Case Number(s): Investigation No.: 04-O-15374
In the Matter of: Daniel Joseph Goulding, Bar # 120561, A Member of the State Bar of California, (Respondent).
Counsel For The State Bar: Kevin B. Taylor, Bar # 151715
Counsel for Respondent: David C. Carr, Bar # 124510
Submitted to: Assigned Judge – State Bar Court Clerk’s Office Los Angeles.
Filed: October 29, 2008.
<<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 .
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. Costs are added to membership fee for calendar year following effective date of discipline.
checked. Costs are to be paid in equal amounts prior to February 1 for the following membership years: two (2) billing cycles following the effective date of the Supreme Court order on this matter. (Hardship, special circumstances or other good cause per rule 5.132, Rules of Procedure.).
<<not>> checked. Costs are waived in part as set forth in a separate attachment entitled "Partial Waiver of Costs".
<<not>> checked. Costs are entirely waived.
COOPERATION AGREEMENT:
Respondent must cooperate fully with the State Bar in any investigation or prosecution it may pursue regarding any attorney involved in any manner with the Estate of James Hervey Johnson, his Charitable Educational Trust or the Trusthseeker Trust. In cooperating with the State Bar in any such investigation or prosecution, Respondent agrees to testify truthfully if requested at any related deposition or trial.
IN THE MATTER OF: Daniel Jospeh Goulding, State Bar No. 120561
STATE BAR COURT CASE NUMBER: Investigation No.: 04-O-15374
FACTS AND CONCLUSIONS OF LAW
Respondent was admitted to the practice of law in the State of California on December 16, 1985.
In 1988, James Hervey Johnson, a noted atheist and something of a free thinking philosopher, died, leaving his assets in trust for the purpose of carrying on his work/philosophy. In 1989, that trust was reformed pursuant to a court order which created two trusts, to wit: the Charitable Educational Trust and the Truthseeker Trust. At the time of the court ordered reformation, the collective assets of the two trusts totaled approximately $16,000,000.
In May 1996, the court appointed Kevin Munnelly and Bonnie Lange as trustees of the two trusts.
From May 1997 through August 2000, Respondent was one of two partners in the law firm of Withers & Goulding. Each partner held a 50% interest in the law firm.
In May 1997, the trustees employed Withers & Goulding to provide legal advice and represent the two trusts and the two trustees. Withers & Goulding continued to represent the trusts and trustees until August 2000, when the law firm’s employment was terminated.
Withers & Goulding’s work for the trusts and trustees included providing legal advice and representation relating to the financial dealings of the trusts and between the trusts, as well as, providing legal services and representation relating to various legal disputes involving the trusts, trustees and various third parties.
Respondent personally provided a significant amount of the legal services performed by Withers & Goulding for the trusts and trustees.
From May 1997 through August 2000, Withers & Goulding charged and collected no less than $2,941,000 from the trusts for legal services it had performed and services which it was anticipated the law firm would perform in the future. These legal fees were charged and collected pursuant to an initial invoice for services billed at an hourly rate, four subsequent but overlapping written retainer agreements and four additional requests for payment of fees.
In August 2000, the California Attorney General’s Office brought a civil action against Withers, as an individual, Respondent as an individual and the trustees on behalf of the beneficiaries of the trusts. This action alleged that the trustees had mismanaged the trusts in various manners and that Withers & Goulding had collected excessive fees from the trusts.
Although Withers & Goulding provided significant legal services of value to the trusts and trustees during the years it represented them, the law firm did not earn the entire $2,941,000 it collected.
During the years that Withers & Goulding represented the trusts and trustees, Withers negotiated and established all fee arrangements between the law firm and the trusts and trustees. Nonetheless, during that same period of time, Respondent was aware of the funds that the law firm was collecting from the trusts and that the law firm had not and likely could not provide legal services commensurate with those fees.
In March 2004, the Attorney General’s civil action was settled. That settlement established that Withers & Goulding had retained $480,000 in unearned fees it had collected from the trusts. As part of that settlement, Respondent agreed to refund $330,000 to the trusts.
Respondent was cooperative with the Attorney General’s Office during the pendency of its civil action and willingly agreed to refund more than two thirds of Withers & Goulding’s obligation to the trusts.
Respondent paid the trusts $150,000 just prior to his execution of the settlement agreement with the Attorney General’s Office and agreed to pay the remaining $180,000 at the rate of $1,500 per month during the ten years following March 2004.
Since entering into the settlement with the Attorney General’s Office, Respondent has made his all of his monthly payments to trusts as agreed. As of September 2008, Respondent had paid the trusts $232,500.
Thereafter, Respondent became able to pay off the balance of the restitution he owed the trusts. Therefore, on October 6, 2008, Respondent paid the trusts $97,500, completing his restitution obligation to the trusts 5 ˝ years sooner than the time frame set forth in his settlement agreement with the Attorney General’s Office.
In August 2000, Respondent left the firm of Withers & Goulding and ended his personal and professional relationship with Withers.
Legal Conclusions
By failing to refund any portion of the unearned fees due the trusts until March 2004, Respondent failed to promptly refund unearned fees upon the termination of employment in wilful violation of rule 3-700(D)(2) of the California Rules of Professional Conduct.
FACTORS IN AGGRAVATION
Respondent’s conduct harmed his clients in that the trusts were deprived of the use of significant funds over a significant period of time.
FACTORS IN MITIGATION
Respondent has no record of prior discipline since being admitted to the State Bar of California and commencing his practice of law in December 1985.
Respondent displayed candor and cooperation with the California Attorney General’s Office and the State Bar during their respective investigations, of this matter. In so doing, Respondent recognized and acknowledged the wrongfulness of his conduct.
Respondent also demonstrated his remorse by taking affirmative steps to address the harm suffered by his clients as a result of his misconduct.
DISCUSSION RE STIPULATED DISCIPLINE
Standard 1.3 of the Standards For Attorney Sanctions For Professional Misconduct provides that the primary purpose of discipline is the protection of the public, the courts and legal profession; maintenance of high professional standards; and the preservation of public confidence in the legal profession.
Standard 2.10 states that reproval or suspension is the appropriate discipline, with due regard to the harm suffered by any victim and the purposes of imposing discipline, for violations of any of the Rules of Professional Conduct not specifically specified in other Standards, such as rule 3-700(D)(2).
The parties submit that the stipulated discipline in this matter complies with the Standards both specifically and with regard to the general purposes and goals of the disciplinary process.
Respondent’s misconduct is aggravated by the fact that it harmed his clients and deprived the trusts of their assets for a significant period of time. However, Respondent cooperated with the California Attorney General’s Office, entered into a stipulation with that office and agreed to pay the trusts more than two thirds of Withers & Goulding’s obligation to the trusts.
Additionally, Respondent, once he was able to do so, accelerated his restitution payments to the trusts, completing same 5 ˝ years early by making a $97,500 payment in October 2008. Respondent made substantial and concrete efforts to rectify the harm he caused. In so doing, Respondent demonstrated his remorse.
Given the aggravating and mitigating circumstances present in this case, a two year stayed suspension, along with the probationary conditions set forth herein, is consistent with Standard 2.10.
Finally, the parties submit that given Respondent’s recognition of wrongdoing, along with his conduct in attempting to rectify the harm he caused, the stipulated discipline and probationary conditions in this matter are sufficient to assure that Respondent will conform his future conduct to ethical standards and, therefore, protect the public, courts and profession. This is consistent with Standard 1.3.
PENDING PROCEEDINGS
The disclosure date referred to, on page one, paragraph A.(7), was October 9, 2008.
COSTS OF DISCIPLINARY PROCEEDINGS.
Respondent acknowledges that the Office of the Chief Trial Counsel has informed Respondent that as of October 9, 2008, the rough estimate of disciplinary costs to be assessed in this matter is $2000.
SIGNATURE OF THE PARTIES
Case Number(s): Investigation No. 04-O-15374
In the Matter of: Daniel Joseph Goulding
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: Daniel Joseph Goulding
Date: October 21, 2008
Respondent’s Counsel: David C. Carr
Date: October 21, 2008
Deputy Trial Counsel: Kevin B. Taylor
Date: October 23, 2008
Case Number(s): Investigation No. 04-O-15374
In the Matter of: Daniel Joseph Goulding
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; or 3) Respondent is not accepted for participation in the Program or does not sign the Program Contract. (See rule 135(b) and 802(b), Rules of Procedure.)
Signed by:
Judge of the State Bar Court: Richard A. Platel
Date: October 29, 2008
[Rules Proc. of State Bar; Rule 5.27(B); 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 Los Angeles, on October 29, 2008, 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 Los Angeles, California, addressed as follows:
DAVID CARR
LAW OFFICE OF DAVID C CARR
3333 CAMINO DEL RIO SOUTH, STE 215
SAN DIEGO, CA 92108
<<not>> checked. by certified mail, No. , with return receipt requested, through the United States Postal Service at , California, addressed as follows:
<<not>> checked. by overnight mail at , California, addressed as follows:
<<not>> checked. by fax transmission, at fax number . No error was reported by the fax machine that I used.
<<not>> checked. By personal service by leaving the documents in a sealed envelope or package clearly labeled to identify the attorney being served with a receptionist or a person having charge of the attorney’s office, addressed as follows:
checked. by interoffice mail through a facility regularly maintained by the State Bar of California addressed as follows:
KEVIN TAYLOR, Enforcement, Los Angeles
I hereby certify that the foregoing is true and correct. Executed in Los Angeles, California, on October 29, 2008.
Signed by:
Angela Owens-Carpenter
Case Administrator
State Bar Court