Case Number(s): 04-O-15243
In the Matter of: Sidney Carl Flores, Bar # 64082, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Susan I. Kagan, Bar # 214209
Counsel for Respondent: Jonathan I. Arons, Bar # 111257
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 June 27, 1975.
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 10 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):
<<not>> 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.
checked. costs to be paid in equal amounts prior to February 1 for the following membership years: 2007, 2008 (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.
State Bar Court case # of prior case: 91-O-05499
Date prior discipline effective: 6/11/94
Rules of Professional Conduct/’ State Bar Act violations: 4-100(A}; 4-100(B){3); 6068(m); Former Rule 8-101 (A)
Degree of prior discipline: No actual suspension; one year stayed suspension; three years’ probation
Stale Bar Court case # of prior case: 94-PM-11934
Date prior discipline effective: 11/18/94
Rules of Professional Conduct/ State Bar Act violations: Violation of Supreme Court order in Case No. S034464
Degree of prior discipline: One year extension of probation ordered in Case No. 89-O-12407
Respondent’s office manager/wife, Anecita Agustinez, signed six client trust account checks without respondent’s knowledge or authorization. Upon learning of the misappropriation, respondent changed the office procedure with respect to the handling of the client trust account and made full restitution to the client victim.
1. In April 1999, Joe Fraga ("Fraga") employed respondent to represent him in a claim for property damage and personal injury arising from an automobile accident.
2. Between January and October 2000, respondent received the aggregate amount of $7,992.75 in settlement of Fraga’s claim. These funds were deposited into respondent’s client trust account. Subsequently, from these entrusted funds, respondent paid liens on Fraga’s behalf. Respondent also appropriately removed his legal fees from the trust account.
3. At all relevant times, respondent’s wife worked as his office manager. While she did not have signature authority on the trust account, she did have access to the records of the account and to the account check book.
4. On or about June 5, 2004, respondent’s wife wrote a check from the trust account, and signed respondent’s name to the check. On or about July 8, 2004, respondent’s wife wrote a check from the trust account, and signed respondent’s name to the check. On or about July 28, 2004, respondent’s wife wrote a check from the trust account, and signed respondent’s name to the check. On or about November 12, 2004, respondent’s wife wrote a check from the trust account, and signed respondent’s name to the check. On or about November 15, 2004, respondent’s wife wrote a check from the trust account, and signed respondent’s name to the check. On or about December 1, 2004, respondent’s wife wrote a check from the trust account, and signed respondent’s name to the check. Respondent’s wife used these checks for personal expenses.
5. Respondent did not know of his wife’s actions in signing the checks at the time she did it, nor did he consent to it. Furthermore, respondent had never given his wife permission to sign his name to checks drawn on the trust account or otherwise consented to her signing his name to any financial or legal document. Respondent’s wife used her position as office manager to conceal her conduct from respondent.
6. During the period in question, respondent did not routinely review his wife’s work as office manager, nor did he otherwise independently ensure that the trust account was properly managed and maintained. This is despite the fact that respondent had been previously disciplined by the State Bar of California for trust account violations (not amount to misappropriation).
7. The checks signed by respondent’s wife were eventually presented for payment and were paid using entrusted funds belonging to Fraga. This resulted in a shortfall in the funds held in trust for Fraga’s behalf of at most $3,349.05. This shortfall occurred on November 10, 2004, when the balance of the trust account was $321.00. On November 10, 2004, the amount of $3,670.05 should have remained in trust for Fraga’s benefit.
Conclusions of Law
1. By failing to exercise sufficient supervision over his wife in her actions as office manager with access to his client trust account, thereby resulting in the use of the trust account for non-trust purposes, respondent recklessly failed to perform competent legal services in willful violation of rule 3-110(A), Rules of Professional Conduct.
2. By failing to maintain $3,349.05 of the $3,670.05 belonging to his client Fraga in his client trust account, respondent failed in maintain the balance of funds received for the benefit of a client in trust in willful violation of rule 4-100(A), Rules of Professional Conduct.
WAIVER 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 August 29, 2005, 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.
FACTS SUPPORTING AGGRAVATING AND MITIGATING CIRCUMSTANCES
SUPPORTING AUTHORITY
Standard 1.7(b) suggests that the degree of discipline imposed shall be disbarment for a member with two prior impositions of discipline unless the most compelling mitigating circumstances clearly predominate.
The parties agree to the following compelling mitigating circumstances: respondent’s office manager/wife signed six client trust account checks without respondent’s knowledge or authorization. Upon learning of the misappropriation, respondent changed the office procedure with respect to the handling of the client trust account and made full restitution to the client victim.
Standard 2.2(b) suggests that the degree of discipline imposed shall be at least a three-month actual suspension for a violation of rule 4-100 of the Rules of Professional Conduct.
Respondent’s 60 days’ actual suspension is in accordance with the Supreme Court’s determinations in Palomo v. State Bar (1984) 36 Cal.3d 785 [205 CaI. Rptr. 834, 685 P.2d 1185] [one year stayed suspension for failure to oversee entrusted funds and maintain detailed records and accounts; one prior record of discipline] and Giovanazzi v. State Bar (1980) 28 Cal.3d 465 [169 CaI. Rptr. 581,619 P.2d 1005] [30 days’ actual suspension for misappropriation of client funds due to poor management and careless supervision of staff; no prior record of discipline].
Case Number(s): 04-O-15243
In the Matter of: Sidney Carl Flores
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
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.
Other Financial Conditions:
The client’s fund certificate required to be filed in satisfaction of probation herein must be from a certified public accountant. A certificate filed by respondent personally or by any other individual who is not a certified public accountant is not acceptable and will not satisfy respondent’s probationary conditions.
SIGNATURE OF THE PARTIES
Case Number(s): 04-O-15243
In the Matter of: Sidney Flores No. 64082
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: Sidney Flores
Date: 2-8-2006
Respondent’s Counsel: Jonathan Arons
Date: February 8, 2006
Deputy Trial Counsel: Susan Kagan
Date: 2/10/06
Case Number(s): 04-O-15243
In the Matter of: Sidney Carl Flores
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:
checked. The stipulated facts and disposition are APPROVED and the DISCIPLINE RECOMMENDED to the Supreme Court.
<<not>> checked. The stipulated facts and disposition are APPROVED AS MODIFIED as set forth below, and the DISCIPLINE IS RECOMMENDED to the Supreme Court.
<<not>> checked. All Hearing dates are vacated.
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: Pat McElroy
Date: March 16, 2006
[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 March 16, 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:
JONATHAN IRWIN ARONS
101 HOWARD ST #310
SAN FRANCISCO CA 94105
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
JEFF DAL CERRO, Enforcement, San Francisco ; SUSAN KAGAN, Enforcement, San Francisco
I hereby certify that the foregoing is true and correct. Executed in San Francisco, California, on March 16, 2006.
Signed by:
Laine Silber
Case Administrator
State Bar Court