVED AS MODIFIED as set forth below, and the DISCIPLINE IS RECOMMENDED to the Supreme Court.
checked. All Hearing dates are vacated.
1. On page 2, under Aggravating Circumstances, the effective date of respondent’s prior discipline was 11/23/97.
2. On page 4, under Additional Conditions of Probation, the "x" next to paragraph E(1) that provides for a conditional standard I A(c)(ii) is deleted since there are no conditions that would extend respondent’s actual suspension beyond 90 days.
3. On page 8, under Conclusions of Law, in the paragraph 2 the following language is inserted before the period: "in willful violation of Business and Professions Code section 60680)."
The parties are bound by the stipulation as approved unless: 1) a motion to withdraw or modify the stipulation, filed within 15 days after service of this order, is granted; or 2) this court modifies or further modifies the approved stipulation. (See rule 135(b), Rules of Procedure.) The effective date of this disposition is the effective date of the Supreme Court order herein, normally 30 days after the file date. (See rule 953(a), California Rules of Court.)
Signed by:
Judge of the State Bar Court: Joann M. Remke
Date: 9/7/06
[Rule 62(b), Rules Proc.; Code Civ. Proc., § 1013a(4)]
I am a Case Administrator of the State Bar Court of California. I am over the age of eighteen and not a party to the within proceeding. Pursuant to standard court practice, in the City and County of San Francisco, on September 7, 2006, I deposited a true copy of the following document(s):
STIPULATION RE FACTS, CONCLUSIONS OF LAW AND DISPOSITION AND ORDER APPROVING
in a sealed envelope for collection and mailing on that date as follows:
checked. by first-class mail, with postage thereon fully prepaid, through the United States Postal Service at San Francisco, California, addressed as follows:
MATTHEW PLANT GUICHARD
GUICHARD TENG & PORTELLO APC
1800 SUTTER ST #730
CONCORD, CA 94520
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
SUSAN KAGAN, Enforcement, San Francisco
I hereby certify that the foregoing is true and correct. Executed in San Francisco, California, on September 7, 2006.
Signed by:
Lauretta Cramer
Case Administrator
State Bar Court